Please ensure Javascript is enabled for purposes of website accessibility

Stock Market News: Starbucks Heats Up; Twitter Climbs Despite Lawsuits

By Dan Caplinger – Updated Apr 14, 2019 at 4:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The overall market gave up ground Wednesday morning.

Wednesday morning brought a modest pullback for most major stock market indexes, reflecting nervousness among investors about what the Federal Open Market Committee will say about interest rates when it finishes its meeting later this afternoon. As of 11:15 a.m. EDT, the Dow Jones Industrial Average (^DJI -1.71%) was down 71 points to 25,816. The S&P 500 (^GSPC -1.51%) fell 9 points to 2,824, and the Nasdaq Composite (^IXIC -1.51%) was off 6 points to 7,718.

Much of the time, investors focus a lot on companies whose stocks make big moves on a given day. But watching successful stocks pick up ground slowly but surely is the key to long-term success, and that's what Starbucks (SBUX -2.67%) has quietly done as it announced some plans to try to improve its business. At the same time, legal controversy has hit Twitter (TWTR 2.57%), but it hasn't put a dent in the social media giant's stock price.

Starbucks looks for a pick-me-up

Shares of Starbucks were up slightly Wednesday morning after the coffee giant unveiled its strategic plans for the coming year and beyond. At its shareholder meeting, Starbucks announced a series of efforts designed to build on the double-digit revenue growth it produced in 2018.

Inside of a coffee roastery, with two people working at a large piece of equipment.

Image source: Starbucks.

Among the initiatives Starbucks is pursuing are integrating technology and product innovation into the store experience, expanding delivery and other convenience-oriented services, and making its Starbucks Rewards loyalty program more valuable. The company is also investing $100 million in a private equity fund designed to seek out innovative small businesses in the food and retail industries, and Starbucks will continue to further social change through reduced environmental impact and greater equity in pay across race and gender.

For investors, the bigger perk might come from Starbucks' announcement that it will buy back up to $2 billion in stock through a newly authorized accelerated repurchase program. With the share price at its highest level ever, some might question the timing of the move. Yet given the momentum that the coffee king has achieved lately, Starbucks has regained investor confidence and has the ability to reap big rewards if its transformation plans lead to faster growth.

Check out the latest earnings call transcripts for Starbucks and Twitter.

Twitter deals with controversy

Meanwhile, Twitter saw its stock climb 3% despite rising attention to a lawsuit from a member of Congress. Republican Rep. Devin Nunes of California named the social media giant as a co-defendant in a suit filed on Monday in a Virginia state court alleging $250 million in compensatory and punitive damages for negligence, defamation, and conspiracy, arguing that "insulting words" from named Twitter users and parody accounts damaged Nunes' reputation.

Popular opinion about the litigation spans the gamut. Some believe that social media outlets like Twitter have a bias against certain points of view, inconsistently applying terms of service to those with differing viewpoints. More cynical observers see the lawsuit as a publicity stunt with motivations to energize a political base.

For Twitter, it isn't the first time that the company has faced scrutiny for the content it allows its users to publish to its social media platform. Yet in terms of legal liability, few believe that Twitter's likely to end up on the hook for a nine-figure damages award at the end of the day.

Dan Caplinger owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks and Twitter. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$84.26 (-2.67%) $-2.31
Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$43.84 (2.57%) $1.10
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$28,725.51 (-1.71%) $-500.10
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,585.62 (-1.51%) $-54.85
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$10,575.62 (-1.51%) $-161.89

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.