Active broad-market exchange-traded funds in Thursday's regular session:
SPDR S&P 500 ( SPY ): -0.7%
VIX Short-Term Futures ETN Ipath ( VXX ): +2%
iShares MSCI Japan Index Fund ( EWJ ): -0.04%
PowerShares QQQ Trust, Series 1 ( QQQ ): -0.7%
iShares MSCI Emerging Index Fund ( EEM ): +0.1%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV edged lower. Actively-traded PowerShares QQQ ( QQQ ) was down 0.7%.
U.S. stocks gave up earlier gains and were in negative territory at session's half, weighed down by comments from Richmond Fed President Jeffrey Lacker who told the Wall Street Journal the robust pace of consumer spending suggests American consumers are in doubt of the Federal Reserve's "resolve" and that an October rate hike is "needed."
In economic data, the final Purchasing Manager's Index for September increased slightly to 53.1, but was barely improved from the 22-month low of 53.0 posted in August. The Institute for Supply Management manufacturing index, meanwhile, declined from 51.1 in August, and at 50.2 is dangerously close to the contraction threshold of sub-50.
Initial jobless claims increased 10,000 for the week ended Sept. 26, but continued to run below the decisive 300,000 level. Also, construction spending rose 0.7% in August, beating +0.6% estimates, but July was revised lower to +0.4% from +0.7%.
Power Play: Health Care
Health care funds were flat to lower, tracking the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were weaker. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 1.2%.
Sarepta Therapeutics (SRPT) was up 22.1% after reporting additional long-term efficacy and safety data from a pivotal phase 2b program of Eteplirsen for the treatment of Duchenne muscular dystrophy. The company said that Eteplirsen provided a statistically significant 6 minute walk test advantage of 151 meters at three years compared to an external control. Also, fourth muscle biopsy results confirmed increased dystrophin production in nearly all Eteplirsen-treated patients and exon skipping in 100% of patients. Moreover, the safety profile of the drug remained consistent with previous results.
Winners and Losers
Funds in the financial sector were weaker, but still ahead of the broader market. Select Financial Sector SPDRs (XLF) was down 0.8%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.7%; Direxion Daily Financial Bear 3X Shares (FAZ) was up 1.8%.
Tech funds were lower, behind the broader market. Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW), iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were in negative territory. SPDR S&P International Technology Sector ETF (IPK) was flat.
Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 2.6%, while Semiconductor Sector Index Fund (SOXX) was down 2.4%.
Tyler Technologies (TYL) was up 7.5% to an all-time high after the company announced that it has signed a definitive agreement to acquire privately held New World Systems Corporation, a public safety and financial solutions provider for local governments, for $670 million in cash and stock, the company said Thursday morning. The transaction is expected to close in the fourth quarter of 2015 and is subject to regulatory approval and customary closing conditions. It is expected to be immediately accretive to non-GAAP earnings per diluted share, with an expected impact to non-GAAP revenues of approximately $134 million, to adjusted EBITDA of approximately $49 million, and to non-GAAP earnings per diluted share of approximately $0.56 for the year ending December 31, 2016.
Energy funds were moderately higher, outperforming the broader market. Dow Jones U.S. Energy Fund (IYE) was down 0.4% and Energy Select Sector SPDR (XLE) was down 0.2%.
PBF Energy (PBF) was up 10.4% after it said its subsidiary signed a definitive agreement to purchase the 155,000 barrel-per-day Torrance refinery in California and related assets from ExxonMobil (XOM) for $537.5 million, plus working capital. PBF will increase its total throughput capacity to 900,000 barrels per day and the deal is expected to close in Q2 2016, the firm said in a statement on Wednesday. ExxonMobil said 700 employees and 700 contractors work at the refinery and associated facilities. Employees are expected to be offered positions with PBF and existing third-party supply agreements, obligations, terms and conditions remain unchanged, it said in a separate statement. ExxonMobil will still have a presence in California through production of oil and natural gas and sales of its fuels and lubricants. XOM shares are down 1.1%.
Crude was down 0.3%; United States Oil Fund (USO) was down 0.5%. Natural gas was down 2.3% and United States Natural Gas Fund (UNG) was down 2%. Gold was down 0.1%, and SPDR Gold Trust (GLD) was down 0.1%.
Funds in the consumer sector slipped lower, in line with the broader market. Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in the red.
Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were weaker.
Crocs (CROX) was down 14.2% after the footwear and apparel company cut its Q3 revenue outlook below consensus forecasts. The company now expects Q3 sales of $270 million to $280 million, due to unfavorable changes in foreign exchange rates totaling $4 million and its decision to hold back $6 million of orders to several Chinese distributors in Q3. Previously, Crocs guided for Q3 sales of $280 million to $290 million. Analysts are expecting revenue of $286.7 million. The company also reaffirmed its mid-term operating margin target range of 10% to 12% by as early as 2018.
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