Ulta Slumps, Netflix Rallies on Expansion Hopes

Dow breaks three-day win streak; Disney stock advances in shortened week of trading

Apr 17, 2014 at 6:33PM

The Dow Jones Industrial Average (DJINDICES:^DJI) nearly finished the week with a perfect record, but turned south in the last hour of trading, breaking a three-day, 397-point rally. The stock market is closed tomorrow in observance of Good Friday. Although blue chips backtracked slightly on Thursday, new data painted a picture of a rosily improving economy, with weekly jobless claims declining more than expected, and U.S. manufacturing growth also showing more robust signs of life. Despite these bullish omens, the Dow lost 16 points, or 0.1%, to end at 16,408. 

The Dow, as a weighted index of just 30 stocks, can be a little misleading. For example, the famed index only fell today because IBM, the second-heaviest weighted stock in the index next to Visa, shed 3.3% on a revenue miss. Most stocks in the Dow actually advanced today; stocks like Walt Disney (NYSE:DIS), which added 1.3%. Disney's still enjoying the success of Frozen, the top-grossing animated film of all-time, in various mediums. The movie's eponymous soundtrack logged its 20th week on the Billboard charts, finishing at the top, outselling the number two album by a four-to-one margin. 

Netflix (NASDAQ:NFLX), in its last day of trading before reporting quarterly earnings on Monday, rallied 4.3% to finish the week. According to a Bloomberg report earlier today, Vodafone is negotiating with Netflix in hopes of giving customers access to its library of streaming video. Netflix stock was also upgraded today by Pacific Crest analysts, who expect growth in international markets to drive share growth through 2016. A deal with Vodafone, which holds significant market share in Europe, could be just such an avenue to growth abroad. 


Source: Ulta website

Ulta Salon, Cosmetics & Fragrance (NASDAQ:ULTA) also ended as a big mover today, slumping 2.7%. Earnings per share and revenue both beat Wall Street estimates in the most recent quarter, as same-store sales surged an impressive 9.2% in the period. Ulta has shown its ability to consistently execute, growing sales by close to 20% annually for the last four years. Meanwhile, net income during that period has more than quintupled. The beauty retailer grew its store count from 550 stores to 675 last year, an increase of 23%. With a goal of 1,200 stores in the U.S., and a proven track record of execution, Ulta stock still boasts marvelous growth prospects.

John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool recommends Netflix, Ulta Salon, Cosmetics & Fragrance, Visa, Vodafone, and Walt Disney. The Motley Fool owns shares of International Business Machines, Netflix, Visa, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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