What's moving markets today: May 21, 2019

JCPenney (JCP), the ailing department store, tanked on Tuesday after reporting a loss during its most recent quarter and a steep drop in sales.

JCPenney lost $154 million during the first quarter of the 2019 fiscal year. Sales at stores open at least a year dropped 5.5% during the quarter compared with a year ago.

JCPenney's stock fell 9% in premarket trading to around $1.05 dollars a share.

Under new CEO Jill Soltau, the retailer is working on clearing out inventory and focusing on its women's clothing business. It has stopped selling appliances and furniture, which hurt sales last quarter, the company said.

On Tuesday, JCPenney also said it snatched Shawn Gensch, chief customer officer at Sprouts Farmers Market, to serve the same role at JCPenney. Soltau has recently recruited executives at Target to work in other leadership positions on her new team.

There was relief for US stocks this morning in a bounce back from yesterday's tech-driven losses. But headline risk from the US-China trade war is never far away. 

For tech companies and investors, they are adjusting to what is being called a new Cold War in tech.

The White House essentially blacklisted Huawei, the second largest smartphone maker in the world and China's crown jewel. The company is a symbol of the Chinese government's strategy to dominate high tech.

The Commerce Department issued limited exemptions for Huawei products late Monday which explains the early optimism ahead of the opening bell.

But the new tough strategy on confronting China remains in place overall. Trade skirmishes have dragged the Nasdaq down more than 4% this month. But the Nasdaq is still up an impressive 16% this year.

Even with tariffs and counter-tariffs, the Nasdaq is still 4% higher than it was when the trade war began last summer.

For me those numbers are both a testament to the resilience of stocks and a reminder of the risk to the downside.

Kohl's (KSS) shares are sinking 10% in premarket trading after reporting dismal earnings, which included a decline in first-quarter sales and cutting its full-year outlook:

Snap (SNAP), the parent company of messaging app Snapchat, has promoted two executives amid a wider shakeup of its leadership team.

The company announced late Monday that Derek Andersen will be its new chief financial officer. He was previously the company's vice president of finance.

Lara Sweet, who was interim CFO, will become the company's first chief people officer. Both will report to CEO Evan Spiegel and begin their new roles immediately.

Sweet will oversee hiring, management strategies and human resources functions. She will continue to be the company's chief accounting officer until a replacement is chosen.

The stock has exploded since the beginning of the year with shares climbing more than 100%.

Read more about the changes here.

Tesla (TSLA) is facing another down day.

Shares are slipping 3.5% in premarket trading after Morgan Stanley released a note cutting its worst-case scenario for Tesla's stock to $10.

The potential steep decline in the stock's value could be prompted by slowing Chinese demand for Tesla's vehicles, the note said:

The firm previously predicted the worst-case scenario for Tesla's stock to be $97 per share.

Yesterday, Wedbush Securities analyst Daniel Ives said he has "major concerns" about Tesla's future. The stock closed 2.7% lower Monday.

Slack is already making changes before it goes public.

The workplace messaging service changed its stock ticker from SK to WORK, the company revealed in an updated regulatory filing. It will still trade on the New York Stock Exchange.

Slack also updated the number of shares of its direct listing its offering to 117 million. The company's shares will list directly on a stock exchange without relying on underwriters to help assess demand and set a price.

Home Depot (HD) continues to benefit from low interest rates and a solid housing market.

The home improvement retail giant reported first quarter earnings of $2.5 billion, or $2.27 a share — an increase of more than 9% from a year ago and topping forecasts.

Revenue increased to $26.4 billion, up nearly 6% from last year. Sales at US stores open at least a year rose 3%.

Home Depot chairman and CEO Craig Menear said the company was pleased with the results, despite poor weather in February and "significant deflation in lumber prices." 

The company reaffirmed its outlook for the year as well. Shares rose slightly in premarket trading. 

Earnings from US retailers kick into high gear Tuesday. 

Walmart (WMT) set a high bar for stores last week. America's largest retailer said sales last quarter at stores open at least a year increased 3.4% from a year earlier. Its online sales growth clocked in at 37% last quarter.

But Walmart warned it will raise prices on some products as a result of the Trump administration's tariffs on Chinese goods.

Nike (NKE), Adidas (ADDDF) and other sneaker brands said in a letter to President Trump Monday that proposed tariffs on imported shoes from China would be "catastrophic" for American consumers.

Expect analysts to press the retailers on how they plan to deal with tariffs and their exposure to China.

Markets appear to be in a holding pattern as uncertainty over trade lingers.

The Dow closed down 0.3% on Monday. The S&P 500 fell 0.7%, and the Nasdaq lost 1.5%.