Stocks climbed on Friday as investors weighed encouraging economic data against continued political turmoil in Washington. According to a report from the Federal Reserve this morning, industrial production climbed a stronger-than-expected 1.1% in the month of February -- the metric's highest growth in four months.
Still, investors were rattled by reports that Donald Trump is preparing to oust his national security advisor, H.R. McMaster, with the commander in chief hinting that more turnover is likely in the near future.
"There will always be change, and I think you want to see change," Trump stated to reporters yesterday. "I want to also see different ideas."
The Dow Jones Industrial Average (DJINDICES:^DJI) extended yesterday's gains, while a more modest rise from the S&P 500 (SNPINDEX:^GSPC) helped the widely followed index break its four-day losing streak.
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Oil stocks enjoyed a more pronounced rise after a significant drop in U.S. gasoline stockpiles countered a larger-than-expected increase in U.S. crude supplies, leaving the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) up 1.3%. Meanwhile, industrial stocks continued to climb, with the Industrial Select Sector SPDR Fund (NYSEMKT:XLI) increasing 0.5%.
Falling as much as 16.4% early today, shares of Overstock.com partially recovered to close down 5.2% after the e-commerce and blockchain specialist posted disappointing fiscal fourth-quarter 2017 results and warned investors of a new SEC investigation.
Overstock's quarterly revenue fell 13% year over year to $456.3 million -- far below expectations for $526.2 million -- which translated to a pre-tax loss of $24.9 million.
CEO Patrick Byrne noted that the company continues to seek strategic alternatives for its e-commerce operations, including a potential sale of the segment. It faces significant margin pressure on the e-commerce side from rival Wayfair, which incurred its own pre-tax loss of $244 million last year.
As such, Byrne says Overstock will finally "respond in kind [by] adopting the classic internet 'growth strategy' I have previously eschewed: high growth, negative GAAP net income, funded out of our negative cash conversion cycle."
In the meantime, Overstock says its blockchain enterprises operating under the Medici Ventures moniker are "progressing nicely."
During the subsequent conference call, however, management warned that in February, the SEC informed the company it is conducting an investigation into its planned tZERO security token offering. Overstock didn't elaborate on the purpose of the investigation, noting it's in the process of providing the SEC with requested documents and will cooperate fully. But it also warned that the development may result in a delay of the offering and negative publicity surrounding its cryptocurrency initiatives.
Jabil supplies a solid quarter
Shares of Jabil climbed 10.1% to end the week after the electronics manufacturing services and supply announced better-than-expected fiscal second-quarter 2018 results. Quarterly revenue grew 19.2% year over year to $5.3 billion, while adjusted earnings jumped 37.5% to $0.66 per share. Both figures compared favorably to Jabil's most recent guidance, which called for adjusted earnings per share in the range of $0.50 to $0.74 on revenue of $4.75 billion to $5.05 billion.
"I'm pleased with the results of our second quarter," stated CEO Mark Mondello, "which was characterized by strong revenue growth, core operating income expansion and healthy cash flow generation."
What's more, for its fiscal third quarter Jabil expects revenue of $4.75 billion to $5.05 billion, and adjusted earnings per share of $0.35 to $0.55. Analysts were only modeling earnings of $0.29 per share on revenue of $4.8 billion.
There was little not to like about this straightforward quarterly beat from Jabil, so it's no surprise to see the stock revisiting its 52-week high in response.