What's moving markets today

By CNN Business

Updated 5:13 p.m. ET, February 22, 2019
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5:13 p.m. ET, February 22, 2019

US stocks close higher on US-China trade hopes

From CNN Business' Paul R. La Monica

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

3:53 p.m. ET, February 22, 2019

Tesla goes to China

From CNN Business' Chris Isidore

A new Tesla rolls off a ship in the port of Shanghai.
A new Tesla rolls off a ship in the port of Shanghai.

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.

1:01 p.m. ET, February 22, 2019

Stocks are up but food companies are getting hammered

From CNN Business' Paul R. La Monica

Stocks are higher at midday:

  • The Dow is up 167 points, pushing it above 26,000 for the first time since November.
  • The S&P is up .75% and the Nasdaq gained 0.6%.

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.

11:30 a.m. ET, February 22, 2019

Kraft is taking General Mills, Campbell Soup and Conagra down with it

From CNN Business' Danielle Wiener-Bronner

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%.

11:48 a.m. ET, February 22, 2019

Wayfair beats Wall Street's forecast, stock soars 30%

From CNN Business' Nathaniel Meyersohn

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.

Active customers, an important growth metric, increased 38% during the quarter from a year ago. Wayfair said it has 15.2 million active customers.

"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.

10:21 a.m. ET, February 22, 2019

Warren Buffett's Berkshire Hathaway has lost more than $4 billion on Kraft Heinz today

From CNN Business' Paul R. La Monica

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.

10:04 a.m. ET, February 22, 2019

Kraft Heinz tumbles 26% after releasing a ton of bad news Thursday

From CNN Business' Jackie Wattles

Shares of Kraft Heinz (KHC) plunged 26% after the company had one of the worst days imaginable on Thursday.

The company:

  • Wrote down the value of its Kraft and Oscar Mayer brands by $15 billion
  • Posted a $12.6 billion loss
  • Cut its dividend by 36%
  • And announced its accounting practices are under investigation by the SEC

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.

By doing this we can improve our growth and returns over time," said CEO Bernardo Hees.
"We still believe ... strongly that our model is working and has a lot of potential for the future."
9:35 a.m. ET, February 22, 2019

Stocks open higher on US-China trade optimism

From CNN Business' David Goldman

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.

4:21 p.m. ET, February 22, 2019

What the Stamps.com CEO told Wall Street about the demise of its Postal Service deal

From CNN Business' David Goldman

From CEO Kenneth McBride on the Stamps.com (STMP) earnings call:

Amazon is changing the shipping business

The standard delivery times in e-commerce have really been set by Amazon. Now everyone in the e-commerce industry needs to match the 2-day delivery in order to compete. UPS, FedEx, DHL, all the regional carriers all have 2-day guaranteed delivery solutions. The USPS does not have 2-day guaranteed delivery solutions.
Our customers are demanding and need 2-day delivery guaranteed. They need to have carriers other than the USPS. 

How the Postal Service deal fell apart

We have proposed our terms of renewal to the USPS. One of our nonnegotiable items is ... we will no longer be exclusive to the USPS.
USPS has not agreed to accept these terms or any other terms of our partnership proposal. So at this point, we've decided to discontinue our shipping partnership with the USPS so that we can fully embrace partnerships with other carriers who we think will be well positioned to win in the shipping business in the next 5 years.

Why make the change now?

In the last month ... Amazon came out and they said, 'Hey, we're going after shipping.' And it was the first time they have publicly acknowledged that. There were some rumors and questions and statements. But then Amazon came out and said it point blank. So that is a big catalyst for us demanding that we remove the exclusivity from our agreement.

What's next for Stamps.com?

We have already begun redirecting the activities of our development teams, of our national sales force and redirecting our marketing budget and other activities to support our new multicarrier-focused partnership model.
The short-term financial impact we will experience as we forgo our shipping revenue share with the USPS will represent some short-term pain for us over the next few years.