Mid-Day ETF Update: ETFs, Stocks Higher as Wall Street Shrugs Off Mixed Economic Data, Focuses on Fed Meeting

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

SPDR Select Sector Fund – Financial ( XLF ): +0.7%

iShares MSCI Emerging Index Fund ( EEM ): -0.1%

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

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.3%

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): -0.02%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV inched higher. Actively traded PowerShares QQQ ( QQQ ) was up 0.3%.

U.S. stocks were in the positive territory at session’s half as investors shifted their focus on the likelihood that the Federal Reserve will not veer from its policy mandate of gradual rate hikes. The Fed’s Federal Open Market Committee starts its two-day meeting this today, and will conclude it with a press conference by Fed Chair Janet Yellen on Wednesday.

Economic data were mixed. New homes under construction fell by 0.8% in August to a seasonally-adjusted annual rate (SAAR) of 1.180 million from an upwardly revised SAAR of 1.190 million, but beating the estimated 1.173 million. Permits, however, were up 5.7% to a SAAR 1.300 million from an upward revised 1.230 million in July.

Meanwhile, import and export prices were both higher by 0.6% last month, the strongest monthly gain in 14 months, better than expectations for a gain of 0.4% and 0.2%, respectively.

Power Play: Consumer

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

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.

Best Buy Co (BBY) fell more than 8% after it set new financial targets for fiscal year 2021. It expects $43 billion in enterprise revenue, $1.9 billion to $2 billion of non-GAAP operating income, and $4.75 to $5 of non-GAAP earnings per share, compared to FY17 enterprise revenue of $39.4 billion and operating income of $1.7 billion. Two analysts polled by Capital IQ are expecting FY21 adjusted EPS of $4.96 per share.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.7%. Direxion Daily Financial Bull 3X shares (FAS) was up 1.3% and its bearish counterpart, FAZ, was down 1.3%.

Bank of Nova Scotia (BNS) was up 0.5% after it sold $1 billion aggregate principal amount of its 2.45% senior notes due 2022 and $4 billion aggregate principal amount of its floating rate senior notes due 2022, according to a Securities and Exchange Commission filing.

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 0.2% while Semiconductor Sector Index Fund (SOXX) was up 0.5%.

Synchronoss Technologies (SNCR) fell 39% to the lowest level since early 2009 after Siris Capital Group said in a regulatory filing it is no longer interested in pursuing an all-cash acquisition of the provider of mobile cloud innovation for mobile carriers but noted it is prepared to consider other forms of a potential transaction. In response, Synchronoss Technologies said Tuesday it remains in active discussions with Siris Capital Group and other interested parties regarding a range of potential strategic transactions. The company said it is “committed to enhancing value” for all shareholders and continues to explore a full range of strategic, operational and financial alternatives, which may include a sale of the company or other transactions. Synchronoss said it will “carefully consider all options” and make a decision that reflects the best interest of all shareholders, although it noted there can be no assurance as to whether or not any transaction will take place, the structure of such a transaction, or the ultimate timing.

Energy

Dow Jones U.S. Energy Fund (IYE) was up 0.3% and Energy Select Sector SPDR (XLE) was up 0.1%.

Rex Energy (REXX) rose 3% after the company said it remains on target to meet its Q3 production guidance of 171.0 to 181.0 million cubic feet equivalent (MMcfe/d) and its full-year 2017 exit rate production growth rate guidance of 15% to 20%.

Commodities

Crude was down 0.7%. United States Oil Fund (USO) was down 0.9%. Natural gas was down 0.2% while United States Natural Gas Fund (UNG) was up 0.4%.

Gold was down 0.02%. SPDR Gold Trust (GLD) was down 0.2%. Silver was up 0.7%, while iShares Silver Trust (SLV) was down 0.1%.

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 0.3%.

Envision Healthcare Holdings (EVHC) was down more than 9.2% after it said late Monday that it authorized a program to repurchase up to $250 million of its common stock. The share repurchase program authorized by the company’s board permits Envision to acquire up to $250 million of its common stock, which represents approximately 4% of the company’s current market capitalization.


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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