Active broad-market exchange-traded funds in Tuesday’s regular session:
SPDR Select Sector Fund – Financial ( XLF ): -0.5%
iPath S&P 500 VIX Short Term Futures ETN ( VXX ): +0.3%
SPDR S&P 500 ( SPY ): -0.01%
iShares Russell 2000 ETF ( IWM ): -0.8%
iShares MSCI Emerging Index Fund ( EEM ): -0.4%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.1%, touching a new 52-week high.
U.S. stocks drifted lower at session’s half, pulling back from record highs, as lower crude oil prices weighed on the broader market and particularly on the energy sector.
In economic data news, personal income and consumer spending both rose 0.4% in April, in line with estimates. PCE price index posted a 0.2% gain for the month, also meeting estimates. The May consumer confidence index declined to 117.9 from 120.3, missing estimates for 119.
Power Play: Financial
Select Financial Sector SPDRs ( XLF ) was down 0.5%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.3%, while its bearish counterpart, FAZ, was up 1.3%.
Walter Investment Management (WAC) tumbled 22% after the company warned late Friday in a regulatory filing some of its financial statements should’t be relied upon. It said there was an accounting error for the valuation allowance on deferred tax asset balances, and expects necessary adjustments to be material. It will have to restate its financial reports and seek appropriate amendments, waivers and/or forbearances to various credit and financing arrangements.
Winners and Losers
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 down 0.3%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.8%; Semiconductor Sector Index Fund (SOXX) was up 0.8%.
TiVo (TIVO) was up 10% after the media and entertainment company disclosed in a filing with U.S. regulators that it has received a final initial determination on its case pending in the International Trade Commission against various respondents, including Comcast Corp. (CMCSA) which found that a violation has occurred with respect to the company’s U.S. patent numbers 8,006,263 and 8,578,413. The ITC judge found no violation with respect to the other four patents asserted by the company in the case.
Dow Jones U.S. Energy Fund (IYE) was down 0.9% and Energy Select Sector SPDR (XLE) was down 1%.
Ensco plc (ESV) said that it has agreed to buy offshore driller Atwood Oceanics (ATW) for $ 10.72 per share in an all stock deal, a 33% premium to the closing price on May 26. The deal is based on Ensco’s closing share price on that day. Upon close of the deal , Ensco shareholders will own approximately 69% of the combined company while Atwood shareholders will own the rest. Ensco said it expects to realize tax expense synergies of approximately $ 65 million for full year 2019 and beyond. Cost synergies are expected to be more than $ 45 million in 2018. The combination is expected to be accretive on a discounted cash flow basis. ESV shares were down 4.1% and ATW shares were up 25.1%.
Crude was up 1.5%. United States Oil Fund (USO) was down 0.8%. Natural gas was down 0.3% while United States Natural Gas Fund (UNG) was down 4.6%.
Gold was up 0.8%. SPDR Gold Trust (GLD) was down 0.4%. Silver was up 0.5% while iShares Silver Trust (SLV) was up 0.4%.
Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were lower. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 1.1%.
MannKind Corp. (MNKD) shares were up 11.2% after the biopharmaceutical company said that its board appointed Michael Castagna as its new CEO, effective May 25. Castagna will succeed Matthew Pfeffer who served as both CEO and CFO since January 2016 and as CFO from 2008 to 2016. Castagna was also appointed to the company’s board. The company also said its principal accounting officer Rose Alinaya will serve as acting CFO until a permanent CFO is named.
Consumer Staples Select Sector SPDR (XLP) and other consumer staples funds Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were weaker.
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 in negative territory.
Sprouts Farmers Market (SFM) and Whole Foods (WFM) were each lower after the NY Post said a possible buyout of either firm by Albertsons is off the table. Sprouts shares have risen sharply after whiff of a possible buyout emerged in March, making it too expensive, the NY Post said. Meanwhile, Whole Foods has not been a willing seller, the story said, citing sources. Target (TGT) also reportedly approached Sprouts last year but any deal in the near term is seen as unlikely now, the report said.
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