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Earnings Data Deluge

Market indexes will try it again: after starting the week in the green ahead of the opening bell yesterday, this morning — on the Dow, at least — starts early-morning trading back in the green. All indexes took a deep slide into yesterday’s close, and the blue-chip Dow looks ready to get it back: +40 points at this hour. The Nasdaq is currently mirror-imaging the Dow, -40 points while the S&P 500 represents the fulcrum: unchanged in the pre-market session.

This softness has not spared two retail majors reporting Q3 earnings ahead of today’s opening bell: Dick’s Sporting Goods DKS and Best Buy BBY: both companies beat estimates on both top and bottom lines, but both stocks are selling off on the news.

Dick’s Sporting Goods simply blew away expectations on quarterly earnings, posting $3.19 per share versus $1.93 anticipated, and swinging to a big positive from the year-ago quarter’s $2.01 per share. Revenues of $2.75 billion in the quarter sped past expectations for $2.47 billion in the quarter. Beating big is nothing new for Dick’s — the company’s 4-quarter trailing average positive surprise had been +117.4%.

Quarterly comps blossomed +12.2%, way past the +1.9% analysts were looking for. The company has got its digital game in full swing: +1% year over year, but +97% from Q3 two years ago. Inventories were not a problem for Dick’s either: +23% year over year. Yet shares are trading -3% at this hour, -4% on the news of the earnings release. It must be a sell-the-news proposition for investors, however; shares of Dick’s had increased +150.4% year to date.

Tumbling even further this morning is Best Buy, down -14.5% at this hour following an earnings report of $2.08 per share on $11.91 billion, beating the $1.95 per share and $11.71 billion in the Zacks consensus, respectively — and swinging to a year-over-year positive on both lines. Digital Sales did fall -10% in the quarter year over year, though overall comps were +2%. But perhaps Best Buy’s +37.3% was still a bit rich for investors’ blood here at the start of holiday shopping season, and the stock is giving back big right now.

After the opening bell today, we will see a pair of economic metrics for November: Markit Manufacturing and Services PMI. The Manufacturing side is expected to grow to 59.0 from 58.4 last month, while the Services estimate is 20 basis points higher than October to 58.9. The Services side looks to have turned around from its lull in late-summer, early fall, while Manufacturing looks to still be down from the highs seen over the summer.

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