Thursday morning brought investors new enthusiasm about the stock market as the tension between the U.S. and Iran continued to wane. The imminent arrival of earnings season has market participants starting to focus more on the prospects for the broader economy, and signs of a healthy holiday season have many people excited about how strong corporate financial results could be. As of 11:30 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) had climbed 198 points to 28,943. The S&P 500 (SNPINDEX:^GSPC) gained 19 points to 3,272, and the Nasdaq Composite (NASDAQINDEX:^IXIC) picked up 73 points to 9,201.
Plant-based food specialist Beyond Meat (NASDAQ:BYND) has regained some upward momentum in the past few days after a rough ride in the second half of 2019, and investors see a lot of potential for the company to make strategic deals with major restaurant operators. Meanwhile, Bed Bath & Beyond (NASDAQ:BBBY) dealt with ugly results for its latest quarter, raising doubts about what the future looks like for the home goods retailer.
Beyond Meat keeps cooking
Shares of Beyond Meat were up 6% on Thursday morning, adding to their gains from earlier in the week. The plant-based food specialist has gotten a lot of attention since its initial public offering last year, and despite extreme turbulence in the stock, many investors believe that the company is just now starting to hit its stride.
Much of the movement in Beyond Meat shares this week has stemmed from speculation about major restaurant chains coming up with distribution partnerships for meatless products. Comments from rival Impossible Foods about supply constraints brought into question its ability to compete for business from McDonald's, potentially leaving the field open for Beyond Meat if it can more effectively serve the fast-food giant.
Many different food-industry players are jumping into plant-based products, and that puts Beyond Meat in a strong position. Yet the big question is how much Beyond Meat can capitalize on that demand quickly -- before competitors choose to build out their own capacity to serve the new market.
Even with today's gains, Beyond Meat shares still trade for just over a third of their peak price last year. That leaves the company with a lot of work to do to catch up -- but with huge gains possible if it succeeds.
A big drop for Bed Bath & Beyond
Meanwhile, shares of Bed Bath & Beyond plunged almost 20% following the company's fiscal third-quarter financial report Wednesday night. The latest numbers from the home goods retailer weren't encouraging, instead adding to the pessimism surrounding the company.
Bed Bath & Beyond's numbers weren't pretty. The retailer reversed a year-ago profit by posting a significant net loss, and revenue fell more than 9% year over year. Comparable sales were down 8.3%, and even after taking out the impact of the shift in the timing of the Thanksgiving holiday, a 3.6% drop in adjusted comps wasn't encouraging.
New CEO Mark Tritton wasn't happy about the results, saying simply that "our performance in the third quarter was unsatisfactory and underscores the imperative for change." The CEO kept a positive attitude about Bed Bath & Beyond's long-term prospects, but the company will need a few more months to finalize a strategic plan and start moving forward again.
Investors weren't happy with Bed Bath & Beyond's decision to take away its guidance for the full fiscal year. Some fear that could mean an ugly holiday period for the retailer -- and that would mark just another challenge that could prove difficult to overcome.