Today's stock market
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As for individual stocks, Target Corporation (NYSE:TGT) helped give retail shares some life with a positive outlook, and Russian technology company Yandex N.V. (NASDAQ:YNDX) took a ride upward after announcing a deal with Uber.
Target's upbeat forecast
Target provided some much-needed cheer to the retail sector today by revising upward its guidance for its fiscal second quarter, sending shares up 4.8%. The company said it now expects to report a "modest increase" in comparable sales and earnings per share to be above the high end of the previous guidance of $0.95 to $1.15. Earlier the company had said it expected a low-single-digit decline in comparable sales.
"Following better-than-expected results in the first quarter, we've seen additional, broad-based improvement in traffic and category sales trends in the second quarter, despite continued challenges in the competitive environment," said Chairman and CEO Brian Cornell in the press release.
The welcome news about an increase in comparable sales follows four straight quarters of declines in the closely watched metric. In May, the company reported a drop in comparable sales of 1.3%, but said that it saw improvement late in the quarter, and today's announcement was seen by investors as confirmation that Target's business has stabilized.
The surprise announcement helped stoke a glimmer of optimism about the battered brick-and-mortar retail industry, and fueled gains in other retail stocks today as well.
Yandex and Uber combine businesses in Russia
Yandex -- the "Google of Russia" -- and Uber announced today an agreement to combine ride-sharing businesses in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia, and spin them off into a new company to be owned 59.3% by Yandex, 36.6% by Uber, and 4.1% by the employees. Yandex will contribute $100 million and Uber $225 million in cash to the new company, which will also operate the UberEATS food delivery service in the region.
The new company will be allowed to continue to use the Uber and Yandex.Taxi brands, which together are seeing bookings run at an annual run rate of over $1 billion in the region. The news sent Yandex's stock soaring 15.9%.
"This combination greatly enhances Yandex's ability to offer better quality service to our riders and drivers, to quickly expand our services to new regions, and to build a sustainable business," said Tigran Khudaverdyan, CEO of Yandex.Taxi and designated CEO of the new company. "The combined companies currently perform over 35 million rides a month while growing over 400% year-over-year."
The move represents something of a retreat from international expansion for privately held Uber, which may be working to strengthen its financial condition before an initial public offering. The results for the new company will be consolidated into Yandex's books, a development that made the stock of the fast-growing Russian leader of search, navigation, and transportation services that much more attractive to investors today.