Mid-Day ETF Update: ETFs, Stocks Weaker Despite Bump in Crude Oil Prices; Concerns Over February Jobs Report Weigh

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

SPDR S&P 500 ( SPY ): -0.3%

Direxion Daily Gold Miners Index Bear 3X Shares ( DUST ): -10.2%

iShares MSCI Emerging Index Fund ( EEM ): +0.7%

Market Vectors Gold Miners ETF ( GDX ): +3.3%

SPDR Select Sector Fund - Financial ( XLF ): -0.02%

Broad-Market Indicators

Most broad-market exchange-traded funds, including SPY, IWM, IVV and others, slipped lower. Concurrently, actively-traded PowerShares QQQ (QQQ) was down 0.7%.

U.S. stocks were in negative territory at session's half, even as crude oil prices rose. Investors are looking ahead to the February jobs report due Friday, and are waiting to see how bullish results could affect the Federal Reserve's monetary policy.

Weak economic data were also weighing on market sentiment. ISM's non-manufacturing index for February fell to a reading of 53.4 - a two-year low - from the prior month's 53.5; the employment gauge also fell to a two-year low of 49.7, from a 52.1 in January. Factory orders for January rose 1.6% versus expectations for a growth of 2.4%.

Earlier weakness was also prompted by lackluster productivity and jobs data. Productivity fell at a 2.2% annual pace in Q4 - a narrower decline than previously reported. For 2015, productivity rose 0.7%. Meanwhile, weekly jobless claims rose by 6,000 to 278,000, versus forecasts for a seasonally adjusted 270,000.

Power Play: Health Care

Health care funds were lower, in line with the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were weaker. Meanwhile Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 1.6%.

Opexa Therapeutics (OPXA) was down 8.3% after the company said in a Securities and Exchange filing it is reducing headcount by approximately 30% to cut operating expenses and conserve cash. The biopharmaceutical company currently has 36 full-time employees. CFO Karthik Radhakrishnan was let go as part of the job cuts and CEO Neil Warma will serve as acting CFO. Opexa said the restructuring is intended to allow it to focus resources on completing the ongoing Phase IIb Abili-T clinical trial of Tcelna in patients with secondary progressive multiple sclerosis. It expects to report top-line data from the trial in early Q4, and the restructuring initiative is expected to extend the company's current cash runway into Q1 of 2017. The company estimates it will record a one-time severance-related cash charge of approximately $325,000 associated with the workforce reduction in Q1 and it anticipates cash charges of approximately $330,000 associated with payments anticipated to be made under the retention plan.

Winners and Losers


Funds in the financial sector were weaker, in line with the broader market. Select Financial Sector SPDRs ( XLF ) was down 0.1%. Daily Financial Bull 3X shares (FAS) was down 0.1% while its bearish counterpart, FAZ, was down 0.2%.

Northstar Realty Europe Corp. (NRE) was up 8% after the real estate investment trust late Wednesday announced the results of an outside evaluation of its property portfolio, putting a $2.6 billion price tag on the combined properties, an 11% increase over their respective purchase


Tech funds were lower, underperforming 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 weaker. Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was up 1.2%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.1%, while Semiconductor Sector Index Fund (SOXX) was down 0.4%.

Semtech (SMTC) was up 8.7% after it reported late Wednesday Q4 adjusted EPS of $0.17 on sales of $118.6 million, both ahead of the analyst consensus of $0.16 per share in earnings on revenue of $116 million. For Q1, the company expects earnings of $0.26 to $0.30 on sales of $124 to $132 million, vs. the Street view of $0.24 per share in earnings on sales of $118 million.


Energy funds were in the green, above the broader market. Dow Jones U.S. Energy Fund (IYE) was up 0.8% while Energy Select Sector SPDR (XLE) was up 0.8%.

Canadian Natural Resources (CNQ) was up 8.2% after it reported Q4 adjusted loss of CAD 49 million ($36.4 million) or CAD 0.04 per share from a profit of CAD 756 million or CAD 0.69 per share a year earlier, beating forecasts for a loss of CAD 0.12 per share. Revenues slumped to CAD 2.79 billion from CAD 4.38 billion last year, yet were above the CAD 2.66 billion consensus. For FY16, the company expects capital expenditures of CAD 3.5 billion to CAD 3.9 billion, down from a prior outlook of CAD 4.5 billion to CAD 5 billion. FY16 overall production is forecast at 809,000 to 868,000 barrels of oil equivalent per day, with a product mix of 64% crude oil and natural gas liquids and 36% natural gas. The company also declared an unchanged quarterly cash dividend of CAD 0.23 per share, payable on April 1 to holders of record on March 18.


Crude was up 0.1%. United States Oil Fund (USO) was down 0.8%. Natural gas futures were down 1.4%. United States Natural Gas Fund (UNG) was flat. Gold was up 1.3% and SPDR Gold Trust (GLD) up 1.3%. Silver was up 1% while iShares Silver Trust (SLV) was up 1.5%.


Consumer staples funds were weaker, below the broader market. Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in negative territory.

Consumer discretionary and retail funds were also lower. Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were in the red.

Tumi Holdings (TUMI) was up 29.1% after the Wall Street Journal reported rival luggage manufacturer Samsonite International is close to sealing a takeover deal at close to $2 billion. Sources cited by the Journal said a deal could be announced as early as this week. The $2 billion purchase price would represent a premium of approximately 46% relative to Tumi's market value of $1.37 billion.

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

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

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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