Wednesday gave investors a great example of the resiliency the stock market has shown throughout the bull market over the past several years. Stocks opened the day lower on fears that sluggish macroeconomic activity worldwide won't meaningfully recover in the near term, and the Dow was down as much as 125 points at one point during the day. Yet more optimistic traders helped major market benchmarks recover from their early losses, and by the close, most managed to finish modestly in positive territory. Several stocks made even sharper advances, and among the best performers of the first day of June were Cracker Barrel Old Country Store (CBRL +0.14%), Demandware (NYSE: DWRE), and Energy Transfer Equity (ETE +0.42%).
Cracker Barrel climbed 8% after the company released its fiscal third-quarter financial results. The combination restaurant and retail outlet reported solid gains in comparable sales for both sides of its business, and that helped push adjusted earnings per share up 22% from the year-ago quarter. Cracker Barrel raised its full-year guidance for earnings and revenue, with new store openings and further gains in comparable sales helping to fuel further growth. In addition, Cracker Barrel boosted its quarterly dividend by almost 5% to $1.15 per share, and it announced a special one-time dividend of $3.25 per share. The combination of healthy fundamentals and shareholder-friendly actions bodes well for the stock, which hit a new all-time high.
Demandware soared 56% in the wake of the enterprise cloud commerce solutions specialist getting a buyout bid from cloud peer Salesforce. The $2.8 billion deal involves Demandware shareholders receiving $75 per share in cash, with the deal expected to close quickly by the end of July. As CEO Tom Ebling explained, "Becoming part of Salesforce will accelerate our vision to empower the world's leading brands with the most innovative digital commerce solutions that enable them to connect one-on-one with customers across any channel." Given the high demand for businesses connected with the red-hot cloud computing area, even this premium doesn't seem completely ridiculous for Salesforce to pay in order to secure what could be a valuable addition to its commerce-cloud platform.
Finally, Energy Transfer Equity rose 8%. The company has been engaged in merger talks with Williams Companies for a long time, with Williams having consistently sought to force Energy Transfer to follow through on its initial buyout offer. Energy Transfer, on the other hand, would arguably be better off if they can cancel or amend the deal because of the plunge in energy prices that followed the initial bid. What has the stock moving higher is new discussion that Williams might finally be open to revising the terms of the deal to make it more attractive to Energy Transfer under new market conditions. That's no guarantee the deal will go through, but it does indicate a change in position that could lead to a resolution of the two companies' disputes sooner than many had anticipated.
