Active broad-market exchange-traded funds in Wednesday's regular session:
iShares MSCI Emerging Index Fund ( EEM ): +0.2%
SPDR S&P 500 ( SPY ): +0.2%
SPDR Select Sector Fund - Financial ( XLF ): +0.2%
Invesco QQQ Trust, Series 1 ( QQQ ): -0.3%
iShares Inc iShares MSCI Brazil ETF ( EWZ ): -0.3%
Broad Market Indicators
Broad-market exchange-traded funds, including IWM and IVV edged lower. Actively traded PowerShares QQQ ( QQQ ) was down 0.3%.
U.S. stocks were mixed at session's half, with Dow Jones Industrial Average slipping into negative territory while the S&P 500 and the Nasdaq struggled to maintain gains.
Wall Street is bracing for the outcome of the Federal Open Market Committee meeting this afternoon and for clues as to how the Fed interprets recent inflation and labor market data. Equities also struggled to stay positive after the historic meeting between the U.S. and North Korea failed to produce any enforceable objectives towards de-nuclearization of the Korean peninsula.
May inflation data provided the Fed with ammunition to maintain a path to interest rate normalization. Consumer prices increased 0.2% in May for both the nominal and core, driving up the year-over-year headline index to 2.8%, its highest since October 2011. The core index was pushed up to 2.1%, a 16-month high.
Power Play: Consumer
Consumer Staples Select Sector SPDR (XLP) was down 0.1% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were weaker.
Consumer Discretionary Select Sector SPDR (XLY) was up 0.6% and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were in negative territory.
H&R Block (HRB) fell nearly 19% a day after the company beat Street projections on fiscal Q4 earnings while saying on its earnings conference call it will close 400 offices and issuing downside revenue guidance for FY19. CFO Tony Bowen said most of the office closures are expected in Q2 and the company will take a charge on the buyout of the remaining lease liability. The company estimates the charge will fall in the range of $15 million to $20 million for fiscal 2019. The company added in the conference call that it expects FY19 revenues of $3.05 billion to $3.1 billion, below the $3.14 billion mean estimate of analysts polled by Capital IQ, which has been updated to $3.08 billion on Wednesday.
Late Tuesday, it reported fiscal Q4 earnings from continuing operations of $5.43 per share, compared with the prior-year period's $3.76 per share. Analysts polled by Capital IQ were expecting EPS of $5.27. Revenue was $2.39 billion, up from $2.33 billion in the same quarter last year. The Street view was for revenue of $2.34 billion. The company also said that its board of directors has approved an increase in its quarterly dividend of 4%, to $0.25 per share, and declared a quarterly cash dividend of $0.25 per share payable on July 2, to shareholders of record as of June 22.
Winners and Losers
The Select Financial Sector SPDRs ( XLF ) was down 0.2%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.6% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 0.6%.
Mackinac Financial (MFNC) jumped more than 6% after the company said it priced 1,935,484 shares at $15.50 each in an underwritten public offering. Mackinac has granted the underwriters an option, exercisable in whole or in part for 30 days, to purchase up to an additional 290,323 shares. Mackinac expects to close the offering, subject to customary conditions, on or about June 15.
Dow Jones U.S. Energy Fund (IYE) was down 0.2% and Energy Select Sector SPDR (XLE) was down 0.2%.
DCP Midstream (DCP) rose nearly 3% after the firm said it has secured an option to acquire up to a 30% ownership interest in two,150,000 barrel per day natural gas liquid (NGL) fractionators. The fractionators will be constructed within Phillip 66's (PSX) Sweeny Hub in Old Ocean, Texas. DCP's option is exercisable at the in-service date of the fractionators, which is expected to be in late 2020, with a capital investment of approximately $400 million. Additionally, DCP has committed to supply agreement
Technology Select Sector SPDR ETF (XLK) was up 0.3% while other tech funds iShares Dow Jones U.S. Technology ETF (IYW), iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were firmer.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.8% and Semiconductor Sector Index Fund (SOXX) was up 0.8%.
Microsoft (MSFT) is revamping its Office applications, which the company said is the world's most-used productivity product, after it gathered feedback from users to guide design changes that it's touting as a "balance of power and simplicity." Business and consumer customers will start getting the refreshed design of the software beginning from Wednesday, Redmond, Washington-based Microsoft said. The technology giant also said it's conducted a survey within the product to "ascertain how features make people feel." MSFT shares rose 0.2%.
Crude was up 0.5%. United States Oil Fund (USO) was up 0.6%. Natural gas was down 0.7% while United States Natural Gas Fund (UNG) was down 0.6%.
Gold was down 0.2%. SPDR Gold Trust (GLD) was down 0.3%. Silver was up 0.2%, while iShares Silver Trust (SLV) was down 0.2%.
Health Care SPDR (XLV) was up 0.5% and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were higher. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.6%.
Pulmatrix (PULM) rose nearly 10% after the biopharmaceutical company reported data from a phase 1 study, which demonstrated that PUR0200 achieved similar improvements in lung function to Spiriva Handihaler at significantly lower doses in patients with chronic obstructive pulmonary disease. "PUR0200 treatment at all doses resulted in a statistically significant increase in FEV1 compared to placebo and caused similar bronchodilation compared to Spiriva HandiHaler," the company said in a statement.
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