Following yesterday's monster gains, stocks are taking a breather today. Roughly halfway through the trading session, the Dow Jones Industrial Average (^DJI 0.49%) is lower by a marginal 6 points, or 0.04%.
While the typical fare of economic news may seem anticlimactic in the wake of the, dare I say, fiscal cliff debacle, it's nevertheless critical for understanding the market's daily movements.
The biggest news out today concerns the employment situation. On one hand, a report released this morning showed that private employers added an estimated 215,000 jobs in the month of December, beating the consensus forecast of 140,000, according to a Bloomberg survey of economists. On the other hand, data from the Labor Department forecast that more Americans filed for unemployment benefits for the week ended Dec. 29. The number of applications for jobless benefits jumped sequentially by 10,000 to 372,000, exceeding the 360,000 median estimate of economists.
In terms of individual stocks, a lot of the action in today's market is focused on the retail sector, as multiple stocks therein are making big moves. Shares of Family Dollar Stores (FDO.DL) are down more than 11% after the company released a disappointing profit forecast for the second quarter of this year. The company now expects to earn no more than $1.28 a share in the quarter compared to the consensus estimate of $1.39 a share.
Shares of Limited Brands (BBWI 1.05%) were also down considerably -- lower by 5.6% at the time of writing. The owner of the Victoria's Secret and Bath & Body Works chains saw same-store sales, a pivotal metric in the retail industry, grow less than expected in the month of December.
Alternatively, while Kohl's (KSS 1.15%) also cut its fourth-quarter profit outlook due largely to deeper discounts, its shares are nevertheless up marginally thanks to a better-than-expected 3.4% increase in December same-store sales. According to Kohl's CEO, Kevin Mansell, "Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned."
And finally, shares of Ross Stores (ROST 1.27%) are higher by an impressive 7.8%. The move comes after the discount retailer raised its fourth-quarter earnings-per-share outlook to $1.05 to $1.06 a share, compared to a previous range of $0.99 to $1.04 a share, and reported comparable-store sales of 6% for the month of December, handily beating the consensus estimate of 2.7%.
