Why Twitter, Stitch Fix, and Deutsche Bank Jumped Today
On Wednesday, the stock market finally managed to hold onto gains throughout the session, with major indexes finishing more than half a percent higher. Investors were pleased at the softer tone of some comments coming from China on the trade front, which seemed to raise the probability that a deal will avoid escalating current tensions into a full-blown trade war. Yet for many companies, gains seemed to be tied just as much to bounces from extremely large downward moves as to any positive news pointing the way to a brighter future. Twitter (NYSE: TWTR), Stitch Fix (NASDAQ: SFIX), and Deutsche Bank (NYSE: DB) were among the best performers on the day. Here's why they did so well.
Twitter's CEO deals with controversy
Twitter shares were higher by 5% as the social media company's CEO chose to address criticism concerning personal decisions that the executive had made. Jack Dorsey had tweeted about going on a meditation retreat in Myanmar, but many activists were unhappy that the Twitter CEO had commented positively on the Asian nation without also mentioning the plight of hundreds of thousands of Rohingya citizens. Unlike what many other high-profile tech executives would have done, Dorsey acknowledged the validity of the criticism, saying that he hadn't intended to minimize the issue. That seemed to satisfy investors, allowing Twitter stock to participate in today's tech rally.
Stitch Fix tries to mend itself
Stitch Fix's stock price rose by almost 9%, regaining a portion of the ground that it lost on Tuesday. Investors initially reacted negatively to the online styling specialist's fiscal first-quarter financial report, in which the company said that it didn't produce the user growth that many had hoped to see. Stitch Fix's response that it hopes to sell more to existing customers didn't initially resonate well with shareholders, leading to a 21% plunge in the stock price. Today, investors seemed to decide that the initial move had been an overreaction, but Stitch Fix will still have to demonstrate its ability to boost sales from any and all available sources in order to keep them happy going forward.
Deutsche Bank could get a bailout
Finally, Deutsche Bank shares finished 8.5% higher. The German bank has been struggling in the face of ongoing operational problems for several years now, but the European nation's government is hoping to convince Deutsche Bank to merge with another German banking institution in the hopes of breaking Deutsche Bank out of a downward spiral of falling revenue and higher expenses. Changes in tax laws could help, but in the end, it'll be up to Deutsche Bank itself -- or whatever post-merger company takes on its operations -- to come up with a business solution that works for the long haul.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Stitch Fix and Twitter. The Motley Fool has a disclosure policy.