What Happened in the Stock Market Today

By Markets Fool.com

Image source: Getty Images.

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Stocks ticked lower on Thursday, as the Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes both finished with minor losses.

Today's stock market:

Index

Percentage change

Point change

Dow

(0.16%)

(29.65)

S&P 500

(0.30%)

(6.39)

Source: Yahoo Finance.

The SPDR Select Financial Sector Fund (NYSEMKT: XLF) was once again the most heavily traded of the exchange-traded funds as investors prepare for a monetary policy meeting of the Federal Reserve next week. Meanwhile, the United States Oil Fund (NYSEMKT: USO) rose slightly as crude oil prices logged their first uptick in four trading sessions.

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Individual stocks on the move included Buffalo Wild Wings (NASDAQ: BWLD) and Groupon (NASDAQ: GRPN), which both made notable moves following the announcement of new quarterly reports.

Buffalo Wild Wings aims for meatier profits

Buffalo Wild Wings shares rose 6% to claw back a small part of their year-to-date losses. Investors cheered the restaurant chain's slight uptick in growth trends as sales at existing locations improved to a 1.8% decline from a 2.1% decline in the prior quarter. That marked the third straight quarter of falling comps, which is an unfortunate first for the company. However, the trend implies that the worst of the slump could be over.

Image source: Buffalo Wild Wings.

B-Dubs launched several traffic building initiatives in the third quarter, including an ultra-quick lunch service and half price wing offering. "Both programs are seeing initial success," CEO Sally Smith said in a press release.

The short-term profit outlook is looking weaker, though. Smith and her team said that they would fall short of the $5.75 per share that they had forecast for 2016 earnings. Chicken wing costs are to blame, as high demand and spotty supply have combined to send prices higher than expected. Longer term, though, B-Dubs has a plan to produce much stronger profits. In a conference call with investors, Smith and her team laid out steps that they are taking to raise restaurant level margins to 20%, up from the current 18% mark. That financial boost, plus evidence of a potential return to growth ahead, was enough to send shares higher on Thursday.

Groupon gets less profitable

Groupon shares plummeted by more than 20% after investors reacted harshly to a third-quarter report that revealed its intention to buy rival LivingSocial. As for the quarterly numbers, revenue rose by 1% as a 4% boost in the U.S. market was offset by declines internationally. The daily deals specialist is exiting several unprofitable markets and aiming to get down to 15 countries from the 27 it competed in a year ago.

Meanwhile, active customer growth, at 1.2 million, marked Groupon's best showing on that metric since 2013. However, the company didn't get any closer to profitability: Gross profit margin ticked down and operating loss worsened to $36 million from $25 million in the prior year period.

Image source: Groupon investor presentation.

Executives stressed the progress Groupon made in shoring up its U.S. market. "Our strategy continues to deliver results with double-digit growth in North American local billings and our highest quarter for customer acquisition in over three years," CEO Rich Williams said.

Yet investors chose to focus on the growing losses combined with what could be a complicated merger with LivingSocial. Groupon said the purchase price was so small that it was "not material," but the move will still extract costs in the form of transaction expenses and integration challenges. This isn't an ideal time for management to be engaged in merger preparations, given that Groupon is trimming down its own portfolio and laying off a large portion of its employee base.

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Demitrios Kalogeropoulos owns shares of Buffalo Wild Wings. The Motley Fool owns shares of and recommends Buffalo Wild Wings. 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.