Investors have seemed uncertain lately about how key issues like trade and economic growth will affect stocks, and as a result, major market benchmarks have made somewhat jerky moves throughout the week. Wednesday morning was no exception, as initial fears about whether a trade deal between the U.S. and China will take place produced very modest losses. As of 11 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 68 points to 27,866. The S&P 500 (SNPINDEX:^GSPC) fell 2 points to 3,118, but the Nasdaq Composite (NASDAQINDEX:^IXIC) moved higher by 3 points to 8,574.
As earnings season winds down, market participants have paid close attention this week to the retail sector, and news from retailers earlier in the week wasn't all that good. Today, though, Lowe's (NYSE:LOW) and Target (NYSE:TGT) gave their shareholders something to smile about, and their outlooks suggest that investors shouldn't assume that the holiday season will be a dud for everyone across the retail sector.
Lowe's goes higher
Shares of Lowe's rose 5% after the home improvement retailer reported its third-quarter financial results. The company surprised investors with a strong performance, including a 36% jump in adjusted earnings per share compared to year-earlier figures.
Investors hadn't been sure what to expect coming into the report, in part because rival Home Depot hadn't been able to deliver the results that its shareholders had hoped to see. Yet Lowe's managed to see success in key areas, including a 3% rise in comparable sales for its U.S. home improvement business.
However, Lowe's isn't done making strategic moves to improve its business. The company said it would close 34 of its store locations in Canada as part of a strategic review of its Canadian operations. Lowe's also hopes to simplify its corporate structure north of the U.S. border. Those moves will cost money, but the retailer thinks the investment will pay off in long-term savings.
With today's move, Lowe's stock is now trading at all-time highs. Shareholders have to hope that the U.S. economy will keep growing at a sufficient pace to keep the housing market healthy, but at least for now, there aren't any obvious signs of new trouble for Lowe's.
Target hits the mark
Shares of Target soared 12% following its release of its third-quarter financial results. There was a lot of good news in the report, including a 4.5% rise in comparable sales that helped push overall revenue up by nearly 5% year over year.
Target saw particularly strong success from its digital sales channel. Comps for that niche were up 31% from year-ago levels, with same-day fulfillment making up about 80% of Target's overall growth in digital comps.
The department store retailer also boosted its guidance for the fourth quarter and full year. Target now expects full-year adjusted earnings of $6.25 to $6.45 per share, up from its previous range of $5.90 to $6.20 per share.
CEO Brian Cornell is optimistic about the future. "We have ushered in the holiday season with an unwavering commitment to guest service," Cornell said, and "we're seeing industry-leading strength across multiple metrics, from the top line to the bottom line." If Target can keep up that momentum, it could mean a lot of holiday joy for shareholders.