The stock market moved higher for the third consecutive day, and finished evenly during the last two hours of trading. The Dow Jones Industrial Average was up by nearly .2%, while a stronger S&P 500 moved ahead by nearly .5%, and the Nasdaq Composite rose nearly .4%.
Traders continued to celebrate the Federal Reserve’s early Christmas present this week in which Janet Yellen said the Fed would be patient with subsequent interest rate hikes. Meanwhile, oil prices firmed today on a great deal of short covering, with both crude oil up more than 4% and Brent oil rising more than 5% by day’s end.
Fed meetings may come and go, and oil prices may rise and fall, but in the end, stock prices will often come down to the undulations of company earnings. And speaking of earnings, Red Hat Inc (RHT), CarMax, Inc (KMX), and Pier 1 Imports Inc (PIR) all rose substantially today after posting their latest earnings reports.
Red Hat Inc (RHT)
RHT stock was up more than 10% on strong volume of 10.4 million shares today, after reporting third quarter 2015 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by 3 cents. Year-over-year, RHT earnings-per-share were flat.
Revenue of $455.9 million also beat the Zacks estimate of $451 million, and was up 15% year-over-year.
RHT stock has been trading sideways between $54 and $63 for months, and so today’s breakout above resistance at $63 was technically significant. Red Hat finished at more than $68.
CarMax Inc (KMX)
CarMax reported stellar earnings for the third quarter, and as a result shares bolted over 11% higher on volume of 5.8 million shares.
KMX said that revenue increased by 16% from $2.9 billion a year ago, to $3.4 billion this year, topping analyst expectations of $3.3 billion. Net income of $130 million, or 60 cents per share, also bested the forecasts of 54 cents per share for KMX.
CarMax reported a 14% rise in used car sales this year, in large part due to easier access to credit for its customers.
Pier 1 Imports Inc (PIR)
Although PIR’s earnings report was mixed, enthusiastic traders pushed the stock up more than 9% anyway. The company’s net income actually dropped from $26.8 million, or 26 cents per share, to $17.9 million, or 20 cents per share for the third quarter of 2014.
But sales of $484.5 million represented a 4.1% increase against $465.5 million year over year. Gross profit also increased, from $202.2 million last year to $204.9 million for the third quarter of 2014.
Intraday, PIR exceeded the 200-day moving average at $15.49, but then pulled back to finish the day at $15.19. PIR stock is up about 35% off its October lows, but may have resistance to overcome at the 200-day moving average.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
