JPMorgan Chase, FedEx, Alphabet: Stocks That Defined the Week
By Francesca Fontana
JPMorgan Chase & Co.
America's biggest banks are churning out big profits -- and
that's a good sign for the U.S. economy. Consumer borrowing and a
rebound in investment-banking revenue propelled JPMorgan Chase and
Citigroup Inc. to double-digit earnings growth in the latest
quarter. It was a different story at Wells Fargo & Co., which
reported a 53% drop in fourth-quarter profit after setting aside
another $1.5 billion to cover costs associated with its 2016
fake-account scandal. JPMorgan shares gained 1.2% Tuesday.
Lululemon Athletica Inc.
The holiday stretch was kind to Lululemon. The sportswear
company said shoppers responded well to its merchandise, especially
men's apparel, during a critical shopping period in November and
December. Lululemon originally fueled its business by selling women
relatively expensive yoga pants and related clothing, and now Chief
Executive Calvin McDonald wants to double Lululemon's men's
business by the end of 2023 with items like a $198 jacket and
sweatpants that cost $128. Revenue for men's apparel rose 38%
year-over-year in the quarter, with strong sales of outerwear,
pants and underwear. Lululemon raised its earnings guidance for the
fourth quarter and shares gained 4.4% Monday.
Amazon.com Inc. delivered some good news to FedEx this week. The
online retailer on Tuesday notified its third-party merchants that
they could once again use FedEx's Ground network to ship orders
placed under Amazon's Prime membership program. That move reversed
a ban on the service imposed nearly a month ago because of
performance issues. FedEx's Ground network was blocked for the
final rush before Christmas and several weeks thereafter. An Amazon
spokesman said FedEx Ground has been reinstated for Prime shipments
fulfilled by third-party sellers now that the services are
consistently meeting the retailer's on-time delivery requirements.
FedEx shares gained 1.8% Tuesday.
Whether Target's turnaround plan is actually on target became an
open question following a disclosure of sluggish holiday toy sales.
"We faced challenges throughout November and December in key
seasonal merchandise categories and our holiday sales did not meet
our expectations," said Chief Executive Brian Cornell, who after
taking the helm in 2014 launched a plan that included store
remodeling and investment in Target's digital platform. Target
cited weak sales of toys and electronics, two categories that are
big sellers during the gift-giving season. The Minneapolis-based
chain also said Wednesday it was appointing a new executive to
oversee its fleet of roughly 1,800 stores. Shares fell 6.6%
The software giant built by Bill Gates wants to eliminate all
emissions produced since the time of its founding. This pledge was
among the commitments Microsoft made Thursday to show greater
awareness of environmental concerns. It would become "carbon
negative" by 2030, meaning it will take more carbon out of the air
than produced by its operations and supply chain. By 2050, it will
have eliminated all emissions created since the company started in
1975. The moves -- which include a pledge to spend $1 billion -- go
a step beyond promises made by some of its high-profile Silicon
Valley competitors. Still, Microsoft's environmental stance has
faced criticism over the company's links to the oil-and-gas
industry. Microsoft shares rose 1.8% Thursday.
Google parent Alphabet became the fourth U.S. company ever to
hit a $1 trillion market value Thursday. The search-engine giant
joins peers Apple Inc., Amazon.com Inc. and Microsoft Corp. as the
only firms to reach the threshold during intraday trading. Apple
and Amazon accomplished the feat in the summer of 2018, while
Microsoft hit $1 trillion for the first time in April of last year.
The large gains for technology stocks come with these companies
rising to the forefront of the world economy and entering new
arenas such as health care and transportation. Alphabet shares
gained 0.9% Thursday.
Old Navy won't be leaving the Gap after all. The company that
owns both brands said late Thursday that it was backing away from a
plan to split the companies because it would have been too
expensive and difficult to achieve. Weaker results also pushed the
struggling company to reverse course. Old Navy had been a bright
spot for its parent company, but the business has stalled more
recently. The company's other brands, which include Banana Republic
and Athleta, have also struggled with falling sales. Hundreds of
those chains' stores have been closed in recent years. Gap shares
fell 0.4% Friday.
Write to Francesca Fontana at firstname.lastname@example.org
(END) Dow Jones Newswires
January 17, 2020 19:34 ET (00:34 GMT)
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