Why Amazon Is Outpacing the Market's Gains Today
Shares of e-commerce powerhouse Amazon (NASDAQ: AMZN) were up about 2% at 3:30 p.m. ET on Friday. The jump outpaced the broad market's gain and you could credit investors' optimistic response to Amazon's announced plans for this year's Prime Day online sale. The above-average bounce, however, may have taken shape even without the announcement that was made around 1 a.m. on Thursday.
Not that investors didn't know it was coming sooner or later, but it's arguable that yesterday's official notification of this year's Prime Day sale was the tangible catalyst investors needed to start scooping up the stock today. The two-day event scheduled for July 12 and 13 is not only a reward for existing Prime subscribers, but also a means of attracting new paying members. Prime customers tend to spend more at Amazon.com than non-Prime customers -- on the order of two to four times as much, according to estimates -- so the company wants to sign up members.
Don't read too much into Friday's bounce, though. Amazon stock ended Thursday's session more than 39% below its late-March peak. This steep sell-off left the stock ripe for bullishness. And take note of the fact that while the Prime Day news is exciting, the market didn't respond to it the same day it was released. Today's marketwide bounce may actually be the true bullish catalyst.
Source Fool.com
