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Fly Intel - End of Day Brief - Thursday July 18, 2019

Stocks higher Thursday following IBM, Netflix earnings

Stocks spent the morning in the red following last night's report from the WSJ that trade talks have "stalled" and a disappointing quarterly report from Netflix (NFLX). Another well known name in tech, and member of the Dow, IBM (IBM) fared better after its own report and the major averages were able to make it back into the green as the session progressed. Investors are bracing for another dose of earnings reports after the bell, headlined by Microsoft (MSFT).

ECONOMIC EVENTS: In the U.S., initial jobless claims rose 8,000 to 216,000 in the week ended July 13. The Philly Fed index bounced 21.5 points to 21.8 in July, which was much better than expected. The leading economic indicator index fell 0.3% to 111.5 in June, which was its first decline since December.

TOP NEWS: Shares of Netflix fell 10.3% after the streaming giant reported disappointing quarterly results, with second quarter net subscriber additions missing the estimates of the company and of Wall Street. While several analysts cut their price targets on the shares following the news, there were no cuts to their ratings on the stock as the consensus opinion is that subscriber growth should return to normal in the second half of the year given the company's stronger upcoming content slate.

IBM (IBM) was the top performer on the Dow, rising 4.5% after its earnings report. Nomura Instinet analyst Jeffrey Kvaal said sales upside in the highest margin segments and a "solid" earnings beat in Q2 lifted visibility into the company's full-year guidance. Meanwhile, UnitedHealth (UNH) lagged on the blue chip index, sliding 2.3%. The health insurer reported better than expected earnings and revenue in the second quarter, but its CFO said during the associated conference cal that its FY19 revenue may miss prior guidance.

Among other large-cap companies reporting earnings last night and this morning, risers included Philip Morris (PM), Union Pacific (UNP) and Honeywell (HON), while decliners included SAP (SAP) and Genuine Parts (GPC).

In other news, AB InBev (BUD) shares were over 1% higher in New York after the Wall Street Journal reported that the brewer is considering selling its South Korea, Australia, and Central America assets in an attempt to reduce debt after calling off the IPO of its Asian business.

Meanwhile, BMW (BMWYY) named Oliver Zipse its new chairman of the board, effective August 16.

Additionally, CNBC reported that President Donald Trump said that he's seriously weighing looking into the Pentagon's JEDI contract, which could be worth up to $10B for Microsoft or Amazon (AMZN).

MAJOR MOVERS: Among the other noteworthy gainers after reporting quarterly results were eBay (EBAY) and Ally Financial (ALLY), which gained 1.9% and 6.5%, respectively.

Among the notable losers was Adtran (ADTN), which slid 23.3% after reporting preliminary Q2 results and providing downbeat guidance for Q3. Also lower after reporting quarterly results was Limelight Networks (LLNW), which fell 10.2%.

INDEXES: The Dow rose 3.12, or 0.01%, to 27,222.97, the Nasdaq gained 22.04, or 0.27%, to 8,207.24, and the S&P 500 advanced 10.69, or 0.36%, to 2,995.11.


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Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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