Stocks wobbled between gains and losses on Thursday as investors prepared for a highly anticipated employment report from the government due out on Friday morning. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) indexes both held close to breakeven but ended the day mixed.
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Crude oil prices continued their rally and passed $50 per barrel for the first time since June. That increase helped United States Oil Fund (NYSEMKT: USO) rise 1% to cut its year-to-date losses to less than 6%. In contrast, gold prices fell for the fifth straight day, which drove a double-digit decline in leveraged miners, captured in the Direxion Daily Gold Miners Index ETF (NYSEMKT: NUGT).
Zumiez posts a growth rebound
Zumiez shares soared 18% higher following its announcement of market-thumping sales growth for the month of September. The clothing retailer's comparable-store sales jumped 6% to mark a sharp rebound from the prior quarter's 5% decrease.
Last month, executives warned investors that "challenging consumer demand" had knocked the company off of its long-run growth target. Zumiez had seen pockets of strong demand in the second quarter, especially in its men's categories, but the third quarter was shaping up to be flat, or even slightly negative.
Business trends have improved since then. Zumiez posted 11.5% higher overall sales in September as revenue reached $75 million. In fact, its 6.3% comps gain would make it one of the faster-growing apparel specialists on the market if it can continue that pace. Buckle, for example, saw its September sales dive by 16%.
Zumiez' management isn't predicting continued 6% comps, but it does now see sales rising by 2% in the third quarter rather than falling by as much as 2%, as it had forecast last month. The faster growth will also power strong profits, so Zumiez hiked its earnings forecast from $0.24 per share to $0.29 per share. Investors raced to catch up to the quick shift in operating trends and sent the stock solidly higher in the process.
Yum! Brands stumbles in China
Yum! Brands slipped by 2% after the fast-food chain posted mixed third-quarter results. Sales fell by 4% to $3.3 billion, which was slightly worse than expected. The company's earnings were $1.09 per share -- up 9% and right at consensus estimates.
Yum!'s KFC and Taco Bell divisions logged impressive gains despite weak selling conditions in the industry. Yet positive comparable-store sales at those two chains were offset by slightly negative comps at Pizza Hut and and Yum!'s China division. Management said the China business was hit by negative sentiment against Western brands tied to an international court ruling challenging the country's claims in the South China Sea. "If not for this event, we believe the China Division would have delivered its fifth consecutive quarter of positive" comps, CEO Greg Creed said in a press release.
Meanwhile, Yum! Brands continues to improve its earnings power. Operating margin jumped by 2 percentage points to 19% of sales, and restaurant level profitability rose to 22% of sales from 20% last year. That success gave management the confidence to boost its full-year profit growth guidance to 15% from 14%.