Stocks opened in negative territory following a worse than expected earnings report from Morgan Stanley (MS). Adding to the downbeat tone were continuing concerns about the government shutdown entering its 27th day and the ongoing trade war with China. The market saw its lows in the opening hour of trading and then drifted higher until crossing into positive ground just after the noon hour. The market continued to drift until headlines said the Trump administration has been discussing lifting some of the tariffs on China in hopes of breaking the stalemate between the two countries. The market reacted immediately by moving to a triple digit gain for the Dow and finally pulling the bluechip index out of correction territory.
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.
The Wall Street Journal reported that House Speaker Nancy Pelosi said that the House would meet next week to pass further legislation that seeks to end the partial government shutdown, though discussions between Democrats and the White House continue to be stalled. In a separate report, the Journal said that Treasury Secretary Steven Mnuchin has proposed that the U.S. consider pulling back tariffs on Chinese imports as a way to both calm markets and give China an incentive to make deeper concessions in their trade talks.
COMPANY NEWS: Shares of Morgan Stanley fell over 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.
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 (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.
Meanwhile, CNBC reported that Walmart (WMT) has opted not to launch a new video streaming service after talks with veteran media executive Mark Greenberg fell apart last year.
MAJOR MOVERS: Among the noteworthy gainers were Signature Bank (SBNY) and M&T Bank (MTB), which rose a respective 8% and 6% after reporting quarterly results. Also higher was Fossil (FOSL), which gained 3% after it agreed to sell "select" smartwatch technology to Google.
Among the notable losers was Signet Jewelers (SIG), which dropped 25% 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 Earthstone Energy (ESTE), which fell 15% after it provided guidance about its Q4 oil and gas sales volumes and fiscal 2019 capital expenditures.
INDEXES: The Dow rose 162.94, or 0.67%, to 24,370.10 , the Nasdaq gained 49.77, or 0.71%, to 7,084.46 , and the S&P 500 advanced 19.86, or 0.76%, to 2,635.96.
Morgan Stanley
-1.95 (-4.38%)
Johnson & Johnson
+1.11 (+0.87%)
Apple
+0.98 (+0.63%)
Amazon.com
+9.16 (+0.54%)
Alphabet
+11.07 (+1.02%)
Alphabet
+10.57 (+0.97%)
SHLD
+
Walmart
+0.41 (+0.43%)
Signature Bank
+8.89 (+7.91%)
M&T Bank
+8.78 (+5.68%)
Fossil
+0.58 (+3.33%)
Signet Jewelers
-8.27 (-24.78%)
Earthstone Energy
-1.05 (-15.51%)