The stock market continued its streak of modest gains on Wednesday, as the S&P 500 now stands within 1% of its all-time record high. Investors are waiting impatiently for U.S. central bankers to make their next move clear about interest rates, and the financial markets are reacting with generally positive expectations about the ability of the U.S. economy to stay strong and keep powering stocks higher. Commodities prices continued to gain ground, led by the energy sector, and positive dividend news among major components in the Dow Jones Industrials also added to positive sentiment. In addition, company-specific news spurred larger gains among individual stocks, and AK Steel (NYSE:AKS), Ashford Hospitality Prime (NYSE:AHP), and Dave & Buster's Entertainment (NASDAQ:PLAY) were among the best performers in the market as of midday.
AK Steel surged 12% after getting favorable comments from analysts Wednesday. The long-beleaguered steelmaker has suffered from poor macroeconomic conditions globally for years, but value-hunting investors are finally starting to find signs of a turnaround for the industry. In particular, analysts at Credit Suisse upgraded AK Steel and some of its peers, arguing that supply deficits in the face of rising demand should finally start to lift depressed steel prices in the near future. With what analysts see as structural changes in the market for sheet and rolled products, AK Steel could enjoy big pricing increases that could boost profitability and mark a sea change in the industry's health going forward.
Ashford Hospitality Prime soared 31% in the wake of receiving a buyout bid from a private investing group. The luxury-hotel real estate investment trust confirmed that it received an unsolicited proposal from the California-based Weisman Group to acquire all of Ashford's assets. The deal would pay investors in the REIT $20.25 per share in cash, which is almost 80% higher than where Ashford closed on Tuesday night. All told, the deal is worth nearly $1.5 billion when you include assumed debt, but the fact that Ashford stock is trading at less than $15 shows skepticism among investors about whether the deal will actually go through. Ashford's announcement says that its board is considering the offer but makes no guarantees that the board will eventually accept it.
Finally, Dave & Buster's rose 9%. The company boosted its guidance for the full year in its most recent financial report released Tuesday afternoon, and it also approved a $100 million stock buyback program to return capital to shareholders. Dave & Buster's now expects sales for fiscal 2016 of $983 million to $995 million, up roughly $12 million from its previous range, and comparable-store sales growth should come in between 3.25% and 4.25% for the year. Expansion plans continue apace, with Dave & Buster's expecting to open nine to 10 stores and having six stores currently under construction. As CEO Steve King noted, "Our unique entertainment, dining, and sports viewing venues are demonstrating their broad-based appeal despite challenges affecting many of our casual dining peers." As long as that trend lasts, Dave & Buster's should be able to sustain its strong performance.