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Mid-Day ETF Update: ETFs, Stocks Weaker As Solid Jobs Report Could Still Spur Interest Rate Hike

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

iShares MSCI Emerging Index Fund ( EEM ): -1%

VanEck Vectors Gold Miners ETF ( GDX ): +0.1%

SPDR S&P 500 ( SPY ): -0.7%

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): -0.3%

United States Oil Fund ( USO ): 1.8%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were edging lower. Actively traded PowerShares QQQ (QQQ) was down 0.6%.

U.S. stocks continued to trade in negative territory, as the September nonfarm payrolls report prompted comments from Cleveland Federal Reserve President Loretta Mester and Federal Reserve Vice Chairman Stanley Fischer regarding the possibility of an interest rate hike within the year.

The U.S. government said that the September employment report showed the economy created 156,000 new jobs, versus expectations for an increase of 168,000. The unemployment rate rose to 5% from 4.9%.

Mester said that the September labor market data was a "solid" report, and that an interest rate hike would still be appropriate, while Fischer said the jobs data was a "Goldilocks report" that would give the Fed ammunition to hike rates, but not enough to indicate an overheating economy.

Meanwhile, wholesale inventories fell 0.2% in August, missing the estimated -0.1%. Sales were up 0.7%, driving the inventory/sales ratio down to 1.33 from 1.34 in July.

Power Play: Technology

Tech funds were lower, but just ahead 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 in negative territory. SPDR S&P International Technology Sector ETF (IPK) was down 0.6%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.5% and Semiconductor Sector Index Fund (SOXX) was down 0.8%.

ParkerVision (PRKR) was up 3.5% after it said it has filed a complaint against Apple (AAPL) in Germany for patent infringement. ParkerVision's German subsidiary, ParkerVision GmbH, said it is seeking injunctive relief and declaration of liability for damages for infringing devices being used or introduced in Germany. The accused products include the Apple iPhone 6, iPhone 6s, and the iPad Air 2.

Winners and Losers

Financial

Select Financial Sector SPDRs (XLF) was down 0.4%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.2% while its bearish counterpart, FAZ, was up 1.4%.

American depositary shares of Lloyds Banking Group (LYG) were down 5.7% after the UK government shelved a plan to sell its remaining stake in the lender, which received a GBP 20 billion ($24.9 billion) bailout from taxpayers during the 2008 global financial crisis. The government still owns about 6.5 billion shares, or a 9.1% stake in Lloyds, which it will sell through a pre-arranged trading plan over the next twelve months, the UK Financial Investments Limited (UKFI,) which manages the government's holdings in banks, said in a statement on Friday. The sale will be managed by Morgan Stanley, which will have full discretion to carry out a "measured and orderly selldown" of Lloyds shares on behalf of the UK Treasury, according to the statement.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 0.3% while Energy Select Sector SPDR (XLE) was down 0.6%.

Resolute Energy (REN) was down 2.1% after it said it completed the $135 million purchase of oil and gas properties in Reeves County, Texas. It financed the transaction in part with proceeds from a private preferred stock offering, which also closed on Friday, the company said. Total net proceeds from the sale of the convertible preferred stock, before offering expenses, were approximately $60 million, it said. It placed 8 1/8% series B cumulative perpetual convertible preferred stock. It sold a total of 62,500 shares of the convertible preferred stock, which includes 7,500 shares issued in connection with the exercise by the initial purchaser of its over-allotment option, it said.

Commodities

Crude was down 1.5%. United States Oil Fund ( USO ) was down 1.6%. Natural gas was up 4.8% and United States Natural Gas Fund (UNG) was down 5.9%.

Gold was up 0.2%. SPDR Gold Trust (GLD) was down 0.2%. Silver was up 0.5% while iShares Silver Trust (SLV) was up 0.4%.

Consumer

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

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

Tyson Foods (TSN) was down 9.2% after the food company disputed a report by a Pivotal analyst who cited a 2008 class-action lawsuit which alleges price collusion by the company in the broiler-chicken market. Tyson Foods said it disputes the "speculative conclusions reached by the analyst," adding it will continue to defend itself in court. The company also said it has not altered its "business practices in response to complaints." In Sept. 2008, a lawsuit was filed in Illinois alleging that Tyson, Pilgrim's Pride (PPC) and Sanderson Farms (SAFM) colluded to support prices by sharing proprietary data and cutting production, Bloomberg reported.

Health Care

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

Clovis Oncology (CLVS) was down 14.6% after it reported primary efficacy and safety data from studies of its investigative ovarian cancer treatment rucaparib. The company said the results demonstrate that rucaparib "may represent an important option for women with multiply relapsed BRCA-mutated ovarian cancer." The company made the announcement at the 2016 ESMO Congress in Copenhagen. Rucaparib is currently under priority review with U.S. Food and Drug Administration (FDA).

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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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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