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Mid-Day ETF Update: ETFs, Stocks Turn Lower as Street Shrugs Off Earnings Results; Digests Trade Deficit, Wholesale Inventories Data

Active broad-market exchange-traded funds in Wednesday's regular session:

SPDR Select Sector Fund - Financial (XLF): -0.3%

iShares MSCI Emerging Index Fund (EEM): +0.2%

SPDR S&P 500 (SPY): -0.2%

iShares Inc iShares MSCI Brazil ETF (EWZ): -2.4%

SPDR Select Sector Fund - Health Care (XLV): -2.2%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV were lower. Actively-traded PowerShares QQQ (QQQ) was up 0.3%.

US stocks were mostly lower as corporate earnings reports failed to spark much of a reaction in the overall market.

In US economic data news, the trade deficit with its global trading partners narrowed 3.4% to $49.4 billion in February, compared with consensus expectations of $53.6 billion, after shrinking 14.6% in January to $51.1 billion. This marks the tightest since June.

Meanwhile, February wholesale inventories rose 0.2%, missing consensus for 0.3%, following a gain of 1.2% in January.

Earlier, the Mortgage Bankers Association said mortgage applications declined 3.5% week-to-week, though volume was still up 14% from the same time last year. Refinance applications brought down the total as they fell 8% for the week. Still, they were up 26% year-over-year, the MBA said.

Power Play: Financial

Select Financial Sector SPDRs (XLF) was down 0.4%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.4%; Direxion Daily Financial Bear 3X Shares (FAZ) was up 1.4%.

Morgan Stanley (MS) rose nearly 2% after the bank reported Q1 adjusted earnings of $1.33 per share, down from $1.45 per share in the prior year period but higher than the $1.17 per share Street estimate provided by Capital IQ. Net revenues were $10.29 billion, down from $11.08 billion reported for the same period last year and higher than the $9.95 billion Street estimate.

Winners and Losers

Technology

Technology Select Sector SPDR ETF (XLK) was up 0.4%; 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 higher.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.1% and Semiconductor Sector Index Fund (SOXX) was up 1.2%.

Qualcomm (QCOM) and Apple (AAPL) agreed to drop all litigation between the companies all over the world, in a settlement that includes a payment to be made from Apple to Qualcomm. In a joint statement, the companies said they reached a six-year license agreement and a multiyear chipset supply agreement. The license deal came into effect on April 1 and includes a two-year option to extend, Qualcomm and Apple said. No other information about the resolution of the dispute was given in the statement. Qualcomm and Apple have been locked in disputes in several countries, with Qualcomm alleging in a San Diego federal court in March that Apple violated three of its patent through the use of Intel (INTC) chips in its iPhones. The resolution comes as an antitrust case -- filed by Apple as a challenge to Qualcomm's business model -- headed to a jury trial this week, according to reports. In November, Qualcomm's chief executive, Steve Mollenkopf, told CNBC the companies were "on the doorstep" of resolving legal issues dating back to early 2017. But in December, a Chinese court granted Qualcomm an injunction against Apple, banning the import and sale of nearly all iPhone models in the country, and Apple later reportedly released a software update to the devices to address concerns regarding its compliance, Reuters said. And in January, Qualcomm asked a German court to enforce an order to ban the sale of iPhones in the country amid a protracted patent dispute, media reported. QCOM shares rose nearly 11% and AAPL shares rose more 1%.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 0.5% and Energy Select Sector SPDR (XLE) was up 0.04%.

BP (BP) is raising its US onshore upstream spending to a range of $2 billion to $2.5 billion this year from $1 billion last year, Argus Media reported, citing a company official. Mohit Singh, senior vice president for business development and exploration at BPX Energy, told participants at Hart Energy's DUG Permian basin conference in Fort Worth, Texas, that overall capital expenditures for 2019 will hold steady around the guidance range of $15 billion to $17 billion despite the increase in US onshore capex. That translates to a decline in spending at other operations. Total capex was $15.1 billion in 2018, according to the report. Singh also confirmed that BP is looking to divest additional assets, including those in east Texas, and in the San Juan and Anadarko basins, Argus Media said. BP ADRs rose marginally.

Commodities

Crude was up 0.2%; United States Oil Fund (USO) was down 0.1%. Natural gas was down 1.8% and United States Natural Gas Fund (UNG) was down 1.9%.

Gold was down 0.1%, and SPDR Gold Trust (GLD) was down 0.2%. Silver was down 0.1% and iShares Silver Trust (SLV) was down 0.4%.

Consumer

Consumer Staples Select Sector SPDR (XLP) was up 0.5% 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 up marginally while SPDR S&P Retail (XRT) , PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were weaker.

The South Korea head of Fiat Chrysler Automobiles (FCAU) said on Wednesday the car maker is on track to achieve its aim of selling 10,000 sport utility vehicles in the country this year, Yonhap News reported. "Improvements on convenience and safety and functional upgrades have made FCA's SUV models sufficient enough to be used as a daily car. They are no longer a candidate for a choice of second car," FCA Korea CEO Pablo Rosso said in a press conference. The auto maker is expecting high demand for SUVs and has rolled out an improved lineup of Wrangler models as well as its flagship Grand Cherokee, the Cherokee, the Compass and the Renegade models. Fiat sold more than 7,500 SUVs in the country last year compared to 7,012 units sold in 2017. This year, the company expects double-digit growth in the SUV segment due to a revamped lineup and an aggressive marketing campaign, according to the report. FCAU shares rose more than 1.3%.

Health Care

Health Care SPDR (XLV) was down 2.6% and other funds iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were lower. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 3.7%.

ADMA Biologics Inc. (ADMA) was down some 6% after the firm said it has been granted a patent from the US Patent and Trademark Office related to methods of treatment and prevention of S. pneumonia infection. The term of the patent extends to March 2037. The patent claims encompass methods of preparing immune globulin via harvesting plasma from S. pneumonia vaccinated, healthy adult human donors and pooling the harvested plasma as the source for manufacturing a hyperimmune anti-pneumococcal immune globulin containing elevated opsonic antibodies to a plurality of S. pneumonia serotypes. The issued claims also encompass hyperimmune anti-pneumococcal immune globulin so prepared, methods of treating S. pneumonia infection and methods of providing immunotherapy using the hyperimmune anti-pneumococcal immune globulin, the company said.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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