Active broad-market exchange-traded funds ahead of Friday's regular session:
SPDR S&P 500 ( SPY ): -0.4%
iShares MSCI Emerging Index Fund ( EEM ): -0.8%
ProShares UltraPro Short QQQ ( SQQQ ): +1.7%
iShares iBoxx $ High Yield Corporate Bond ETF ( HYG ): -0.2%
VanEck Vectors Gold Miners ETF ( GDX ): +0.2%
Broad Market Indicators
Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ (QQQ) was down 0.5%.
US stock futures were in negative territory ahead of the opening bell as Wall Street is scrutinizing more closely the positive response from China after common trade discussions with the US.
On the economic front, the Labor Department's Consumer Price Index for December showed a decline of 0.1% -- marking the first decline in nine months The consensus was for a decline of 0.1%, while it remained unchanged in November. The yearly increase in core CPI remained unchanged at 2.2%, slightly above the Fed's target.
Power Play: Industrial
Select Sector SPDR-Industrial (XLI) and other industrial funds iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ) and Vanguard Industrials (VIS) were inactive.
Flotek Industries (FTK) shares jumped some 105% as the oil and gas technology company said it has agreed to sell citrus flavor specialist Florida Chemical Company to Archer Daniels Midland (ADM) for $175 million in cash. Flotek and ADM have entered into long-term reciprocal supply agreements in connection with the deal. The companies expect the acquisition to close in Q1. Flotek expects the transaction to have a negligible cash tax effect, as the gain on the sale should be substantially offset by its operating losses. It plans to use proceeds to pay off its credit facility balance of about $50 million and is also considering investing $20 million to $30 million in previously-identified growth capital projects. Flotek plans to establish a strategic capital committee to advise the board on the use of proceeds.
Winners and Losers
The Select Financial Sector SPDRs (XLF) was inactive. Direxion Daily Financial Bull 3X shares (FAS) was up 0.3% and its bearish counterpart Direxion Daily Financial Bear 3X Shares (FAZ) was down 0.3% in pre-market trade.
Deutsche Bank (DB) was down more than 1% after it substantially trimmed costs in 2018 as the German lender resumes its restructuring efforts, Reuters reported. "We have our costs under control," James von Moltke, the bank's chief financial officer, told participants at a New Year's reception. Bloomberg News had earlier reported that the bank is outsourcing 60 accounting jobs from its Jacksonville, Fla., office to Mumbai, India. The report also said the Frankfurt-based lender is planning to move more jobs from its US operations to India this year.
Technology Select Sector SPDR ETF (XLK) and other tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were inactive.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were flat.
Activision Blizzard (ATVI) fell some 9% after the company said on Thursday it does not expect to recognize material revenue, operating income or operating loss from the Destiny franchise in 2019, as it transfers Destiny to game developer Bungie, which will assume full publishing rights and responsibilities for the franchise. "Going forward, Bungie will own and develop the franchise," the company said. Destiny was developed by Bungie and published by Activision as part of a ten-year deal between the two companies.
Dow Jones US Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was down 0.2% in pre-market trade.
Pacific Gas & Electric Co (PCG) dropped 7% after Moody's downgraded Pacific Gas & Electric Company ratings. Ratings cuts include the company's senior unsecured rating to Ba3 from Baa2 and its short term rating for commercial paper to Not Prime from Prime-2. Moody's also downgraded PG&E's holding company, PG&E Corporation (PCG or parent), including its senior unsecured rating to B2 from Baa3 and its short term rating for commercial paper to Not Prime from Prime-3. The ratings agency assigned a Ba3 Corporate Family Rating (CFR), a B1-PD Probability of Default rating and an SGL-3 Speculative Grade Liquidity Rating. Ratings of PCG and PG&E remain on review for downgrade.
Crude was down 1.2%. United States Oil Fund (USO) was down 0.5%. Natural gas was up 1.8% while the United States Natural Gas Fund (UNG) was up 2.2%.
Gold was up 0.5%. SPDR Gold Trust (GLD) was up 0.5%. Silver was up 0.6%, while iShares Silver Trust (SLV) was up 0.8%.
Consumer Staples Select Sector SPDR (XLP) and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were inactive.
Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were also quiet in pre-market trade.
PVH (PVH) rose nearly 5% even as the company said late Thursday it is restructuring its Calvin Klein business and expects $120 million pre-tax costs over the next 12 months, as it updates its key guidance, excluding the restructuring exercise. It now expects Q4 revenue and full year 2018 to be at least $2.40 billion and $9.57 billion, respectively, and adjusted EPS to be at least $1.75 for Q4 and at least $9.50 for the full-year 2018. The Street view is for EPS of $1.60 on revenue of $2.4 billion for Q4, and for EPS of $9.36 on revenue of $9.56 billion for the year. The company said it is relaunching the CALVIN KLEIN 205W39NYC business under a new name, design approach and creative direction, and has adopted a digital approach and introduced "Consumer Marketing Organization."
Health Care SPDR (XLV) was up 0.3% and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were flat in pre-market trade. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.1%.
Puma Biotechnology (PBYI) was up 1% after it said it entered into an exclusive license agreement with Knight Therapeutics granting the latter exclusive rights to commercialize Nerlynx in Canada. Puma Biotechnology filed a new drug submission in July for Nerlynx with Health Canada for the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy. Under the terms of the licensing deal, Knight will be responsible for all commercial activities and future regulatory submissions for Nerlynx in Canada. Puma will receive upfront and milestone payments of up to $7.2 million throughout the term of the agreement, as well as double-digit royalties on net sales of Nerlynx in Canada. Neratinib was approved by the Food and Drug Administration in July 2017 and is marketed in the US as Nerlynx tablets.
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