Stock Market Today: Why CarMax and GameStop are on the Move
The Dow Jones Industrial Average has gained 56 points in pre-market trading, suggesting a positive start to the stock market today. Still, investors can expect plenty of volatility ahead as Wall Street digests today's jobs report from the U.S. Department of Labor. The update showed that the economy added 192,000 jobs in March, while the unemployment rate held steady at 6.7%. Economists had expected job gains of 200,000 and an unemployment rate of 6.6%. Job growth figures for January and February were both revised slightly higher, for a total additional 37,000 jobs over those months.
Meanwhile, news is breaking this morning on several stocks that could see heavy trading in today's session, including CarMax and GameStop .
CarMax this morning posted a 9% revenue improvement for its fiscal fourth quarter. The car retailer's sales rose to $3.08 billion, which was below the $3.18 billion that analysts expected. Profit fell 4% to $0.44 a share -- as opposed to the 15% rise that Wall Street was looking for.
However, that earnings swing was mainly the result of an accounting adjustment. Accounting changes aside, CarMax's business looks quite strong: comparable-store sales increased by 7% in the fourth quarter and by 12% for the full fiscal year, which made last year the company's strongest in terms of sales growth since 2002. CarMax also announced a boost to its share buyback plan, bringing its total repurchase authorization to about $1.3 billion. The stock was down 5.2% in pre-market trading.
GameStop shares caught an upgrade this morning from a Bank of America analyst who thinks that the stock could climb to $56, or 25% above yesterday's closing price. Despite fears of the video game retailer turning into "the next Blockbuster" due to the move toward digital game downloads, that stock rally isn't as far-fetched as it sounds. In fact, GameStop's business doesn't line up with the Blockbuster comparison at all. The company posted decent sales growth last year, and not just in the category of physical game and hardware sales. Its digital and mobile business grew to over $1 billion from a standing start three years ago. And new initiatives, including its wireless and consumer electronics expansion, are showing promise as well. In the meantime, GameStop can count on a record launch for next-generation consoles from Sony and Microsoft to power its results over the next few years. The stock was up 5.1% in pre-market trading.
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The article Stock Market Today: Why CarMax and GameStop are on the Move originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends CarMax. The Motley Fool owns shares of CarMax, GameStop, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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