Sometimes, what looks like a quiet day on Wall Street is a victory. Early in the day, big declines for the Dow Jones Industrial Average (^DJI 0.70%), Nasdaq Composite (^IXIC 0.20%), and S&P 500 (^GSPC 0.25%) made it look as though markets were ready to give back a sizable portion of their gains from earlier in the month. Yet by the close, most markets were relatively flat, with the Dow just barely getting into positive territory.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+0.03% |
+10 |
|
S&P 500 |
(0.02%) |
(1) |
|
Nasdaq |
(0.18%) |
(21) |
Data source: Yahoo! Finance.
Plenty of companies are releasing financial reports as earnings season continues, but a couple of stocks stood out for their performances on Wednesday. Shopify (SHOP 0.54%) has seen huge declines from its all-time highs, but the e-commerce software platform provider took steps to assert its pricing power with its clients. Meanwhile, U.S. Bancorp (USB 0.20%) became the latest bank to report its results, and investors were generally pleased with what the Minneapolis-based financial institution had to say about its performance and future prospects.
Shopify hikes prices
Shares of Shopify jumped 11% on Wednesday. The e-commerce specialist decided to test whether its clients truly value its service by making a major move to boost revenue.
Shopify announced late Tuesday that it would boost its prices on its various e-commerce platform plans. It hasn't changed the charges for its services in 12 years, so the company decided that the time was right to implement an increase.
Basic-plan charges will rise from $29 per month to $39, while the namesake Shopify-level plan will go from $79 to $105 per month. Users of Shopify's advanced tier of services will see a $100 per-month increase, going to $399.
NASDAQ: SHOP
Key Data Points
The price changes will take effect immediately for new merchants, but existing clients will get a three-month grace period before they'll have to pay the higher monthly rates. Alternatively, merchants who shift from monthly to annual subscription terms will be able to lock in what they've been paying on a per-month basis for up to a full year beyond the April 23 effective date.
However, those who already took advantage of annual subscriptions to save money will find that the new renewal prices are, in some cases, significantly higher than what they were paying previously -- particularly if they took advantage of promotions that got them up to 50% off the regular per-month price.
Shopify stock has pulled back dramatically as demand has normalized following the big spike at the beginning of the COVID-19 pandemic. However, Shopify still has long-term momentum on its side, and investors are excited to see the company get more value for what it's offering its customers.
U.S. Bancorp keeps growing
In the banking sector, U.S. Bancorp's stock rose 5%. Fourth-quarter results from the company made shareholders optimistic about the coming year for the bank stock.
U.S. Bancorp's results showed resilience in the face of deteriorating conditions in the economy. Net interest income soared by more than half year over year to $4.32 billion, helping to offset a fairly steep decline in noninterest income. Net income dropped as a result of some acquisition-related charges following the purchase of MUFG Union Bank, but adjusted earnings of $1.20 per share compared favorably to year-earlier numbers.
NYSE: USB
Key Data Points
The size of U.S. Bancorp's book of business expanded dramatically as a result of the acquisition. Total loans jumped 19% from year-ago levels, while deposits were up 7%.
However, some troubling aspects of economic weakness showed up in the bank's allowances for credit losses. Net charge-offs quadrupled to $578 million, and U.S. Bancorp added $1.19 billion to its loss provision.
For 2023, U.S. Bancorp expects to see revenue of $29 billion to $31 billion, with net interest margin continuing to rise. That bodes well for the bank's prospects, and bullish investors have confidence that U.S. Bancorp will be able to endure tough times and emerge stronger than ever.
