What Happened in the Stock Market Today

Image source: Getty Images.

Stocks dipped on Tuesday, with both the Dow Jones Industrial Average (^DJI 0.69%) and the S&P 500 (^GSPC 1.20%) indexes finishing lower by more than 0.25%.

Today's stock market:

Data source: Yahoo! Finance.

Financial stocks took a step back from their three-month rally, and that decline pushed the Financial Select Sector SPDR Fund (XLF 0.64%) down 2%. On the positive column, gold prices rose as the U.S. dollar declined, which produced an 8% spike in the highly leveraged Direxion Daily Gold Miners Bull 3X ETF (NUGT 3.17%).

As for individual stocks, Morgan Stanley (MS 1.81%) and Tiffany (TIF) stood out with big pricing moves.

Morgan Stanley beats expectations

Morgan Stanley fell 4% despite a fourth-quarter earnings report that showed impressive profit gains. The finance giant earned $1.7 billion to close out fiscal 2016, up sharply from $908 in the prior-year period. That translated into $0.81 per share of earnings, compared to consensus estimates that were looking for just $0.65 per share. The $9 billion of revenue, representing 17% year-over-year growth, also beat expectations. 

Image source: Getty Images.

"Our quarterly results reflect consistent strong performance," CEO James Gorman said in a press release, "while our annual results show meaningful earnings growth over 2015." Executives were especially pleased with their execution around costs that helped return on equity climb to 8% from the year, up from 7% in 2015.

Morgan Stanley enjoyed strong gains out of its mergers and acquisitions business, and its trading revenues also benefited from improved market conditions in the fixed-income segment. On the other hand, profitability slipped at the wealth management segment.

Looking forward, the company plans to continue squeezing efficiencies out of the operations, with total expense reduction set to reach a $1 billion annual pace over the next four quarters. Executives believe they can push profitability higher in the wealth management division, too, up to as much as 25% from the most recent 22%. If all goes to plan, these initiatives should deliver on Morgan Stanley's broad goal of roughly 10% return on equity in the new fiscal year.

Tiffany's industry struggles

Tiffany declined 2% following the company's official reading on sales over the critical holiday shopping season. Revenue for the final two months of the year was flat, as minor improvements around the world were offset by declining results in the U.S. market. 

Image source: Tiffany.

Comparable-store sales fell 3% in the U.S. geography, which management blamed on lower customer traffic and a disruption to the company's flagship New York location that's situated near Trump Tower. That store saw sales fall 14% as access to the building became more difficult following Donald Trump's election.

Comps fell in other key markets, including the Europe and Asia-Pacific regions, but new retail locations helped overall revenue climb in both areas. Still, executives weren't excited by the broader results. "These overall holiday period sales results were somewhat lower than we had anticipated," CEO Frederic Cumenal said in a press release.

Cumenal and his team still expect gross profit margin to improve for the 2016 fiscal year. That, plus additional cost cuts should keep the earnings drop to around 5%. However, they are predicting no improvement to the sluggish industry trends that hurt the business in 2016, which means the hints of a sales uptick management pointed out in early November didn't bring the hoped-for rebound in broader demand trends.