Mid-Afternoon Market Update: Dow Falls 80 Points; GameStop Shares Down After Disappointing Sales

Toward the end of trading Friday, the Dow traded down 0.44 percent to 18,366.91 while the NASDAQ declined 0.19 percent to 5,202.37. The S&P also fell, dropping 0.37 percent to 2,164.51.

Leading and Lagging Sectors

Friday afternoon, healthcare shares gained by 0.02 percent. Meanwhile, top gainers in the sector included CyberOptics Corporation CYBE, and Senomyx Inc. SNMX.

In trading on Friday, utilities shares fell by 1.58 percent. Meanwhile, top losers in the sector included Companhia Paranaense de Energia (ADR) ELP, down 4 percent, and American States Water Co AWR, down 3 percent.

Top Headline

Big Lots, Inc. BIG reported better-than-expected second quarter earnings and boosted its full year earnings forecast.

The retailer's net income increased from $17.64 million to $22.72 million and EPS from $0.35 to $0.51. On an adjusted basis, it would have earned $0.52 a share, which is $0.06 a share more than the analysts' estimates of $0.46.

Big Lots' net sales were $1.203 billion compared to $1.209 billion in the previous year quarter. Analysts expected $1.22 billion revenue. Its comparable store sales rose 0.3 percent in the second quarter.

Going forward, the retailer offered guidance of an adjusted loss of $0.04 a share – adjusted income of $0.01 a share for the third quarter. Street expects the company to suffer a loss per share of $0.01. For the full year, Big Lots boosted its adjusted EPS forecast from $3.35-$3.45 to $3.45-$3.55. Analysts are looking for an EPS of $3.47.

Equities Trading UP

Petroquest Energy Inc PQ shares shot up 30 percent to $2.28 as the company reported private exchange offers and a consent solicitation for its outstanding 10% Senior Notes due 2017 and its outstanding 10% Second Lien Senior Secured Notes due 2021. The company announced an entry into commitment letter for four year $50 million term loan facility. Johnson Rice upgraded Petroquest Energy from Accumulate to Buy.

Shares of Performance Sports Group Ltd PSG got a boost, shooting up 36 percent to $2.45. The New York Post reported that Performance Sports is nearing a deal to get a 60-day extension to comply with its loan covenants.

Bottomline Technologies EPAY shares were also up, gaining 11 percent to $23.05 as the company posted better-than-expected Q4 results.

Equities Trading DOWN

ITT Educational Services, Inc. ESI shares dropped 63 percent to $0.540 amid news that the U.S. Department of Education will have increased oversight for the company.

Shares of Aceto Corporation ACET were down 22 percent to $20.06 as the company posted weak Q4 results.

GameStop Corp. GME was down, falling around 11 percent to $28.78. GameStop reported in-line earnings for its second quarter, but revenues missed by $90 million. Its comparable same-store sales in the US and internationally were down 12.5 and 5.9 percent, respectively.

Commodities

In commodity news, oil traded up 0.17 percent to $47.41 while gold traded down 0.05 percent to $1,324.00.

Silver traded up 0.30 percent Friday to $18.67, while copper fell 0.12 percent to $2.08.

Eurozone

European shares closed higher today. The eurozone’s STOXX 600 rose 0.50 percent, the Spanish Ibex Index gained 0.70 percent, while Italy’s FTSE MIB Index gained 0.80 percent. Meanwhile the German DAX gained 0.55 percent, and the French CAC 40 climbed 0.80 percent, while U.K. shares rose 0.31 percent.

Economics

The U.S. economy grew at an annual rate of 1.1 percent in the second quarter, versus a prior reading of a 1.2 percent growth. Economists were projecting a 1.1 percent growth.

The U.S. trade deficit narrowed to $59.3 billion in July, versus $64.5 billion in June. However, economists were expecting a $62.5 billion deficit. Exports increased by $2.9 billion for the month, while imports declined by $2.4 billion.

The University of Michigan's consumer sentiment index slipped to 89.80 in August, versus a prior reading of 90.40. Economists estimated a reading of 90.60.