Wall Street bounced back after a big loss yesterday, as stocks were buoyed by higher oil prices and some good earnings reports.
Oil rose as high as $34.82 after the Russians said that they and Saudi Arabia would both cut their production of oil up to 5%, in an effort to lift the weakened oil market. But Saudi Arabia would not confirm this report. Later on, OPEC delegates even denied there would be any meeting with Russia to discuss production cuts.
Still the 4% gain in oil remained intact until the end of the day.
In other economic news, the National Association of Realtors said pending home sales were up, but only by 0.1% in December. Another positive was that jobless claims came in 4,000 below expectations at 278,000. This was a 16,000 drop from the previous week. However, the Commerce Department reported that durable goods were off 5.1% in December. Analysts were expecting a 1% decline, so this was quite a miss.
The Dow Jones Industrial Average was up by 0.8%, while the S&P 500 gained 0.6%. The Nasdaq was best of all at a plus 0.9%. All sectors, except healthcare, were up today, with energy and utilities the strongest of all.
As mentioned, solid earnings drove many stocks higher, including Facebook Inc (NASDAQ:FB), Paypal Holdings Inc (NASDAQ:PYPL) and Under Armour Inc (NYSE:UA). Their success made them three of today’s best stocks. Here’s the full story:
Facebook Inc (FB)
FB stock had a lot of “friends” today, after the social media giant ripped 15.5% higher after reporting fourth-quarter earnings of 54 cents a share on revenue of $5.84 billion late on Wednesday.
Analysts, who predicted 42 cents a share on only $5.37 billion, were left speechless. Excluding expenses, FB also beat on EPS, 79 cents to the estimates for 68 cents a share.
In addition, the company announced an increase of 14% among monthly active users to 1.59 billion. Some 80% of advertising revenue now comes from cell phone ad sales.
Also boosting FB stock was a price target upgrade by Rbc Capital Markets, LLC, from $130 to $160 a share. By day’s end, FB shareholders were really “liking” their FB stock!
PayPal Holdings Inc (PYPL)
Also soaring higher today was PayPal, after announcing fourth-quarter earnings of 36 cents a share, with revenue of $2.56 billion late on Wednesday. Analysts’ estimates were for 35 cents a share on $2.51 billion in revenue.
Adding to the celebration was the board of directors’ authorization to begin a stock buyback program totaling $2 billion. PayPal users also increased in the fourth quarter, from 173 million to 179 million.
PYPL stock, which has recently fallen from $38 to $31 a share, bounced back 8% today, touching the 50-day moving average for the first time in 2016.
Under Armour Inc (UA)
As good as FB and PYPL were today, UA was even better. The maker of athletic apparel posted fourth-quarter earnings of 48 cents a share, two cents better than analysts’ estimates. Revenue of $1.17 billion was up 31% from a year ago, and ahead of forecasts for $1.12 billion.
Sales of footwear, including the new Stephen Curry line, were $166.9 million, almost double from a year ago.
The company also announced 2016 guidance of $4.95 billion in revenue, an increase of 25% year over year. Previous estimates were for $4.91 billion.
UA soared 23% higher on the news. Volume of 18.5 million shares was about five times normal for UA stock.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
