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Stock Market News: These 2 Stocks Are Defying Coronavirus Losses

By Dan Caplinger – Apr 13, 2020 at 11:35AM

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The broader market lost ground, but these two giants are finding ways to respond to consumer demand.

The stock market lost ground on Monday morning, giving back a portion of the huge gains it posted last week. Many market participants seemed just as bewildered by the big rise in stocks last week as they had been at the speed of the prior descent, and it's likely that volatility will continue for some time. As of 11 a.m. EDT, the Dow Jones Industrial Average (^DJI -1.71%) was down 519 points to 23,200. The S&P 500 (^GSPC -1.51%) fell 56 points to 2,734, and the Nasdaq Composite (^IXIC -1.51%) fell 84 points to 8,069.

Even amid the losses, however, some stocks showed their resilience in the face of the coronavirus pandemic. Amazon.com (AMZN -1.57%) has seen a huge shift toward its grocery delivery services, which right now, is threatening to overwhelm the e-commerce giant. Meanwhile, even as competition ramps up in video streaming, Netflix (NFLX -1.78%) is still showing it can keep its rivals at bay and remain a leader in the space at a time when those staying at home are looking for more entertainment than ever.

A wait list for would-be Amazon customers?

Shares of Amazon.com were up 3% Monday morning as the company gave several signs of soaring demand for its services. The news added up to enthusiasm about Amazon's long-term prospects.

On one hand, Amazon said that it would add 75,000 more workers to meet rising demand for deliveries, boosting the 100,000 payroll additions it's already made. In addition, it will seek to boost pay for existing workers while addressing some of the concerns employees have expressed recently about health conditions at some of its locations.

Cart in a grocery store aisle.

Image source: Getty Images.

In addition, customers of Amazon's Whole Foods Market unit are finding themselves on waiting lists as they try to order food online. Despite having nearly doubled the number of locations offering grocery pickup to more than 150 stores, Whole Foods doesn't have enough delivery slots to meet demand for online grocery customers looking to have food sent directly to their homes.

The same problems that are making grocery delivery more attractive for food companies are also making it harder for Amazon to take advantage of the rising demand. The e-commerce company is working to boost its capacity, but it could take time for it to catch up.

Dealing with Disney

Shares of Netflix rose 4%, revealing the enthusiasm for the streaming video giant. Even with news out from rival Disney (DIS -3.20%) on its competing Disney+ platform, Netflix is making its case for being the premier pick in the industry.

After five months, Disney+ has reached the 50 million member mark. That's due largely to the service's premiere in Europe and India in the past couple of weeks, and the rate of growth for Disney+ has dramatically surpassed the company's own expectations.

Yet the stay-at-home mandate hundreds of millions of people worldwide are experiencing has shown the value of having more than one streaming service available. With Netflix and others working hard to produce their own proprietary content, subscribing to multiple services has become necessary for those who want to see all the latest programs.

Netflix will report its earnings next week, and investors will want to watch closely to see whether the company is seeing the bump higher in demand that seems likely. Even with Disney and others vying for supremacy in the space, it'll be hard to supplant Netflix entirely -- and shareholders are more confident than ever in Netflix's ability to hold off its competitors.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dan Caplinger owns shares of Walt Disney. The Motley Fool owns shares of and recommends Amazon, Netflix, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short April 2020 $135 calls on Walt Disney, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$235.44 (-1.78%) $-4.27
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$113.00 (-1.57%) $-1.80
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$28,725.51 (-1.71%) $-500.10
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,585.62 (-1.51%) $-54.85
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$94.33 (-3.20%) $-3.12
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$10,575.62 (-1.51%) $-161.89

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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