What Happened in the Stock Market Today

By Demitrios Kalogeropoulos Markets Fool.com

Image source: Getty Images.

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Stocks fell slightly on Thursday, with the Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes each shedding less than 0.25%.

Today's stock market:

Index

Percentage Change

Point Change

Dow

(0.12%)

(22.95)

S&P 500

(0.19%)

(4.23)

Data source: Yahoo! Finance.

Among the most popular exchange-traded funds, theiShares MSCI Emerging Market ETF(NYSEMKT: EEM)lost 1% on declines in Asian stock indexes. The heavily leveraged bullish gold fundDirexion Daily Gold Miners Bull 3X ETF (NYSEMKT: NUGT)fell 1% to bring its one-month decline to over 30% amid slumping gold prices.

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As for individual stocks, Micron Technology(NASDAQ: MU) and Bed Bath & Beyond(NASDAQ: BBBY)stood out with unusually large price moves.

Micron Technology rides the wave higher

This is a good time to be in the memory chip business. Micron Technology, one of the biggest producers of high-performance memory units, jumped 13% on Thursday following surprisingly strong quarterly results. Micron posted a 23% spike in sales and engineered a return to profitability as it generated $180 million of earnings compared to a net loss of $170 million in the prior quarter.

Image source: Getty Images.

CEO Mark Durcan said in a press release that the strong figures were powered by "positive market momentum, driven by favorable demand trends and limited industry supply." Micron posted an 18% jump in DRAM memory chip sales and a 26% spike in NAND volume. Average selling prices rose, which, combined with a decrease in manufacturing costs, pushed profitability higher by 7 percentage points to 25% of sales.

Micron's core markets are extremely cyclical, which exposes it to painful periods of net losses like the one that sent the stock lower by 60% in 2015. Another such downturn could happen again if rivals decide to step up chip manufacturing volumes to drive prices lower. On the other hand, Micron's growing scale, in part thanks to its $4 billion buyout of DRAM specialist Inotera, is putting it in a more powerful market position that shareholders hope could lessen the whiplash from the industry's next cyclical downswing.

Bed Bath & Beyond's weak profit forecast

Bed Bath & Beyond dropped 9% after the specialty retailer posted a surprise decline in revenue for its fiscal third quarter. Sales at existing locations fell 1.4% to mark a worsening from the prior quarter's 1.2% pace. Consensus estimates had been holding out for a tiny uptick in comps.

Image source: Bed Bath and Beyond.

In a conference call with Wall Street analysts, executives noted that customer traffic fell, and that trend was only partially offset by growth in average spending per visit. Bed Bath & Beyond had to increase its promotional activities, too, which hurt profitability.

Gross profit margin slipped to 37% of sales from 38%.

Management was encouraged by relatively stronger comps later in the quarter, but trends so far for the critical holiday period imply soft growth to close out 2016. CEO Steven Temares and his team are forecasting a 0.5% drop in comps for the full fiscal year.

Executives also see another year of heavy investment spending weighing down profits. They predict roughly $4.50 per share of earnings, which missed analyst forecasts of $4.73 per share by a wide margin. Without stronger customer traffic trends, the retailer has little choice but to sacrifice short-term profits in order to keep inventory moving through its supply chain.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Bed Bath and Beyond. 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.