Top Stories of the Week is a guide to the biggest market stories of the week, from stock gains and brutal slips to facts and predictions that are making waves on Wall Street.
Markets took a second breath on Friday with a strong rebound that took the major indices to positive levels for the week. The Dow Jones Industrial rose a whopping 823 points, or nearly 2.7 percent, while the Nasdaq Composite and S&P 500 gained more than 3 percent. Shares were supported by a consumer sentiment report that showed a reduction in inflation expectations, which could lead to a moderation in the Federal Reserve System’s rate hike if the downtrend continues.
GameStop, AMC hail Revlon, the latest brand to become a popular meme stock. The cosmetics giant noted that its shares were up more than 140 percent after it filed for Chapter 11 bankruptcy earlier this week. Shares are now up 580 percent from their all-time low, and retail investors appear to be behind the growth. Within the GameStop saga they are focused on action due to the sizeable short positions agreed against Revlon resulting in a minor short squeeze. It’s still unclear how or if this will alter the company’s assets, but so far it’s progressing with bankruptcy, which aims to remove the debt burden Revlon has imposed on retailers during a severe trade pandemic.
Support for Kellogg’s supermarket is spreading and investors appear to be backing the move. Shares rose more than 4 percent weekly as the snack and cereal maker outlined its plan to become three smaller companies: one for snacks, one for cereals and one for plant-based foods. According to the CEO, the aim is to make every new company more agile. The split comes when muesli sales have stagnated and snack sales have risen. Kellogg’s also announced Monday it would buy Clif Bar for $2.9 billion, signaling further commitment to the growth of the snack food category.
When the U.S. Food and Drug Administration ordered Juul Labs to remove its e-cigarettes from stores this week, shares of Altria Group, the tobacco company behind Marlboros and Parliament, fell 8 percent. That’s because Altria holds a 35% stake in a privately owned vape company whose future may be in doubt after one of its flagship products was banned. Juul, meanwhile, is appealing the decision, but the FDA didn’t take a ban lightly. This comes after a two-year review of the product’s health risks. Additionally, the agency banned Juul’s flavored vapors in 2019, so interventions took years to prepare.
It’s been a mixed bag for electric car makers this week. Shares of Toyota, the world’s largest automaker, fell shortly after the company announced it would be taking back 2,700 bZ4X SUVs worldwide over problems with their wheels. Subaru’s shares followed the call-up of 2,600 of the Solterra, its first all-electric vehicle co-produced with Toyota and sharing components with the bZ4X. Product recall issues come at the height of an already difficult year for automakers, which have been forced to scale back production due to supply chain issues. Meanwhile, Tesla’s stock is up nearly 15 percent this week, despite CEO Elon Musk calling the Texas and German factories “gigantic money-making facilities” (meaning losing money) and Credit Suisse lowering the company’s price target. expected supply disruption from China.