Mid-Day ETF Update: ETFs, Stocks Weaker But Off Session Lows Following Week Housing Data

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

SPDR S&P 500 ( SPY ): -1.29%

iShares Russell 2000 Index ( IWM ): -1.75%

PowerShares QQQ Trust, Series 1 ( QQQ ): -1.34%

iShares MSCI Japan ( EWJ ): -1.38%

iPath S&P 500 VIX ST Futures ETN ( VXX ): +3.05%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were weaker. Actively traded PowerShares QQQ ( QQQ ) was also in the red, down 1.31%.

U.S. stocks continued to see weakness in the session's half following the weak housing report from the National Association of Home Builders/Wells Fargo, which said the housing-market index for builder confidence fell to 45 in May - the lowest in a year. In other economic data, the Empire State index grew to 19.0 in May, its highest level since mid-2010, according to the New York Federal Reserve Bank. Meanwhile, the Philadelphia Fed's manufacturing index slipped to 15.4 in May from a 16.6 reading in April. Finally, weekly jobless claims fell by 24,000 to a seasonally adjusted 297,000 - the lowest level since May 2007.

Power Play: Health Care

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 2.17%.

In corporate news, Kindred Healthcare (KND) was up 7% after it announced a proposal to acquire all the outstanding shares of Gentiva Health Services (GTV) for a combination of $7.00 per share in cash and $7.00 of Kindred common stock. Kindred also offered to increase its offer to 100% cash if the Gentiva Board so elects. Kindred's proposal would provide Gentiva shareholders with consideration valued at approximately $14.00 per share, representing a 64% premium over the closing price of Gentiva common stock on May 14, and a 59% premium over Gentiva's 60-day volume-weighted average closing price. The proposed price for Gentiva implies a total equity value of approximately $533 million. With the assumption of Gentiva's debt, the transaction would be valued at approximately $1.6 billion. In a response dated May 13, Gentiva replied to Kindred as follows: "Having considered your revised proposal, our Board continues to believe that our long-term strategy as a stand-alone company will generate substantially more value to our shareholders. Accordingly, at this time, we are not interested in pursuing the transaction you are proposing." GTIV shares soared more than 60%.

Winners and Losers


Select Financial Sector SPDRs (XLF) was down 1.73%. Direxion Daily Financial Bull 3X shares (FAS) was down 4.86%. Its bearish counterpart, FAZ, was up 4.90%.

Among sector news, LGI Homes (LGIH) was up 4% after it reported Q1 net income attributable to owners of the company climbed to $4.6 million, or $0.22 per share, from $2.5 million a year earlier. The company didn't provide per-share figures for the prior-year results because it just went public in November 2013. No analyst estimates were available via Capital IQ for the quarterly results. Total revenue more than tripled to $75.9 million from $22 million. The growth came as its number of home closing jumped 92% to 485 homes, and the average home-sales price increased 11% to $156,535. The company expects FY14 EPS of $1.22 to $1.30. Three analysts polled by Capital IQ had forecast $1.23 on average.


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. SPDR S&P International Technology Sector ETF (IPK) was down 0.66%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 2.2% and Semiconductor Sector Index Fund (SOXX) was down 1.59%.

In corporate news,Acxiom (ACXM) was down 23% after it posted Q4 net loss attributable to ACXM stockholders of $0.24 per share, ex one-time items, compared with the prior-year period's earnings of $0.19 per share. Revenue was $277 million, roughly flat compared to Q4 2013. Analysts polled by Capital IQ were expecting EPS of $0.20 on revenues of $278.17 million. The company expects fiscal 2015 EPS of $0.75 - $0.85 versus the Street view of $0.87 EPS. It anticipates revenue to be down by roughly 5% due to the impact of lost IT Infrastructure Management customers and the exit of its analog paper survey business in Europe. Separately, the company announced that it has entered into a definitive agreement to acquire privately held LiveRamp, a service for onboarding customer data into digital marketing applications, for $310 million in cash.


Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were in negative territory.

Among stocks, USEC Inc. (USU) was down more than 2% after it said its Q1 net loss widened to $50.8 million and said it's ability to continue as a going concern will depend on a bankruptcy court's approval of its reorganization plan under Chapter 11 proceedings. The net loss was $50.8 million for the quarter ended March 31, 2014, compared to a net loss of $2.0 million a year ago. Revenue dropped to $148.6 million, down 54% compared to the same quarter of 2013.


Crude was down 0.91%; United States Oil Fund (USO) was down 0.54%. Natural gas was up 2.88% and United States Natural Gas Fund (UNG) was up 2.39%.

Gold was down 0.74% and silver was down 1.34%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.76% and iShares Silver Trust (SLV) was down 1.36%.


Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were weaker but still near their record or multi-year highs.

Among stocks, Arctic Cat (ACAT) was down more than 13% after it reported a fiscal Q4 loss of $0.12 per diluted share, down from a loss of $0.38 per diluted share in fiscal Q4 2013 but greater than the loss of $0.10 predicted by analysts. Total revenues of $145.40 million were up from $113.23 million in fiscal Q4 2013 but missed analyst projections of $154.17 million. For the fiscal year ending March 31, 2015, Arctic Cat anticipates net sales in the range of $775 million to $786 million, with unfavorable Canadian currency exchange expected to reduce consolidated net sales by approximately $12 million or 1.5 percent. The company estimates that fiscal 2015 earnings per share will be in the range of $2.33 to $2.43 per diluted share, which includes an unfavorable Canadian currency impact of $0.79 per diluted share.

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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.

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