Mid-Morning Market Update: Markets Drop; PepsiCo Earnings Top Estimates

Following the market opening Thursday, the Dow traded down 0.54 percent to 16,901.71 while the NASDAQ tumbled 0.70 percent to 4,437.52. The S&P also fell, dropping 0.59 percent to 1,957.21.

Leading and Lagging Sectors

Non-cyclical consumer goods & services shares surged by 0.20 percent on Thursday. Top gainers in the sector included BRF S.A. BRFS, up 1.9 percent, and Pilgrim's Pride PPC, up 1.3 percent.

In trading on Thursday, energy shares were relative laggards, down on the day by about 1.47 percent. Top losers in the sector included Solazyme SZYM, down 9.5 percent, and Energy XXI (Bermuda) EXXI, off 8.8 percent.

Top Headline

PepsiCo PEP reported better-than-expected third-quarter earnings and lifted its earnings forecast for the year.

The Purchase, New York-based company posted a quarterly profit of $2.01 billion, or $1.32 per share, versus a year-ago profit of $1.92 billion, or $1.23 per share. Excluding certain items, the company earned $1.36 per share.

Its revenue rose 1.8% to $17.22 billion, while organic revenue climbed 3.1%. However, analysts were expecting earnings of $1.29 per share on revenue of $17.07 billion.

Equities Trading UP

Gentiva Health Services GTIV shares shot up 17.59 percent to $19.65 following Kindred bid. Kindred Healthcare KND announced its plans to acquire Gentiva for $19.50 per share in a combination of cash and stock.

Shares of Impax Laboratories IPXL got a boost, shooting up 14.39 percent to $27.27 after the company announced its plans to acquire Tower Holdings and Lineage Therapeutics.

Ruby Tuesday RT shares were also up, gaining 19.76 percent to $7.09 after the company posted a narrower-than-expected adjusted loss for its fiscal first-quarter and raised its 2015 profit margin outlook.

Equities Trading DOWN

Shares of Kofax KFX were down 23.52 percent to $5.95 after the company issued a downbeat Q1 forecast and lowered its FY15 outlook.

The Gap GPS shares tumbled 11.67 percent to $37.01 after the company announced the retirement of its Chairman and Chief Executive Glenn Murphy. The company named Art Peck as its new CEO and Bob Fisher as its new chairman. Gap also said same-store sales came in flat in September. Analysts at Sterne Agee downgraded Gap from Buy to Neutral and lowered the price target from $52 to $40.

Hubbell (NYSE: HUB-B) was down, falling 8.49 percent to $113.66 after the company lowered its forecast.

Commodities

In commodity news, oil traded down 0.58 percent to $86.80, while gold traded up 1.57 percent to $1,224.90.

Silver traded up 2.53 percent Thursday to $17.50, while copper rose 1 percent to $3.03.

Euro zone

European shares were mostly higher today. The eurozone’s STOXX 600 surged 0.37 percent, the Spanish Ibex Index climbed 0.20 percent, while Italy’s FTSE MIB Index declined 0.24 percent. Meanwhile, the German DAX gained 0.79 percent and the French CAC 40 rose 0.09 percent while UK shares rose 0.01 percent.

Economics

US jobless claims came in flat at 287,000 in the week ended October 4. However, economists were expecting claims to increase to 294,000 in the week.

US wholesale inventories increased 0.7% in August, while wholesale sales dropped 0.7%.

The Treasury is set to auction 3-month, 6-month and 52-week bills.

Data on money supply will be released at 4:30 p.m. ET.