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Stock Market News: Walmart's 1-Day Shipping; Disney to Buy Comcast's Hulu Stake

By Steve Symington – Updated May 14, 2019 at 4:33PM

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On a strong day for the broader markets, see why these two industry giants stand out.

After starting the week with a painful plunge on heightened trade tensions between China and the United States, major market indexes rebounded nicely early Tuesday. As of 11:30 a.m. EDT, the Dow Jones Industrial Average (^DJI -1.62%) was up 272 points to 25,597, the S&P 500 (^GSPC -1.72%) jumped 28 points to 2,840, and the Nasdaq Composite (^IXIC 0.00%) had gained 94 points to 7,418.

As for individual stocks, Disney (DIS -2.60%) climbed in the wake of striking a deal to acquire Comcast's (CMCSA -1.94%) minority stake in Hulu, and Walmart (WMT -2.50%) rose after unveiling plans to roll out one-day shipping options on a limited basis this year.

Disney takes control of Hulu

Shares of Disney were up 2% after the entertainment conglomerate announced it will take full operational control of streaming-video platform Hulu -- of which Disney currently owns a two-thirds stake -- effective immediately, after Comcast agreed to sell its 33% stake in the platform.

This shouldn't be a big surprise, as the agreement follows reports late last month that the two companies were in talks to determine how to move forward after AT&T sold its own 9.5% ownership interest back to Hulu. Disney and Comcast further revealed today that Hulu's purchase of that stake will be funded pro rata to their current two-thirds/one-third ownership interests.

Chrome bull and bear figurines standing on top of a newspaper with stock market data.

Image source: Getty Images.

Though Disney does have full operational control today, investors should note Comcast won't give up its 33% stake just yet. Rather, as early as January 2024, Comcast can either sell its interest in Hulu to Disney for fair market value at that time, or for a guaranteed price representing a minimum equity value for Hulu of $27.5 billion. 

Walmart fires back at Amazon

Walmart stock is up around 0.5% after the retail giant announced it is adding free next-day delivery "on a wide range of general merchandise from, without a membership fee."

The statement is an obvious jab at, which announced plans late last month to plow $800 million into incremental infrastructure investments this quarter alone to accelerate its transition from two-day to one-day shipping for members of its popular Prime subscription service.

Dubbed NextDay delivery, Walmart's program will roll out gradually in the coming months, and aims to reach around 75% of the U.S. population by the end of 2019. NextDay delivery will start with around 220,000 of Walmart's most frequently purchased items -- from diapers to toys, laundry detergent, and electronics -- on orders of at least $35.

What's more, Walmart claims it will cost the company "less -- not more -- to deliver orders the next day [...] because eligible items come from a single fulfillment center located closest to the customer."

"This means the order ships in one box, or as few as possible, and it travels a shorter distance via inexpensive ground shipping," the company elaborated. "That's in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly."

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 AMZN and Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Walmart Stock Quote
$130.06 (-2.50%) $-3.33
The Walt Disney Company Stock Quote
The Walt Disney Company
$99.50 (-2.60%) $-2.66
Comcast Corporation Stock Quote
Comcast Corporation
$31.84 (-1.94%) $0.63
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$29,590.41 (-1.62%) $-486.27
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,693.23 (-1.72%) $-64.76
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$11,066.81 (0.00%) $0.00

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

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