ETF Outlook For Wednesday, January 22, 2014 (DIA, IEZ, IAT, SMH)

ETF Outlook for Wednesday, January 22, 2014

SPDR Dow Jones Industrial Average ETF DIA

Software giant, and the second largest holding in DIA, IBM IBM is lower Wednesday morning after reporting earnings after the bell yesterday. The stock is lower after missing its revenue estimates due to slowing sales in China and the emerging markets.

With a weighting of 7.4 percent in the ETF, IBM will have an affect on the action of DIA today and in pre-market trading the ETF is down 0.3 percent. The top holding, Visa V, has been on a tear lately and if that continues it could help mitigate the losses of IBM.

iShares U.S. Oil Equipment & Services ETF IEZ

Three large oil & gas equipment stocks were in the news after the bell yesterday. Halliburton HAL beat estimates, Schlumberger SLB was upgraded by Credit Suisse, and Baker Hughes BHI also beat earnings expectations.

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The latter two stocks are down pre-market as HAL trades slightly above yesterday’s closing price. The shares of XES will be greatly affected by the movement in the three stocks as they make up 38 percent of the portfolio of IEZ. The ETF has been struggling lately, but as long as it holds the low hit this month the outlook remains positive for the sector.

iShares U.S. Regional Banks ETF IAT

The ETF concentrating on regional banks will likely be on the defensive this morning after its top holding reported earnings this morning. U.S. Bancorp beat profit estimates, but the stock is down slightly in early pre-market trading.

Because USB makes up 20 percent of the ETF, today’s post-earnings volatility will in the stock will move the ETF. The ETF has had a great 2014 so far as it trades at the best level in over five years. Look for a little pullback in the coming days before the uptrend continues.

Market Vector Semiconductor ETF SMH

The chip stocks have been putting in a solid start to the year until the recent pullback in the ETF. SMH is a basket of the largest stocks in the semiconductor sector.

Last night, Advanced Micro Devices AMD reported dismal earnings and the stock is lower by several percentage points. Even though the company is no longer a big player in the industry, it could have an affect on the ETF today. Several other names in the sector are lower and SMH could be directly affected.