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What Happened in the Stock Market Today

By Demitri Kalogeropoulos – Apr 5, 2017 at 4:45PM

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Panera Bread and Greenbrier stocks stood out on a negative day for market indexes.

After enjoying solid gains through most of the trading session, stocks stumbled into the close to end with modest losses on Wednesday. The Dow Jones Industrial Average (^DJI -0.57%) and the S&P 500 (^GSPC -0.87%) indexes each finished lower by less than 0.5%.

Today's stock market


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Data source: Yahoo! Finance.

Financial stocks attracted the heaviest trading, and the popular Financial Select Sector SPDR ETF (XLF -0.71%) trailed the broader market with a 0.8% decline. Meanwhile, a slight drop in gold prices wasn't enough to sink the leveraged bullish bet on the precious metal, Direxion Daily Gold Miners Bull 3X ETF (NUGT -0.42%). That fund beat the market with a 0.2% gain.

As for individual stocks, Panera Bread (PNRA) and Greenbrier (GBX -1.67%) stood out with large price jumps following market-moving news.

Tickers showing a mix of positive and negative stock price movements.

Image source: Getty Images.

Greenbrier confirms its outlook

Shares of railcar specialist Greenbrier jumped 10% after the company posted fiscal second-quarter earnings results that included surprisingly strong sales and profit figures. The company delivered 3,900 railcars in the quarter, which led to a 15% decline in revenue, but consensus estimates were bracing for a more painful 22% dip. Earnings also outperformed expectations at $1.09 per share compared to the $0.84 per share that analysts were targeting.

A few key financial metrics improved in comparison to the prior quarter. Gross margin rose to 21% of sales from 20.4% and selling and administrative expenses dropped 4.1%. Those positive trends sparked a 38% jump in earnings. Executives credited their two major initiatives of focusing on the core U.S. business while engaging in targeted international expansion. "Our substantial advances on both prongs of this strategy resulted in a strong quarter," CEO William Furman said in a press release, "including a healthy aggregate gross margin of 21%."

Steady backlog and production trends gave Furman and his executive team confidence to reaffirm full-year guidance that calls for deliveries of 14,000 to 16,000 units leading to revenue ranging from $2 billion to $2.4 billion. The midpoint of that sales figure implies double-digit declines for the year, but is still higher than the $2.1 billion that Wall Street had been targeting. Thus, investors spent Wednesday's trading session ratcheting up their expectations.

Panera Bread goes private

Panera Bread shares shot up for the second day this week after the company announced that it is being acquired for $7.5 billion, or $315 per share in cash. The fast-casual restaurant chain will be headed to privately held JAB Holding, which owns a collection of coffee brands in addition to food service franchises including Krispy Kreme Doughnuts and Einstein Noah.

A Panera Bread sandwich.

Image source: Getty Images.

Shareholders might question the timing of the deal, given that Panera Bread is booking market-thumping sales growth right now. In fact, sales at existing locations rose by 5.3% in the first quarter, beating the industry by nearly 7 full percentage points.

Yet management sees the deal as the right path for the business. "We believe this transaction with JAB offers the best way to continue to operate with this approach," CEO Ron Shaich said. "We are pleased to join with JAB, a private investor with an equally long-term perspective," he added.

Shareholders stand to collect a 30% premium for their holdings compared to the average stock price over the 30 days preceding the first news reports that surfaced of a potential buyout. Panera Bread expects the deal to close sometime in the third quarter of 2017.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Panera Bread. The Motley Fool recommends The Greenbrier Companies. The Motley Fool has a disclosure policy.

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