The Nasdaq Composite (NASDAQINDEX:^IXIC) has been the highflier among major benchmarks lately, and the index closed at a record high again Wednesday. Although it didn't manage to stay above the 11,000 mark, it nevertheless came close to that level, and the Nasdaq-100 managed to push forward with a tiny gain to hit an all-time high as well.
Internet retail has been one of the strongest industries this year, and general-purpose marketplaces like that of Latin America's MercadoLibre (NASDAQ:MELI) have filled an essential role in making sure people can get the things they need. The travel industry hasn't been as kind to hotel specialist Booking Holdings (NASDAQ:BKNG), but its stock also gained ground Wednesday as investors hoped for a longer-term solution to the COVID-19 pandemic that could restore faith among would-be travelers looking to leave home.
MercadoLibre pays off
Shares of MercadoLibre rose 4%, adding to its recent gains. The advance was enough for the Latin American e-commerce giant to set an all-time high.
Long before the coronavirus hit, MercadoLibre was laying the foundation to become the most important player in e-commerce in its region of the world. Not only had it established a popular online marketplace for goods of all kinds covering the large number of countries in South and Central America, but it had also built out an electronic payments network to help facilitate transactions. Mercado Pago has grown to be a force to be reckoned with independently, attracting investment from U.S. counterpart PayPal Holdings (NASDAQ:PYPL) and capturing growth both on MercadoLibre's marketplace and from unrelated third-party transactions.
MercadoLibre offers additional services to enable a growing consumer class to improve its standard of living. Shipping and fulfillment through Mercado Envios and the Mercado Credito financial services unit are natural expansions of the company's marketplace, and they're showing strong growth in their own right.
MercadoLibre pushed back its quarterly earnings release to next week after having expected to report Thursday. Nevertheless, investors are excited about what they're likely to see from the online retail and e-commerce services company even if they have to wait a little longer.
Is Booking Holdings getting ahead of itself?
Elsewhere, shares of Booking Holdings were up 3%. There was some newfound optimism in the travel industry Wednesday, but investors instead seemed to respond to efforts from the online travel giant to cut costs.
In a filing late Tuesday with the U.S. Securities and Exchange Commission, Booking announced plans to cut the global workforce of its Booking.com unit by as much as 25%. The company cited the impact of the COVID-19 pandemic on the travel industry as a key factor, and it said it would work with its usual partners to try to tailor the job cuts in the least disruptive manner.
Nevertheless, Booking wasn't able to predict exactly what impact the move would have on its financial results. There's still considerable uncertainty with respect to how the continuing outbreak will affect travel. That's particularly true for Booking, which relies on international travel more than some of its peers. With many international borders remaining closed, especially for outbound U.S. travelers, the impact of COVID-19 could be protracted.
Booking is slated to report its quarterly results Thursday afternoon, and investors will watch closely to see how the company fares in a key part of its fiscal year. The stock has already regained much of its lost ground without any assurances that travel activity will resume. There's a danger that Booking won't see a hoped-for rebound in business, and if that happens, the stock's recent rise could reverse itself quickly.