Costco's Shares Touch Record High After Founder Lauds Obama

Costco Wholesale Corporation (Nasdaq:COST) stock price touched an all-time high on Thursday, a day after co-founder and former CEO James Sinegal addressed the Democratic National Convention.

Shares of the Issaquah, Wash., retailer hit a record $99.84 before easing to $99.72, up $1.50, in late trading. The shares have gained nearly 20 percent this year and 27 percent over the past 52 weeks.

Did the company's stock get a DNC bump?

Overall U.S. markets surged Thursday on positive news surrounding the European debt crisis. The S&P 500 rose nearly 2 percent in late trading.

Costco's shares had been steadily rising in the past two weeks on a series of rosy outlooks for discount retailers that began after Wal-Mart Stores Inc. (NYSE: WMT) reported 2 percent growth in comparable stores sales in the second quarter ended July 27, the fourth consecutive quarter of same-store sales growth.

The news sent major discount retailers' stock prices up in the belief Wal-Mart's performance was an indication of cautious consumers down-grading their purchasing from mid-range merchandisers to discounters like Wal-Mart and warehouse clubs like Costco and Sam's Club.

Costco followed through when it reported positive comp-stores net sales growth of 8 percent in the four weeks ended Aug. 26. That led to a batch of positive analysts' ratings that sent the stock to a 52-week high last Friday.

On Wednesday, before Sinegal, 75, lauded President Barak Obama as business-friendly, JPMorgan Chase reiterated Costco's "overweight" rating -- meaning the company is expected to out-perform its peers. Such ratings usually pump up a company's stock price.

Sinegal, no longer in daily management, dismissed some Republicans' claims that entrepreneurs succeed in a vacuum based solely on the sweat of their brow.

"Some of my friends in corporate America say that all they need is a government that gets off the backs of businesses," Sinegal said in his speech. "But I think they get it all wrong. Business needs a president who has covered the backs of businesses."

Republican nominee Mitt Romney criticized Obama as not appreciating the role of business by taking out of context remarks that business executives take for granted the infrastructure, police services and other elements paid for by the public sector.

"Some of my friends in corporate America say that all they need is a government that gets off the backs of businesses," Sinegal said in his speech. "But I think they get it all wrong. Business needs a president who has covered the backs of businesses."

Austin Ligon, co-founder of the used-car retailer CarMax, Inc. (NYSE:KMX) also spoke at the Democratic parley. He lauded the president for bailing out the troubled auto industry. He also echoed Sinegal's remarks that business relies upon national infrastructure

"We worked hard to build and conceive an idea for CarMax, but we didn't do it alone," Ligon said, referring to government's role in creating the infrastructure needed for business to thrive.

Shares of Carmax touched $32.62 before easing back to $32.49, up 87 cents, in late trading.