Mid-Day ETF Update: ETFs, Stocks Higher on Upbeat Earnings Despite Mixed Economic Data

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

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

United States Oil Fund ( USO ): -3%

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): -1.4%

SPDR S&P 500 ( SPY ): +0.2%

United States Natural Gas Fund LP ( UNG ): +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 were higher at session’s half, with the Dow Jones Industrial Average rallying for a sixth consecutive day, nearing the 22,000 benchmark while the Standard & Poor’s 500 and the Nasdaq Composite stemmed three-day slides.

Market sentiment brightened following strong earnings results — 73% of the S&P 500 companies that reported as of Monday topped Wall Street estimates on earnings, according to The Earnings Scout.

Economic data served as a modest drag on equity markets this morning as personal income growth was at its lowest since November while manufacturing slowed in July. Additionally, construction spending contracted by 1.3%.

Power Play: 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.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.3% while Semiconductor Sector Index Fund (SOXX) was up 0.3%.

Yirendai (YRD) was down 14.9% after it reported Q2 diluted net income of RMB4.45 ($0.66) per American depository share, down slightly from the RMB4.46 per ADS in the year ago quarter. Analysts polled by Capital IQ had expected earnings per ADS of $0.58. Total revenues were RMB1.18 billion ($174.5 million), up from RMB733.8 million reported for the same period last year and above the $153.8 million estimate. For Q3, the company expects adjusted EBITDA to range from RMB280 million to RMB320 million on revenues of RMB1.3 billion to RMB1.35 billion. For 2017, the company expects adjusted EBITDA to range from RMB1.3 billion to RMB1.4 billion on revenues of RMB4.8 billion to RMB5 billion.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.7%. Direxion Daily Financial Bull 3X shares (FAS) was up 1.7% and its bearish counterpart, FAZ, was down 1.8%.

Thomson Reuters Corp (TRI) was up 4.9% after it reported Q2 adjusted EPS of $0.60, up from $0.47 a year earlier, exceeding analysts’ estimate of $0.51 in a Capital IQ poll, prompting the company to raise its adjusted EPS target for 2017 to $2.40 – $2.45 from previous guidance of $2.35, which is above the Street’s $2.35 per share consensus. Revenues inched up to $2.78 billion from $2.77 billion a year ago, matching analysts’ expectations. Thomson Reuters added it expects low single-digit revenue growth for FY17. The company also said it would pay an unchanged quarterly dividend of $0.345 per share, payable on September 15, 2017 to common shareholders of record as of August 17, 2017.

Industrial

Industrial funds Select Sector SPDR-Industrial (XLI), Vanguard Industrials (VIS) and iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ) were lower.

Columbus McKinnon (CMCO) rose 19.7% to a new 52-week high after it reported Q1 2018 diluted EPS of $0.51, up from $0.32, and easily beating the Capital IQ consensus forecast of $0.32. Revenues for the quarter were $203.7 million, up from $149 million for the year-ago quarter, and ahead of the analyst forecast of $190.6 million.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 0.1% while Energy Select Sector SPDR (XLE) was down 0.2%.

U.S. Silica Holdings (SLCA) was down 9.4% after it reported Q2 EPS of $0.36, recovering from a loss of $0.19 per share a year earlier. Excluding an expense, earnings were $0.38 per share, still missing analysts’ estimate of EPS of $0.39 in a Capital IQ poll. The company noted that Q2 results were negatively hit by $1.5 million in business development related expenses, adding that excluding this expense, net of the $0.6 million tax effect, EPS was $0.38 per basic share for the quarter. Revenue rose to $290.5 million from $117.0 million a year ago, but also missing the $316.43 million estimate. The company is raising its guidance for capital expenditures for 2017 to the range of $325 million to $375 million from $125 million to $150 million previously.

Commodities

Crude was up 1.3%. United States Oil Fund ( USO ) was down 3.2%. Natural gas was down 0.8% while United States Natural Gas Fund ( UNG ) was down 0.1%.

Gold was up 0.7%. SPDR Gold Trust (GLD) was up 0.2%. Silver was up 0.8% while iShares Silver Trust (SLV) was down 0.3%.

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) and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were also modestly firmer.

Under Armour (UAA) was down 8.6% after the company said it would restructure to focus on return-on-investment and cost of capital which would result in pre-tax restructuring charges of $110 million to 130 million in fiscal 2017. The company now said it is expecting net revenues for the fiscal 2017 to grow 9% to 11%, down from the previous expectation of 11% to 12% growth, reflecting moderation in its North American business. Excluding the impact of the restructuring plan, FY adjusted diluted earnings per share is expected to reach $0.37-$0.40, the company said. That compared with market expectations of $0.42 for the year. In Q2, the net loss was $0.03 per share, narrowing from a $0.12 loss a year earlier for its class A and B stock, better than the $0.06 loss expected by analysts in a Capital IQ poll. Revenues increased to $1.09 billion from $1.0 billion a year ago, and were a touch higher than the $1.08 billion estimate.

Health Care

Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH), were in positive territory. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 1.4%.

CombiMatrix (CBMX) was down 39.6% after it said it has agreed to be bought by Invitae Corporation (NVTA) in an all-stock deal worth approximately $33 million. The deal is seen closing in Q4. Invitae also said it will buy Good Start Genetics through the issuance of up to approximately 1.65 million shares of Invitae common stock, the payment of approximately $18.3 million in cash consideration to eliminate Good Start’s outstanding secured debt, and the payment or assumption of approximately $6.0 million in Good Start pre-closing and closing-related liabilities and obligations. The proposed acquisition of Good Start is expected to close in the first part of August.


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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