What Happened in the Stock Market Today

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Stocks were slightly up on Friday after declining for three consecutive sessions earlier in the week, with the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) both closing just in positive territory.

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Today's stock market

Index Percentage Change Point Change
Dow 0.07% 14.31
S&P 500 0.13% 3.11

Bank stocks continued to slide, however, as the SPDR S&P Bank ETF (NYSEMKT: KBE) fell 0.6%. But technology stocks helped prop up the broader market, with the Technology Select Sector SPDR ETF (NYSEMKT: XLK) climbing 0.7%.

As for individual stocks, Snap Inc. (NYSE: SNAP) bucked the positive trend in tech after posting mixed second-quarter results, and the market aggressively drove down shares of J.C. Penney (NYSE: JCP) after company's wider-than-expected quarterly loss.

Snap earnings: Solid growth, big losses

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Shares of Snap Inc. dropped 13.8% today after the parent company of Snapchat announced second-quarter earnings. Revenue climbed an impressive 153% year over year to $181.7 million, helped by a 21% increase in daily active users (to 143 million) and 109% growth in average revenue per user (to $1.05). On the bottom line, however, that translated to an adjusted net loss of $195.5 million, or $0.16 per share. Analysts, on average, were expecting Snap to post a narrower adjusted net loss of $0.15 per share on lower revenue of $186.2 million. 

To be fair, that's not to say Snap's results were that bad relative to expectations. But we're also talking about company with a core product that many investors worry is ripe for disruption from competitive products from any number of enormous tech industry peers. With shares still trading at roughly 27 times trailing-12-month sales, it's hardly surprising to see the market is unforgiving of Snap's modest bottom-line miss.

J.C. Penney's surprising loss

J.C. Penney stock plunged 16.6% today following a mixed Q2 report. J.C. Penney's quarterly revenue climbed 1.5% year over year to $2.96 billion, well above the $2.84 billion investors were expecting. But those gains came at the expense of profitability; the department store chain incurred an adjusted quarterly net loss of $28 million, or $0.09 per share, which was much larger than Wall Street's prediction for a $0.05-per-share loss.

To be fair, J.C. Penney's profitability was held back by the liquidation of inventory in 127 of its closing stores during the quarter. And because J.C. Penney insists those liquidations will be isolated to the second quarter, it felt comfortable reiterating its guidance for full-year adjusted earnings per share in the range of $0.40 to $0.65. 

"[We] remain confident in our ability to further strengthen our balance sheet, while driving sustainable growth and long-term profitability for JCPenney," stated Chairman and CEO Marvin Ellison.

Ellison also noted the company is excited by "a strong start in August for the all-important back to school season," and should be able to improve its results for the balance of the year.

With that in mind, today's drop could certainly be a short-sighted move by Mr. Market. But it's also hard to blame investors for being skeptical given J.C. Penney's struggles as it has worked to recapture sustained, profitable growth in recent years.

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