Stocks Increasing Amid Well Received Earnings Reports

U.S. equities are rising, although no notable directional drivers seem to be in play amid the holiday-shortened week, with the markets closed on Thursday for Thanksgiving and trading in a half day on Friday. Equity reports provided some positive earnings surprises, as Dell Technologies, Dollar Tree, and Best Buy all bested expectations, with the latter resuming its share repurchase program in November after a pause in Q2. Additionally, Best Buy is rising as the company posted optimistic guidance, while Dollar Tree is falling after the company tightened its expected full-year earnings range to the lower half of its previous outlook. Today’s economic calendar is quiet, with the most notable report being the Richmond Fed Manufacturing Index, which continued to worsen as expected. The economic docket will heat up tomorrow, with reports on durable goods orders, manufacturing and services PMIs, consumer sentiment, new home sales, as well as the minutes from the Fed’s November monetary policy meeting, and more. Treasury yields are mostly lower ahead of this week’s economic data and the recent inflation reports, while the U.S. dollar is declining. Crude oil and gold prices are gaining ground. Asian stocks ended mixed amid concerns regarding China’s response to its growing number of COVID cases, while European stocks are higher. The global markets continue to assess monetary policy implications from recent inflation data.

At 10:53 a.m. ET, the Dow Jones Industrial Average is rising 0.9%, the S&P 500 Index is gaining 0.8%, and the Nasdaq Composite is up 0.5%. WTI crude oil is increasing $1.49 to $81.53 per barrel, and Brent crude oil is climbing $1.99 at $89.44 per barrel. The gold spot price is trading $3.80 higher to $1,743.40 per ounce, and the Dollar Index is falling 0.5% to 107.37.

Dell Technologies Inc. (DELL $43) reported adjusted Q3 earnings-per-share (EPS) of $2.30, well above the $1.60 FactSet estimate, as revenues declined 6.4% year-over-year (y/y) to $24.72 billion, better than the anticipated fall to $24.37 billion. The multinational technology company noted how it was able to reduce backlog to meet consumer needs, and Chuck Whitten, co-Chief Operating Officer, stated, “With the industry's largest direct sales force and our technology ecosystem, we anticipated the changing landscape and responded quickly. We combatted slower demand and drove record profitability, with record operating income of $1.8 billion." Shares of DELL are rising.

Best Buy Company Inc. (BBY $78) posted adjusted Q3 EPS of $1.38, noticeably higher than the $1.03 estimate, as revenues fell 11.1% y/y to $10.59 billion, versus the $10.31 billion estimate. Chief Executive Officer (CEO) Corie Barry noted the challenging environment for the industry, and said, “Throughout the quarter, we were committed to balancing our near-term response to current conditions and managing well what is in our control, while also advancing our strategic initiatives and investing in areas important for our long-term growth.” The multinational consumer electronics retailer resumed its share repurchase program in November after pausing during Q2, and expects to spend around $1 billion in share repurchases this year. The company offered slightly better-than-expected full-year guidance, but kept its Q4 expectations unchanged. BBY is rising noticeably.

Dollar Tree Inc (DLTR $150) announced adjusted Q3 EPS of $1.20, close to the expected $1.18, as revenues rose 8.1% y/y to $6.94 billion, versus the $6.84 billion expectation. As noted by CEO Mike Wyszynski, same-store sales for both its Family Dollar and Dollar Tree segments improved versus the prior quarter, and shoppers seem to be responding to its new value proposition as the company focuses on driving both traffic and store productivity. Following price actions taken in Q2, the chain of discount stores noted that its Family Dollar Segment delivered its strongest quarterly same-store sales increase since 2020, and comparable traffic grew for the first time in 12 quarters. DLTR offered a Q4 outlook that was slightly above estimates. The company also reaffirmed its enterprise comparable sales for the full year, while raising its revenue guidance and tightening its EPS range to the lower half of its previous guidance, flagging some inflationary cost pressures. Shares are falling.