Shares of Amazon are up big this morning after the retail giant announced late Monday it will hire 100,000 warehouse and delivery workers in the U.S. to handle increased demand as consumers spend more time at home to help slow the spread of the coronavirus outbreak.
As of 10:30 a.m. EDT, shares of Amazon.com Inc. (Nasdaq: AMZN) are up about 5.3%, pushing prices above $1,775. Meanwhile, the coronavirus, or COVID-19, is still wreaking havoc on U.S. stocks and creating extreme volatility for markets as a whole.
The CBOE Volatility Index reached a record high of 82.69 — higher than during the 2008 crisis — by Monday’s market close. The VIX, or fear gauge, tracks the 30-day implied volatility of the S&P 500 in real time. A score of 20 means average volatility of 1% daily swings up or down.
Amazon also announced it will invest more than $350 million to raise worker pay for employees in the U.S. and Canada by $2 an hour, 2 pounds in the UK and 2 euros in the European Union. The company currently pays $15 an hour to U.S. workers.
“As the COVID-19 pandemic continues, Amazon and our network of partners are helping communities around the world in a way that very few can — delivering critical supplies directly to the doorsteps of people who need them,” the company said in a blog post. “Getting a priority item to your doorstep is vital as communities practice social-distancing, particularly for the elderly and others with underlying health issues. We are seeing a significant increase in demand, which means our labor needs are unprecedented for this time of year.
Amazon Hiring, but Is the Stock a ‘Buy’?
Amazon, like the rest of the market, has seen wild swings of late and that will continue. AMZN, which is one of the most high-priced stocks on the Nasdaq, ticked up to $2,185.95 amid February’s run of record closings before quickly falling into a bear market along with just about everything else.
Shares bottomed at $1,676.21 on March 12, and its 52-week low is $1,626.03, a key support level moving forward.
Amazon mostly moved sideways throughout 2019 before a monster earnings report after the holidays on Jan. 30 sent it soaring to a new intraday record high.
With U.S. shoppers wary of venturing out and stores also closed as some communities institute curfews, it could be a boon for Amazon in the near-term, particularly in the event of a global lockdown.
A quick look at the last economic downturn from 2007 to 2009, although very different from the ongoing global pandemic, Amazon could be even more resistant to recession now than it was then.
If shares again dip near the $1,626.03 support level, it could be a good time to start building a position.