Market Minute: China Sours on KFC; Penney's Saga Takes a Dramatic Turn

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China loses its appetite for KFC, and the J.C. Penney soap opera takes a new turn. Those and more are what's in business news Tuesday.

The major stock averages were little changed Monday. The Dow Jones industrial average (^DJI) fell 6 points, the Standard & Poor's 500 (^GPSC) edged 2 points lower, while the Nasdaq composite index (^IXIC) gained nearly 10.

KFC china weak sales
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KFC and its parent company, Yum Brands (YUM), continue to struggle in China. A key measure of Yum's sales tumbled 13 percent last month, far worse than expected. China is critical for Yum, accounting for more than half of the chain's revenue. The company has been under pressure ever since reports of potential safety problems among its suppliers surfaced late last year.

Controversial activist investor Bill Ackman has resigned as a director at J.C. Penney (JCP). Ackman, who is also the company's largest shareholder, caused a stir last week when he called for the ouster of the retailer's CEO. The company's board today reaffirmed its support for CEO Mike Ullman.

SciClone Pharmaceuticals (SCLN) has received another subpoena as part of the Securities and Exchange Commission's investigation into foreign corruption involving the company's dealings in China. The probes are weighing on SciClone. Last week, it lowered earnings estimate for the year.

Avanir Pharmaceuticals (AVNR) is set to take off. The company now has exclusive rights to market Merck's (MRK) diabetes drug Januvia to long-term care facilities.

Hewlett-Packard (HPQ) and former chief Mark Hurd are off the hook. A federal judge has dismissed a securities fraud lawsuit that had accused them of violating ethical conduct standards.

BP (BP) is suing to overturn a U.S. government ruling that bars the company from bidding on new federal contracts to supply fuel. According to the Houston Chronicle, BP is seeking an injunction to lift the Environmental Protection Agency order that came in the wake of the 2010 Gulf of Mexico oil spill.

And real-estate giant Blackstone Group (BX) has reportedly agreed to buy 80 apartment complexes. Bloomberg reports Blackstone will pay $2.7 billion to acquire the properties from a unit of General Electric (GE).

-Produced by Drew Trachtenberg.


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40 Comments

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betty_brock

Wow, Evan really is a dope.

August 13 2013 at 4:16 PM Report abuse rate up rate down Reply
jona817

KFC probably doesn't do well in Chna because they don't serve chicken feet...which I hear is a delicacy there.

August 13 2013 at 2:23 PM Report abuse rate up rate down Reply
Velocity105

I'd rather open a business in Mexico then give any of my products to China. I don't think they're anything but problematic for the U.S. and we should not sell them any more government bonds, if they call in all our markers, the country would go bankrupt. Isn't hacking, selling our military counterfeit vehicle parts, killing our pets and sickening children with the lead in their paint on toys enough proof?

August 13 2013 at 2:17 PM Report abuse +1 rate up rate down Reply
toosmart4u

Try being a vegetarian, you wont's have to worry about the meat.

August 13 2013 at 12:48 PM Report abuse -2 rate up rate down Reply
westy666

KFC began to kill it's brand when they went to serving pigeon-sized chicken pieces for the same prices as their previous larger sized ones.

After candy bars reduced their size, but kept the same size wrappers, the public was educated to look for tricks and delusional advertising.

August 13 2013 at 12:27 PM Report abuse rate up rate down Reply
1 reply to westy666's comment
WILD BILL

Yeah open up a bag of chips you got eight chips in a bag that would hold a small car.

August 13 2013 at 1:43 PM Report abuse -1 rate up rate down Reply
spdy65

KFC is killing itself with that new boneless chicken crap. Anyone tried it? It is tough, kind of gristly,not good at all. If this is their new product, I won't be back.

August 13 2013 at 12:14 PM Report abuse rate up rate down Reply
sharoann

KFC has no options for a healther or lighter meal. No grilled sandwiches, salads, etc.
With healthy eating being shoved down everyones throats right now, you would think they would pick up on that.

August 13 2013 at 12:04 PM Report abuse rate up rate down Reply
louis

Amazing. No one has blamed Obama yet.

August 13 2013 at 11:47 AM Report abuse +1 rate up rate down Reply
michael_vici

中国隐秘共产党控制纳米分子虐待人,我是受害者。我被控制着总是纠结于一些小的事情上,例如身上哪里没有弄干净,就这样的问题我可以纠结一个晚上。一个劲的清洗。比如我上完厕所,我怕阴茎上带尿,于是就用纸擦干净,可是我的手好像又脏了,于是再洗手。水溅到身上了,又要洗身上。就这样洗不完了。现在我被虐待的实在不行了。我就想让别人知道我被虐待了,还有没有天理王法。

August 13 2013 at 11:46 AM Report abuse rate up rate down Reply
geraldlsolis

As usual, these articles are written by people who aren't there in China, in a KFC, or any other such chain to really understand what's going on. China is NOT "souring on KFC". Having just returned from my most recent trip to China, and having really eaten in a KFC, I can say that KFC will weather this storm also. Yes, their sales for one month were down 13%. It's all about the current fear of the chicken-based flu. The KFC I ate in was full of patrons. The tray liner explained how KFC was taking steps to ensure the safety of their chicken suppliers. In the meantime, there have been no further reports of anyone contracting this particular flu in the past three months, so the "scare" will soon pass, and life will go on.

August 13 2013 at 11:43 AM Report abuse +1 rate up rate down Reply