Stock Market Update

[BRIEFING.COM] The major averages remain mixed, with the S&P 500 flat, the Nasdaq Composite up 0.4%, and the DJIA down 0.4%. The Dow has weakened from its 0.1% opening decline, while the modest early gains in the S&P 500 and Nasdaq have narrowed. Small caps are showing better relative strength, with the Russell 2000 up 0.9%.

AutoZone (AZO 2938.34, +135.09, +4.82%) is trading higher after its fiscal fourth-quarter report, as a margin-driven earnings beat outweighed another revenue shortfall. Gross margin expanded 182 basis points to 53.3%, helping operating profit rise 10.1%, even as operating expenses increased as a percentage of sales. The quality and durability of that margin improvement remain important considerations: tariff refunds and a favorable non-cash LIFO impact provided a combined 250 basis points of benefit, more than the reported expansion. Comparable-sales growth was also modest on a constant-currency basis, although domestic commercial sales increased 8.6% and management said business improved during the final eight weeks of the quarter.