After multiple painful trading sessions leading up to the Christmas holiday, U.S. stocks rebounded strongly on Wednesday despite continued conflict in Washington and concerns over the country's economic policies. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) both gained about 5%.
Today's stock market
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Oil stocks set the pace today, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) soaring 10.5%. Retailers rallied following reports that the 2018 holiday shopping season marked its strongest growth in nearly a decade, helping the SPDR S&P Retail ETF (NYSEMKT:XRT) rise 5.7%.
Amazon's banner holiday quarter
Amazon.com stock popped 9.5% after the e-commerce giant announced its core retail business set multiple company records this holiday season.
To be clear, Amazon didn't reveal exact sales data for the crucial holiday period. But it did tease that it saw "more items ordered worldwide than ever before," adding "Amazon customers shopped at record levels from a wide selection of products across every department."
Amazon also says it shipped "millions more Amazon Devices this holiday season compared to last year," with the most popular including its Echo, Echo Dot, and Fire TV Stick 4K devices.
Perhaps most encouraging, Amazon revealed "tens of millions" of customers globally started Prime free trials or paid memberships this holiday season -- a trend that will only serve to reinforce its e-commerce industry dominance going forward.
Roku is Needham's best idea
Shares of Roku gained 11.7% after Needham analyst Laura Martin named the streaming-media specialist the firm's "Top Pick for 2019."
Martin cited multiple potential catalysts to justify her optimism, including healthy growth and engagement from its recently launched ad-supported streaming channel, where unique active accounts climbed 43% last quarter to 24 million. What's more, Martin pointed out a large percentage of these users do not have traditional cable packages, leaving advertisers highly motivated to leverage differentiated platforms like Roku to reach them.
Though I'll caution investors should not use this as a central pillar of any buy thesis, Martin also added that Roku could become an attractive acquisition target in the coming year.
As such, Martin reaffirmed her buy rating with a $45 price target on Roku stock, marking a roughly 50% premium even after today's pop.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.