ETF Preview: ETFs, Futures Lower After Mortgage Applications Fall Sharply

Broad market exchange-traded fund SPDR S&P 500 ETF Trust SPY slid 0.8% in premarket activity Wednesday, and the actively traded Invesco QQQ Trust Series QQQ shed 1.1%.

US stock futures were also losing ground, with the S&P 500 0.7% lower ahead of the start of trading.

Traders will be looking at mortgage applications, which fell by 11% in the week ended May 13 following a 2% increase in overall activity in the week before, data from the Mortgage Bankers Association showed.

US housing starts for April came in at an 1.724 million annual rate compared with a prior revised reading of 1.728 million, while the building permits annual rate was 1.819 million versus a prior figure of 1.873 million.

The Energy Information Administration's weekly report on US petroleum inventories is scheduled for a 10:30 am ET release, and Federal Reserve Bank of Philadelphia President Patrick Harker is due to speak at 4 pm ET.

In premarket action, bitcoin was below $30,000 after falling about 0.8%, while cryptocurrency fund ProShares Bitcoin Strategy ETF BITO declined 0.6%.

Power Play: Consumer

Consumer Staples Select Sector SPDR XLP ticked 0.9% lower, while Vanguard Consumer Staples ETF VDC was down 0.6% and iShares Dow Jones US Consumer Goods IYK was flat.

Consumer Discretionary Select Sector SPDR XLY was 2.5% lower; among retail funds, Market Vectors Retail ETF RTH fell about 1.7% and SPDR S&P Retail XRT shed 4.6%.

Target TGT was falling more than 23% after the department store chain reported Q1 adjusted earnings of $2.19 per diluted share, down from $3.69 a year earlier and below the $3.06 consensus estimate of analysts polled by Yahoo! Finance.

Winners and Losers

Financials

Select Financial Sector SPDR XLF was dropping 0.5%. Direxion Daily Financial Bull 3X Shares FAS was down 1.8%, while its bearish counterpart Direxion Daily Financial Bear 3X Shares FAZ gained 1.9%.

DLocal DLO late Tuesday reported Q1 net income of $0.08 per share, up from $0.06 a year earlier, as revenue more than doubled to $87.5 million, exceeding the Capital IQ-compiled analyst consensus of $82.6 million. The company's shares were more than 10% higher.

Energy

Dow Jones US Energy Fund IYE was climbing nearly 0.4% while the Energy Select Sector SPDR ETF XLE gained almost 0.8% in premarket activity.

Borr Drilling BORR jumped 6% after saying it has secured a binding letter of award from an unnamed operator in Southeast Asia to provide a jack-up rig for use in a drilling program that is due to start in Q4.

Commodities

Front-month US West Texas Intermediate crude oil was about 2.5% higher, and natural gas was up 1.1%. United States Oil Fund USO was gaining more than 2%, and the United States Natural Gas Fund UNG rose almost 1.7%.

Gold and silver were both down by about 0.6%; SPDR Gold Trust GLD declined 0.3% while iShares Silver Trust SLV edged 0.2% higher.

Technology

Technology Select Sector SPDR ETF XLK was down nearly 1% and iShares Dow Jones US Technology ETF IYW was almost 0.2% lower. The iShares S&P North American Technology ETF IGM was inactive.

Among semiconductor ETFs, SPDR S&P Semiconductor XSD slid 2.7% and the Semiconductor Sector Index Fund SOXX shed 1%.

Agilysys AGYS was up about 9.5% after it reported fiscal Q4 adjusted diluted earnings late Tuesday of $0.24, up from $0.21 a year earlier. Analysts polled by Capital IQ expected $0.17.

Health Care

The Health Care SPDR XLV fell around 0.4% and iShares Dow Jones US Healthcare IYH was flat. The Vanguard Health Care ETF VHT was inactive and iShares Biotechnology ETF IBB was 0.9% lower.

Tonix Pharmaceuticals Holding TNXP added 2.3% after it extended a research collaboration with the University of Alberta to develop antiviral drugs against future variants of the coronavirus and other emerging viruses.

Industrial

Select Sector SPDR-Industrial XLI was almost 0.7% lower, while iShares US Industrials IYJ and the Vanguard Industrials Index Fund VIS were both inactive.

Terran Orbital LLAP was unchanged after saying its PredaSAR subsidiary won a contract from the Defense Advanced Research Projects Agency to "research synthetic aperture radar satellite formation flying concepts and joint data collection techniques."