Stocks opened in negative territory but the averages drifted off their lows in morning trading and eventually crossed into positive ground. The averages continue to search for direction and have turned mixed near midday, as concerns over trade talks, higher interest rates, and higher oil prices are all percolating. ECONOMIC EVENTS: In the U.S., initial jobless claims rose 11,000 to 222,000 in the week ended May 12. The Philadelphia Fed Business Outlook Survey climbed 11.2 points to a 34.4 reading, which was much stronger than expected. An index of leading economic indicators rose another 0.4% to 109.4 in April, as expected. COMPANY NEWS: Shares of Walmart (WMT) were 1.5% lower despite the company reporting better than expected results for the first quarter, with U.S. comp sales increasing 2.1% year-over-year in the period. In particular, the Dow member said that its e-commerce sales grew 33% in Q1 and that the company is on track to boost its online grocery pickup by roughly 1,000 stores this year. The retail giant noted, however, that its investment in Flipkart is expected to negatively impact fiscal 2019 earnings per share by roughly 25c-30c if the deal closes at the end of the second quarter… In other earnings news, shares of Cisco (CSCO) fell 3% after the company reported quarterly results and provided guidance for the fourth quarter. Of note, Piper Jaffray said that the only “disappointments” were the lower percentage of recurring revenue, implied recurring software product revenue, services revenue, and reported free cash flow… A day after rival Macy’s (M) reported quarterly results, J.C. Penney (JCP) reported results for its fiscal Q1 but lowered its adjusted earnings guidance for fiscal 2018. J.C. Penney shares were down 11% near noon… Meanwhile, Wells Fargo (WFC) shares were 1.5% lower after the Wall Street Journal reported that employees in the bank’s wholesale unit added or altered information on documents related to corporate customers without customers’ knowledge in 2017 and early 2018. The Journal said that the information added varied from social security numbers to addresses to dates of birth for people associated with business-banking clients. MAJOR MOVERS: Among the noteworthy gainers was Loxo Oncology (LOXO), which jumped 19% after it released data regarding its experimental LOXO-292 cancer drug. Also higher was WWE (WWE), which gained 15% after Guggenheim analyst Curry Baker said he is “bullish” on the company’s TV renewal prospects based on the terms about to be achieved by UFC. Among the notable losers was Jounce Therapeutics (JNCE), which plunged 33% after the company’s report of “underwhelming” JTX2011 data ahead of the ASCO meeting led to a downgrade of the stock at Wells Fargo. Also lower was Flowers Foods (FLO), which fell 9% after reporting quarterly results. INDEXES: Near midday, the Dow was down 17.57, or 0.07%, to 24,751.36, the Nasdaq was up 5.15, or 0.07%, to 7,403.44, and the S&P 500 was up 2.48, or 0.09%, to 2,724.94.
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