Mid-Morning Market Update: Markets Open Lower; Deere Earnings Miss Views

Following the market opening Friday, the Dow traded down 0.44 percent to 25749.82 while the NASDAQ fell 0.71 percent to 7,841.99. The S&P also fell, dropping 0.60 percent to 2,859.01.

Leading and Lagging Sectors

Utilities shares slipped by just 0.2 percent on Friday. Meanwhile, top gainers in the sector included Ferrellgas Partners, L.P. FGP, up 1 percent, and Consolidated Water Co. Ltd. CWCO, up 2 percent.

In trading on Friday, industrial shares fell by 0.9 percent.

Top Headline

Deere & Company DE reported downbeat earnings for its second quarter and lowered its FY19 guidance

Deere & Company reported net income of $1.135 billion for the quarter, or $3.52 per share, compared with net income of $1.208 billion, or $3.67 per share, for the same period last year. Global net sales and revenues increased 6 percent, to $11.342 billion, for the second quarter. Wall Street analysts expected earnings of $3.61 per share on sales of $10.18 billion.

Deere expects equipment sales are projected to increase by about 5 percent for fiscal 2019 compared with 2018. The company cut 2019 net income guidance from $3.6 billion to $3.3 billion and cut 2019 sales growth guidance from 7 percent to 5 percent.

Equities Trading UP

Cray Inc. CRAY shares shot up 18 percent to $35.30 after Hewlett Packard Enterprise Co HPE announced plans to acquire Cray in a transaction valued at approximately $1.3 billion.

Shares of Soliton, Inc. SOLY got a boost, shooting up 14 percent to $8.25 after the company issued an update on application for FDA Clearance and addressed recent anonymous article on SeekingAlpha.com.

CAE Inc. CAE shares were also up, gaining 6 percent to $25.29 as the company reported upbeat Q4 results.

Equities Trading DOWN

NeoPhotonics Corporation NPTN shares tumbled 18 percent to $3.71 after MKM Partners downgraded the stock from Buy to Neutral and lowered the price target from $9 to $4.5.

Shares of Baidu, Inc. BIDU were down 15 percent to $130.71 after the company reported worse-than-expected Q1 EPS. The company also issued Q2 sales guidance below analyst estimates.

Pinterest, Inc. PINS was down, falling 10 percent to $27.73 after the company reported wider-than-expected Q1 loss. Pinterest said it projects full-year revenue of $1.055 billion to $1.08 billion.

Commodities
In commodity news, oil traded up 0.8 percent to $63.35, while gold traded up 0.1 percent to $1,286.80.

Silver traded down 0.4 percent Friday to $14.485, while copper fell 0.6 percent to $2.733.

Euro zone
European shares were lower today. The eurozone’s STOXX 600 fell 0.8 percent, the Spanish Ibex Index dropped 0.7 percent, while Italy’s FTSE MIB Index declined 0.7 percent. Meanwhile, the German DAX declined 1.1 percent, and the French CAC 40 fell 0.7 percent while UK shares dropped 0.5 percent.

Economics

The University of Michigan's consumer sentiment increased to 102.4 in May, versus April’s reading of 97.2. However, economists were projecting a reading of 97.1.

The index of leading economic indicators rose 0.2 percent for April.

New York Federal Reserve Bank President John Williams will speak in New York at 11:15 a.m. ET.

The Baker Hughes North American rig count report for the latest week is schedule for release at 1:00 p.m. ET.

Federal Reserve Board of Governors Vice Chairman Richard Clarida is set to speak in Philadelphia, Pennsylvania at 1:40 p.m. ET.

New York Federal Reserve Bank President John Williams will speak in New York at 2:00 p.m. ET.