What Happened in the Stock Market Today

By Demitrios Kalogeropoulos Markets Fool.com

Image source: Getty Images.

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Stocks gave up strong gains early in the day to end Tuesday's session mixed. The Dow Jones Industrial Average(DJINDICES: ^DJI)fell very slightly while the S&P 500 (SNPINDEX: ^GSPC) didn't budge.

Today's stock market


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Data source: Yahoo! Finance.

Fluctuating gold prices kept exchange-traded funds tied to the precious metal popular among investors, as both the Direxion Junior Gold Miners Bull 3X ETF (NYSEMKT: JNUG)and theDirexion Daily Gold Miners Bull 3X ETF (NYSEMKT: NUGT)posted strong gains.

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As for individual stocks, Chipotle Mexican Grill(NYSE: CMG) and Pacific Continental (NASDAQ: PCBK) stocks stood out with large price increases following market-moving news.

Chipotle ends its sales slide

Chipotle shares rose 5% to cross back above $400 per share after the company issued preliminary fourth-quarter earnings results. The restaurant chain said revenue ticked up to $1.04 billion, which was roughly on par with consensus estimates. Earnings are projected to be about $0.54 per share and fall below forecasts due to increased spending on promotions and advertising, in addition to higher food costs.

Image source: Chipotle Mexican Grill.

The good news is that sales growth is finally turning a corner. After declining 15% in the third quarter, comparable-store sales fell by an estimated 5% in the fourth quarter. Chipotle broke that figure down by month as well, which showed that trends improved sharply from a 20% comps drop in October to a 1.4% decrease in November followed by a 14.7% increase in December.

That December figure is up against the easiest possible comparison, given that sales collapsed in the year-ago period following a highly publicized food-safety scare. Yet it will still be a welcome relief for the business to start posting growth again after 12 straight months of double-digit customer traffic declines. Chipotle will announce its official fourth-quarter results after the market closes on Thursday, Feb. 2.

Pacific Continental gets purchased

Pacific Continental sharesspiked 26% after the company announced a deal to merge with Columbia Banking System, which agreed to buy the regional bank for approximately $644 million. The all-stock transaction entitles shareholders to 0.643 shares of Columbia Banking System for each share of Pacific Continental they own, which will work out to about 20% of the combined entity once the deal goes through. The actual closing price is variable, since it is tied to the value of Columbia Banking System's stock. But the parties fixed a range of potential values between $27.76 per share and $37.56 per share.

Columbia Banking System is eager to bolster its presence in the Pacific Northwest, and this deal will instantly give it a strong position in Eugene, Oregon, along with deeper penetration in the Seattle and Portland markets. At a value of roughly three times tangible book value, executives believe the purchase makes good financial sense, too: "This merger exceeds our financial metrics with double digit earnings accretion and a tangible book value earnback of 3.7 years," Columbia CEO Melanie Dressel said in a press release.

Pacific Continental's management sees this as a win for its stakeholders. "We are very pleased and excited to partner with Columbia and view it is a wonderful opportunity to continue serving our communities as the premier community bank," CEO Roger Busse said. The stock closed trading at $26 per share, or just below the proposed purchase price, which implies that investors expect the deal to proceed as planned toward a projected closing date in mid-2017.

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Demitrios Kalogeropoulos owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool has a disclosure policy.