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What Happened in the Stock Market Today

By Demitri Kalogeropoulos – Nov 23, 2016 at 5:29PM

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Urban Outfitters and Deere posted big stock price swings as markets rose on Wednesday.

Image source: Getty Images.

Stocks rose ahead of the Thanksgiving holiday, with both the Dow Jones Industrial Average (^DJI 1.01%) and the S&P 500 (^GSPC 0.66%) adding to their impressive 2016 gains with minor upticks.

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Data source: Yahoo! Finance.

But it was a rough day for gold, as the precious metal fell below $1,200 per ounce for the first time since February. That slump pushed the VanEck Vectors Gold Miners ETF (GDX 1.16%) down 5% and the highly leveraged Direxion Daily Gold Miners Bull 3X ETF (NUGT 2.66%) lower by 16%.

As for individual stocks, Urban Outfitters (URBN 4.33%) and Deere (DE 2.43%) stocks made headlines with unusually large moves following their quarterly earnings announcements.

Urban Outfitters

Urban Outfitters' stock took a step back from its 2016 rally, falling 13% to knock its year-to-date return down to 54%. Shares declined following the retailer's generally solid third-quarter results that showed sales at existing locations improved 1% to continue the expansion pace from the prior quarter. Revenue was again mixed across its portfolio. The Urban Outfitters brand saw a strong 5% comps improvement, while the Free People and Anthropolgie segments shrank.

Image source: Urban Outfitters.

Gross profit growth slowed, with the margin holding steady compared with the prior quarter's 2-percentage-point jump. Management explained that the profitability pinch was mostly due to increased spending in the online sales channel. Overall, though, executives were happy with the operating momentum demonstrated by its third straight quarter of comps growth.

"I am pleased to announce our teams delivered record third-quarter sales," CEO Richard Hayne said in a press release.

Judging by the stock's slump on Wednesday, Wall Street was holding out for more in the way of earnings growth. Sure, investors will want to watch gross profit trends to make sure executives are striking the right balance between sales growth and gross margin. But the company's bigger-picture trajectory of modest sales and profit gains seems intact heading into the retailing industry's most important season.


Industrial equipment maker Deere is finding ways to profit despite a global farm recession. Sales fell 3% in the quarter that just closed, while net income trounced expectations with its 17% decline to $0.90 per share. 

Image source: Getty Images.

Higher equipment prices helped offset lower shipment volumes, and the company also benefited from decreased expenses. Overall, operating profit margin held steady at 7% of sales. With respect to the fiscal year that just closed, CEO Samuel Allen said management was happy with the results. "The company in 2016 had one of its 10 best years in both sales and earnings, a noteworthy achievement in light of the difficult business climate," Allen said in a press release.

Deere expects this cyclical downturn to hurt operating results to a lesser extent than past declines. In fact, their projection for the coming year calls for a 1% drop in sales while net income weighs in at $1.4 billion, 8% below the prior year's result but far better than consensus estimates. Meanwhile, those relatively minor top- and bottom-line slumps imply that the company is making good on its goal of diversifying into a wider mix of revenue streams while adding flexibility into its cost structure. Investors celebrated that progress by pushing shares up to a record high.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool is short Deere & Company and has the following options: long December 2016 $92 calls on Deere & Company. 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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