What Happened in the Stock Market Today

By Markets Fool.com

What Brexit? Stocks jumped for the second straight session on Wednesday as investors bid up the Dow Jones Industrial Average by 285 points, or 1.6%, and the S&P 500 by 35 points, or 1.7%.

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^DJI data by YCharts.

Both indexes are back in positive territory for the year and have recovered most of the decline they suffered in the two days following the news last week that the U.K. had voted to leave the European Union.

As for individual stocks, Dow giant Nike and snack titan General Mills saw spiking trade volume on Thursday after announcing quarterly earnings results. Here's why.

Nike sees more growth ahead

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Nike was the Dow's biggest daily gainer, jumping 4% after it closed out its fiscal year with solid earnings results. Revenue rose 6%, or 9% after accounting for currency swings. Net income ticked down by 2%, but a shrinking share count produced steady earnings on a per share basis. Nike earned $0.49 per share, slightly higher than consensus estimates.

Image source: Getty Images.

The company endured a minor drop in profitability in Q4, as management predicted, but gross margin expanded for the full year to 46.2% of sales from 46%. The international business turned in an especially strong performance, with Japan revenue spiking 22%, Western Europe up 19%, and China up 23%. The U.S., Nike's biggest single market, posted zero growth for the quarter on softness in the apparel side of the business.

CEO Mark Parker and his executive team projected a solid fiscal 2017 for the brand. Sales growth should be in the low single digits after accounting for currency moves, continuing 2016's momentum. Gross margin should tick higher again, Parker said, and this time by as much as half of a percent thanks to cost cuts and higher average selling prices. The current quarter won't look pretty on the top or bottom lines since growth is projected to be the slowest of the year, even as costs spike thanks to marketing spend for the Olympics and the European Soccer Championships. Nike's long-term plan seems firmly in place, though, and points to more sales and profit growth ahead.

General Mills aims for higher profits on flat sales

General Mills, the owner of Cheerios and Yoplait, rose in heavy trading following its fiscal Q4 earnings release. Sales fell by 9%, which was better than the 10% drop analysts were expecting. The decline was completely driven by unusual factors like a brand divestment and a slightly shorter fiscal calendar. Strip out those headwinds, and revenue actually ticked higher by 1%.

Image source: Getty Images.

General Mills beat consensus estimates by a wider margin on profits: It posted $0.66 per share of earnings compared to the $0.60 Wall Street had modeled. Management credited productivity and cost savings initiatives for the profit boost while highlighting the return to organic growth over the last four quarters. "Our renovation and innovation efforts helped improve topline momentum on many businesses, and our productivity and cost-savings initiatives drove strong margin expansion," CEO Ken Powell said in a press release.

For the year ahead, executives project a minor decrease in organic sales, but as much as an 8% EPS boost. Cost cuts will make the business fundamentally more profitable, with operating margin approaching a strong 20% of sales by 2018. Still, investors might want to wait for signs of stronger revenue growth before paying nearly 30 times the past year's earnings for a piece of General Mills.

The article What Happened in the Stock Market Today originally appeared on Fool.com.

Demitrios Kalogeropoulos owns shares of Nike. The Motley Fool owns shares of and recommends Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.