What Happened in the Stock Market Today

Image source: Getty Images.

Stocks posted solid gains for the second straight session on Thursday, as the Dow Jones Industrial Average (^DJI 0.57%) and the S&P 500 (^GSPC -0.93%) indexes both rose by more than 0.5%.

Today's stock market:

Data source: Yahoo! Finance.

Another strong uptick in oil prices, driven by falling supplies and a weaker dollar, helped United States Oil (USO 0.05%) post a 1% gain -- leaving the exchange traded fund up 4% on the week. iShares MSCI Emerging Markets (EEM -0.44%) also had a good day by logging a near 1% increase reflecting market rallies in Europe and Asia following the U.S. Federal Reserve's Wednesday decision to hold off on raising interest rates until at least December.

Individual stocks on the move included Red Hat (RHT) and Herman Miller (MLKN 1.09%), which both announced earnings updates for investors ahead of the opening bell.

Red Hat raises its outlook

Red Hat shares rose 4% after the open-source software specialist posted solid quarterly earnings figures. Sales rose 19% to $600 million and profit jumped 17% to $0.55 per share. That was good enough to edge consensus estimates that were calling for $594 million of revenue and earnings of $0.54 per share. 

The company is enjoying a tailwind as more businesses move to the cloud and find need for its application development solutions. In fact, Red Hat closed a record number of large deals (totaling more than $1 million each) this quarter, a category which is up 60% compared to the prior-year period. "This demonstrates our customers' commitment to Red Hat and the broad demand for our expanding technology portfolio as enterprises embrace digital transformation," CEO Frank Calderoni said in a press release. The standout performer this quarter was the infrastructure segment that rose 18% to pass $420 million.

Calderoni and his executive team see the positive momentum continuing through the second half of the year. They raised their sales outlook slightly, to $2.43 billion from $2.4 billion. That will likely include a 19% revenue jump for the third quarter, executives said. Their confidence is bolstered by the fact that each of Red Hat's geographic divisions saw strong bookings growth in Q2.

Herman Miller misses expectations

Office furniture producer Herman Miller slipped by 5% after posting sales growth that missed management's target. Revenue was $599 million, or just below the low end of the guidance range it provided in late June. Executives admitted that the selling environment was weak this quarter, but they were pleased the company still managed overall organic growth of 1.5%. Meanwhile, Herman Miller achieved its profit goals despite the soft demand thanks to expense discipline and a steady gross margin of 38% of sales. 

Image source: Getty Images.

"Our results demonstrate the balanced nature of our business model," Chief Financial Officer Jeff Stutz said in a press release, "with continued strength within our ELA and specialty segments helping to offset a relatively slow start to the period in North America."

Stutz and his team said they saw order volume begin to pick up in the U.S. market toward the end of the quarter. Reflecting that shift, they are forecasting a solid rebound in organic growth to 2.5% in Q3. Given that its operating trends are solid and on track to meet management's long-term goal, Thursday's sell-off could be an opportunity for investors to take advantage of selling on the part of some shareholders who are nervous over what appear to be short-term demand issues.