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 (DJINDICES:^DJI) was down 71 points to 25,816. The S&P 500 (SNPINDEX:^GSPC) fell 9 points to 2,824, and the Nasdaq Composite (NASDAQINDEX:^IXIC) 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 (NASDAQ:SBUX) has quietly done as it announced some plans to try to improve its business. At the same time, legal controversy has hit Twitter (NYSE:TWTR), 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.
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.
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.