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Markets React Positively to Spending News on Wednesday

U.S. stocks were in the green on Wednesday after Congress authorized spending $8 billion to combat the coronavirus. The Dow Jones Industrial Average gained 3.45% to 26,810, the S&P 500 Index rose 3.08% to 3,096 and the Nasdaq Composite Index jumped 2.78% to 8,925.

Non-index stocks have also posted gains and losses recently. Shares of Nordstrom Inc. (NYSE:JWN) fell more than 2% on Wednesday after the company announced fourth-quarter 2019 results. The department store posted earnings of $1.42 per share, 6 cents shy of estimates. Revenue grew 1.4% year over year to $4.44 billion, but fell $120 million short of expectations.


"Our 2019 results reflected the accelerated roll out of our market strategy, our strength of Nordstrom Rack's execution, improved merchandise margins and realized expense savings that were 10 percent above our plan," CEO Erik Nordstrom said.

The gross profit declined 9% to 35% of net sales during the quarter as a result of higher costs from growth of the loyalty program and planned occupancy costs related to the New York City flagship store.

Moreover, the adjusted earnings before interest and taxes of $299 million, or 6.7% of net sales, was down from $333 million, or 7.6% of net sales, in the year-ago quarter.

For the full year, the Ebit was $784 million, or 5.2% of net sales, compared with $837 million, or 5.4% of net sales, for fiscal 2018. Further, the gross profit was 34.4%, remaining flat when compared to last year.

Looking ahead to fiscal 2020, Nordstrom expects net sales growth to be between 1.5% and 2.5% and the Ebit margin to range from 5.3% to 5.5%.

During the quarter ended Dec. 31, Richard Snow (Trades, Portfolio) and Philippe Laffont (Trades, Portfolio) sold out the stock, while Ray Dalio (Trades, Portfolio) trimmed his holding by 97% to 36,017 shares. Mark Hillman (Trades, Portfolio) boosted his position by 289% to 142,710 shares.

Gainers

  • Centene Corp. (NYSE:CNC) +15.3%
  • Humana Inc. (NYSE:HUM) +12.9%
  • UnitedHealth Group Inc. (NYSE:UNH) +10.8%
  • Cigna Corp. (NYSE:CI) +10%
  • L Brands Inc. (NYSE:LB) +9.5%



Losers

  • Hewlett Packard Enterprise Co. (NYSE:HPE) -3.7%
  • Halliburton Co. (NYSE:HAL) -3.6%
  • Kohl's Corp. (NYSE:KSS) -3.2%
  • Comerica Inc. (NYSE:CMA) -2.5%
  • Macy's Inc. (NYSE:M) -1.6%



Global markets

The main European stock markets traded in the green. The U.K.'s FTSE 100 climbed 1.45%, France's CAC 40 jumped 1.33%, Germany's Dax rose 1.19% and Spain's Ibex 35 advanced 1.12%.

In Asia, Japan's Nikkei 225 swelled 0.08%, India's BSE Sensex slid 0.55%, Hong Kong's Hang Seng declined 0.24% and China's Shanghai Composite gained 0.63%.

Disclosure: The author holds no positions in any stocks mentioned.

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This article first appeared on GuruFocus.