What Happened in the Stock Market Today

Image source: Getty Images.

Stocks started the new trading week with losses on Monday, as the Dow Jones Industrial Average (^DJI -1.73%) and the S&P 500 (^GSPC -1.42%) indexes were both dragged down by weakness in the financial services sector. The Dow and the S&P never broke into positive territory during the session, and each closed with roughly 1 percentage point of declines. 

Today's stock market

Data source: Yahoo! Finance.

A bad day for banks made the Financial Service Sector SPDR ETF (XLF -1.39%) one of the day's worst-performing broad exchange-traded funds, as a 1.4% drop cut its year-to-date gain to 4%. Meanwhile, another swing in crude oil prices helped push United States Oil (USO -0.75%) to a 2.2% gain on the day.

As for individual stocks, Sally Beauty (SBH -2.66%) and Lands End (LE -2.90%) each made notable moves on Monday.

Lands End loses direction

Lands End shares plunged 13% to reach a 34% loss year to date after the company announced that CEO Federica Marchionni has stepped down after less than two years on the job. The retailer's chief financial officer, James Gooch, will step in as an interim leader, along with Joseph Boitano, Lands End's chief merchandising officer. Meanwhile, the board of directors is hunting for a more permanent replacement with the help of an executive search firm.

Image source: Getty Images.

Abrupt change at the top is rarely good news for a retailer, and the timing is particularly bad for Lands End. It last posted a 3% drop in comparable-store sales and has produced an $8 million loss through the first six months of the year, compared to a $9 million profit over the same period in 2015. Marchionni and her team had been working to shift away from a highly promotional sales model, with one payoff being a slight uptick in gross margin in Q2.

Yet customer traffic trends have been weak, and so sales results underperformed executives' expectations. In early September Lands End promised "swift action" to drive an improvement in sales trends for the third quarter along with initiatives that should get the retailer back into the black. This week's executive shakeup adds doubt to both of those plans just as Lands End enters the critical holiday shopping season.

Sally Beauty gets a big invitation

Beauty products retailer and distributor Sally Beauty jumped 6% on heavy trading after the S&P Dow Jones Indices announced that the stock is joining the S&P MidCap 400 index, effective at the close of trading on Tuesday, Sept. 27. This index is for companies with market capitalizations of between $1.4 billion and $5.9 billion, and criteria for membership typically includes positive sales trends in a growing industry. Sally Beauty can check off both of those requirements: Revenue is up 4% over the last nine months and gross margin ticked higher last quarter to 50% of sales.

Image source: Getty Images.

The company isn't exactly firing on all cylinders right now, though. Overall revenue growth slowed to 3% last quarter and failed to meet management's expectations. CEO Chris Brickman aims to ease up on store design changes as a result so that the focus can turn to improving the customer experience and, ideally, returning to accelerating sales gains. That growth will ultimately be the key to shares producing consistent returns for investors. The stock's addition into the mid-cap index, in contrast, simply boosts demand for shares in the short term since many index funds are required to own stocks that comprise popular indexes like the MidCap 400.