Stocks added to Wednesday's gains in Thursday's session, supported by the de-escalation of U.S.-Iran tensions and a decline in jobless claims. CNN's report that Iran signaled to the U.S. via back channels that their retaliatory action had ended added support to yesterday's indications that tensions have cooled. However, U.S. intelligence officials have evidence that the Boeing 737-800 operated by Ukraine International Airlines was downed on Wednesday by an Iranian missile and not mechanical failure, NBC News and others media outlets reported.
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 9,000 to 214,000 in the week ended January 4.
TOP NEWS: Boeing (BA) shares were 1.5% higher following reports from Newsweek, CBS and NBC that indicated U.S. officials believe Iran shot down a jet made by the company and operated by a Ukrainian airline. The incident, which occurred on Tuesday night, killed all 176 people on board. President Trump said at the White House that he does not personally believe the Boeing 737-800 crash operated by Ukraine International Airlines was due to a mechanical error. Canadian Prime Minister Justin Trudeau went further, publicly stating that intelligence gathered by his nation and allies indicates the passenger plane was shot down by an Iranian missile, though he would not say if the strike was an accident and declined to say if Canada sees the event as an act of war.
Shares of Bed Bath & Beyond (BBBY) dropped 19.2%% after the company reported third quarter results that an analyst at Loop Capital called the worst "since the Great Recession." In addition to Bed Bath & Beyond's weak report and guidance retraction, other retailers - including Kohl's (KSS), L Brands (LB) and J.C. Penney (JCP) - reported same-store sales declines for the crucial holiday period. Bucking this morning's retail sector trend, shares of Chico's (CHS) rose 10.6% after the company raised its fourth quarter total net sales and consolidated comparable sales forecast to approximately flat, an improvement on its previous outlook of a low single-digit decline.
Tesla (TSLA) shares slipped 2.2% after Baird analyst Ben Kallo downgraded the stock to Neutral from Outperform despite raising his price target for the shares to $525 from $355. While Kallo would not short the stock and remains "positively biased over the long run," he recommends taking profits at current levels with the risk/reward more balanced following the recent rise in Tesla's share price.
In M&A news, Wesco (WCC) confirmed it submitted an improved proposal to the board of directors of Anixter International (AXE) to acquire Anixter for $100 per share in cash and stock. The Anixter board has determined Wesco's proposal represents a "Superior Company Proposal" as defined in Anixter's merger agreement with Clayton, Dubilier & Rice, the bidder added in announcing its increased offer.
Meanwhile, Peloton (PTON) shares fell 6% after Bloomberg reported that gym chain operator and SoulCycle majority owner Equinox is in advanced talks to secure new funding from investors including private equity firm Silver Lake. The investment would help Equinox expand a digital platform design to compete against Peloton, according to Bloomberg.
MAJOR MOVERS: Among the noteworthy gainers was Argenx (ARGX), which rose 5.6% after it reported "positive" clinical data on pemphigus vulgaris as part of a 2020 corporate update. Also higher was DBV Technologies (DBVT), which gained 14.8% after the company reported "positive" topline results from its Phase 3 trial of its of investigational Viaskin Peanut patch for use in protecting peanut-allergic children.
Among the notable losers was Whiting Petroleum (WLL), which fell 5% after Wells Fargo analyst Nitin Kumar downgraded the stock to Underweight from Equal Weight. Also lower was Acuity Brands (AYI), which dropped 13.8% after reporting quarterly results.
INDEXES: The Dow rose 211.81, or 0.74%, to 28,956.90, the Nasdaq gained 74.18, or 0.81%, to 9,203.43, and the S&P 500 advanced 21.65, or 0.67%, to 3,274.70.
