It was another mostly sideways close for the stock market on Tuesday as the three major indexes ended up little changed.
First, the scoreboard:
Dow:17,217.11, -13.43, (-0.08%) S&P 500: 2,030.77, -2.89, (-0.14%) Nasdaq: 4,880.97, -24.50, (-0.50%)
And now, the top stories:
Yum Brands is splitting into two publicly traded companies. Yum China is a spinoff of its unit in the country, and would give the new business exclusive rights to its flagship restaurants: KFC, Pizza Hut, and Taco Bell. Yum Brands, the second company, would focus on the rest of the world. In the announcement, CEO Greg Creed said the separation will help both brands focus on their own commercial priorities and use resources to meet their specific needs. Just last week, activist investor Keith Meister of Corvex Capital, who had called for a split of the China unit, joined the company’s board. Shares rallied as much as 4%. The ‘Oprah effect’ is still rubbing off on Weight Watchers‘ stock. Shares rallied another 30% today, after spiking more than 100% on Monday. The company said Monday that Oprah joined its board and bought a 10% stake – costing her $43 million and earning her $70 million on the ~100% spike. Barclays analysts bumped up their rating on the stock to “Equal Weight” from “Underweight”, and hiked their price target 180% to $14 from $5. They also wrote to clients that a well-designed new program is necessary for Weight Watchers’ success, regardless of Oprah. In economic data, housing starts grew 6.5% in September, way above expectations, at an annualized pace of 1.206 million. Building permits fell 5% at an annualized pace of 1.103 million. Realtor.com’s Jonathan Smoke cautioned in a note to Business Insider that the month-on-month and year-on-year changes were not outside the confidence intervals, meaning the jump may be statistical noise. Tesla shares tanked by as much as 11% after Consumer Reports withdrew its recommendation for the Model S sedan on concerns about reliability. A survey of 1,400 Model S owners brought up issues about the car’s body, sunroof leaks, and other things. Consumer Reports’ data simultaneously showed that 97% of owners would buy the car again. IBM shares fell by as much as 5% following the company’s disappointing third-quarter earnings results. Operating, non-GAAP earnings came in at $3.34 ($3.30 estimated) on revenues of $19.3 billion ($19.6 billion expected). IBM cut its forecasts for full-year 2015 earnings, and expects full-year free cash flow to be almost flat. The company is beefing up its cloud computing and big data businesses as it shrinks its hardware unit. Harley Davidson also disappointed on the top line, with third-quarter diluted earnings per share of 69 cents (78 cents expected). Its stock fell by as much as 14%. The motorcycle manufacturer said it was planning job cuts in the fourth quarter, and expected strong competition to continue. Cheaper motorcycles manufactured abroad, and the strong dollar, impacted its performance in the third quarter.
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