What's moving markets today
Markets came under pressure early in the day after Commerce Secretary Wilbur Ross warned that the United States is still “miles and miles” from a trade deal with China.
A big rally for chip makers lifted the Nasdaq on Thursday, but the broader markets lagged behind.
Robust earnings from Lam Research (LRCX), Xilinx (XLNX) and Texas Instruments (TXN) sparked a buying binge in the chip sector. All three traded sharply higher, while rival Applied Materials (AMAT) soared 10%.
A pessimistic analyst report knocked the wind out of Canada Goose (GOOS) shares, which are down 10% in trading.
Wells Fargo analyst Ike Bochurow said in his note that high-priced designer clothing is experiencing challenges because of slowing economies in Europe and China.
He also said another concern for the brand is that Canada Goose has decreased in popularity on social media:
We see a recent slowdown in both Google trend search and Instagram engagement over the holiday quarter — most notably in December — as somewhat concerning for a stock that currently relies heavily on momentum and robust growth to keep their premium valuation justified."
Bochurow lowered Goose's price target from $80 to $68. It closed Wednesday at $49 per share.
Canada Goose went public in March 2017 and sells $1,000 winter jackets. The stock has soared nearly 200% since then.
Commerce Secretary Wilbur Ross is denting Wall Street's hopes for a trade deal.
Markets were lower earlier after Ross told CNBC that the United States is still “miles and miles” from a trade deal with China.
Semiconductor stocks soared Thursday thanks to solid earnings from Texas Instruments and XIlinx. Chip companies are doing well largely because of surging demand for 5G networks.
Xilinx said sales from its communications segment rose more than 40% compared to a year ago thanks to the deployment of 5G in South Korea and preparations for 5G upgrades in the United States and China.
Texas Instruments told analysts on a conference call Wednesday that its communications revenue was up 20%, mostly because of 5G.
All of this good news should bode well for semiconductor giant Intel (INTC), which reports earnings after the closing bell Thursday. Intel has been aggressively touting its own 5G products. Shares rose 4% in early trading.
The number of Americans applying for jobless benefits last week dropped to its lowest in 49 years.
According to data from the Labor Department, initial claims for unemployment benefits dropped 13,000 to 199,000 for the week ending January 19 — the lowest level for claims since November 15, 1969 when it was 197,000 claims.
The numbers are estimated for six states where many federal employees live and could be impacted by the partial government shutdown, including California and Virginia. That means the overall figure could be revised.
Regardless, the preliminary numbers indicate the economy is strong.
Ian Shepherdson, an economist at Pantheon Macroeconomics, said in his note that companies are "scared to let people go unless they have no other choice, because it’s so hard to recruit."
More bad news for California utility PG&E, which has said it intends to file for bankruptcy as a result of expected liabilities it will face for its role in the Northern California wildfires last November. An activist shareholder wants the company to dump its entire board and plans to nominate its own slate of directors.
In a letter to fellow investors, BlueMountain Capital Management, a hedge fund that owns just under 1% of PG&E's shares, wrote:
The board "has not only failed the Company and its shareholders; it has failed its customers; it has failed its employees; and, it has failed the people of California."
BlueMountain Capital has already asked PG&E twice to delay the bankruptcy filing until after the annual shareholder meeting in May, arguing that a Chapter 11 reorganization would hurt wildfire victims, the company's employees, customers, suppliers and creditors.
PG&E said in a statement to CNN Business that the board is already looking for some new members and added that bankruptcy is "the only viable option" for the company.
American Airlines (AAL) shares are taking off because of a better-than-expected fourth quarter earnings. The stock is soaring nearly 7% in premarket trading.
Its fourth-quarter earnings came in at $1.04 per share, slightly higher than analysts' expectations. But its revenue fell slightly below expectations because of higher fuel prices.
For 2019, American said it expects earnings per share between $5.50 to $7.50, ahead of analysts' expectations of $5.90.
"We are intent upon running the most reliable operation in our post-merger history, pursuing high margin growth opportunities at our most profitable hubs, and executing on a number of valuable revenue and cost saving initiatives," CEO Doug Parker said in a release.
JetBlue (JBLU) investors are feeling far from blue: The stock is up nearly 3% following a strong fourth-quarter earnings report.
The New York-based carrier's earnings per share was $0.50 — considerably higher than the $0.32 per share it recorded for fourth-quarter of 2017. JetBlue also said its revenue on each seat sold also increased 2.4%.
"We expect to see margin expansion resulting from our network reallocation, ancillary revenue initiatives, improvements to our fleet and our progress in better controlling our costs," CEO Robin Hayes said in a release.