What we tend to notice here in the Ahead of Wall Street column (in this afternoon-edition’s case, Ahead of Tomorrow Morning’s Open) is that, when there is important data coming out the next morning, trading tends to heat up in one direction or another, as it has done today. The data in question is, as most everyone knows by now, the long-awaited Employment Situation report from the U.S. government; the direction of trading is decidedly down.
This is more or less getting a lead-off of first base, with expectations for tomorrow’s jobs numbers projected to hamper market trading on the news. This would speak to a higher-than-expected nonfarm payrolls number Friday morning, which would mean 225K new jobs filled in February or more. It would also suggest January’s mammoth 517K jobs gain, which surprised everyone when the numbers came out, would not be significantly revised downward.
If this “lead-off” is incorrect, however, it provides an excellent opportunity for market participants to buy into oversold equities — all four major indices are -2% to -4% lower over the past five trading days. A poor showing in tomorrow’s Employment Situation, in our current “bad news is good news” environment, may provide a pop to stocks as early as the report’s release. So have yourself situated properly bright and early tomorrow morning.
In any case, the Dow sold off -541 points for the session, -1.65% — and it was the outperformer. The S&P 500 slid -1.85% on the day and the Nasdaq shed -1.98%. Worst hit of all was the small-cap Russell 2000, -2.81% on the day. We’ve experienced almost a straight shot downward since March 3rd, with the Dow on a three-day slide. Each of the indices is -4%, save the Nasdaq, which is -3.24% over that time.
Oracle ORCL is out with fiscal Q3 earnings after today’s close, beating estimates on the bottom line by two cents per share to $1.22 (ahead of the year-ago $1.13 per share reported) on revenues of $12.40 billion which were a smidge above the Zacks consensus. Cloud business was good in the quarter, although On Premise disappointed expectations (or at least the whisper number). Shares were down more than -5% on the news.
Ulta Beauty ULTA smashed estimates on the bottom line, reporting earnings of $6.68 per share, way past the $5.64 in the Zacks consensus. Revenues of $3.2 billion also topped expectations for $3.02 billion in the quarter, as the company spoke of “strength and resiliency in the beauty business.” However, shares are down -2.5% in late trading on slowing store growth, even as guidance was ratcheted up. Ulta shares had grown 10% year to date.
The Gap GPS missed expectations on both top and bottom lines this afternoon, reporting -75 cents per share versus -59 cents expected, and well below the -$0.02 reported in the year-ago quarter. Sales came in at $4.24 billion, missing the $4.33 billion anticipated, as same-store sales were down -5% in the quarter. To add to the company’s challenges, its Athleta CEO is stepping down immediately, and the board has yet to decide on a new CEO at this time.
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