Wednesday once again showed the resiliency of the stock market, as major benchmarks recovered from fairly substantial losses early in the day to close with much more modest declines. The Dow Jones Industrials finished with a drop of just 17 points after having been down triple digits earlier in the session, and losses for the S&P 500 and Nasdaq Composite were limited to less than a quarter percent. Earnings season is slated to begin late this week, with big banks first out of the starting gate. Market participants are generally optimistic about how companies did in the fourth quarter of 2017, and they'll hope to see favorable outlooks in light of tax reform.
Today, United Continental Holdings (UAL -0.46%), AmTrust Financial Services (AFSI), and Churchill Downs (CHDN -1.62%) were among the best performers. Below, we'll look more closely at these stocks to tell you why they did so well.
United flies higher
Shares of United Continental Holdings rose 7% after the airline released its operational performance for the month of December and upgraded its fourth-quarter outlook. United said that revenue passenger miles rose 2.7% from December 2016, with a 3.7% rise in available seat miles resulting in a reduction in load factors of almost a full percentage point. The airline said it was the best December ever for the company, and United now expects fourth-quarter passenger unit revenue to be flat compared to the year-earlier quarter. With some having expected declines from United for the quarter, the news was seen favorably, and many see ongoing opportunities for airlines in 2018.
AmTrust soars on buyout offer
AmTrust Financial Services stock soared 25% in the wake of the company receiving a buyout proposal from private equity investors. A group led by Stone Point Capital joined with CEO Barry Zyskind and family members to offer $12.25 per share in cash for the AmTrust stock that they don't already collectively own. The property and casualty insurance company said that it had created a special committee to consider the offer, and the deal won't go forward without the committee's approval. With shares having jumped well above the initial $12.25 bid, investors clearly believe that they can do better than the first offer.
Churchill Downs races ahead
Finally, shares of Churchill Downs picked up 6%. The Kentucky Derby operator said that it had started a cash tender offer to buy back up to $500 million in stock, using a modified Dutch auction to solicit interest from shareholders in a range of $230 to $265 per share. The massive tender offer amounts to more than 12% of Churchill Downs' market capitalization. The company is returning part of the cash from the proceeds of its having sold off its Big Fish Games mobile gaming subsidiary for $990 million. As interest in regional gaming and entertainment has risen, Churchill Downs could play an increasingly important role in how the industry moves forward.