Mid-Morning Market Update: Markets Drop; Michael Kors Plans To Close 100 To 125 Stores

Following the market opening Wednesday, the Dow traded down 0.32 percent to 20,962.22 while the NASDAQ declined 0.53 percent to 6,170.63. The S&P also fell, dropping 0.29 percent to 2,405.94.

Leading and Lagging Sectors

Non-cyclical consumer goods & services sector was the top gainer in the US market on Wednesday.

In trading on Wednesday, basic materials shares fell 0.86 percent. Meanwhile, top losers in the sector included Cliffs Natural Resources Inc CLF, down 9 percent, and Koppers Holdings Inc. KOP, down 8 percent.

Top Headline

Michael Kors Holdings Ltd KORS posted a loss for its fourth quarter loss and announced plans to close between 100 and 125 stores over the next 2 years.

The company also issued a weak earnings forecast for the current quarter. However, the company’s adjusted earnings for the fourth quarter exceeded expectations.

Michael Kors posted Q4 earnings of $0.73 per share on revenue of $1.06 billion. However, analysts were expecting earnings of $0.70 per share on revenue of $1.05 billion.

Equities Trading UP

J.Jill Inc JILL shares shot up 12 percent to $12.63. J Jill posted Q1 earnings of $0.24 per share on sales of $166.1 million. J Jill expects Q2 earnings of $0.27 to $0.29 per share.

Shares of Mechel PAO (ADR) MTL got a boost, shooting up 11 percent to $5.64. Mechel’s net profit for the first quarter surged to 13.9 billion roubles ($245 million), from 312 million roubles in the year-ago period.

Columbus McKinnon Corp. CMCO shares were also up, gaining 11 percent to $27.03. Columbus McKinnon posted Q4 adjusted earnings of $0.40 per share on revenue of $183.7 million.

Equities Trading DOWN

Michael Kors Holdings Ltd KORS shares dropped 9 percent to $32.99 after the company posted a loss for its fourth quarter loss and announced plans to close between 100 and 125 stores over the next 2 years. The company also issued a weak earnings forecast for the current quarter.

Shares of EnerSys ENS were down 8 percent to $76.50 after the company posted downbeat quarterly earnings.

Koppers Holdings Inc. KOP was down, falling around 8 percent to $34.65. Jefferies downgraded Koppers Holdings from Buy to Hold.

Commodities

In commodity news, oil traded down 2.22 percent to $48.56 while gold traded up 0.26 percent to $1,269.00.

Silver traded down 0.44 percent Wednesday to $17.35, while copper fell 0.08 percent to $2.562.

Eurozone

European shares were higher today. The eurozone’s STOXX 600 gained 0.43 percent, the Spanish Ibex Index rose 0.67 percent, while Italy’s FTSE MIB Index gained 0.56 percent. Meanwhile the German DAX climbed 0.77 percent, and the French CAC 40 rose 0.51 percent while U.K. shares rose 0.68 percent.

Economics

The Johnson Redbook Retail Sales Index declined 1.1 percent during the first four weeks of May versus April.

The Chicago PMI declined to a reading of 55.2 in May, versus 58.3.

The pending home sales index dropped 1.3 percent to 109.8 in April, versus a revised reading of March. Economists were expecting a 0.3 percent gain in April.

The Federal Open Market Committee will release its latest Beige Book report at 2:00 p.m. ET.

Data on farm prices for May will be released at 3:00 p.m. ET.

San Francisco Federal Reserve Bank President John Williams is set to speak in Seoul at 7:30 p.m. ET.