Active broad-market exchange-traded funds in Monday's regular session:
SPDR Select Sector Fund - Financial ( XLF ): -0.6%
SPDR S&P 500 ( SPY ): -0.2%
iShares MSCI Emerging Index Fund ( EEM ): -0.6%
iShares China Large-Cap ETF ( FXI ): -1.2%
Broad Market Indicators
Broad-market exchange-traded funds, including IWM and IVV were lower. Actively-traded PowerShares QQQ ( QQQ ) was down 0.2%.
US stocks slipped marginally Monday at midday after results from financial giants Goldman Sachs (GS) and Citigroup (C) failed to impress investors.
In economic data news, the New York Empire State manufacturing index rebounded 6.4 points to 10.1 in April, stronger than the 6.8 expected and erasing the drop to 3.7 in March. The employment component declined slightly to 11.9 following the jump to 13.8 previously, while the workweek climbed to 4.3 from a negative-3.4. New orders increased to 7.5 from 3.0, while prices paid slipped to 27.3 from 34.1, with prices received at 14.0 from 18.1.
Power Play: Financial
Select Financial Sector SPDRs ( XLF ) was down 0.6%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.4%; Direxion Daily Financial Bear 3X Shares (FAZ) was up 1.6%.
Citigroup (C) was up 0.06% after i t report ed first-quarter per-share earnings that easily beat market expectations, but its investment banking, equity market and fixed income revenues fell. The New York-based bank posted Q1 per-share earnings of $1.87, compared to $1.68 in the prior-year quarter, beating the $1.80 consensus per-share earnings estimate compiled by Capital IQ. The company said Q1 revenue was $18.58 billion, 2% lower compared to $18.87 billion in the year-ago period, but above the $18.56 billion consensus revenue estimate provided by Capital IQ.
The revenue for the bank's institutional clients group fell 2% to $9.7 billion as growth in banking was more than offset by a decline in its market and securities services business, Citigroup said. Investment banking revenues fell 20% in the first quarter "as strong growth in advisory and investment grade debt underwriting more than offset a decline in equity underwriting driven by a lower market wallet," the bank said.
Winners and Losers
Technology
Technology Select Sector SPDR ETF (XLK) was down 0.2%; 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 weaker.
Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.6% and Semiconductor Sector Index Fund (SOXX) was down 0.8%.
Alliance Data Systems (ADS) fell more than 9% after it said it had entered into a definitive agreement to sell its Epsilon business to French advertising and public relations firm Publicis Groupe for $4.4 billion in cash. The company plans to use the net proceeds of approximately $3.5 billion for share repurchases and debt repayments. ADS expects the deal to be accretive to core EPS guidance of $22 on a full-year, run-rate basis. The deal is expected to close in early Q3, subject to customary closing conditions.
Energy
Dow Jones U.S. Energy Fund (IYE) was down 0.5% and Energy Select Sector SPDR (XLE) was down 0.3%.
National Oilwell Varco (NOV) rose nearly 5% after saying it expects its first-quarter 2019 revenue to be $1.94 billion, down from previous expectations. "The severity of the decline in demand for oilfield equipment resulting from the sharp fall in oil prices during late 2018, further compounded by capital austerity that has taken hold in upstream oil and gas markets, was greater than we expected," Chief Executive Clay Williams said. All three of the company's operating segments will report results below prior expectations and that the company expects to report, on a consolidated basis, a GAAP operating loss of about $48 million and adjusted EBITDA of about $140 million, the company said. National Oilwell Varco is set to release complete results after market close on April 25.
Commodities
Crude was down 1.1%; United States Oil Fund (USO) was down 0.7%. Natural gas was down 2% and United States Natural Gas Fund (UNG) was down 1.8%.
Gold was down 0.2%, and SPDR Gold Trust (GLD) was down 0.1%. Silver was down 0.1% and iShares Silver Trust (SLV) was up 0.1%.
Consumer
Consumer Staples Select Sector SPDR (XLP) was up 0.4% while iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in the green.
Consumer Discretionary Select Sector SPDR (XLY) was down marginally and SPDR S&P Retail (XRT) , PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were weaker.
Toyota Motor (TM) edged lower following a Reuters report that said the auto manufacturer has agreed to sell a license to Chinese electric vehicle startup Singulato for the use of the design of Toyota's eQ battery electric microcar. The report did not disclose a price tag for the sale. The deal, said Reuters, is set to be announced Tuesday at the Shanghai auto show, during which Singulato is also expected to unveil a concept car based on the Toyota technology. Reuters, however, noted that the sale's financial terms are not expected to be released, though a Singulato source said the price reached "several tens of millions of dollars."
Health Care
Health Care SPDR (XLV) was up 0.2% and other funds iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were lower. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 1.1%.
Fibrocell Science (FCSC) was surging some 52% after the company announced a collaboration agreement with Castle Creek Pharmaceuticals over the development and commercialization of its lead gene therapy candidate FCX-007, for the treatment of recessive dystrophic epidermolysis bullosa. Under the deal, Fibrocell will receive a $7.5 million upfront payment, $2.5 million for the first patient enrolled in the phase 3 clinical trial and $30 million upon the approval of a biologics license application (BLA) and the gene therapy's commercial readiness. The company will also be eligible to receive up to $75 million in additional payments upon achieving certain sales milestones and be entitled to a 30% share in the gross profits from FCX-007 sales.
Meanwhile, Castle Creek will receive an exclusive license to commercialize FCX-007 in the US and be responsible for up to $20 million in development and manufacturing expenses prior to the gene therapy's initial BLA filing with the FDA. If the said expenses exceed $20 million, Castle Creek will shoulder 70% of the exceeding costs, while Fibrocell will cover the rest. The companies further agreed that Fibrocell will retain sole ownership of the Rare Pediatric Disease Priority Review Voucher, which may be granted upon market approval of FCX-007. This voucher can be used to secure priority review for a subsequent new drug application or BLA, and can be sold to another entity. Fibrocell noted that FCX-007 is being developed in collaboration with Intrexon (XON), which will be entitled to 50% of all upfront, milestone, and profit share payments from Castle Creek as part of the companies' existing exclusive channel collaboration.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
