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

Stocks higher to close out short week as earnings, economic data impress

The S&P 500 notched a small advance on Thursday to end the holiday-shortened week relatively flat as investors did not seem to be rattled by the release of the Mueller report. Earnings from some big names in insurance, industrial goods and financial services were positive, as was economic data in the U.S. Following the long Easter weekend investors will be facing a big pick up in the volume of earnings reports, which may yield some additional volatility after this low-key week.

ECONOMIC EVENTS: In the U.S., retail sales rebounded 1.6%, and were up 1.2% excluding autos, in March, which was stronger than forecast. Initial jobless claims fell 5,000 to 192,000 in the week ending April 13, marking a third consecutive 49-year low. The Philly Fed index declined 5.2 points to 8.5 in April. The leading economic indicators index rose 0.4% to 111.9 in March, a new record high level. Business inventories grew 0.3% in February, with sales up 0.1%.. Markit's flash manufacturing PMI was unchanged at 52.4 in April, while the services index dropped 2.4 points to 52.9. In energy news, Baker Hughes reports that the U.S. rig count is down 10 rigs from last week to 1,012.

TOP NEWS: On the earnings front, shares of Travelers (TRV) rose 2.25% after the insurance giant reported better than expected core earnings and revenue and raised its quarterly dividend by 6.5%. Honeywell (HON) shares were 3.8% higher after the company reported better than expected Q1 results and raised its FY19 profit view. American Express (AXP) was up 1.7% after reporting mixed Q1 results, with better than expected earnings and lower than expected revenue. The card issuer also backed its existing FY19 earnings outlook.

Philip Morris (PM) reported first quarter adjusted EPS and revenue that came in better than expected, but gave a lower than forecast earnings outlook for the fiscal year. Adding an additional weight on the stock was news that Senate Majority Leader Mitch McConnell plans to introduce legislation in the U.S. Senate to raise the nationwide minimum age to buy tobacco products to 21 from 18.

There were five initial public offerings in a busy day for new issues, headlined by Zoom Video Communications (ZM) and Pinterest (PINS). The enterprise video conferencing software maker opened at $65 per share, way above its IPO price of $36 per share, while the interest sharing service operator opened at $23.75 after pricing its IPO at $19.00 per share.

Shares of Canopy Growth (CGC) gained 4.1% after the Canadian cannabis company confirmed a deal granting it the rights, and obligation, to purchase U.S.-based Acreage Holdings (ACRGF) at an agreed-upon price when and if marijuana becomes federally legal in the U.S.

Meanwhile, Facebook (FB) said in a blog post that millions of Instagram user passwords had been exposed to employees after being stored in a readable format. "We now estimate that this issue impacted millions of Instagram users," the company said. "We will be notifying these users as we did the others. Our investigation has determined that these stored passwords were not internally abused or improperly accessed."

MAJOR MOVERS: Among the noteworthy gainers was Blackstone (BX), which rose 7.5% after it reported quarterly results and announced its conversion to a corporation. Also higher after reporting quarterly results were Adtran (ADTN) and United Rentals (URI), which gained a respective 14% and 8.1%.

Among the notable losers was Check Point (CHKP), which slid 7.4% after reporting quarterly results and provided guidance for the second quarter. Also lower after reporting quarterly results were Sleep Number (SNBR) and Skechers (SKX), which fell 18.5% and 10.4%, respectively.

INDEXES: The Dow rose 106.88, or 0.4%, to 26,559.54, the Nasdaq gained 1.98, or 0.02%, to 7,998.06, and the S&P 500 advanced 4.58, or 0.16%, to 2,905.03.


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