Mid-Day Market Update: VeriFone Drops Following Earnings Miss; Ashford Hospitality Prime Shares Surge

Midway through trading Wednesday, the Dow traded up 0.19 percent to 17,972.86 while the NASDAQ climbed 0.06 percent to 4,964.79. The S&P also rose, gaining 0.12 percent to 2,114.69. 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 AK Steel Holding Corporation AKS and United States Steel Corporation X. In trading on Wednesday, cyclical consumer goods & services shares fell by 0.19 percent. Meanwhile, top losers in the sector included Oxford Industries Inc OXM, down 6 percent, and Ctrip.com International, Ltd. (ADR) CTRP, down 6 percent. Top Headline Lululemon Athletica inc. LULU reported weaker-than-expected adjusted earnings for the first quarter. However, revenue came in above the expected level. The company's earnings forecast for the second quarter also fell short of the expectations. Lululemon reported net income of $45.34 million in the first quarter, down from $47.81 million while earnings slipped to $0.33 a share from $0.34 a share in the year-ago quarter. Excluding adjustments, it would have earned only $0.31 a share thus missing the Street analysts' expectations by a penny. The company's net revenue grew 17 percent to $495.5 million from $423.5 million in the previous year quarter. Street analysts' predicted revenue of $487.67 million. Moving ahead, Lululemon expects net revenue of $505-$515 million based on total comparable sales in the mid-single digits on a constant dollar basis for the second quarter. The company also expects earnings per share to be $0.36 to $0.38 for the same period. Street estimate earnings of $0.39 a share and revenue of $513.9 million. Equities Trading UP Bridgeline Digital Inc BLIN shares shot up 70 percent to $1.79 as the company announced the launch of iAPPS Pro product line. Shares of Gevo, Inc. GEVO got a boost, shooting up 64 percent to $0.989. Alaska Airlines announced that two jets flew on Gevo's renewable alcohol-to-jet fuel. Ashford Hospitality Prime Inc AHP shares were also up, gaining 33 percent to $15.00 as the company confirmed Wednesday it received an unsolicited proposal from The Weisman Group, an investment firm based in Sherman Oaks, California, to acquire the Company's assets. Equities Trading DOWN Fibrocell Science Inc FCSC shares dropped 37 percent to $1.25 after the company revealed that the primary endpoints were not met in its second stage clinical trial of azficel-T for the treatment of vocal cord scarring resulting in chronic or severe dysphonia. Shares of VeriFone Systems Inc PAY were down 28 percent to $20.23 after the company reported downbeat earnings for its second quarter and announced its plans to lower its workforce. The company also cut its annual outlook. JP Morgan downgraded VeriFone from Overweight to Neutral and lowered the target price from $34 to $24. Catabasis Pharmaceuticals Inc CATB was down, falling around 25 percent to $5.12 as the company reported that it failed to meet primary endpoint in CAT-2054 Phase 2a trial. Commodities In commodity news, oil traded up 0.77 percent to $50.75 while gold traded up 1.21 percent to $1,262.10. Silver traded up 3.76 percent Wednesday to $17.01, while copper rose 0.44 percent to $2.06. Eurozone European shares were mostly lower today. The eurozone's STOXX 600 fell 0.63 percent, the Spanish Ibex Index dropped 0.99 percent, while Italy's FTSE MIB Index slipped 0.74 percent. Meanwhile the German DAX declined 0.81 percent, and the French CAC 40 fell 0.72 percent, while U.K. shares rose 0.12 percent. Economics The MBA reported that its index of mortgage application activity rose 9.30 percent for the week ended June 3, 2016. U.S. job openings increased to 5.79 million for April, versus a prior reading of 5.76 million, the Labor Department said in its monthly JOLTS report. Economists were expecting a reading of 5.67 million. Crude oil inventories dropped 3.23 million barrels last week, the Energy Information Administration. However, analysts were expecting a drop of 2.74 million barrels.