Major benchmarks surged higher on Thursday as trade war fears eased a bit, although indexes remain below recent highs reached before the U.S.-China trade conflict intensified earlier this month. A 10% tariff on $300 billion of Chinese goods is set to go into effect on Sept. 1, news that led China's central bank to set the yuan's daily reference rate at the lowest level in more than a decade.
Today's stock market
As for individual stocks, Kraft Heinz (NASDAQ:KHC) tumbled after the packaged food giant reported weak first-half results featuring additional impairment charges, and Advanced Micro Devices (NASDAQ:AMD) soared following the semiconductor specialist's launch of its latest line of server chips.
Kraft Heinz is struggling
Shares of Kraft Heinz slumped 8.6% after the food company's long-awaited financial results disappointed investors. Back in May, Kraft Heinz delayed its first-quarter report as it worked to restate its financial statements for 2016 and 2017. That followed a $15.4 billion writedown related to its Kraft and Oscar Meyer brands in February.
Kraft Heinz finally reported some results on Thursday, and the news was not good. Sales were down 4.8% year over year to $12.37 billion in the first half of 2019, and adjusted earnings per share plunged 23.8% to $1.44. Organic sales decreased 1.5%, mostly driven by price declines. The company also wrote down an additional $1.2 billion related to its intangible assets.
"The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward," said CEO Miguel Patricio in prepared remarks included in the earnings release.
Including today's rout, shares of Kraft Heinz are down about 70% since peaking in 2017.
AMD's server chip comeback
Advanced Micro Devices stock jumped 16.2% after the chip company launched the second generation of its EPYC server processors. The new chips are built on a cutting-edge 7-nanometer manufacturing process, allowing for better performance and efficiency than their predecessors.
Early reviews of the new EPYC chips were overwhelmingly positive, with tech site Anandtech finding that AMD had beaten rival Intel on performance, performance per watt, and performance per dollar. AMD claims that its new chips offer 25% to 50% lower total cost of ownership than competitive offerings from Intel.
Making announcements alongside AMD, Alphabet subsidiary Google and Twitter both committed to the new chips. Google is using the new EPYC processors internally, and it plans to offer them on its cloud platform later this year. Twitter also has plans to adopt the new chips, expecting a 25% reduction in total costs.
AMD currently has a minuscule share of the server chip market. These second-generation EPYC chips could change that over the next couple of years.