Yahoo Finance What Happened in the Stock Market Today
Stocks shrugged off news of higher inflation and rising interest rates Wednesday, and the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) both surged more than 1%.
Today's stock market
Index | Percentage Change | Point Change |
|---|---|---|
Dow | 1.03% | 253.04 |
S&P 500 | 1.34% | 35.70 |
Data source: Yahoo! Finance.
Bank stocks led the rally on the steepening yield curve, but rate-sensitive utilities fell. The SPDR S&P Bank ETF (NYSEMKT: KBE) rose 2.9% while the Utilities Select SPDR ETF (NYSEMKT: XLU) lost 1.1%.
As for individual stocks, Fossil Group (NASDAQ: FOSL) nearly doubled on news of a turnaround, and Chipotle Mexican Grill (NYSE: CMG) investors cheered the announcement of the company's new CEO.
Image source: Getty Images.
Fossil skyrockets on smartwatch sales
Shares of fashion accessory maker Fossil Group soared an astounding 87.7% after the company announced fourth-quarter results that declined year over year but trounced Wall Street expectations. Revenue fell 4% to $921 million and adjusted earnings per share sank 47% to $0.64. Analysts were expecting EPS of $0.40 on sales of $890 million.
Fossil's primary business, watches, declined 3% to $728 million, and 6% in constant currency terms. Leathers fell 7% and jewelry sales were down 8%. Sales in the Americas fell 9% in constant currency, while those in Europe and Asia dropped 6% and 3%, respectively.
Obviously there was good news amid all those declines, and that would be that the company is having surprising success with its smartwatches, or "wearables," as Fossil call them. CEO Kosta Kartsotis said in the press release:
While sales and earnings were challenged as expected, we generated progress toward our objectives that include: driving growth in wearables across our portfolio of powerful brands, leveraging our scale to lower supply chain costs, increasing our digital capabilities, and continuing the transformation of our business through New World Fossil. To this end, fiscal 2017 saw us nearly double wearables to over $300 million, representing 14% of total watch sales.
In the conference call, company officials said industry research showed that the wearables market was $17 billion last year and is expected to grow to $32 billion by 2020. Fossil is one of the most heavily shorted stocks on the market, so signs that the company is getting traction in smartwatches sent those shorts scrambling to cover.
Chipotle's new CEO has investors cheering
Chipotle Mexican Grill announced its selection to succeed founder Steve Ells as CEO, and investors sent the stock up 15.4%. The company hired Brian Niccol, former CEO of Taco Bell, a division of Yum! Brands.
Niccol has been at Taco Bell since 2011, and oversaw a turnaround of that brand, making it popular with younger consumers through use of social media and clever advertising. He also drove new initiatives like the introduction of breakfast and the use of mobile ordering and payment. Prior to his stint at Taco Bell, Niccol led brand strategy and positioning at Pizza Hut and spent 10 years at Proctor & Gamble.
"Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business," said founder, Chairman, and current CEO Steve Ells in the press release. "His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant." Ells will become executive chairman.
Chipotle still hasn't recovered from food safety issues in 2015, and the company has stumbled in recent attempts to innovate with new products such as chorizo and queso. With the stock still down 61% from its peak almost three years ago, investors had been hoping for a change, and it's hard to imagine a better choice than an experienced executive and turnaround expert like Niccol.
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Jim Crumly owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool recommends Fossil Group. The Motley Fool has a disclosure policy.
