Mid-Day ETF Update: ETFs, Stocks Higher as Mixed Economic Data Remains In Focus, Offsetting Geopolitical Risks

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

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

SPDR Select Sector Fund – Financial ( XLF ): -0.01%

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.4%

iShares MSCI Emerging Index Fund ( EEM ): +0.3%

VanEck Vectors Gold Miners ETF ( GDX ): -0.6%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ ( QQQ ) was down 0.4%.

U.S. stocks extended their gains into the session’s half with the Dow, S&P 500 and Nasdaq Composite all setting record highs as Wall Street overlooked another provocative missile test from North Korea and terrorist attack in a London subway station, focusing instead on downbeat U.S. economic data that could preclude another interest rate hike.

Retail sales were down 0.2% last month, missing estimates for a slight gain, while sales excluding autos and gas fell 0.1% versus +0.3% expectations. Excluding auto sales only, retail sales were up 0.2%, but this was well below +0.5% estimates.

Industrial production, meanwhile, fell a 0.9%, the biggest monthly drop since May 2009, and significantly below estimates for a 0.1% increase. As a result, capacity utilization dropped to 76.1% from July’s 76.9%.

Accordingly, consumer sentiment deteriorated as measured by the Univ of Michigan. The preliminary September index dropped to 95.3 from 96.8 in August.

And, the Empire State manufacturing index dropped to 24.4 from 25.2 in August, but business inventories and sales were both up by 0.2%.

Power Play: Health Care

Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH), were lower. Meanwhile, Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 0.1%.

Mirati Therapeutics (MRTX) rose more than 145% after the clinical-stage biopharmaceutical company reported positive preliminary data from two ongoing studies on non-small cell lung cancer treatment. The company said in a statement after market close on Thursday that an ongoing phase 2 trial of sitravatinib in combination with nivolumab in non-small cell lung cancer patients demonstrated confirmed some partial responses in evaluable patients.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.1%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.3% and its bearish counterpart, FAZ, was up 0.4%.

Melrose Bancorp (MELR) fell 6% although the bank holding company late Thursday authorized an expansion of its stock buyback program by up to 130,037 additional shares, or about 5% of its current outstanding stock.

Technology

Tech funds 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 higher. SPDR S&P International Technology Sector ETF (IPK) was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 2% while Semiconductor Sector Index Fund (SOXX) was up 1.7%.

Alphabet (GOOG, GOOGL) shares fell marginally after Bloomberg reported that the tech giant is considering a $1 billion investment in ride-share startup Lyft, as Alphabet’s relationship with Uber shows signs of strain. The investment could come directly from Alphabet or through its private equity arm, CapitalG. The investment, however, could further complicate the relationship between Alphabet and Uber. Alphabet is a shareholder in Uber, but its Waymo unit is currently suing the ride-share company, alleging that former Google employee Anthony Levandowski stole more than 14,000 documents while working on Google’s self-driving technology. Levandowski went on to found Otto, later acquired by Uber.

Energy

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

Resolute Energy (REN) was up 9% after the company said late Thursday it has entered into a definitive agreement to sell its subsidiary that holds interest in Aneth Field in the Paradox Basin of southeastern Utah to an affiliate of Sydney-listed Elk Petroleum for $160 million upfront cash, and up to $35 million of contingency payments. The company expects the deal to reduce 2017 production by approximately 1,000 barrels of oil equivalent per day. The transaction is expected to close in late October.

Commodities

Crude was down 0.4%. United States Oil Fund (USO) was up 0.4%. Natural gas was down 1.4% while United States Natural Gas Fund (UNG) was down 1.6%.

Gold was down 0.3%. SPDR Gold Trust (GLD) was down 0.3%. Silver was down 0.6%, while iShares Silver 6Trust (SLV) was down 0.4%.

Consumer

Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were higher.

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

Fiesta Restaurant Group (FRGI) rose nearly 8% after the company said of the 43 Taco Cabana stores that were closed as a result of Hurricane Harvey, all but one have reopened. The chain lost a combined 319 days of operation in the aftermath of the storm. The company is still assessing damage to its Pollo Tropical restaurants, but does not anticipate any significant damage to its restaurants impacted by Hurricane Irma. Of the 149 restaurants in the state of Florida and Atlanta, Georgia area, 119 have reopened, including 70 of the 88 restaurants in its core south Florida markets. Pollo Tropical lost a combined 719 operating days as a result of Hurricane Irma through Sept 14. Six additional Pollo Tropical restaurants have been permanently closed; four in San Antonio and two in south Texas that were not reopened after Hurricane Harvey. Up to two of the closed south Texas locations may be rebranded as Taco Cabana.


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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