Mid-Day ETF Update: ETFs, U.S. Stocks Turn Negative as Mixed Economic Data Overshadows Strong Earnings

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

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.1%

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

SPDR S&P 500 ( SPY ): +0.1%

VelocityShares Daily 2x VIX Short Term ETN ( TVIX ): +0.1%

Barclays Bank PLC iPath S&P 500 VIX Short-Term Futures ETN ( VXX ): -0.2%

Broad Market Indicators

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

U.S. stocks returned earlier gains and turned negative at session's half, as Wall Street shifted its focus to mixed economic data.

Gains were sparked by strong quarterly results from Amazon (AMZN) coupled with upbeat results from Intel (INTC) and Microsoft (MSFT), although they were offset by disappointing results from Exxon Mobile (XOM) and Starbucks (SBUX).

Personal consumption rose 1.1% in Q1 -- the weakest pace of consumption in almost 5 years and down sharply from 4.0% in Q4. This overshadowed the Q1 GDP annualized growth rate of 2.3%, which was better than expectations for a 2.0% growth rate but down from 2.9% in Q4.

Wall Street was also spooked by the pace of wage and employment costs in Q1 as the employment cost index jumped 0.8%, beating up 0.7% projections and fueling fears of inflationary wage pressures. The yield on the 10-year note jumped to 2.98% and the dollar spiked higher versus the yen.

Finally, consumer confidence dipped in April with the Univ of Michigan final consumer sentiment index for April peeling back to 98.8 from the 14-year high of 101.4 in March.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) was down 0.3% 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 0.6% and Semiconductor Sector Index Fund (SOXX) was up 0.7%.

Shares of Charter Communications (CHTR) were some 13% lower after the company reported better-than-expected Q1 results, but said the pace of new sales slowed from the same quarter last year. Net income of $0.70 per share increased from $0.57 per share in the same quarter last year and beat the Capital IQ consensus estimate of $0.51 per share. Total revenue increased to $10.66 billion from $10.16 billion and beat the estimated $10.62 billion. In Q1, Charter residential customer relationships grew by 231,000 versus an adjusted 320,000 in the same quarter of 2017. Additionally, total residential and business relationships increased 261,000 in Q1 compared to 355,000 for the same quarter last year.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was up 0.02%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.2% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was down 0.3%.

Provident Financial Services, Inc (PFS) rose marginally after the firm reported Q1 net income of $0.43 per share, an increase from $0.37 per share a year ago but a penny lower than the GAAP consensus estimate from Capital IQ. Net interest income and non-interest income totaled $86.6 million, up from $79.5 million last year and slightly better than the estimated $86.4 million. Additionally, the company said it will pay an unchanged quarterly dividend of $0.20 per share on May 31 to shareholders of record as of May 15. This is up a penny from the quarterly dividend paid in May 2017.


Dow Jones US Energy Fund (IYE) was down 0.9% and Energy Select Sector SPDR (XLE) was down 0.8%.

ExxonMobil (XOM) was down nearly 4% as the oil major reported mixed Q1 results, with weaker-than-expected earnings on improved revenues that beat views compiled by Capital IQ. Q1 EPS was $1.09, up from $0.95 per share in the year-ago quarter but four cents below the consensus. Revenues rose to $68.21 billion from $58.67 billion a year earlier and topped the $61.49 billion average of four analysts.


Select Sector SPDR-Industrial (XLI) fell 0.5% and other industrial funds Vanguard Industrials (VIS) and iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), were in the red.

Rockwell Collins (COL) fell marginally after the company reported financial results for fiscal Q2, with adjusted earnings of $1.81 per share, compared with the prior-year period's $1.39 per share. Analysts polled by Capital IQ were expecting EPS of $1.76. Revenue was $2.18 billion, up from $1.34 billion in the same quarter last year. The Street view was for revenue of $2.16 billion.


Crude was down 0.2%. United States Oil Fund (USO) was up 0.01%. Natural gas was down 2.3% while United States Natural Gas Fund (UNG) was down 1.7%.

Gold was up 0.4%. SPDR Gold Trust (GLD) was up 0.3%. Silver was down 0.4%, while iShares Silver Trust (SLV) was down 0.5%.


Consumer Staples Select Sector SPDR (XLP) was up 0.7% and other funds Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were firmer.

Consumer Discretionary Select Sector SPDR (XLY) was up 0.7% and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were in positive territory.

Expedia (EXPE) rose 8% after the company reported financial results for Q1, with adjusted loss of $0.36 per share, compared with the prior-year period's $0.01 loss per share. Analysts polled by Capital IQ were expecting a loss of $0.48 per share. Revenue was $2.51 billion, up 14.6% from $2.19 billion in the same quarter last year. The Street view was for revenue of $2.44 billion. The company's board of directors has authorized an additional repurchase of up to 15 million shares of Expedia Group common stock. Expedia has repurchased 1.8 million share for an aggregate purchase price of $191 million excluding transaction costs (an average of $106.80 per share). As of March 31, there were 3.2 million shares remaining under the February 2015 repurchase authorization.

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 0.2%.

Sanofi (SNY) ADRs were over 2% lower although the company reported Q1 non-GAAP EPS of EUR 1.28 ($1.55), versus EUR 1.42 last year, which beat the $1.40 per share consensus of analysts polled by Capital IQ. Revenue for the quarter came in at EUR 7.90 billion, versus EUR 8.65 billion last year, which beat the EUR7.88 billion mean estimate. The company said it continues to expect 2018 non-GAAP EPS to grow between 2% and 5%. A EUR 1.5 billion share buyback program is expected to be completed in mid-2019.

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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