Stock exchange traded funds were slightly higher Wednesday as Dell (NasdaqGS: DELL) lifted tech ETFs but weak results from Staples (NasdaqGS: SPLS) sparked concerns over the consumer sector. Investors remain cautious prior to the Federal Reserve’s assessment of the economy.
Dell shares rallied about 5% Wednesday following strong quarterly results. Wall Street analysts cheered the company’s gross margin but expressed concern over weak revenue. Brean Murray analysts boosted their target price on Dell shares to $19 “on the back of much stronger than anticipated gross margin,” according to a note. The stock “will likely trade up today but could soften through the day as revenue was softer in most areas … Looking forward, we expect the stock to remain somewhat volatile and could likely again be prone to bouts of trading a bit disconnected from ultimate results.”[Dell Revenue, Gross Margin Put Tech ETFs in Focus]
A 15% sell-off in Staples rained on the parade in retail ETFs, which have rallied this year. The office-supplies company reported lower-than-expected quarterly profit and cut its full-year view. “Our first-quarter results show that we’re making good progress on our key growth initiatives and we’re gaining share in North America, but at a cost to our bottom line,” said Ron Sargent, Staples’ chief executive. [Staples Pullback to Ring Up Retail ETFs]
Quarterly earnings Wednesday from Deere (NYSE: DE) were set to drive ETFs that invest in agribusiness and industrial stocks. ETFs such as the $4 billion Market Vectors Agribusiness (NYSEArca: MOO), which holds 8% in Deere, could see weakness after the quarterly report. Deere shares slipped about 1% before the bell Wednesday. Likewise, the $4 billion SPDR Industrial Select Sector Fund (NYSEArca: XLI) holds 2.9% in Deere. [Deere Earnings Drive Agribusiness and Industrial ETFs]