US Markets
U.S. stocks were in the red on Tuesday morning. The Dow retreated more than 125 points, or 0.42%, to 28,724, while the S&P 500 index fell 0.43% to 3,519 and the Nasdaq Composite Index was down 0.29%, to 11,841.
Gainers
- Waters Corp (WAT, Financial) +3.6%
- Walt Disney Co (DIS, Financial) +3.3%
- EOG Resources Inc (EOG, Financial) +4.6%
- Clorox Co (CLX, Financial) +2.3%
- Autozone Inc (AZO, Financial) +1.6%
Losers
- Royal Caribbean Cruises Ltd (RCL, Financial) -10.6%
- Norwegian Cruise Line Holdings Ltd (NCLH, Financial) -6.5%
- Carnival Corp (CCL, Financial) -5.6%
- Vulcan Materials Co (VMC, Financial) -3.6%
- Martin Marietta Materials Inc (MLM, Financial) -3.8%
Global Markets
The main European stock markets traded in the red. The UK's FTSE 100 fell 0.44%, France's CAC 40 lost 0.71%, Germany's Dax was down 1.08% and Spain's Ibex 35 retreated 0.74%.
In Asia, Japan's Nikkei 225 gained 0.18%, India's BSE Sensex advanced 0.08%, Hong Kong's Hang Seng jumped 2.20% and China's Shanghai Composite was up 0.04%.
Fastenal releases earnings report
Shares of Fastenal Company (FAST, Financial) fell 4.5% on Tuesday morning after the company announced financial results for its third quarter of fiscal 2020. It posted earnings per share of 38 cents, beating analysts' estimates by 1 cent. Revenue of $1.41 billion grew 2.2% year-over-year and beat expectations by $10 million.
The gross profit, as a percentage of net sales, was down 190 basis points to 45.3% in the third quarter from 47.2% in the same quarter of 2019 due to lower product margins on behalf of pandemic-related expenses such as masks and face shields.
The operating income, as a percentage of net sales, rose to 20.5% from 20.4% in the third quarter of 2019. Employee-related expenses, which represent two-thirds of total operating and administrative expenses, declined 4.9% in the third quarter of 2020 when compared to the third quarter of 2019.
Looking at cash generation, the operating cash flow reached $780.8 in the first nine months of 2020, an increase of 32.3% from the first nine months of 2019, fueled by reduced inventory levels.
In the first quarter of 2020, Ron Baron (Trades, Portfolio) cut his investment in the stock by 31% to 79,020 shares. Joel Greenblatt (Trades, Portfolio) sold out the stock.
Disclosure: The author holds no positions in any stocks mentioned.
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