Mid-Morning Market Update: Markets Mostly Lower; Michael Kors Issues Downbeat Guidance

Following the market opening Wednesday, the Dow traded up 0.03 percent to 18,539.28 while the NASDAQ declined 0.16 percent to 5,217.30. The S&P also fell, dropping 0.05 percent to 2,180.69.

Leading and Lagging Sectors

Wednesday morning, the basic materials sector proved to be a source of strength for the market. Leading the sector was strength from Eldorado Gold Corp (USA) EGO and Endeavour Silver Corp EXK.

In trading on Wednesday, healthcare shares slipped by 0.42 percent. Meanwhile, top losers in the sector included Myriad Genetics, Inc. MYGN, down 29 percent, and Zogenix, Inc. ZGNX, down 11 percent.

Top Headline

Michael Kors Holdings Ltd KORS reported better-than-expected earnings and revenue for the first quarter. However, the company offered a soft outlook for the second quarter and fiscal year 2017.

The global apparel retailer's net income was $147.1 million, or $0.83 a share, in the first quarter. On an adjusted basis, its net income would have been $156.0 million, or $0.88 a share. This was way ahead of the Street analysts' estimate of $0.74 a share.

Michael Kors' total revenue rose modestly by 0.2 percent from $986.0 million to $987.9 million surprising the Street, which was predicting a year-over-year drop of 3.3 percent. On a constant currency basis, revenue was flat.

Moving ahead, the retailer expects EPS to be $0.84-$0.88 on revenues of $1.07-$1.085 billion for the second quarter. Street analysts' have consensus EPS estimate of $1.03 on $1.11 billion revenue.

Equities Trading UP

DXP Enterprises Inc DXPE shares shot up 35 percent to $23.53 following Q2 results. DXP Enterprises reported Q2 earnings of $0.34 per share on revenue of $256.2 million.

Shares of OpGen Inc OPGN got a boost, shooting up 25 percent to $2.60. OpGen reported a Q2 Loss of $0.37 per share on revenue of $1.2 million.

Healthways, Inc. HWAY shares were also up, gaining 20 percent to $21.64 as the company posted better-than-expected Q2 earnings.

Equities Trading DOWN

SunPower Corporation SPWR shares dropped 28 percent to $10.70 after the company posted a loss for its second quarter and issued a weak revenue forecast. Management expected a workforce reduction of about 15 percent totaling about 1,200 employees in the future and restructuring charges totaling $30-$45 million.

Shares of Myriad Genetics, Inc. MYGN were down 29 percent to $20.79 after the company posted weaker-than-expected Q4 results and issued a downbeat guidance.

WaferGen Bio-systems, Inc. WGBS was down, falling around 29 percent to $0.893 after the company reported a wider-than-expected quarterly loss.

Commodities

In commodity news, oil traded up 0.54 percent to $43.00 while gold traded up 0.86 percent to $1,358.30.

Silver traded up 2.34 percent Wednesday to $20.32, while copper rose 1.95 percent to $2.19.

Eurozone

European shares were mostly lower today. The eurozone’s STOXX 600 fell 0.12 percent, the Spanish Ibex Index rose 0.13 percent, while Italy’s FTSE MIB Index gained 0.09 percent. Meanwhile the German DAX fell 0.29 percent, and the French CAC 40 slipped 0.19 percent, while U.K. shares fell 0.01 percent.

Economics

The MBA reported that its index of mortgage application activity rose 7.1 percent for the week ended August 5, 2016.

The Energy Information Administration’s weekly report on petroleum inventories is schedule for release at 10:30 a.m. ET.

The U.S. Treasury budget data for July will be released at 2:00 p.m. ET.

The Treasury is set to auction 10-year notes at 1:00 p.m. ET.