Stock Market News: Starbucks Climbs, Luckin Crashes on China Coffee Scandal
The stock market bounced higher Thursday morning, clawing back some of the ground it lost on Wednesday. The latest news on the economy was dire, as initial claims for unemployment benefits nearly doubled to 6.65 million on a seasonally adjusted basis. However, oil prices soared by $5 per barrel on reports that Russia would consider production cuts, potentially putting a floor under the plunging energy markets. As of 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 308 points to 21,252. The S&P 500 (SNPINDEX: ^GSPC) rose 36 points to 2,506, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 70 points to 7,431.
It's been easy to lose perspective on individual stocks during the COVID-19 pandemic, as the entire market has often moved up or down in lockstep. However, an accounting scandal involving Luckin Coffee (NASDAQ: LK) reminded investors that company-specific surprises can still send an individual stock down sharply -- and benefit the shares of rivals like Starbucks (NASDAQ: SBUX).
Shares of Luckin Coffee were down almost 70% as of 11 a.m. EDT after having plunged more than 80% earlier in the session. The Chinese coffee company made a surprising revelation about its recent financial performance that forced many investors to reevaluate their views on the stock.
Source Fool.com
