Mid-Day ETF Update: ETFs, Stocks Weaker on Disappointing ECB Stimulus Measures

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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 ): +2.4%

iShares MSCI Emerging Index Fund ( EEM ): -0.3%

SPDR Select Sector Fund - Financial ( XLF ): -0.6%

iShares MSCI Eurozone ETF ( EZU ): -0.2%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV edged lower. Actively-traded PowerShares QQQ (QQQ) was down 0.9%.

U.S. stocks continued to trade lower following news that the European Central Bank will implement tame measures to stimulate economic growth. The ECB said it will further cut its deposit rate to minus 0.3% from minus 0.2%, as well as extend its asset purchase program until the end of March 2017, or beyond, if necessary.

In economic data, Initial jobless claims increased an as-expected 9,000 to 269,000 for the week ended Nov. 28 while the final purchasing managers' index read for the services sector declined to 56.1 during November from October's 56.5 final reading and factory orders rose 1.5% during October.

Power Play: Technology

Tech funds were firmer, ahead of 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 higher. SPDR S&P International Technology Sector ETF (IPK) was up 0.5%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.3%, and Semiconductor Sector Index Fund (SOXX) was down 0.3%.

Yahoo! (YHOO) was down 2.6% after The Wall Street Journal cited an unnamed person with knowledge of the matter as saying Alibaba (BABA) is unlikely to be interested in buying the company's internet business or the Japan business. The report also said Alibaba would only be interested in buying Yahoo's 15% in the Chinese e-commerce giant, if it came at a steep discount. Meanwhile, a separate report in the Journal said companies likely to explore buying Yahoo's internet business are Verizon Communications (VZ), IAC/InterActiveCorp (IACI). It also cited unnamed executives as saying that other pieces of Yahoo could be of interest to News Corp (NWSA), Time Inc (TIME) and private equity firm TPG.

Winners and Losers


Funds in the financial sector were weaker, behind with the broader market. Select Financial Sector SPDRs ( XLF ) was down 0.8%. Direxion Daily Financial Bull 3X shares (FAS) was down 2.4%; Direxion Daily Financial Bear 3X Shares (FAZ) was up 2.1%.

Toronto Dominion Bank (TD) was down 1.6% after it reported adjusted EPS in the quarter ended Oct. 31 of $1.14, a penny above the street view as compiled by Capital IQ, and also above the $0.98 reported a year earlier. Toronto Dominion reported adjusted net income of $2.18 billion on revenues of $8.05 billion, the latter figure well above the street view of $7.54 billion. In the year-earlier period, the bank reported adjusted net income of $1.86 billion on revenues of $7.45 billion.


Energy funds were lower, lagging behind the broader market. Dow Jones U.S. Energy Fund (IYE) was down 1.3% and Energy Select Sector SPDR (XLE) was down 1.4%.

Chesapeake Energy (CHK) was down 8.9% to its lowest level since July 2002 after the oil and gas company said it is offering to exchange up to $1.5 billion of new 8.00% Senior Secured Second Lien Notes due 2022 for some of its outstanding senior unsecured notes. Terms of the offering were set forth in the company's Dec. 2 confidential offering memorandum and letter of transmittal. The exchange offer will expire at 11:59 p.m. ET on Dec. 30, with the settlement date expected on Dec. 31.


Crude was up 4%. United States Oil Fund (USO) was up 1.9%. Natural gas futures were up 0.7%. United States Natural Gas Fund (UNG) was up 0.7%. Gold was up 0.5% and SPDR Gold Trust (GLD) was up 0.7%. Silver was up 0.2% and iShares Silver Trust (SLV) was up 0.2%.

Health Care

Health care funds were in the red, underperforming the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were modestly higher. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 2.4%.

Dyax (DYAX)was up 11.9% after the company said the waiting period under the Hart-Scott-Rodino waiting period has been terminated by the U.S.Federal Trade Commission related to its acquisition by a subsidiary of Shire (SHPG). On Nov. 2 Dyax and Shire entered into a merger agreement under which Shire will acquire Dyax for $37.30 in cash per Dyax share, representing total upfront consideration of approximately $5.9 billion.

The completion of the merger remains subject to certain other closing conditions, including adoption of the agreement by Dyax's stockholders.


Consumer staples funds were in negative territory, 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 and retail funds were also weaker, below the broader market. Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were lower.

PVH Corp. (PVH) was down 8.7% after the apparel company reported Q3 adjusted EPS of $2.66, up from $2.56 a year earlier and beating the $2.48 mean estimate compiled by Capital IQ. Revenues fell 3% to $2.16 billion, shy of the $2.17 billion consensus. Looking ahead, the company expects Q4 EPS of $1.37 to $1.47 and fiscal 2016 EPS of $6.90 to $7.00 per share. Analysts are expecting Q4 and full-year EPS of $1.61 and $6.96, respectively.

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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