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BUSINESSWednesday 21 October
Stocks edge lower; IBM’s woes weigh on the Dow AP: Yum Brands
plans to spin off
ALEX VEIGA Nasdaq composite shed slid $7.80 to $48.25. rival Western Digital. SanD- China business
AP Business Writer 24.50 points, or 0.5 percent, About 57 percent of the isk gained $3.19 to $75.19.
U.S. stocks snapped a to 4,880.97. companies in the S&P Western Digital fell $5.62, or M. CHAPMAN
three-day winning streak The Dow is down 3.4 per- 500 index report earnings 7 percent, to $74.86. AP Business Writer
Tuesday as weak compa- cent this year, while the over the next two weeks. Investors also bid up shares NEW YORK (AP) — The
ny earnings and outlooks S&P 500 is off 1.4 percent. That works out to about in Team Health Holdings on owner of KFC, Pizza Hut
weighed on the market. The Nasdaq is up 3.1 per- 117 companies this week, news that AmSurg is offer- and Taco Bell plans to spin
Major indexes wavered cent for the year. including Boeing, Gen- ing to buy the health care off its China business into a
between small gains and Weak hardware sales and eral Motors and eBay on staffing and services com- separate, publicly traded
losses for most of the day the impact of the strong Wednesday. pany in a cash-and-stock company.
before settling slightly low- dollar hurt IBM’s results in “The major data points for deal worth about $7.8 bil- Yum Brands has had trou-
er in the last 15 minutes of the third quarter. The com- investors are really still go- lion. Team Health vaulted ble with its China business.
trading. The slide in crude Earlier this month the Louis-
oil prices deepened. Steven Capo, left, a floor official with Jefferies & Company, follows stock prices at the New York ville, Kentucky-based com-
Investors are mostly fo- Stock Exchange. U.S. stocks snapped a three-day winning streak Tuesday as weak company pany cut its profit outlook
cused on corporate Amer- earnings and outlooks weighed on the market. for the year, citing a slow-
ica the next couple of er-than-expected come-
weeks as the third-quarter (AP Photo/Richard Drew) back for its China division.
earnings season unfolds. In the latest quarter, Yum
This week and next week pany, which reported its ing to be with earnings, $10.09, or 19.2 percent, to Brands reported that sales
are particularly heavy, latest results late Monday, getting a sense of how $62.59. Yum Brands, which in China rose just 2 percent
with big companies includ- was among the stocks to confidentbusinesses are, owns KFC, Pizza Hut and at established locations.
ing Coca-Cola, Procter & slump on Tuesday as inves- demand and pricing,” said Taco Bell, rose 1.8 percent Yum has been trying to win
Gamble and Apple report- tors sized up earnings. The Eric Wiegand, senior port- after saying it plans to spin back customers after neg-
ing earnings. stock weighed heavily on folio manager at U.S. Bank off its China business, which ative publicity stemming
Traders are trying to glean the 30-stock Dow, losing Wealth Management. has stumbled recently. from food supply contro-
whether the global econ- $8.58, or 5.7 percent, to Beyond earnings, trad- The stock added $1.32 to versies.
omy is slowing and how $140.64. ers welcomed some deal $73.03. The company has said
U.S. companies are coping Harley-Davidson sank 13.9 news Tuesday. In Europe, Germany’s DAX that part of the difficulties
with factors like the stron- percent after the com- SanDisk climbed 4.4 per- fell 0.2 percent, while the in China are due to a mix
ger dollar, which can crimp pany reported a drop in cent on media reports in- CAC-40 in France slid 0.6 of external factors, such as
profits for companies as third-quarter profit and cut dicating that the data stor- percent. The FTSE 100 in- the Chinese economy, as
their goods become pricier its forecasts for motorcycle age company was in ad- dex of leading British shares well as internal issues, such
overseas. shipments. Harley shares vanced talks to sell itself to dipped 0.1 percent.q as the execution of mar-
Tuesday’s tentative trad- keting for Pizza Hut.
ing action suggests inves- The announcement of the
tors are not sure what to planned split comes just
make of the earnings sea- five days after Yum Brands
son so far, said Chris Gaff- named activist investor
ney, president at EverBank Keith Meister to its board.
World Markets. Meister is the founder and
“Everybody’s watching managing partner of Cor-
earnings and it’s been vex Management, one of
mixed so far,” Gaffney said. Yum’s largest shareholders
“We went into this earn- with nearly 5 percent of
ings season with lowered the company’s common
expectations and even in stock. Meister previously
spite of that we’re seeing said that he’d been in a
some misses.” “constructive dialogue”
The Dow Jones industrial with Yum’s board and
average lost 13.43 points, management over the
or 0.1 percent, to 17,217.11. past several months.
The Standard & Poor’s 500 News of Yum’s separation
index fell 2.89 points, or 0.1 plan come as not much of
percent, to 2,030.77. The a surprise, given the prob-
lems in China and the fact
Harley-Davidson plans job cuts after earnings miss that the company had
said just days ago that it
NEW YORK (AP) — Harley- per share, missing Wall Zacks expected $1.21 bil- as it reallocates spending. was close to completing a
Davidson Inc. plans to cut Street expectations. The “Our ongoing commit- review of its strategic op-
an unspecified number of average estimate of 12 lion. Meanwhile, the com- ment to manage supply tions, including potential
jobs and ship fewer motor- analysts surveyed by Zacks in line with demand and changes to its corporate
cycles than it had planned Investment Research was pany cut its guidance for maintain the premium na- structure.
for the year after reporting for earnings of 78 cents per ture of the brand remains Yum Brands said Tues-
third-quarter earnings and share. motorcycle shipments a top priority for Harley- day that it believes the
revenue that fell short of The maker of the iconic Davidson,” said President China business, which will
Wall Street expectations. Harley-Davidson motor- for the year to between and CEO Matt Levatich, in be called Yum China af-
Its shares tumbled 14 per- cycle reported a slight rise a statement. ter the separation, could
cent in morning trading in revenue to $1.14 billion, 265,000 and 270,000 from Its shares dropped $7.83, grow from its current 6,900
Tuesday. but that also missed Street or 14 percent, to $48.22 restaurants to more than
The company earned forecasts. prior guidance of between in late morning trading 20,000 restaurants in the fu-
$140.3 million, or 69 cents Ten analysts surveyed by Tuesday.q ture. q
276,000 and 281,000.
Harley-Davidson also ex-
pects expenses of be-
tween $30 million and $35
million in the fourth quarter
for employee separation
and reorganization costs
