U.S. stock markets struggled for much of the day before pulling higher in the last few hours of trading. Traders continue to be concerned about geopolitical events in Yemen, which could trigger a possible disruption to crude oil production in the region.
As might be expected, oil prices surged higher as a result, with West Texas Intermediate crude oil up 3.2% to $50.80 a barrel.
In other economic news, U.S. weekly jobless claims fell 9,000 –11,000 less than expected — to 282,000 for the week ending March 21.
The Dow Jones Industrial Average and the S&P 500 both lost 0.2% on the day, while the Nasdaq Composite was off 0.3%.
All sectors finished lower today, although several retail stocks, such as Signet Jewelers Ltd. (NYSE:SIG) and Five Below Inc (NASDAQ:FIVE) gained ground on earnings beats. Those two, along with Red Hat Inc (NYSE:RHT), were three of today’s best stocks.
Red Hat Inc (RHT)
RHT stock blasted 10.1% higher after reporting fourth-quarter earnings of 43 cents a share on revenue of $463.9 million, easily besting the Street view of 41 cents a share and revenue of $456.5 million
Sales of RHT’s cloud-based products were up nearly 16% year-over-year. In addition, Red Hat’s board of directors plans to buy back $500 million worth of RHT stock, which replaces a previous expiring commitment to purchase $300 million in RHT stock.
Red Hat’s growth is being driven by its foray into Cloud computing services and other areas beyond its original core Linux business. Today’s stock action lifted RHT stock out of a three-month basing pattern.
Signet Jewelers Ltd. (SIG)
SIG stock looks like a real gem today, gaining 6% on strong volume, after its fourth-quarter earnings came in at $3.06 per share, 3 cents ahead of Wall Street expectations. Revenue increased 46.4% to $2.28 billion, but missed the Street’s forecast of $2.32 billion.
Signet, which already owns Kay Jewelers, saw much of its sales and e-commerce growth come from its 2014 purchase of Zales jewelry stores.
Today’s action lifted SIG stock above previous resistance levels near $133. SIG stock finished the day at $135.
Five Below Inc (FIVE)
Despite a weaker outlook for the current quarter and fiscal year, FIVE stock gapped up 10.3% today after posting earnings of 61 cents per share on revenue of $263.8 million, edging analysts’ estimates for 60 cents per share and $262.2 million in revenue. In addition, the discount retailer said it will open another 70 stores this year.
The price increase comes on the same day that Credit Suisse dropped its price target on FIVE stock from $45 to $38, although it did maintain its “outperform” rating. Investors shrugged off the Credit Suisse news, instead focusing on the more positive events.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
