Dow Logs 5th Straight Advance, Kroger and Rite Aid Swing Big on Earnings

Wal-Mart stock posts another day of gains despite concerns about recent revelations

Jun 19, 2014 at 6:55PM
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The Dow Jones Industrial Average (DJINDICES:^DJI), after trading in the red for much of the day, made a comeback in afternoon trading, finishing with gains for a fifth-straight session. Wal-Mart (NYSE:WMT) ended as one of the 17 Dow stocks to advance on Thursday, while elsewhere in the markets, shares of Rite Aid (NYSE:RAD) and Kroger (NYSE:KR) headed in drastically different directions after quarterly earnings reports. The Dow closed up 14 points, or 0.1%, to end at 16,921.

Wal-Mart was nearly the best performer in the blue chip index yesterday; today, shares rose again, though only by 0.2%. Investors have a whole heap of mixed news to sort out with the world's largest retailer, ranging from the company's encouraging investments in mobile and online retail to the concerning issues of employee strikes, and worker conditions raised in recent weeks. On one hand, Wal-Mart's been on a tech acquisition spree in recent years, and the company's plan to build a distribution center in Indiana for online orders has investors cautiously optimistic that Wal-Mart can start putting up a fight against Amazon.com. On the other hand, a fatal crash earlier this month involving a Wal-Mart trucker and a vehicle carrying former 30 Rock and SNL star Tracy Morgan brings heaps of scrutiny on the company for its working conditions, as the trucker was in the 14th hour of his shift during the late-night wreck.

Outside of the Dow, Rite Aid stock shed 3.5% on Thursday after the company's quarterly earnings disappointed Wall Street, which has developed lofty expectations for the business during the course of last year. The stock ended sharply higher on Tuesday and Wednesday as investors eagerly anticipated today's numbers. While revenue growth managed to modestly beat expectations, edging up 3% year over year, profits fell by more than 50% during the same period. While that figure alone may instinctively spook shareholders, Rite Aid's quarter actually wasn't all bad.

Kroger

Source: Kroger website

Grocery giant Kroger's quarter certainly wasn't too shabby, as evidenced by its outsized 5.1% gains today. It was tough to find a weakness in the company's first-quarter numbers: earnings per share jumped from $0.92 to $1.09, same-store sales grew by 4.6%, and Kroger increased its growth forecasts for the fiscal year. Citing the acquisition of North Carolina-based Harris Teeter as a boost to its results, the company guided for 12% to 15% earnings growth this year, a far cry from long-term growth between 8% and 11%.

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

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