What’s moving markets today

Amazon (AMZN) said Thursday that its holiday quarter sales hit $72.4 billion, up 20% from the same period a year earlier and at the high end of its previous forecast.

Amazon’s annual revenue reached $232.9 billion.

But sales growth is slowing down. Its 20% sales growth for the quarter was well below the 38% growth it saw in the same period a year earlier. Amazon also forecast weaker than expected sales for the first quarter of 2019.

Amazon reported $3 billion in profit for the final three months of 2018, marking the fifth consecutive quarter that its profits topped $1 billion.

Amazon’s total profit for 2018 topped $10 billion for the first time in the company’s history.

Its shares were essentially flat following the earnings report Thursday. But the stock has had a strong start to the year. It was up more than 10% in January.

Foxconn is in line to collect $4 billion in state and local government incentives when it builds a new location in the state of Wisconsin. But exactly what kind of facility the electronics giant has in the works is unclear. Our own Chris Isidore breaks it down:

The original plan: Build a massive manufacturing plant to make flat screen panels that would employ 13,000.

The new plan: A technology hub dedicated to research and development rather than manufacturing, that also has a smaller factory component.

In a statement, the company said:

Nothing with the incentives plan has changed – yet. But Governor Tony Evers only just learned about the revised plans this week.

It was freezing on Wall Street but the stock market was on fire.

The S&P 500 climbed nearly 1%, lifting its January gain to 8%. That’s the biggest January rally since 1987.

The Dow closed just slightly higher on the day, but still achieved its strongest January since 1989. The Nasdaq soared 1.4%.

Facebook (FB) was the big winner. It surged 11% on its booming bottom line and solid user growth.

And General Electric (GE) cruised 12% higher, its best day in nearly a decade. Wall Street is betting GE’s earnings report and subprime mortgage settlement mean the company’s crisis is finally over.

Wall Street is on the verge of closing out January on a positive note.

The stars of the show on Thursday were GE and Facebook, two of the biggest disappointments of last year.

GE (GE) soared 15% after reaching a $1.5 billion subprime mortgage settlement and posting results that were better than feared. GE is on track for its best day since 2009.

Facebook (FB) wasn’t far behind. The Mark Zuckerberg-led company climbed 13% in response to a record profit and solid user growth.

The Dow was held back by DowDuPont (DWDP), which tumbled nearly 8% after announcing disappointing results.

If the markets avoid an afternoon slide, the Dow and S&P 500 could notch their best January performance in at least 30 years.

Maybe the housing market isn’t cooling off that much after all?

The government said Thursday new home sales in November increased nearly 17% from October, well above Wall Street’s forecasts. (The data is a little old since the report’s original release date was postponed during the partial government shutdown.)

A big reason for the pop in sales is housing prices tumbled sharply. The median sales price was $302,400, compared to $325,100 in October and $343,400 a year ago.

The average 30-year fixed mortgage rate was hovering around 5% in November. During the past few months, mortgage rates have cooled to about 4.46%. If prices and mortgage rates continue to fall, that might entice even more previously reluctant buyers to shop for a house.

That would be great news for housing-related stocks. The S&P Homebuilders ETF (XHB) was up 2% Thursday. The index includes Home Depot (HD) and Lowe’s (LOW), insulation company Owens-Corning (OC) and floor maker Mohawk (MHK) as well as major builders.

Marlboro owner Altria and the analysts that follow it clearly believe the company’s future is more about vaping than smoking. Juul, the e-cigarette company in which Altria bought a 35% stake in December for $12.8 billion, was mentioned 98 times during Altria’s earnings conference call Thursday.

Altria chairman Howard Willard noted that Juul’s sales topped $1 billion last year, up from about $200 million in 2017. The company added that it expected US vaping volumes to grow about 15% to 20% annually for the next five years while traditional cigarettes should continue to post declines of around 4% to 5%.

Willard also touted Altria’s recent investment in Canadian marijuana company Cronos (CRON), saying that “the growth opportunities are significant and will extend across the globe as cannabis markets open.” 

Shares of Altria (MO) rose 2% in early trading. But the stock is still lagging the broader market this year as some analysts remain skeptical of the Juul deal. Morgan Stanley downgraded Altria a few weeks ago, citing concerns that it overpaid for Juul.

US markets opened mixed Thursday.

Facebook (FB) stock soared 11% at the opening bell, a day after the social media company posted a record $6.9 billion profit.

Tesla (TSLA) slumped 4% the morning after CEO Elon Musk told investors that the company’s chief financial officer is leaving.

General Electric (GE) spiked 10% after the company said it reached a $1.5 billion settlement with the Justice Department, putting to rest a major question about the beleaguered business. Shares were already up 20% this year on investor hopes that the company’s decade-old struggles are coming to an end.

Intel (INTC) shares fell 3%. The company announced that interim CEO Robert Swan will take the position permanently after a months-long search.

The number of people filing first-time unemployment insurance claims soared to its highest level since September 30, 2017. The probable culprit: The five-week government shutdown, which ended last Friday.

Initial jobless claims rose to a seasonally adjusted 253,000, up from a 49-year low of 200,000 the prior week. That’s well above the four-week moving average of 215,000 unemployment claims.

That’s potentially troubling news for the jobs report, which the Department of Labor will release tomorrow morning. Although furloughed workers will be counted as employed in that report, it’s still a mystery how many out-of-work government contractors will be considered unemployed.

Seasonal adjustments may have also thrown the initial claims number a bit off course, according to Chris Rupkey, chief financial economist at MUFG.

“It looks that the seasonal factors are having trouble adjusting for the winter weather-related layoffs this time of year,” he said, noting the Martin Luther King Jr. holiday may have thrown the Labor Department’s calculations for loop.

The growth of online shopping might be hurting brick-and-mortar stores, but it’s helping delivery companies such as United Parcel Service

UPS (UPS) shipped more packages than ever over the holidays. The record helped lift earnings to $1.7 billion, a 17% rise from a year earlier.

The results were slightly better than Wall Street forecasts. Revenue was up nearly 5% in the quarter.

It wasn’t all domestic deliveries helping results. Despite concerns about slowing overseas economies and trade wars, UPS reported record results in its international division.

The company was not only helped by an increase in the number of shipments but also higher average revenue per packages. It expects earnings to continue to improve in 2019.

Shares of UPS were up nearly 5% in premarket trading.

General Electric (GE) shares climbed 8% in premarket trading following its earnings report.

The company announced it has agreed to pay a $1.5 billion civil penalty to settle the Justice Department’s investigation into WMC Mortgage, the subprime lender that was shut down a decade ago. GE previously set aside that amount.

But its adjusted profit declined more than Wall Street analysts had been anticipating because of an an $872 million loss at the company’s turbine division.

It’s one of the best performing stocks in the S&P 500 in 2019, rising 20%.