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Mid-Day ETF Update: Trump's Travel Ban, Subsequent Backlash Weigh on Wall Street, Overshadowing Bullish Data

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

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): +4.9%

SPDR S&P 500 ( SPY ): -0.9%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): -3.2%

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): +1.3%

SPDR Select Sector Fund - Financial ( XLF ): -1.3%

Broad Market Indicators

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

U.S. stocks were in negative territory at session's half, as the fallout from President Trump's travel ban on individuals from a handful of countries in the Middle East unnerved investors. Travel-related stocks led the broader market lower, taking the brunt of today's selling pressure -- airline stocks were facing deep losses, followed by lower share prices for hotels, cruise operators, even spilling into on-line travel companies like Priceline (PCLN), Tripadvisor (TRIP) and Expedia (EXPE).

The negative effect of the travel ban overshadowed bullish economic data released earlier. Personal income rose 0.3% in December, missing estimates for an increase of 0.4%, but follows an upward revised 0.1% in November from 0.0%.

Consumption spending was up 0.5% last month versus the estimated 0.4%.

Pending home sales spiked 1.6% in December, more than offsetting a 2.5% decline the month prior. While the Dallas Fed manufacturing index jumped to 22.0 from 17.7 in December.

Power Play: Technology

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 0.7%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1% and Semiconductor Sector Index Fund (SOXX) was down 0.9%.

Fitbit (FIT) fell 15.7% to a new record low after it said it expects to report 6.5 million devices sold in Q4 and revenue to be in the range of $572 million to $580 million, compared to previously announced guidance range of $725 million to $750 million, and well below the $732.8 million consensus provided by Capital IQ. For FY16, Fitbit expects annual revenue growth to be approximately 17% from the previous forecasted growth rate of 25% to 26%. Non-GAAP diluted net loss per share for Q4 is expected to be in the range of $0.51 to $0.56 compared to the previously announced guidance range of non-GAAP diluted net income of $0.14 to $0.18 per share. Analysts are expecting Q4 adjusted profit of $0.17 a share.

For 2017, the company expects a "challenging year over year comparison in the first half of 2017 given that new product introductions represented 52% of revenue in the first half of 2016. As a result, Fitbit expects preliminary 2017 revenue guidance of $1.5 billion to $1.7 billion and preliminary non-GAAP basic net loss of $0.22 to $0.44 per share. This is significantly below Wall Street estimates of $2.38 billion in revenue and a profit of $0.64 per share. Additionally, the company said it will cut 6% of its workforce, or approximately 110 employees, incurring a "reorganization cost" of $4 million in Q1.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was down 1.3%. Direxion Daily Financial Bull 3X shares (FAS) was down 3.1%, while its bearish counterpart, FAZ, was up 3.2%.

Aspen Insurance Holdings (AHL) was down 3% after saying it restructured its ceded reinsurance arrangements and purchased some run-off reinsurance in Q4. As a result of these actions, together with loss activity in lines that are being exited or re-positioned, Aspen Insurance is expected to record an underwriting loss of approximately $30 million in Q4. It also said the Reinsurance segment is expected to record underwriting income of approximately $10 million in Q4. Results for the quarter reflect an increase of approximately $15 million in catastrophe losses, and an increase of approximately $25 million in energy and property-related losses compared with the year-ago period, and one-time commission-related adjustments of approximately $10 million in Q4. In total, it said the group expects a loss ratio of approximately 63% and an expense ratio of approximately 44% in Q4. It expects to record a diluted book value per share of approximately $46.70 as at December 31, 2016.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 2.1% and Energy Select Sector SPDR (XLE) was down 2.1%.

Broadwind Energy (BWEN) was down 2.2% after the provider of advanced products and services for energy, mining and infrastructure applications said it reached an agreement to acquire North Carolina-based Red Wolf Company, a fabricator, kitter and assembler of industrial systems supporting the gas turbine market. The transaction is expected to close on Feb. 1, subject to the execution of definitive agreements.

Commodities

Crude was down 0.9%. United States Oil Fund (USO) was down 1%. Natural gas was down 3.5% while United States Natural Gas Fund (UNG) was down 3.9%.

Gold was up 0.6%. SPDR Gold Trust (GLD) was up 0.5%. Silver was down 0.1% while iShares Silver Trust (SLV) was up 0.1%.

Consumer

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

Likewise, 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.

Rite Aid (RAD) was down 16.6% after the company's deal to be acquired by Walgreens Boots Alliance (WBA) was amended to include a sharply lower price per share than previously agreed upon. Walgreens will now pay minimum $6.50 and maximum $7 per share for Rite Aid, down from the $9 per share original price agreed upon in October 2015. WBA shares were down 0.3%.

Health Care

Health care funds were lower, in step with the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were weaker. Meanwhile, Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 1.2%.

Eyegate Pharmaceuticals (EYEG) was up 12.9% after the company said 75% of subjects in pilot trial of its ocular bandage gel achieved complete wound closure by day three, compared to 53.8% of patients that received the standard of care. EyeGate OBG coats the ocular surface with little to no optical blur and can resist degradation under conditions that are present in the eye.

"The positive results from this pilot study of Eyegate OBG reinforces our belief in the product's potential as a viable option for the treatment of corneal epithelial defects," Chief Medical Officer Barbara Wirostko said. "We are highly encouraged by the data and remain committed to further exploring EyeGate OBG in future clinical trials."

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 MTNewswires.com. 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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