On Monday markets were closed for the Martin Luther King Jr. holiday, and on Tuesday the existing home sales report for December fell a larger than expected 6.4% to an annualized 4.99 million units, its lowest level in more than three years. In addition, the Chinese economy grew 6.6% last year, its slowest pace in 28 years, and the IMF reduced its forecast of global growth in 2019 from 3.7% to 3.5%. Markets threw in the towel on all the news of a slowdown and the Dow Industrials closed 301 points lower.
On Wednesday some strong earnings by Dow bellwethers including IBM improved moods and markets rallied with the Dow Industrials closing up 171 points. The White House Council of Economic Advisers Chairman Kevin Hassett said that a continued partial government shutdown could reduce economic expansion to zero this quarter, although growth would rebound strongly after the government reopened. Ten year Treasuries yielded 2.75% and West Texas Intermediate crude finished at $52.60 a barrel.
On Thursday jobless claims for the week ending January 19th fell 13,000 to 199,000, lower than expected, and the EIA petroleum status report for the week ending January 18th saw crude oil inventories rise 8 million barrels. Commerce Secretary Wilbur Ross said the U.S. and China were still far apart on reaching a trade deal. Markets were mixed, but airlines and semiconductors rallied on strong earnings.
On Friday markets opened strongly higher on optimism that the government shutdown will end soon and the trade dispute with China will also be resolved. In addition, news broke that the Federal Reserve is considering ending it’s program of rolling off bonds from its balance sheet. Now let’s take a look at some stocks.
Johnson & Johnson (NYSE: JNJ) reported its fourth quarter financial results and topped estimates. In spite of this, shares fell by as much as 2.3% on Tuesday after the Company said sales could be slowing. For the quarter, Johnson & Johnson reported earnings of $1.97 per share on revenue of $20.4 billion, while lowering its sales estimates for 2019 to about $80.8 billion.
eBay, Inc. (NASDAQ: EBAY) shares climbed by 8.6% on Tuesday after Elliott Management Corp. announced it has more than a 4% stake, worth $1.4 billion. Also, Elliott’s activist investors are urging eBay to consider selling or spinning off its StubHub ticketing segment. Starboard Value LP, who also holds a large stake in eBay, has also spoken to eBay about the changes.
International Business Machine Corporation (NYSE: IBM) reported its fourth quarter financial results after market close on Tuesday, coming in with earnings of $4.87 per share on revenue of $21.76 billion. Analysts expected earnings of $4.82 per share.
American Airlines Group Inc. (NASDAQ: AAL) reported its fourth quarter financial results before market open on Thursday. The airline topped estimates for earnings but narrowly missed revenue estimates. American Airlines reported adjusted earnings of $1.04 per share on revenue of $10.94 billion. Analysts had forecast earnings of $1.01 per share. Despite the revenue miss, shares rose by 5.8% in the morning.
Intel Corporation (NASDAQ: INTC) reported its fourth quarter financial results after market close on Thursday and missed revenue estimates. For the quarter, the company earned $1.28 per share on revenue of $18.66 billion. Analysts were expecting revenue of $19.01 billion. Furthermore, Intel lowered its guidance for the next quarter, expecting earnings of 87 cents per share on revenue of $16 billion. Shares of Intel dipped by 7% shortly after the news.