Stocks got off to a strong start in the second quarter, moving higher on news that manufacturing activity in China rose in March. Domestic economic data were more mixed, with U.S. manufacturing activity accelerating but retail sales falling 0.2% in February. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^SPX) both gained more than 1%.
Today's stock market
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Apple axes AirPower, cuts prices in China
Apple investors got a mixed bag of news today, with the company canceling the AirPower charging mat and reducing prices in China. Shares crept up 0.7%.
The cancellation of AirPower amounts to an embarrassment for Apple, but probably won't have much of an impact on financial results. The company announced AirPower in September 2017 as part of the iPhone X unveiling and said it would be available in 2018. Apparently the product development hit some technical snags, so iPhone users will continue to rely on third-party devices for wireless charging.
More important to the company's future results was a price cut to iPhone products in China, as reported by CNBC. The price of the entry-level iPhone X model, the XR, was lowered 4.6%, and the price tags on the XS and XS Max were cut 5.7% and 5.2%, respectively.
A shortfall in China sales took Apple by surprise and caused a rare downward revision in guidance in January. This week's price action may help revive the iPhone business there, and a cut in China's value-added tax from 16% to 13%, which went into effect today, should ease the profit impact on Apple.
Kellogg cuts back on sweets
Kellogg is getting out of the cookie business, announcing today that it is selling those brands, along with fruit-flavored snacks, pie crust, and ice cream cone product lines to Italian confection company Ferrero Group for $1.3 billion. Kellogg shares fell 2.4%.
The divestiture includes cookie brands such as Keebler, Mother's, Famous Amos, and cookies the company makes for Girl Scouts. Ferrero Group makes chocolates, Nutella, and Tic Tac breath mints.
Kellogg had already announced it was looking for a buyer for those businesses as it tries to reshape its portfolio by investing in new brands in areas such as digestive health and natural foods and reviving existing brands. The affected products accounted for net sales of almost $900 million in 2018 out of total sales of $13.5 billion. The U.S. snack segment of the company suffered a sales decline of nearly 5% last year, and Kellogg thinks divesting parts of that business will help it deliver organic growth of 1% to 2% in 2019, up from a flat performance last year.