Stocks took a significant step back from record highs on Tuesday, with both the Dow Jones Industrial Average (^DJI 0.21%) and the S&P 500 (^GSPC 0.28%) indexes finishing lower by more than a full percentage point.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
(1.14%) |
(237.85) |
|
S&P 500 |
(1.24%) |
(29.45) |
Data source: Yahoo! Finance.
Financial stocks, which have risen the most in the recent rally, were hit especially hard in Tuesday's downturn. That selling pressure dragged the Financial Select Sector SPDR ETF (XLF 0.34%) lower by 2.8%. Gold prices moved in the opposite direction and helped push up bullish bets on that precious metal. The Direxion Daily Gold Miners Bull 3X ETF (NUGT -0.33%) jumped 4.2% for the day.
As for individual stocks, General Mills (GIS 0.90%) and Marriott International (MAR 0.19%) stood out following fresh announcements of the companies' latest operating trends.
Image source: Getty Images.
Marriott's new growth forecast
Marriott shares touched a new record high in early trading before ending with just a half-percent gain. The hotel chain sparked shareholder enthusiasm by announcing an aggressive new growth plan that calls for adding as many as 300,000 rooms to its portfolio by 2019. That would effectively speed up its capacity expansion rate to 6.5% per year from 5% over the last three years.
With its recent acquisition of the Starwood brand, Marriott already controls 8% of worldwide hotel rooms, the company explained. But healthy demand for travel should allow it to extend that scale advantage, according to executives. "We are more optimistic than ever about our future," CEO Arne Sorenson said. "We expect to deliver significant free cash flow and sustained earnings growth as we expand our footprint strategically around the world," added Chief Financial Officer Leeny Oberg.
Image source: Getty Images.
Management believes they could achieve revenue per available room (RevPAR) growth of between 1% and 3% in each of the next three years, compared to the 1% uptick it managed in 2016. That, plus the additional $675 million from added room capacity, should help power earnings gains of between 17% and 21% by 2019. Executives were careful not to call these goals official forecasts, but they do show how bullish Marriott is about its near-term growth opportunities now that it has had some time to integrate the Starwood properties into its portfolio.
General Mills meets targets
Shares of General Mills fell less than 1% in heavy trading following the release of the packaged food giant's fiscal third-quarter results. Sales dropped 5% as a small increase in average prices failed to offset significant volume reductions. Still, the results were consistent with management's conservative full-year projections. "Our third-quarter results finished in line with our expectations and keep us on track to deliver the guidance we updated last month," CEO Ken Powell said in a press release.
General Mills is declining to match its competitors, which are sharply marking down their prices right now, especially in the soup and yogurt categories. This decision has protected profitability and its premium brand positioning -- at the expense of sales growth. In fact, gross margin rose by 60 basis points to 34.5% of sales this quarter.
The company still sees revenue falling by 4% for the full year as operating profit margin improves by at least a full percentage point. It is aiming to more aggressively protect market share through stepped up advertising in the fiscal fourth quarter. However, with many processed food categories declining by double digits, it could be a while before General Mills returns to a robust organic growth rate.
