What Happened in the Stock Market Today

Image source: Getty Images.

A late afternoon rebound helped stocks avoid ending at session lows on Tuesday, but the Dow Jones Industrial Average (^DJI 0.81%) still fell by over 100 points as the S&P 500 (^GSPC 0.90%) indexes shed nearly 0.7%.

Today's stock market:

Source: Yahoo! Finance.

The SPDR Select Financial Sector Fund (XLF 1.69%) traded heavily as the Federal Reserve kicked off its two-day monetary policy meeting. The Fed is expected to announce on Wednesday that it is leaving interest rates at their current levels for now. But investors will be parsing the statement for hints about a possible December increase, which could have significant profit implications for financial stocks. The iPath VIX Short Term Futures Fund (VXX) spiked by nearly 5% on increasing expectations for volatility around this week's Fed meeting and next week's presidential election results.

Individual stocks making headlines included Coach (TPR 1.64%) and Pitney Bowes (PBI 1.62%), which moved in opposite directions following their quarterly report releases.

Coach posts surging profits

Coach shares bucked the market's downtrend after the luxury apparel specialist revealed some good news for investors in its third-quarter report. Its risky shift away from the value side of the industry seems to be paying off: Coach pulled back from the department-store channel and ended its online promotions last quarter but still managed to increase overall revenue. Sales at existing locations grew by 2%, for about the same pace as in the prior quarter.

Image source: Getty Images.

Meanwhile, higher selling prices pushed gross profit margin up, and that improvement combined with lower selling expenses to produce a 20% surge in operating profit.

"We are pleased with our performance in the quarter, highlighted by continued positive comparable store sales in North America and growth internationally," CEO Victor Luis said in a press release.

Management believes the strategic shifts, while lowering growth in the short term, will help raise the brand's value over time.

The retailer confirmed its prior revenue outlook and projected operating margin of 19% of sales this year, marking a healthy improvement over last year's 15%. It also heads into the critical holiday shopping season in a lean inventory position, given that inventories declined by 5% last quarter even as sales ticked higher by 1%.

Pitney Bowes lowers its outlook

The market punished shares of Pitney Bowes after it revealed growing challenges in key segments of its business. The mailing and shipping solutions specialist booked a surprising 6% drop in its small and medium business division and an even larger decline in segment profit.

Executives said results were hurt by lower-than-expected license revenue, and because those sales carry the highest profit margins, Pitney Bowes' profitability suffered. The company posted a 22% decline in earnings to $0.35 per share, missing consensus estimates that were calling for $0.37 per share of profit.

Executives sounded optimistic that there will be improvements ahead.

"We are confident that the actions we have put in place in the third quarter will begin to yield better results," beginning as early as next quarter and through 2017, CEO Marc Lautenbach said.

However, the latest stumbles will still knock the company just off its already-weak 2016 growth forecast. Lautenbach and his team now see sales declining by 2% rather than rising by 1%, as adjusted earnings come in closer to $1.75 per share than the $1.80 prior forecast.