Major benchmarks kept moving in a positive direction Friday morning, building on momentum from Thursday's midday turnaround. Market participants seemed to draw favorable conclusions from the September jobs report, which showed reasonably solid growth in nonfarm payrolls while still leaving open the possibility that the Federal Reserve will step in to reduce interest rates further. As of 11:20 a.m. EDT, the Dow Jones Industrial Average (^DJI 0.56%) was up 182 points to 26,383. The S&P 500 (^GSPC -0.88%) rose 20 points to 2,931, and the Nasdaq Composite (^IXIC -2.05%) picked up 51 points to 7,924.
The warehouse retail industry has long had Costco Wholesale (COST -0.24%) as its leader, and so many investors wanted to see how the the company would fare in its fiscal fourth-quarter financial report. Meanwhile, Snap (SNAP -4.04%) has been under considerable competitive pressure lately, but at least one analyst believes that the stock might be ripe for a comeback.
Costco defies naysayers
Costco Wholesale saw its stock rise almost 1% after releasing its most recent financial results. Unlike many of its peers, Costco hasn't really seen an abrupt slowdown in its business, and its latest numbers from the fiscal fourth quarter demonstrated the company's continuing ability to keep making steady progress despite prevailing industry conditions.
Image source: Costco Wholesale.
Costco posted a 7% rise in revenue for the quarter compared to year-earlier levels, with net income rising by 5%. Comparable sales across the store network picked up 5.1%, and the retailer's efforts to bolster its digital capabilities were evident in its 21.9% rise in e-commerce comps.
Many watchers saw the report as weak, with revenue coming in just a little less than expected. Yet despite some cost pressures and sluggish growth in membership fee revenue, Costco sees plenty of opportunity for growth. In particular, a welcome reception for the warehouse retailer's first store in China during the quarter showed a potential pathway toward a new surge in sales.
Even as the U.S. economy slows and global macroeconomic concerns arise, international expansion seems like the natural avenue for Costco to move forward. People everywhere like bargains, and Costco has delivered them for years.
Snap bounces back
Shares of Snap climbed just over 1% Friday morning. The stock recovered slightly from some of its losses Thursday as Wall Street analysts stepped in with positive comments.
Yesterday's drop had stemmed from news that Instagram had added a new feature. Threads from Instagram is an app that makes it easier for users to share a variety of media, including everything from video and photos to messages and stories, and Snap shares had been down as much as 7% because of the perceived threat to the social media company's own similar Snapchat features.
However, Morgan Stanley boosted its rating on Snap from underweight to equal weight. Morgan Stanley believes that the company's strategies on advertising and monetization have gone surprisingly well, and it sees further efforts to squeeze more revenue from users as being promising. The analyst also added $3 to its target price for Snap stock, coming in at $17 per share.
Snap's huge rebound in 2019 has shocked many investors. Yet the move shows just how negatively people perceived the social media company coming into this year. If it can keep executing well, Snap could well build on its stock's gains.
