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

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

Steve Symington
Steve Symington
May 14, 2019 at 11:57AM
Consumer Goods

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 (DJINDICES:^DJI) was up 272 points to 25,597, the S&P 500 (SNPINDEX:^GSPC) jumped 28 points to 2,840, and the Nasdaq Composite (NASDAQINDEX:^IXIC) had gained 94 points to 7,418.

As for individual stocks, Disney (NYSE:DIS) climbed in the wake of striking a deal to acquire Comcast's (NASDAQ:CMCSA) minority stake in Hulu, and Walmart (NYSE:WMT) 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 Walmart.com, without a membership fee."

The statement is an obvious jab at Amazon.com, 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."