The Dow closed up 181 points, or 0.7% on Friday, boosted by optimism the US-China trade talks were making progress.
The Nasdaq was up 0.9% and the S&P 500 was up 0.6%
For the week, the Dow was up 0.6% – extending its winning streak to nine. The Nasdaq was also up for the 9th straight week, finishing up 0.7%. The S&P 500 was up 0.6% for the week.
Investors cheered signs of progress on the trade front as US and Chinese officials met in Washington to try and hash out a trade agreement ahead of a March 1 deadline.
Alibaba (BABA) was up 3%.
Friday’s big winners included home furnishing site Wayfair (W), which was up 28% on solid earnings.
Food companies got hammered, dragged down by bad news from Kraft Heinz (KHC). The company’s stock was down 27%. Campbell Soup (CPB) fell 7%, and JM Smucker (SJM) dipped 5%.
Stamps.com (STMP) plunged 58% after it said it was ending an exclusive relationship with the US Postal Service
Tesla (TSLA) has had a bad week – not as bad as Kraft Heinz (KHC), but still.
However there was one bright spot: The automaker delivered its first Model 3 to a customer in China on Friday, weeks ahead of schedule, according to CNN Business’ Chris Isidore. There was even a ceremony held for the delivery in Beijing.
China is a critical market for Tesla – it’s the largest market for both overall car sales and for the sale of electric vehicles.
Read more about Tesla’s most recent travails here.
Stocks are higher at midday:
The bad news from Kraft Heinz (KHC), which is down 27%, is also hurting General Mills (GIS), which is down 4%. Campbell Soup (CPB) plunged 8%, and JM Smucker (SJM) dipped 6%.
Friday’s big gainers include Wayfair (W), which jumped 30% on strong earnings, and Roku (ROKU), which gained 22% after it also posted good results.
The bad news from Kraft Heinz (KHC) is hurting its competitors.
Shares of General Mills (GIS) and Conagra (CAG) fell about 4% on Friday. Campbell Soup (CPB) plunged around 8%.
Mondelez (MDLZ ) and Nestle (NSRGY) both dipped around 1%.
Investors likely fear that the troubles that contributed to Kraft’s whopping $15 billion write-down could impact its competitors, as well. Big consumer packaged goods companies rely on similar supply chains and face similar challenges, like rising commodity and transportation costs.
Kraft shares are still plummeting. Mid-morning on Friday, the stock was down 28%.
Wayfair (W), the online home furnishings’ retailer, surged more than 30% on Friday after it reported quarterly earnings that beat Wall Street’s predictions.
The company lost $143 million during the quarter, but that was less than investors expected. The company also posted $576 million in sales, a 40% increase from the same period a year ago.
“Our offering is resonating more and more with our customers in North America and Europe,” said Wayfair CEO Niraj Shah.
Opening brick-and-mortar stores could become the next big thing for Wayfair. The company opened its first permanent store in Kentucky earlier this month, and Shah said there are “a lot of opportunities” for stores in the future.
Kraft Heinz (KHC) shares lost more than a quarter of their value Friday following the shocking news of a big writedown and an accounting probe by the SEC. But nobody is feeling the pain of this Velveeta-esque meltdown more than the Oracle of Omaha.
Warren Buffett’s Berkshire Hathaway (BRK.B) is the biggest investor in Kraft Heinz. It owns nearly 326 million shares. Following the huge drop Friday, that stake was worth about $4.3 billion less than what it was on Thursday.
Buffett’s partner on the Kraft Heinz deal, giant private equity firm 3G Capital, is getting hit hard too. The value of its investment plunged by about $3.5 billion.
Other big losers? Average Americans that likely own at least a small slice of Kraft Heinz in mutual funds or ETFs. Vanguard, State Street, BlackRock, Invesco and Fidelity are all among the 10 largest shareholders of Kraft Heinz.
Shares of Kraft Heinz (KHC) plunged 26% after the company had one of the worst days imaginable on Thursday.
The company:
Sales were up about 1% in the fourth quarter.
But higher-than-expected manufacturing and logistics costs plagued the company, and it overestimated that savings from its 2015 merger would continue to help lower costs.
Kraft said cutting the dividend will help the company reduce its debt faster, support its investments and help the company divest businesses that aren’t supporting the bottom line.
The Dow rose 90 points as American and Chinese trade negotiators continue talks in Washington. Investors have grown increasingly optimistic that the two sides will strike a deal to avoid another costly round of tariffs.
The S&P 500 and the Nasdaq each rose 0.3%.
Shares of Kraft Heinz (KHC) plunged 26% after reporting a huge quarterly loss, a massive writedown on two of its biggest brands, a dividend cut and an SEC probe into its accounting practices.
Stamps.com’s (STMP) stock fell 53% after the company announced it has ended its partnership with the US Postal Service.
From CEO Kenneth McBride on the Stamps.com (STMP) earnings call:
Amazon is changing the shipping business
How the Postal Service deal fell apart
Why make the change now?
What’s next for Stamps.com?
Berkshire Hathaway (BRKA) is expected to report earnings on Friday. If history is a guide, CEO Warren Buffett will also release his annual shareholder letter on Saturday.
Buffett’s letter is closely read for its investment advice.
This year, the memo will be mined for insight on slowing economic growth in the United States and around the world, and what it means for companies and markets.
A smaller development that could also be explained: Last week, Berkshire revealed that it sold its entire $2 billion stake in Oracle (ORCL) after holding the investment for just one quarter.
US stock futures are pointing higher this morning.
Investors offloaded stocks yesterday after getting several pieces of worrying news about the global economy.
The Dow and S&P 500 closed 0.2% lower Thursday, and the Nasdaq shed 0.1%, snapping an eight-day winning streak.
US durable goods orders grew less then expected in December, and existing home sales declined in January. Surveys showed further manufacturing weakness across the developed world.
“The US data have clearly turned a corner recently,” said Simon MacAdam, global economist at Capital Economics. “With the economy likely to lose a lot more pace this year, the Fed is unlikely to hike rates again this cycle.”
