What Happened in the Stock Market Today

By Markets Fool.com

Image source: Getty Images.

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Stocks ticked down on Tuesday as investors digested a flood of third-quarter earnings reports. Both the Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes ended the trading session lower by roughly 0.3%.

Today's stock market:

Index

Percentage Change

Point Change

Dow

(0.29%)

(53.76)

S&P 500

(0.38%)

(8.17)

Data source: Yahoo! Finance.

The Direxion Daily Gold Miners 3X Bull ETF (NYSEMKT: NUGT) enjoyed a 9% jump as its highly leveraged bet on the precious metal benefited from an uptick in gold prices. The VanEck Vectors Gold Miners ETF (NYSEMKT: GDX) also enjoyed a solid uptick, rising 3% to bring its year-to-date return over 90%.

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Earnings reports continued to drive unusually large share price swings, including in Under Armour (NYSE: UA)(NYSE: UA-C) and Procter & Gamble (NYSE: PG) on Tuesday.

Under Armour lowers its profit outlook

Under Armour shareholders endured a 13% daily loss following the athletic apparel specialist's quarterly earnings report. Sales spiked by a healthy 22% to $1.45 billion to edge past consensus estimates that were calling for a 21% jump to $1.45 billion. Earnings also beat expectations, rising 28% to $128 million, which translated to $0.29 per share. The 33 Wall Street analysts who cover the stock were, on average, looking for $0.25 per share of profit.

Image source: Getty Images.

Under Armour continues to reap huge rewards from its growing global branding. The international segment enjoyed 74% higher sales with help from significant marketing spending around the Rio Olympic Games. Footwear also expanded at a much faster pace than the rest of the company, soaring 42% to pass $250 million of sales. "Our key strategies and investments to diversify our portfolio on a global scale were evident across categories, channels, and geographies," CEO Kevin Plank said in a press release.

However, those investments are costly. Under Armour's gross margin fell by more than a percentage point to 47.5% of sales as it increased promotions. Moreover, Plank and his team see profitability continuing to shrink. In an update to their long-term guidance, the management team lowered its operating profit forecast through 2018, which likely explains the stock's drop on Tuesday. The company left its aggressive sales forecast in place, though, so its market-beating growth potential is still in place, even if shareholders will have to wait longer for the profit payoff.

Procter & Gamble's solid sales growth

Procter & Gamble's stock jumped 3% after the consumer goods titan announced its best growth pace in years. Organic sales rose by 3%, compared to 2% in the prior quarter, which got P&G off to a strong start in its new fiscal year.

Image source: P&G.

Notably, P&G's gains were driven by higher sales volume and not just increased prices. The company has now posted two straight quarters of volume-powered growth to add weight to management's aim to boost overall sales by 2% this year, compared to 1% in fiscal 2016.

At the same time, cost cuts produced plenty of excess cash that P&G could direct toward increasing its marketing investments while still boosting profits. The company's core earnings rose by 12%, compared to an 8% decline last quarter. "We delivered broad-based organic sales growth improvement across product categories and markets, as well as strong cost savings," CEO David Taylor said in a press release.

The strong results weren't good enough to convince management to boost its outlook. P&G still sees a tough global selling environment keeping growth to a minimum this year. However, with its new, more profitable portfolio finally in place, and with sales volumes picking up, it is likely the maker of Tide detergent and Gillette razors will soon reverse the market share declines that have eaten into earnings over the last two years.

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Demitrios Kalogeropoulos owns shares of Under Armour (C shares). The Motley Fool owns shares of and recommends Under Armour (A and C shares). The Motley Fool recommends Procter and Gamble. 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.