Stocks add to record levels after retail sales, jobless claims data
Stocks are extending their recent rally as a risk-on tone continues in the market amid a mostly upbeat run of corporate earnings results and following the inking of the U.S.-China trade agreement.
ECONOMIC EVENTS: In the U.S., retail sales tracked estimates with a 0.3% December gain for the headline figure and a firm 0.7% gain excluding autos. Initial jobless claims fell 10,000 to 204,000 in the week ended January 11. Import prices increased 0.3% in December with export prices falling 0.2%. The Philly Fed manufacturing index jumped to 17.0 in January, after dropping to a 6-month low of 2.4 in December. The NAHB housing market index dipped 1 point to 75 in January. The November U.S. business inventory report tracked estimates with a 0.2% headline inventory drop.
TOP NEWS: Shares of Morgan Stanley (MS) are up 8% at midday after the firm reported better than expected earnings and revenue in the fourth quarter. CEO James Gorman said the bank delivered strong quarterly earnings across all of its businesses, highlighting that "firmwide revenues were over $10B for the fourth consecutive quarter."
Shares of Tesla (TSLA) are down 3% after Morgan Stanley analyst Adam Jonas downgraded the stock to Underweight, a sell-equivalent rating, following the 105% rally over the last four months. Additionally, Tesla's overall vehicle registrations nearly halved in California during the fourth quarter, Reuters' Akanksha Rana wrote, citing a Dominion Cross-Sell report, which collates data from state motor vehicle records.
Shares of XPO Logistics (XPO) have jumped 13% this morning after the company confirmed plans to explore strategic alternatives, including a sale of the company or spinoff of one or more business units. Chairman and CEO Bradley Jacobs said in an interview with The Wall Street Journal that Goldman Sachs and JPMorgan have been "mandated to run four simultaneous auction processes" for XPO's European transportation and supply chain units, its supply chain business in the Americas and the Asia-Pacific regions and the company’s North American transportation unit, excluding the less-than-truckload business. "We may not sell all four, we may sell none," Jacobs added.
Southwest Airlines (LUV) announced that the airline is proactively removing the Boeing (BA) 737 MAX from its flight schedule through June 6 based on "continued uncertainty around the timing of MAX return to service."
MAJOR MOVERS: Among the noteworthy gainers was Spirit Airlines (SAVE), which rose 7% after providing CASM and TRASM guidance for the fourth quarter.
Also higher was Signet Jewelers (SIG), which surged 41% higher after reporting quarterly results.
Among the notable losers was Qudian (QD), which dropped 16% after it withdrew its fiscal 2019 guidance and announced a $500M share repurchase program.
Also lower was Alcoa (AA), which fell 8% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 166.52, or 0.57%, to 29,196.74, the Nasdaq was up 56.76, or 0.61%, to 9,315.45, and the S&P 500 was up 17.41, or 0.53%, to 3,306.70.