The U.S. stock market closed mostly lower on Tuesday, September 6, 2023, as investors weighed the prospects of higher interest rates and inflation. However, some stocks managed to outperform the market and post impressive gains. Here are some of the highlights from Tuesday’s trading session.
Brady Corporation Surges on Strong Earnings
Brady Corporation (NYSE: BRC), a provider of identification solutions and workplace safety products, saw its shares soar by more than 11% on Tuesday after the company reported better-than-expected fourth-quarter results. The company posted revenue of $325.4 million, up 16.4% year-over-year, and earnings per share of $0.76, beating the consensus estimates of $308.9 million and $0.64, respectively. The company also raised its dividend by 2.4% to $0.215 per share.
Brady’s CEO J. Michael Nauman attributed the strong performance to the company’s diversified portfolio, operational excellence, and strategic investments. He also expressed confidence in the company’s future growth prospects, saying that Brady is well-positioned to capitalize on the recovery of the global economy and the increasing demand for its products and solutions.
American Eagle Outfitters Climbs on Upbeat Guidance
American Eagle Outfitters (NYSE: AEO), a leading apparel retailer, also delivered a positive surprise to investors on Tuesday. The company announced that it expects to report record revenue and operating income for the third quarter of 2023, driven by strong sales across its brands and channels. The company said that it expects revenue to increase by about 35% year-over-year, while operating income is expected to more than double from the same period last year.
The company’s CEO Jay Schottenstein said that the company’s results reflect its “powerful competitive advantages” and its ability to “connect with customers and deliver innovative products”. He also praised the company’s team for their resilience and agility amid the challenging environment. The company will report its full third-quarter results on September 14, 2023.
Dow Jones Industrial Average Falls Nearly 200 Points
While Brady and American Eagle Outfitters enjoyed a positive day, the broader market was under pressure on Tuesday. The Dow Jones Industrial Average fell by around 196 points, or 0.6%, to close at 34,641.97. The S&P 500 also declined by 0.4% to end at 4,496.83, while the Nasdaq Composite edged down by 0.1% to finish at 14,020.95.
The main reason for the market weakness was the fear of higher interest rates and inflation, as investors digested the latest economic data that showed strong growth in the U.S. services sector in August. The data added to the expectations that the Federal Reserve will start tapering its bond-buying program soon and raise interest rates sooner than anticipated.
The yield on the 10-year Treasury note jumped to as high as 3.35%, while the yield on the 2-year Treasury note rose to as high as 3.51%. Higher yields tend to weigh on stock prices, especially those of growth-oriented sectors such as technology and energy.
What’s Next for the Market?
Investors are looking ahead to more economic data and earnings reports in the coming days. Some of the key events to watch include:
- The weekly jobless claims report on Thursday, September 8, 2023.
- The consumer price index (CPI) report for August on Friday, September 9, 2023.
- The earnings reports from Core & Main (NYSE: CNM), GameStop (NYSE: GME), and Oracle (NYSE: ORCL) on Wednesday, September 14, 2023.
The market sentiment may also be influenced by other factors such as geopolitical tensions, COVID-19 developments, and regulatory actions.