What Happened in the Stock Market Today

Stocks fell on Wednesday, with the energy sector again leading the declines as oil prices dropped. The Dow Jones Industrial Average (^DJI -0.11%) and the S&P 500 (^GSPC 0.02%) indexes both logged minor losses.

Today's stock market:

Source: Yahoo Finance.

Individual stocks making big moves on Wednesday included Palo Alto Networks (PANW 0.11%) and Chico's FAS (CHS), which both attracted unusually high trading volume following their quarterly earnings announcements.

Palo Alto Networks beats expectations

Cybersecurity specialist Palo Alto saw its stock drop 8% despite announcing quarterly results that beat management's top and bottom-line targets. Sales rose 41% to $401 million – trouncing executives' late May forecast of $388 million. Non-GAAP income, at $0.50 per share, was at the top end of guidance. "Customers are turning to our Next-Generation Security Platform in record numbers to more effectively prevent cyberattacks no matter where their data resides," CEO Mark McLaughlin said in a press release that trumpeted Palo Alto's record fiscal year of sales, billings, and deferred revenue .

Image source: Getty Images.

On the other hand, the company's billings growth slowed for the second straight quarter -- and by a much larger margin this time. Billings rose by 45%, compared to 61% in fiscal Q3 and 62% in fiscal Q2. Some of that decline can be pegged to customers increasingly opting for subscriptions over product purchases, which tends to hurt the top line initially while boosting revenue and cash flow over time. Indeed, Palo Alto's free cash flow jumped to 43% of operating cash from 35%.

The company issued a somewhat conservative outlook for the coming quarter that calls for a continued sales growth slowdown. The $399 million of revenue that McLaughlin and his team projected was slightly below consensus estimates, which could be the driver behind the stock's daily decline. Long term investors can look past that dip, though, to see an industry that's growing quickly and pushing Palo Alto's client base, recurring revenue, and cash flow figures, higher.

Chico's slices costs

Chico's FAS, a women's apparel retailer, jumped 12% after announcing better-than-expected quarterly earnings along with a major cost-cutting initiative. The operating numbers may have beat consensus estimates, but they weren't particularly exciting. Comparable-store sales fell 3% as the retailer endured a dip in both customer traffic and average spending per visit. However, that marked a slight improvement over the prior quarter's 4% comps decline .

Image source: Getty Images.

Gross profit margin fell by a percentage point to 38% of sales, again representing a slight improvement in trend. Last quarter Chico's posted a 2 percentage-point decline in this metric. "We are pleased with our second quarter performance which reflected continued progress in our efforts to transform our company to win in the future," CEO Shelley Broader said in a press release.

Executives also announced a large reorganization that removed 200 positions, or 13% of its corporate headcount. The cuts already started boosting the bottom line. In time they should add $25 million in annual savings to Chico's already-announced cuts for a total of about $100 million of savings going forward (or about 4% of 2015 sales). That added efficiency will likely remove most of the financial sting from the continued weakness in sales that Chico's projected for the second half of this fiscal year.