Thursday morning was relatively quiet for the stock market, with investors pausing to consider the many economic and political goings-on across the globe. Market participants still remain concerned about potential antitrust actions against some of the top technology companies in the world, but the U.S. economy hasn't yet succumbed to the weakness that many other countries are seeing. As of 11:20 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 101 points to 25,640. The S&P 500 (SNPINDEX:^GSPC) picked up 7 points to 2,834, and the Nasdaq Composite (NASDAQINDEX:^IXIC) was higher by just 2 points to 7,577.
Amid the calm, story stocks took center stage, with both good news and bad for some companies. Fiat Chrysler Automobiles (NYSE:FCAU) decided to withdraw its offer to buy France's Groupe Renault due to some difficult obstacles, but Stitch Fix (NASDAQ:SFIX) showed its fashion savvy in navigating the challenging e-commerce market to find success for its subscription apparel-delivery business.
Fiat Chrysler bids Renault adieu
Shares of Fiat Chrysler Automobiles were down less than 1% on news that the automaker had decided not to go forward with its plan to try to acquire Renault. The move came just over a week after Fiat Chrysler had first made its offer.
The auto giant had harsh words to say about the reason for its move. In its view, it remained "firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted." Yet despite its attempts to balance the needs of all stakeholders involved in the industry, Fiat Chrysler concluded that "political conditions in France do not currently exist for such a combination to proceed successfully."
Part of the problem, though, likely came from the other side of the globe. Because of the alliance between Renault and Nissan Motor, both companies own a significant minority position in each other's stock. Yet with Nissan having to deal with the departure of former CEO Carlos Ghosn, Renault's stake in the Japanese automaker created obstacles to finalizing a deal that apparently proved insurmountable.
Investors expect the political and economic fallout to spread well beyond the auto industry. With nationalist sentiment rising not only in the U.S. but across much of Europe as well, it's likely that multinational corporations of all types will find it more difficult to make cross-border deals that satisfy everyone involved.
Stitch Fix exceeds expectations
Stitch Fix saw its stock soar 15% following the subscription clothing company's release of its fiscal third-quarter financial results. Revenue for the online personal styling service rose 29% from year-ago levels, and Stitch Fix posted a modest profit that was substantially better than most investors had expected.
Stitch Fix has had a powerful combination of attracting new customers and getting its existing clientele to commit more fully to doing business with it. The company now sports 3.1 million active clients, up 17% from year-ago levels, and it grew its revenue per client by 8% year over year.
CEO Katrina Lake was particularly excited about how the company did. "The continued strength of our women's category and the growth of our men's category," Lake said, "give us even more confidence in our ability to scale new categories and geographies." That'll be especially important as Stitch Fix moves forward with recently announced plans to offer its service to U.K. customers.
Investors in Stitch Fix have had to endure a lot of turbulence, as shares are still lower by more than 40% from their best levels last summer. Yet shareholders are now hopeful that the company can keep up its momentum and deliver even better results in the future.