Wednesday was mixed on Wall Street as major stock indexes initially climbed but gave up much of their gains by the end of the session. With the G-20 summit coming up this weekend in Japan, many market participants are watching closely to see if the U.S. and China will be able to reach a constructive deal to avoid further escalation in the trade war that's developed between the world's two largest economic powers. Yet even though uncertainty has investors somewhat on edge, many stocks managed to overcome that nervousness to post significant gains. EnscoRowan (NYSE:ESV), Grocery Outlet Holding (NASDAQ:GO), and Overstock.com (NASDAQ:OSTK) were among the top performers. Here's why they did so well.
EnscoRowan rides oil higher
Shares of EnscoRowan gained 11% as the oil services giant responded positively to news from the commodity markets. Crude oil prices have mounted a major comeback recently, rising from just over $50 per barrel a couple weeks ago to hit $59 per barrel today. Oil markets are important drivers of activity for energy services companies in general, and EnscoRowan is particularly sensitive to movements in crude because of its specialty in hard-to-reach areas that require undersea operations to drill. Investors hope that the recent merger of Ensco and Rowan will pay off for the combined company, and higher crude prices are a step in the right direction.
Grocery Outlet satisfies shareholders
Grocery Outlet Holdings saw its stock rise 7.5%, adding to recent gains immediately following its initial public offering last week. The discount grocery chain got a nice jump out of the gate after its IPO, as investors are optimistic that the company is in the right niche in a highly competitive sector. Even as many retailers have seen threats from e-commerce competition, Grocery Outlet's focus on deep discount closeout and overstock merchandise gives it lower costs, allowing it to pass on deals to customers without sacrificing profit margin entirely. Yet until the company gets a bigger following, Grocery Outlet might have difficulty continuing to grow its business while ensuring that aggressive promotions don't leave it without any earnings at all.
Overstock.com has crypto on its side
Finally, shares of Overstock.com soared 25.5%. Given the gains in Grocery Outlet, it would be reasonable to think that Overstock's rise might have to do with something similar. Yet even though Overstock.com has played on the discount side of internet retail, it sees its future in blockchain technology, and the soaring price of bitcoin tokens recently has sent shares through the roof. There's a lot of uncertainty about the crypto side of Overstock, but the stock has become a proxy for the bitcoin market, and if it can develop a meaningful business in blockchain, then today's gains might well prove to have been justified in the long run.