Mid-Day ETF Update: ETFs, U.S. Stocks Mixed to Lower as Street Digests Mixed Economic Data, Earnings

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

iShares MSCI Emerging Index Fund ( EEM ): -0.4%

SPDR Select Sector Fund - Financial ( XLF ): +0.1%

SPDR S&P 500 ( SPY ): +0.03%

VelocityShares Daily 2x VIX Short Term ETN ( TVIX ): +2.8%

Barclays Bank PLC iPath S&P 500 VIX Short-Term Futures ETN ( VXX ): -2%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were mixed. Actively traded PowerShares QQQ (QQQ) was up 0.1%.

U.S. stocks were mixed to lower at session's half amid a mixed set of economic data, earnings report and declines in the energy and materials sectors.

IHS Markit's closely-watched U.S. flash services purchasing managers' index rose to 54.4 in April from 54.0 in March, missing analysts' estimates for 54.5. The Chicago Fed National Activity Index meanwhile fell to 0.10 from a revised reading of 0.98 and falling short of analysts' estimates for 0.29.

Separate data showed existing home sales rose by 1.1% in March to 5.60 million, beating analysts' estimates for 5.53 million and also ahead of the unrevised reading for February of 5.54 million.

Looking ahead, Alphabet (GOOG), Facebook (FB) and Twitter ( TWTR ) will be reporting their financial results in the after-hours session.

Power Play: Health Care

Health Care SPDR (XLV) was up 0.4% and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were higher. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 0.3%.

Akorn (AKRX) fell some 30% after the firm filed a complaint in Delaware Chancery Court asking that Fresenius Kabi AG be required to fulfil its obligations under the definitive merger agreement. Fresenius' attempt to terminate the transaction on the pretext that the findings from the ongoing investigation are a "breach of the merger agreement is completely without merit," the company said in a statement. "The ongoing investigation, of which we have voluntarily notified and are in regular communication with the Food and Drug Administration, has not found any facts that would result in a material adverse effect on Akorn's business and therefore there is no basis to terminate the transaction," the statement continued. The company further added that the investigation is not a condition to closing and the only remaining condition is approval from the Federal Trade Commission. "We intend to vigorously enforce our rights, and Fresenius' obligations, under our binding merger agreement."

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was up 0.1%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.1% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 0.2%.

Old National Bancorp (ONB) rose more than 6% after the bank reported financial results for Q1, with better-than-expected earnings while revenue fell short of analysts' estimates. The bank holding company for Old National Bank posted Q1 adjusted earnings of $0.34 per diluted share, compared with the prior-year period's $0.27 per diluted share. Analysts polled by Capital IQ were expecting EPS of $0.29. Revenue, calculated as the sum of net interest income and non-interest income, was $170.9 million, from $148.7 million in the same quarter last year. The Street view is for revenue of $172.1 million.


Dow Jones US Energy Fund (IYE) was down 0.1% and Energy Select Sector SPDR (XLE) was down 0.1%.

Ocean Rig UDW (ORIG) fell more than 2% after the company said it has reached an agreement with Samsung Heavy Industries to postpone the delivery of newbuilding drill ship Ocean Rig Santorini to September 2019. The company expects its remaining yard installments to total $372 million, $360 million of which is expected to be financed by a non-recourse seller's credit. "With oil prices increasing to above $70 per barrel, the agreed terms provide substantial optionality and leverage to a market that is expected to be improving when the rig delivers," said CEO Pankaj Khanna.


Technology Select Sector SPDR ETF (XLK) was down 0.2% and other tech funds 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 lower.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.3% and Semiconductor Sector Index Fund (SOXX) was down 1%.

Science Applications International (SAIC) rose some 0.8% after the company said it won a contract valued at more than $73 million from the US Navy's Space and Naval Warfare Systems Command to provide architecture and systems engineering support services. Under the award, the technology company will provide full spectrum architecture, analysis, interoperability assessments, engineeering, configuration management, and technical management services.The award has a one-year base performance period, plus four one-year options.


Crude was down 0.3%. United States Oil Fund (USO) was up 0.1%. Natural gas was down 2.2% while United States Natural Gas Fund (UNG) was up 0.1%.

Gold was down 1%. SPDR Gold Trust (GLD) was down 0.9%. Silver was down 2.9%, while iShares Silver Trust (SLV) was down 2.7%.


Consumer Staples Select Sector SPDR (XLP) was down 0.2% and other funds Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were weaker.

Consumer Discretionary Select Sector SPDR (XLY) was up 0.3% and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were in negative territory.

ESL Investments, which is controlled by Sears Holdings' (SHLD) Chief Executive Edward Lampert and is the biggest stockholder in the department store operator, offered to buy Kenmore and two other brands to provide the company with liquidity. Sears has marketed Kenmore and the Home Improvement, or SHIP, and PartsDirect businesses of the Sears Home Services division for about two years but has been unable to reach agreement with potential buyers, apart from offloading its Craftsman tool brand in 2017. ESL is offering to buy SHIP and PartsDirect for an enterprise value of $500 million, and said it's prepared to submit a proposal if Sears decides to divest some or all of the Kenmore appliances brand. It's also willing to make an offer from some real estate assets owned by the company. SHLD rose nearly 3%.

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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