Tuesday morning was quiet on Wall Street as a rising number of professional investors start to prepare for the Thanksgiving holiday. Without much news to move the overall market, indexes showed only small changes. As of 11 a.m. EST, the Dow Jones Industrial Average (^DJI -0.98%) was up 27 points to 28,094. The S&P 500 (^GSPC -0.46%) rose 3 points to 3,137, and the Nasdaq Composite (^IXIC -0.64%) moved higher by 16 points to 8,648.
It's late in earnings season, but a few companies are still reporting their most recent results, and investors looked closely at Best Buy's (BBY 1.09%) latest figures to get a reading on how the consumer economy is faring. Meanwhile, Alibaba Group Holding (BABA 0.64%) got a good reception for its initial public offering on the Hong Kong Stock Exchange, and the geopolitical situation in Hong Kong put the IPO into a different perspective for some.
Best Buy lights up
Shares of Best Buy rose 9% after the consumer electronics giant reported its third-quarter financial results. On its face, top-line growth was tepid, as revenue climbed 1.8%. However, Best Buy's profits looked strong, jumping more than 20% year over year on an adjusted basis.
Image source: Best Buy.
Best Buy did reasonably well in the U.S. market, with comparable sales rising 2% and strength in appliances, headphones, tablets, and service revenue. Online sales climbed 15% from year-ago levels. However, international markets hurt Best Buy, as falling revenue and negative currency impacts held back overseas business.
Investors were especially pleased with Best Buy's outlook. CEO Corie Barry said, "We are excited about our holiday plans," citing good deals, desirable inventory, and free next-day delivery for online purchases. The retailer boosted its guidance for comparable sales and adjusted earnings per share for the full year, with hopes to see comparable sales systemwide rise 0.5% to 3% in the fourth quarter.
Best Buy has tried to connect better with customers, and the holiday season is a great time to make those connections. Shareholders are optimistic that Best Buy can keep making progress and demonstrate that big-box retail can adapt to the rise of e-commerce.
Alibaba gets its Hong Kong IPO done
Shares of Alibaba Group were little changed on the New York Stock Exchange, but the Chinese internet giant had a successful initial public offering in Hong Kong. The company's shares listed there rose more than 6% overnight, with plenty of investor demand for the stock.
Many have expected Alibaba to look to raise capital through a Hong Kong listing. Indeed, when Alibaba went public in the U.S. five years ago, the company had actually wanted to do its IPO on the Hong Kong Stock Exchange. It didn't meet the requirements to do so at the time, but since then, Alibaba has been able to qualify. The Hong Kong IPO raised almost $13 billion for Alibaba to use for further expansion.
U.S. investors don't pay as much attention to Alibaba as they do to more familiar e-commerce giants on this side of the Pacific, but the Chinese company has seen huge growth in its retail business. The rise of the consumer class in China and greater internet penetration across the nation have been huge catalysts for Alibaba.
That said, competition among Chinese internet companies is fierce. More capital will help Alibaba keep up the pace with growth initiatives, but it'll have to execute well in order to take maximum advantage of the opportunity and gain ground over its rivals.
