Stock Market Today: J.C. Penney Grows, but at What Cost?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Expect a flat start in the stock market today, as the Dow Jones Industrial Average is set to fall a modest 21 points at the opening bell, according to index futures. With the third-quarter earnings season behind us, investor attention is turning back to the Federal Reserve and its stimulus plans. Nervousness about the timing of the Fed's "tapering" has helped push gold prices to a five-month low, and it's putting even more focus than usual on the nonfarm payroll report due out on Friday. Still, retailers gave investors some new data to digest regarding sales in the critical holiday season today. J.C. Penney returned to revenue growth, and Express' highly promotional holiday season dented its profit outlook.

J.C. Penney shares are on the move in the wake of its "holiday update" released last night. Penney announced that it managed solid revenue growth in November: Comparable-store sales were 10.1% higher than in the same period last year. While that sounds impressive, keep in mind that Penney saw that figure crater by more than 30% in the holiday quarter of 2012, giving it a very low bar to meet this time. The company's update also didn't provide any reading on profitability, which will be under pressure as it fights with rivals for top-line growth. J.C. Penney's stock is down 2.1% in premarket trading, but it's lower by more than 50% on the year.

Meanwhile, Express reported earnings this morning that failed to impress investors. The apparel chain saw its profit grow by 15% as net sales rose 7% to pass $500 million. Comparable-store sales growth came in at a healthy 5%, reversing last year's 5% dip. However, the company's reading on the holiday season points to a brutal quarter ahead. CEO Michael Weiss said that Thanksgiving week results were below management's expectations and that promotions and discounts are now expected to "reach heightened levels" above and beyond the heavy promotions that were already planned. As a result, Express lowered its earnings outlook and now sees EPS coming in well below last year's haul. The stock is down 19.5% in premarket trading.

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