Major benchmarks waffled between positive and negative territory on Tuesday before gaining ground after Chinese media confirmed that the country has offered to increase purchases of United States agricultural products -- but only if the U.S. eases its supply ban against Huawei and postpones next month's planned tariff increases on imported Chinese products. According to CNBC this morning, Huawei also dropped a lawsuit against the U.S. after equipment seized two years ago by the government was returned to the company.
When the closing bells rang today, the Dow Jones Industrial Average (^DJI 0.14%) had gained around 0.3% and the S&P 500 (^GSPC 0.19%) edged just barely into the green.
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As for individual stocks, Wendy's (WEN 0.56%) dropped after lowering its full-year guidance, and Ford (F 0.96%) fell as a key credit-rating agency downgraded its debt rating.
Wendy's goes cold ahead of its breakfast rollout
Wendy's plunged 10.2% today after the fast-food chain unveiled a plan to expand its breakfast offerings -- including signature items like its Breakfast Baconator, Frosty-ccino, and a Honey Butter Chicken Biscuit -- to each of its more than 5,800 U.S. restaurants (as of the end of last year) in 2020. Breakfast is currently available in just over 300 Wendy's locations.
"Launching breakfast in our U.S. restaurants nationwide provides incredible growth opportunities," said CEO Todd Penegor. "We are well positioned to pursue it."
That said, Wendy's says the rollout will require investments of around $20 million to complete. The company and its franchisees will also hire an additional 20,000 U.S. employees to support the move. As such, Wendy's reiterated its goal for global systemwide sales growth of 3% to 4% next year, but now expects adjusted earnings per share to decline by roughly 3.5% to 6.5% in 2019 -- a reduction from its previous target for EPS growth of 3.5% to 7%.
Moody's sours on Ford debt
Meanwhile, shares of Ford fell as much as 5.2% early today, then partly recovered to close down 1.4% after Moody's (MCO 0.94%) downgraded Ford's credit rating by one notch to Ba1 -- that's the highest "junk" score and just below an investment-grade level.
To justify its call, Moody's said it is worried Ford is tackling its ongoing restructuring "from a weak position, as measures of cash flow and profit margins are below our expectations, and below the performance of investment-grade rated auto peers."
Moody's added that Ford's cash flow and profits will likely remain under pressure through 2021 as it spends another $7 billion in cash to implement its turnaround.
To be sure, Ford's profits dropped sharply in its most recent quarter due to restructuring charges -- though the company had already warned investors that would be the case earlier this year.
"Ford remains very confident in our plan and progress," the automaker replied in a statement this morning. "Our underlying business is strong, our balance sheet is solid, and we have plenty of liquidity to invest in our compelling strategy for the future."