ETF Preview: Broad Market ETFs Drop Pre-Market, Oil and Gas Bear Funds Outperform (NYSEARCA:SPY)

Pre-Market Movers Tuesday: GASX +14% RUSS +8.3% TVIX +4.1% RUSL -4.4% XIV -1.9% Broad Market Indicators Broad-market exchange-traded funds, including SPY, IWM and IVV were lower pre-market after a weaker close Monday. Actively-traded PowerShares QQQ (QQQ) was down 0.6%. Bear market funds, especially those focused on the oil and gas market, were among the best performers. Direxion Daily Nat Gas Rltd Bear 3X ETF (GASX) jumped 15%, while ProShares Short Oil & Gas (DDG) jumped 7%. U.S. stock futures are pointing to another weaker session as sharp falls in Asia and Europe set the tone for U.S. trading. Concern over the global growth outlook, coupled with continuing weakness in oil prices, triggered a major sell off in banking and financial stocks. Shares in some Italian banks were suspended from trading after steep declines. In the US, economic data due Tuesday includes the December wholesale inventories at 10 a.m. ET, which are expected to fall 0.1% after declining 0.3% in November. Power Play: Energy Dow Jones U.S. Energy Fund (IYE) was inactive and Energy Select Sector SPDR (XLE) was 1.3%. WPX Energy (WPX) said it has agreed to sell its subsidiary WPX Energy Rocky Mountain to Terra Energy Partners for $910 million. In addition, Terra is assuming approximately $100 million in transportation obligations in exchange for more than $90 million of WPX’s natural gas hedge value. WPX will retain more than $110 million in additional hedge gains, which will be realized throughout the year.

Winners and Losers Financial Select Financial Sector SPDRs (XLF) was down 1.1%. Direxion Daily Financial Bull 3X shares (FAS) was down 2.8%; Direxion Daily Financial Bear 3X Shares (FAZ) rose 2.5%. Liberty Property Trust (LPT), a real estate company, reported Q4 results that topped the Street view on funds from operations and total revenues. The company reported Q4 funds from operations of $97.9 million, or $0.65 per share, down from $102.5 million, or $0.67 per share, in the prior year period but topping analyst estimates of $0.64. On a GAAP basis the company reported Q4 net income of $82.4 million, or $0.54 per share, down from $84.5 million, or $0.55 per share, for Q4 2014. Total revenues of $199.4 million were down from $203.7 million in Q4 2014 but exceeded analyst projections of $197.9 million. Technology Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) are all inactive. iShares S&P North American Technology-Software Index (IGV) were down 1%, while SPDR S&P International Technology Sector ETF (IPK) was also flat after a sharply lower close. Semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were inactive after a weaker close. Vishay Intertechnology (VSH), a manufacturer of discrete semiconductors and passive components, posted mixed Q4 results, with lower earnings that beat expectations on revenue that was in line. The net loss attributable to Vishay stockholders was $137.8 million, or $0.93 per share, compared to net earnings of $29.2 million, or $0.19 per diluted share for the fiscal quarter ended December 31, 2014. Adjusted earnings were $0.14, down from $0.19 a year earlier, but topping estimates for $0.12. Commodities Crude was flat at $29.69 a barrel. United States Oil Fund (USO) fell 0.7%. Natural gas was down 1.7%.

United States Natural Gas Fund (UNG) dropped 1.5%. Gold was edging lower and SPDR Gold Trust (GLD) rose 0.6%. Silver also had a weaker bias and iShares Silver Trust (SLV) increased 0.5%. Health Care Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were flat. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 1.9%. ADRs of Sanofi (SNY) were slipping pre-market Tuesday after the Paris-based drugmaker reported better-than-expected Q4 adjusted profits on higher revenues that missed consensus forecasts and guided for flat FY16 EPS versus FY15. Q4 adjusted EPS fell to EUR 1.31 a share from EUR 1.39 a share in the year-ago period, yet beat the EUR 1.24 per share mean estimate compiled by Capital IQ. On a reported basis, net income attributable to shareholders fell sharply to EUR 334 million or EUR 0.26 per share from EUR 1.34 billion or EUR 1.02 per share a year earlier. Revenues increased 2.3% year-over-year to EUR 9.28 billion, but fell short of the EUR 9.44 billion consensus. Consumer Consumer Staples Select Sector SPDR (XLP) was edging higher, iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were flat. Consumer Discretionary Select Sector SPDR (XLY) was flat, SPDR S&P Retail (XRT) was edging higher, PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were unchanged after a lower close. Motorcar Parts of America (MPAA), a manufacturer of aftermarket automotive parts, reported Tuesday its financial results for Q3 2016 that topped analyst estimates. Net income for the quarter was $7.7 million, or $0.41 per share; up from $2.9 million, or $0.16 per share in Q3 2015. On an adjusted basis, net income for the quarter was $0.52 per share, up from $0.43 per share in the prior year period and higher than the $0.51 per share Street estimate provided by Capital IQ. Net sales were $94 million, up from $84 million reported for the same period last year and higher than the $92 million Street estimate. Active broad-market exchange-traded funds in Monday’s regular session: SPDR S&P 500 (NYSEARCA:SPY): -2% VIX Short-Term Futures ETN Ipath (VXX): +6.4% PowerShares QQQ Trust, Series 1 (QQQ): -2.4% Market Vectors Gold Miners ETF (GDX): 4.5% SPDR Select Sector Fund – Financial (XLF): -2.9%

The ETF is down 0.30% or $0.56 after the news, hitting $184.79 per share. SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has declined 10.30% since July 6, 2015 and is downtrending. It has outperformed by 0.10% the S&P500.

SPDR S&P 500 ETF Trust is an exchange traded fund. The ETF has a market cap of $163.50 billion. The Trust corresponds to the price and yield performance of the S&P 500 Index. It currently has negative earnings. The S&P 500 Index is composed of 500 selected stocks and spans over 24 separate industry groups.

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