With little new information on trade negotiations with China, investors were focused on upcoming earnings reports on Monday. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) were in the red in the morning, rose in the afternoon, and jumped in the final minutes of trading.
Today's stock market
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Technology led the market today, with the Technology Select Sector SPDR ETF (NYSEMKT: XLK) rising 1.6%. Healthcare stocks were laggards; the Health Care Select Sector SPDR ETF (NYSEMKT: XLV) slipped 0.3%.
As for individual stocks, two dividend-paying consumer goods giants, Clorox (NYSE: CLX) and Sysco (NYSE: SYY), reported surprisingly high profits in their latest quarters.
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Clorox sees steady growth
Shares of consumer goods conglomerate Clorox jumped 5.7% after the company beat profit expectations for its fiscal second quarter, thanks to price increases and cost-cutting. Net sales grew 4% to $1.47 billion, about what analysts were anticipating. Earnings per share of $1.40 came in well ahead of expectations of $1.30.
The company's largest segment, cleaning, increased sales 6% and pre-tax earnings 12%, with growth across all businesses. The lifestyle segment, which was bolstered by Clorox's acquisition of Nutranext last year, had sales growth of 25% and a pre-tax earnings increase of 13%. Sales declined in the household segment by 4% due to competition, and international sales were down 8% on currency losses.
Clorox maintained earlier full-year guidance of EPS between $6.20 and $6.40 despite $0.05 to $0.07 of negative impact from tariffs. That steady outlook for continued growth was encouraging for investors in the consumer staples sector, which was hit hard in the fourth quarter.
Sysco battles cost pressures
Last quarter, shares of food distributor Sysco were hammered when the company reported disappointing profit on rising supply chain costs. Those cost pressures were still in evidence when the company announceded Q2 results today, but it beat lowered expectations and promised further savings measures, sending the stock up 4.8%.
Sales came in as expected, up 2.5% to $14.8 billion, while the company earned an adjusted $0.75 per share, down 3.8% from last year but above the analyst consensus of $0.73. Sales in the U.S. grew 4.2% and gross profit increased 4.5%, but operating expenses were up 4.7% due to increased costs in warehouse and transportation.
Sysco said it has recently implemented organizational and executive leadership changes that will result in a 10% reduction in salaried corporate support positions, and it expects to see further benefit from cost savings initiatives in the second half.
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