Friday morning gave Wall Street dour news, with major benchmarks giving up ground. The latest picture on the employment front was ugly, with the unemployment rate soaring from 3.5% to 4.4% after the U.S. economy lost more than 700,000 jobs during March. As of 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 203 points to 21,211. The S&P 500 (SNPINDEX:^GSPC) fell 27 points to 2,500, and the Nasdaq Composite (NASDAQINDEX:^IXIC) dropped 73 points to 7,414.
Even as the coronavirus bear market has crushed many stocks, a few have found ways to gain ground. Chewy (NYSE:CHWY) has been one of the winners from consumers having to stay at home with their pets rather than going out to shop for them, and MarketAxess Holdings (NASDAQ:MKTX) has benefited from the shift toward electronic trading in the bond market. Only one of these stocks gained ground Friday morning, but they both have solid prospects for future growth.
Sales soar at Chewy
Shares of Chewy fell 4% in the wake of the company's release of fiscal fourth-quarter financial results. The pet supply e-tailer has gained in popularity as a result of pet owners stocking up on the things they need to take care of their animals, but some aren't sure that'll translate into greater profit over the long run.
Chewy's financial numbers were mixed. Revenue for the quarter jumped 35% from year-earlier levels on a comparable-calendar basis, closing a fiscal year in which sales soared 40% from fiscal 2018 results. Gross margin improved as well, rising more than 3 percentage points to 24.1%. Yet net losses only narrowed slightly year over year, with Chewy posting almost $61 million in red ink in Q4 and more than $252 million for the year.
Chewy is also optimistic about the current quarter, projecting sales growth of 35% to 37% compared to the year-ago period. So far, the company hasn't seen any supply disruptions from the coronavirus outbreak, in part because the majority of its products come from sources within the U.S. rather than having to be imported.
However, Chewy didn't offer guidance for the full 2020 fiscal year, and investors seemed worried about the company's ability to keep up its pace of growth. Even with today's decline, however, Chewy's share price is still up 17% over the past month, reflecting the belief that people's love for their pets will keep the company successful.
Bidding up bonds
Meanwhile, MarketAxess Holdings saw its stock climb 6%. The electronic bond trading specialist has seen a rise in interest lately, as the bond market has been volatile and gotten a lot of attention from the financial community, as well as investors seeking to flesh out their asset allocation strategies.
MarketAxess saw its total trading volume of credit securities soar more than 50% in March compared to year-ago levels, setting new records for its open trading platform in investments including U.S. Treasury bonds, municipal bonds, Eurobonds, emerging market bonds, and U.S. investment-grade and high-yield corporate bonds.
Moreover, more institutional clients have turned to MarketAxess to be able to keep trading bonds under current working conditions. As CEO Rick McVey explained, MarketAxess helped more than 10,000 users keep trading from home.
Investors have loved MarketAxess' efforts to bring the bond market into the 21st century, keeping the stock on the rise over the past month even as the broader market fell. The success of the company during the coronavirus crisis only highlights the long-term potential that MarketAxess has in the years to come.