The stock market came into Wednesday morning with a singular focus on the latest readings on the Consumer Price Index. With so much at stake for the economy and the interest rate environment, investors were generally pleased to see year-over-year inflation rates fall, largely as a result of high-inflation months in the first half of 2022 having rolled out of the annual comparisons. Stock index futures moved higher after the report.
One key advancing stock Wednesday morning was Domino's Pizza (DPZ 0.87%), which announced an innovative new partnership that addresses some of its core concerns the pizza restaurant giant faces while also providing new channels for both companies. However, Silk Road Medical (SILK 0.85%) got some downbeat news that sent shares of the medical device maker plunging. You'll find a whole lot more of the details surrounding both companies and their stock price moves below.
Domino's turns to Uber
Shares of Domino's Pizza soared 11% in premarket trading Wednesday morning. The pizza leader announced a new global agreement with Uber Technologies that gives customers even more choices in figuring out how to get the food they've ordered.
Under the terms of the partnership with Uber, Domino's customers in the U.S. will be able to order food through the Uber Eats and Postmates apps. To be clear, though, delivery will still be handled by Domino's own personnel, with the pizza company having emphasized the value of "the trained delivery experts of Domino's and its franchisees ... that customers have come to rely on for more than 60 years." The rollout of the service will start this fall in four test markets, but Domino's anticipates full ordering capabilities across the U.S. by the end of the year.
Domino's sees even bigger implications from the new arrangement. Domino's and Uber Eats currently share 27 different international markets, and having an agreement in place that also includes the U.S. could mean that 70% of Domino's locations worldwide would be available for Uber Eats ordering.
Uber stock was up just 1%, but the outsize move for Domino's reflects just how many customers order food exclusively through the Uber Eats app. By opening up that customer base, Domino's could now have a catalyst to get its sales moving higher at a faster pace.
Silk Road falls on Medicare concerns
Silk Road Medical, however, didn't do nearly as well. Shares of the medical device maker dropped 24% in premarket trading as investors reacted to a proposed decision memorandum from the Centers for Medicare & Medicaid Services that could have implications for Silk Road's business.
Silk Road is the company behind the transcarotid artery revascularization (TCAR) procedure, which is a minimally invasive surgical procedure to protect against stroke by treating carotid artery disease. With alternative treatments having demonstrated certain shortcomings, Silk Road believes that TCAR has become the best-in-class option for patients.
However, analysts at J.P. Morgan (NYSE: JPM) downgraded Silk Road stock from overweight to neutral, slashing its price target from $50 to $28 per share. The move came after the federal agency overseeing Medicare proposed conditions under which patients suffering from carotid artery stenosis would be able to get coverage for percutaneous transluminal angioplasty procedures along with carotid stents.
Investors are always concerned when major funding sources make decisions that could adversely impact businesses, and Silk Road faces such a threat right now. The Medicare proposal isn't final yet, but shareholders are preparing for what could be a worst-case scenario for the TCAR procedure and Silk Road's future prospects.
