Stocks opened in negative territory following a poor earnings report from Morgan Stanley (MS) and amid ongoing concern over the government shutdown entering its 27th day and the tariff war with China. Despite the concerns, the market saw its lows shortly after the open and then slowly pared its losses. The market has been moving in a narrow range, with the Nasdaq and S&P in positive territory and the Dow little changed.
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 3,000 to 213,000 in the week ended January 12. The January reading of the Philly Fed manufacturing index bounced 7.9 points to 17.0, which was better than expected.
COMPANY NEWS: Shares of Morgan Stanley (MS) are down 4% after the firm's Q4 earnings came in well below the consensus view due to revenue in its two largest operating segments, institutional securities and wealth management, coming in below consensus expectations. Goldman Sachs analyst Richard Ramsden also noted that Morgan Stanley did not update its financial targets for ROTCE and wealth management margins, which he said may be disappointing to some.
Johnson & Johnson's (JNJ) Janssen Pharmaceuticals unit will collaborate with Apple (AAPL) on a clinical study evaluating the effect of an Apple Watch-based ECG app together with irregular heart rhythm notifications on outcomes in atrial fibrillation, or AF, patients, the companies announced. Apple sees healthcare and wellness as a core part of its app, services, and wearables strategies and is moving further into the sector amid competition with tech companies like Amazon (AMZN) and Google (GOOG, GOOGL).
Sears Holdings (SHLD) announced that ESL Investments was selected as the winning bidder in the company's auction and will acquire substantially all of the company's assets, including the "Go Forward Stores" on a going-concern basis, for approximately $5.2B, subject to bankruptcy court approval. The Restructuring Committee of Sears' board said the deal will "provide a path for Sears to emerge from the chapter 11 process" and "preserve employment for tens of thousands of associates."
MAJOR MOVERS: Among the noteworthy gainers were Signature Bank (SBNY) and M&T Bank (MTB), which gained a respective 7% and 5% after reporting quarterly results.
Among the notable losers was Signet Jewelers (SIG), which dropped 23% after it said its holiday season comparable sales fell 1.3% year-over-year and cut its guidance for the fourth quarter and fiscal 2019. Also lower was Western Digital (WDC), which slipped 5% after Wells Fargo analyst Aaron Rankers cut his price target on the stock to $65 from $75 as fundamentals "remain weak."
INDEXES: Near midday, the Dow was down 4.53, or 0.01%, to 24,202.63, the Nasdaq was up 14.55, or 0.21%, to 7,049.24, and the S&P 500 was up 6.20, or 0.24%, to 2,622.30.
Morgan Stanley
-1.82 (-4.09%)
Apple
-0.75 (-0.48%)
Johnson & Johnson
+0.65 (+0.51%)
SHLD
+
Signature Bank
+7.98 (+7.10%)
M&T Bank
+7.32 (+4.74%)
Signet Jewelers
-7.745 (-23.21%)
Western Digital
-1.83 (-4.84%)