Stocks appear headed for a tumble today. The Dow Jones Industrial Average (^DJI -0.12%) 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 (FDO.DL) and Costco (COST -0.11%) 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.
