What Happened in the Stock Market Today

By Demitrios Kalogeropoulos Markets Fool.com

Stocks pushed higher on Friday, with both the Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes booking solid gains.

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Today's stock market

Index

Percentage Change

Point Change

Dow

0.48%

96.97

S&P 500

0.36%

8.23

Data source: Yahoo! Finance.

Financial stocks remained in focus as investors sought to catch up to their rapidly changing earnings prospects under lessened regulatory pressures. TheFinancial Sector SPDR Select ETF (NYSEMKT: XLF) hardly budged, though, ticking up by less than 0.5%. Traders continued to focus attention on leveraged bets on the price of gold, and those risky positions paid off slightly as the Direxion Daily Gold Miners Bull 3X ETF (NYSEMKT: NUGT)added 4%.

Image source: Getty Images.

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Earnings reports produced solid gains for shareholders ofActivision Blizzard (NASDAQ: ATVI) and Skechers (NYSE: SKX)that far outpaced the broader market's growth.

Activision Blizzard levels up

Activision Blizzard shares soared over 18% higher to a new record after the video game developer raced past its own fourth-quarter outlook. Instead of rising 37% to $1.86 billion, as management projected back in early November, sales soared 49% to $2 billion. The company significantly outpaced earnings expectations, too, as profit improved to $0.65 per share from $0.25 per share in the year-ago period.

Image source: Getty Images.

The impressive gains weren't the result of any single video game hit, but rather the combination of a wide range of operating and financial wins. Among the biggest was Blizzard's launch of the new property Overwatch, which became the studio's quickest franchise to reach 25 million players and helped Blizzard reach a record 36 million active gamers overall. Activision Blizzard also set a franchise record for in-game spending in its Call of Duty franchise, helping digital revenue double to $1.45 billion. The King digital segment, meanwhile, blew past executives' expectations as profitability surged due to the successful addition of advertising to many of its biggest mobile games. "Our record performance in 2016 further strengthened our position as the world's leading stand-alone interactive entertainment company," CEO Bobby Kotick said in a press release.

Activision is entering the new fiscal year with the wind at its back, boasting a packed pipeline of gaming properties, surging digital spending, and the highest profitability it has ever generated. These advantages suggest continued market-thumping growth ahead as the developer cashes in on new and existing franchises while pushing into complementary business lines like consumer products and e-sports.

Skechers finds global success

Skechers stock gained 19% following surprisingly strong fourth-quarter results from the shoe specialist. Revenue jumped 6% to $764 million, soaring past management's guidance range of $710 million to $735 million. The key contributor to that beat was a 48.5% spike in sales in the Chinese wholesale market. The retailing segment also enjoyed a solid uptick, with comparable-store sales growth improving to 4% from 3% in the prior quarter.

Image source: Getty Images.

Gross profit margin expanded by a full percentage point to 47% of sales, which was surprising given the intense competition in the industry over the holiday season. "Our continued growth and strong market position," CEO Robert Greenberg said in a prepared statement, "is due to aggressively revamping our product lines to include more youthful, relevant, and innovative styles, while still creating comfort footwear that our broad consumer base finds appealing."

Greenberg and his team believe that international markets are their biggest growth opportunities right now and they expect these segments to account for over 50% of sales for the first time in fiscal 2017, Skechers' 25th year in business. But executives will need to keep up their pace of winning product innovations if they want to continue grabbing market share from top rivals in the sports footwear industry.

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Demitrios Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard and Skechers. The Motley Fool has a disclosure policy.