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What Happened in the Stock Market Today

By Demitri Kalogeropoulos – Nov 11, 2016 at 5:18PM

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Disney and NVIDIA stocks stood out with big gains on a mixed day for major indexes.

Image source: Getty Images.

Stocks turned in a mixed showing on Friday, with the Dow Jones Industrial Average (^DJI 1.26%) gaining slightly as the S&P 500 (^GSPC 1.44%) ticked lower.

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Data source: Yahoo! Finance.

The VanEck Vectors Gold Miners ETF (GDX -0.52%) plunged by 8% after the price of the precious metal slumped to a one-month low. Emerging markets fell hard for the third straight session, leading the Emerging Market Index Fund (EEM -0.13%) lower by another 2%.

A few individual stocks significantly outperformed those ETFs and the broader market, including Disney (DIS 2.07%) and NVIDIA (NVDA 1.44%).

NVIDIA hits the next level

Expectations were high heading into NVIDIA's quarterly earnings report, but the graphics chip specialist still managed to blow them away. Sales rose 54% to pass $2 billion as earnings, up 89%, also hit a new high. "We had a breakout quarter -- record revenue, record margins and record earnings were driven by strength across all product lines," CEO Jen-Hsun Huang said in a press release. The stock rose 30% to bring its year-to-date return to over 160%.

Image source: Getty Images.

Gaming, which is by far NVIDIA's biggest product line, saw a 63% jump. Many of its growth businesses did just as well, if not better. The data center segment nearly tripled to $240 million and the automotive platform improved by 61% to $127 million. NVIDIA also managed to turn a higher proportion of its revenue into profits as gross margin jumped 3 percentage points to 59% of sales. Thanks to slow-growing operating expenses, net income more than doubled to $542 million.

Executives see another $2 billion quarter on the way as gaming, deep learning, and data center segments continue to attract surging demand. Wall Street raced to catch up since the implied 50% sales jump was far above consensus estimates calling for just 30% growth in the current quarter. The share price swing left the stock richly valued at almost 40 times next year's profit. Yet NVIDIA has found a way to earn its significant premium through a string of impressive quarterly reports this year.

Disney churns out growth

Disney was the best-performing stock on the Dow following its fiscal fourth-quarter earnings announcement. In that report, the entertainment giant revealed 3% lower revenue and a 10% decrease in operating income. However, those results were hurt by an extra sales week in the comparable year-ago period that inflated key figures relative to this year's numbers.

There's no question that the company is struggling with parts of its huge media empire. The cable networks segment posted a 13% profit decline as ESPN endured another quarter of falling subscriber figures. The parks and resorts segment also shrunk as the first quarter of sales at the Shanghai Disney Resort couldn't offset weakness in other international properties like Disneyland Paris and Hong Kong Disneyland.

Image source: Disney.

Disney's broader results are rock-solid, though. Over the last 12 months, cash flow is up 27%, net income has grown by 12% to $9.4 billion, and a record box-office year pushed total revenue up 6% to $55.6 billion. "We're very pleased with our performance for the year, delivering the highest revenue, net income and earnings per share in Disney's history," CEO Bob Iger said in a press release. More subscriber challenges are on the way for its cable networks, but this week's figures demonstrate that the company can still manage significant sales and profit gains even during a weak period for its biggest single business segment.

Demitrios Kalogeropoulos owns shares of Walt Disney. The Motley Fool owns shares of and recommends Nvidia and Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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