U.S. stocks closed mixed and were flat again today, unable to break through recent highs. The Dow Jones Industrial Average was down 0.02% and the S&P 500 fell 0.07%, while the Nasdaq gained 0.31%.
Retail stocks had a tremendous day, as several of them were up strongly on good earnings reports, after a few days of consolidating pull backs. Among the best retail performers were American Eagle Outfitters (AEO) and JC Penney Company Inc (JCP), while rising star, Twitter Inc (TWTR), led the way among a tepid Internet sector.
American Eagle Outfitters (AEO)
AEO stock bolted higher by more than 10% after the Pittsburgh-based clothing retailer raised its third-quarter earnings guidance well before it’s scheduled to report results on Dec. 4. Over the last four days, AEO stock had pulled back from $13.80 to $12.27, but staged a monumental turn around on the good news that was delivered this morning.
American Eagle announced it will report adjusted EPS of 22 cents, which is well above its own previous estimate of 17 to 19 cents. Analysts had expected AEO to earn only 18 cents per share for the third quarter. CEO Jay Schottenstein released a statement, saying, “We are encouraged by our ability to reduce promotional activity, particularly given the challenging and highly promotional retail climate.”
JCPenney (JCP)
Not to be outdone, JCP stock climbed 7.8% today to close at $7.76 on anticipation for a solid earnings report after today’s closing bell. Despite the strong showing on good volume, the street was looking for JCPenney to report a loss of 80 cents per share, and a decrease of 1.1% in revenue of $2.81 billion.
JCP has been trying to turn things around for several months, but the stock has fallen more than 30% since September. After the bell, JCP reported a loss of 77 cents per share, 3 cents better than the analysts’ estimates.
Twitter (TWTR)
TWTR led the way among a weak online sector today after company officials announced in a San Francisco analyst meeting that in the first half of 2015, Twitter will provide its users with the means to take, edit, and share video in real time through its Twitter application for the very first time. The stock closed 7.45% higher at $42.54, on heavy volume of 50 million shares.
Vice President of Product Management, Christian Oestlien, told the group:
“Imagine the power and impact of Twitter on world events and personal experiences as they unfold in real time on our platform through video.”
The hosted videos will be different from video app Vine. Twitter executives also told the analysts that the site attracts about 500 million non-Twitter members per month, who look at Twitter content without logging on to the actual site.
TWTR shares are down from $56 over the last month.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
