Stock Market Today: Why Family Dollar and Costco are on the Move

What you need to know about today's stock market.

Jul 10, 2014 at 9:25AM

Stocks appear headed for a tumble today. The Dow Jones Industrial Average (DJINDICES:^DJI) has lost 166 points in pre-market trading, suggesting a sharply lower start to the stock market. Wall Street seems to be following Europe's lead: The Stoxx index plummeted overnight on new sovereign debt worries, and was down nearly 2% as of 8:30 a.m. EDT. 

Meanwhile, in company news, both Family Dollar (NYSE:FDO) and Costco (NASDAQ:COST) stocks are on the move after the retailers posted financial results this morning.


Family Dollar today posted mixed results for its fiscal third quarter. The discount retailer's comparable-store sales fell by 1.8% on lower customer traffic. However, a rising store count and more growth in its consumables business helped lift overall year-over-year sales higher by 3% to $2.66 billion, just above Wall Street's estimate of $2.61 billion. Still, profit was surprisingly low, falling 19% to $0.85 a share as Family Dollar cut prices in a bid to protect market share. CEO Howard Levine said in a press release that those price investments were already "resonating with customers" and that management is "encouraged by the improving trends." The company reaffirmed its outlook for fiscal fourth-quarter earnings of roughly $0.80 a share on flat sales growth. The stock was down 2.4% in pre-market trading.

Costco announced this morning that year-over-year revenue in June rose 10% to reach $11 billion. Stripping out its growing store base, sales at existing warehouses climbed an impressive 6%, or well above the numbers other retailers are posting these days. June's results also keep Costco right on track to match last quarter's 6% overall comp gain when the company delivers its fiscal fourth-quarter results in early October. Wall Street analysts expect Costco to post quarterly earnings of $1.51 per share on $35 billion in sales, or 8% growth over the prior-year period for both figures. With results like that, it's no wonder the warehouse retailer commands a big valuation premium over slower-growing companies such as Wal-Mart and Target. Costco's shares were down 0.2% in pre-market trading in what looks set to be a rough day for stocks overall.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks like Costco simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information