What Happened in the Stock Market Today

By Markets Fool.com

Image source: Getty Images.

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Stocks rebounded from Thursday's losses to log solid gains on Friday. The Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes both ended the trading week near session highs.

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Data source: Yahoo! Finance.

The banking sector led the market higher, and that produced a 1.4% jump in the Financial Select Sector SPDR ETF (NYSEMKT: XLF). Oil prices took another step up as well, which pushed theUnited States Oil Fund LP (NYSEMKT: USO)to a 7% gain for the week.

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A few individual stocks stood out with even larger moves on Friday, including Costco (NASDAQ: COST) and CalAmp (NASDAQ: CAMP).

Costco's growth rebound

Costco shares rose 3% after the warehouse retailer announced revenue and profit growth to close out its fiscal fourth quarter. After adjusting for volatile gas price swings, sales at existing locations rose by 3%, which marked an acceleration over the prior quarter's 2% uptick. Costco's earnings also improved, rising to $1.77 per share from $1.73 last year.

Image source: Costco.

Beyond those top- and bottom-line gains, investors received several pieces of encouraging news from management. Food cost deflation, which is hurting grocery stores right now, wasn't much of a problem for Costco, executives said in a conference call. Membership growth was strong as well, although renewal rates ticked down to 90.3% from 90.4%. Chief Financial Officer Richard Galanti said that decline was due to the company's credit card switchover. The company went through a similar change in the Canada market, and renewal rates have already begun climbing, suggesting that the negative impact will be minor for this latest switch.

Looking ahead, executives believe the credit card shift will be a net positive despite some hiccups. "There were a few operational glitches during the first few weeks after the cut over," Galanti explained. "We're now past that, and more importantly, the new card is fantastic for our members." Costco hopes the change will produce more engaged members. Executives are also counting on another fiscal year of aggressive store expansion to help drive growth going forward.

CalAmp's slowing sales gains

Wireless communications tech specialist CalAmp's shares slumped by 15% on surprisingly weak quarterly results. Revenue rose by 30% to $90 million, which was a slowdown from the prior quarter's 39% pace. The sales number was also at the low end of the forecast management issued in late June.

Adjusted earnings barely met the bottom of the guidance range, too, weighing in at $12 million.CEO Michael Burdiek blamed "tough macro conditions in North America" for pushing CalAmp's expansion pace lower this quarter. In that weak environment, the company is choosing to focus on making smart investments to position itself for more growth once the industry rebounds. "We continue to invest in market-leading telematics solutions, and we remain optimistic that we will see a pick-up in growth fromCalAmp'score businesses and new opportunities emerging through LoJack channels," Burdiek said in a press release.

Current conditions imply that a return to accelerating growth will take longer than originally expected. Management last quarter forecasted a recovery in the second half of 2016, but the updated projection extends that outlook into the next fiscal year. For the current quarter, meanwhile, CalAmp sees sales coming in at $84 million, or significantly below consensus estimates, which were calling for $95 million of revenue.

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Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool recommends CalAmp. 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.