At one point, stocks fell by more than 1% on Thursday before climbing higher through the afternoon hours to end with just minor losses. By the closing bell the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) indexes had each lost roughly 0.3%.
Today's stock market:
|Index||Percentage Change||Point Change|
The iShares MCSI Emerging Market Fund (NYSEMKT:EEM) fell 1% thanks to an overnight drop in Asian markets. The exchange traded fund remains solidly higher on the year, though, up 18% since January. Meanwhile, the SPDR Select Finance Sector Fund (NYSEMKT:XLF) fell 1% on heavy trading as investors braced for a slew of earnings reports from the world's biggest banks over the coming days.
Wells Fargo replaces its CEO
After initially spiking in the wake of news that CEO John Stumpf has resigned, Wells Fargo shares fell 2% on Thursday to within just a few percentage points of its 52-week low. The drop came as incoming CEO Tim Sloan officially took over the bank's top executive spot.
Sloan has a major challenge ahead in working to get the company past what appears to be widespread fraudulent activity that resulted in the opening of millions of credit card and checking accounts without the consent of the customers involved. Sure, the vast majority of the bank's business isn't touched by this scandal, but the hit to the company's brand and reputation might echo throughout the enterprise.
Still, the management change at least shows that Wells Fargo is taking this threat seriously after fumbling the early response. "My immediate and highest priority," Sloan said, "is to restore trust in Wells Fargo."
The bank is due to post earnings results before the market opens on Friday, Oct. 14. Consensus estimates call for a slight profit decline to $1.01 per share as revenue ticks up by 2% to $22.2 billion. In addition to the commentary around profitability and interest rates, investors will likely hear plenty from Sloan and his team on how Wells Fargo plans to regain the trust of its customers -- and shareholders.
Ulta Salon raises its long-term outlook
Beauty retailer Ultra Salon was one of the market's biggest gainers, notching an 11% spike after management issued optimistic guidance for its growth pace. Ulta now sees comparable-store sales increasing by 14% to 15% in the third quarter, compared to the 12% boost they had predicted in late August. For investors keeping track, that's the third time so far this year that CEO Mary Dillon and her executive team have raised their sales targets.
This outlook boost extended into beyond just the current quarter. Ulta raised its full-year sales growth projection to 13% from 12% and also increased its long-run forecast (for fiscal 2017 through 2019) to reflect 8% higher comps on average, compared to the 6% they had previously forecast. "We are confident that executing against our strategic imperatives will continue to drive excellent financial results and create sustainable, long term shareholder value," Dillon said in a press release.
Ulta was already one of the fastest-growing retailers in the country before this upgrade. In fact, customer traffic soared by 11% in the first quarter and by 10% in the second quarter. Thursday's comments by management imply the company kept up its stellar growth pace at least into the the third quarter. That success will be critical if Ulta wants to hit its goal of doubling market share over the coming years while producing strong profit gains for investors.