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Dow Posts Solid Gains as Optimism Surrounds U.S.-China Trade Negotiations

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average rose as Wall Street monitored reported progress in U.S.-China trade talks. The Nasdaq was up for the ninth time in 10 trading sessions.
  • Kraft Heinz Co. (KHC) plunged 27.46% Friday after the company posted a fourth-quarter loss of nearly $13 billion, said it had received a subpoena from the Securities and Exchange Commission, and planned to slash its dividend.
  • Wayfair Inc. (W) jumped 27.9% after the online home furnishings company reported a narrower-than-expected adjusted loss in the fourth quarter and revenue of $2.01 billion that beat analysts’ forecasts.

Wall Street Overview

Stocks rose on Friday, Feb. 22, as investors continued to monitor the U.S.-China trade talks while navigating weaker-than-expected data in some of the world’s biggest economies.

The Dow Jones Industrial Average rose 181 points, or 0.7%, to 26,032, the S&P 500 gained 0.64%, and the Nasdaq rose 0.91%.

China’s vice premier, Liu He, is scheduled to meet with Donald Trump in the Oval Office later Friday as this week’s round of trade talks winds down in Washington. Multiple media reports suggested significant progress has been made between the two sides, with the very real possibility that next week’s March 1 deadline for a trade deal could be extended. Issues such as intellectual property protection and currency manipulation remain sticking points in the months-long talks, however.

Set against that optimism has been a series of weaker economic data points, including softer-than-expected existing home sales in the United States, slower manufacturing output in Europe and the first contraction in business activity in the U.S. mid-Atlantic region in nearly three years.

Kraft Heinz Co. (KHC)  slid 27.46% Friday after the company posted a fourth-quarter loss of nearly $13 billion, said it had received a subpoena from the Securities and Exchange Commission, and planned to slash its dividend.

The company said it received a subpoena from the SEC in October 2018 “associated with an investigation into the company’s procurement area, more specifically the company’s accounting policies, procedures, and internal controls related to its procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with its vendors.”

Kraft Heinz reported a fourth-quarter loss of $12.61 billion, or $10.34 a share. The period included a charge of $15.4 billion for writing down the value of some of its key brands, such as the Kraft and Oscar Mayer trademarks. Adjusted earnings were 84 cents a share, below analysts’ estimates of 94 cents. Revenue in the quarter was $6.89 billion vs. estimates of $6.94 billion.

Kraft Heinz said it would cut its quarterly dividend to 40 cents a share from 62.5 cents.

Newmont Mining Corp. (NEM)  rose 3% Friday on reports that rival Barrick Gold Corp.  (GOLD)  was prepping a hostile takeover bid that would value the mining company at around $19 billion.

Canada’s Globe & Mail Newspaper reported Friday that Barrick, the world’s biggest gold producer fresh off a $6.1 billion takeover of Randgold Resources, was looking to buy Newmont and dump some of that company’s assets to Australia’s Newcrest Mining (NCMGY) as the bullion industry continues to consolidate.

Baidu Inc. (BIDU)  fell 2.7% Friday after the China-focused search engine operator posted stronger-than-expected fourth-quarter earnings and held to its near-term revenue guidance despite the broader slowdown in the world’s second-largest economy.

Shares of Stamps.com Inc. (STMP) plummeted 57.77% Friday after the online shipping and postage company said its key partnership with the United States Postal Service has ended.

The breakup came after Stamps.com said it no longer wants to be exclusive with the Postal Service, terms that the postal service refused to accept, said Kenneth Thomas McBride, Stamps.com’s chairman and CEO.

Wayfair Inc. (W)  jumped 27.9% after the online home furnishings company reported a narrower-than-expected adjusted loss in the fourth quarter and revenue of $2.01 billion that beat analysts’ forecasts.

Roku Inc. (ROKU)  was up 25.23% Friday after the media streaming service added 7.8 million subscribers in 2018 on its way to topping analysts’ fourth quarter top- and bottom-line estimates.

Roku reported revenue of $275.7 million and earnings of 5 cents a share. Analysts were expecting revenue of $262.1 million and earnings of 3 cents.