Market Minute: A Debt Ceiling Deadline Rally? Investor Pushes Darden to Split

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Stocks are set to rally Thursday morning on hopes for an extension of the debt ceiling deadline, and the owner of Red Lobster faces an investor challenge. Those stories and more are what's in Thursday's Market Minute.

The Dow Jones industrial average (^DJI) rose 26 points Wednesday and the Standard & Poor's 500 index (^GPSC) edged slightly higher. But the Nasdaq composite index (^IXIC) fell 17 points.

Darden Restaurants activist investors split red lobster olive garden
Jonathan Fickies/Bloomberg via Getty Images
An activist investor has taken a stake in Darden Restaurants (DRI), and is pushing it to split into two separate companies. Barington Capital Group wants Darden to put its Olive Garden and Red Lobster restaurants into one business, and split off its six other, faster-growing chains into a separate business. Darden says it will "evaluate" the suggestions.

Another casual dining chain, Ruby Tuesday (RT), reports a steeper than expected quarterly loss because of a sharp drop in sales.

Oil giant Chevron (CVX) warns that its third-quarter earnings will be lower-than-expected because of a big squeeze on its refining division.

And shares of software maker Citrix (CTXS) are set to tumble after warning that earnings and sales will fall short of Street expectations.

The biotech firm Gilead Sciences (GILD) is stopping a clinical trial earlier than planned because its leukemia drug was providing significant help to patients. It may ask the Food and Drug Administration to speed up approval of the drug. Gilead shares are up 60 percent so far this year, and are likely to add to those gains today.

Two leading research firms say sales of personal computers continued to decline in the third quarter. Industry-wide sales fell by about 8 percent, even though Hewlett-Packard (HPQ) and Dell (DELL) both eked out small gains, while Apple's (AAPL) shipment of Macs fell.

And Toyota Motor (TM) is cutting the price on the plug-in version of its 2014 Prius hybrid by 2,000 dollars. The base price for the car is now just under $30,000 dollars. This follows price rollbacks for the rival Nissan Leaf and General Motors' Volt plug-in. Separately, GM (GM) says it will stop using a lithium-ion battery in the Chevrolet Malibu, in favor of a cheaper, lead-acid battery.

-Produced by Drew Trachtenberg.

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puzzleguy1

Today's big rally will dissipate as soon as Obama and Dems PROPERLY call the GOP gambit what it is: A desperate attempt by Repubs to get themselves out of the deep hole they have dug for themselves. Now that the GOP sees that it's "get rid of Obamacare" didn't work with the public, they've fallen back on the deficit and the need for controlling spending. Of course, they fail to mention that under Obama, the deficit has been reduced by near 50%. This isn't a serious entreaty by Boehner et al; it's slapstick comedy.

October 10 2013 at 1:49 PM Report abuse +1 rate up rate down Reply
Kent

I like Red Lobster and Olive Garden and probably eat in one of those restaurants every 6 weeks or so. It would be more often, if either chain had a location closer to my house.

While I like the Capital Grille, I can only justify dinner for two that costs over $100 for a birthday or anniversary. And frankly, I like the Lettuce Entertain You steakhouse Wildfire better than Capital Grille. Frankly, LongHorn is overpriced, when compared to Lone Star or Claim Jumper.

October 10 2013 at 1:17 PM Report abuse rate up rate down Reply
TINKDAY

As the rest of the economy continues to tank and trillions more are added to the debt to continue the bail out and politicians continue to blame SS for the financial problems of this country and the mega rich continue to increase their wealth beyond belief. The great thing about this, is there is no question we are reliving the 1929 depression, but to a much greater extent. The wealth of the country continues to be held by a very small group, that wealth continues to grow at the expense of the rest of us and very sonn this will all come crashing down and neither the fed nor the government will be able to stop the slide. Without the consumer. Apple, Microsoft , and all the other corporations, will be in big trouble and who will be able to pay for health care, when all these corporations continue to contract and down size by laying off more and more people.

October 10 2013 at 1:03 PM Report abuse rate up rate down Reply
1 reply to TINKDAY's comment
Kent

The wealthy may have a high percentage of the overall wealth, but the lower classe have far more wealth than they did prior to the Depression.

Further, you tend to find that a lot of the mega-rich grew up very modestly. For example, Larry Ellison of Oracle grew up on the South Side of Chicago in a working class neighborhood. Steve Jobs grew up very middle class. T. Boone Pickens grew up middle class, and his mother was a government employee.

Further, I would argue that the middle class spends far more on consumer goods, in terms of income percentage, today than 50 years ago. I can see a blue-collar worker and a wealthy individual carrying the same iPhone. Fifty years ago, the blue-collar worker probably had a black Western Electric rotary dial desktop phone, while a wealthy person had a rotary dial, Touch-Tone Trimline phone in a color that went with the pallate of the room.

October 10 2013 at 1:13 PM Report abuse +1 rate up rate down Reply
one_old_crow

Ruby Tuesday's reports a steeper than expected quarterly loss! What did they expect from what I consider one of the worse places to dine out. I ate there once, and the food was horrible, and the service was worse. Stupidly I gave it another chance, and nothing changed. In my opinion, they really should be going "Out of Business" !

October 10 2013 at 1:02 PM Report abuse rate up rate down Reply
upsidethef

I wont eat at red lobster over their handling of a racist verbal attack on one of their waitresses. If anyone wishes to merge , I will boycott that restaurant also, and urge everone else to do the same

October 10 2013 at 12:58 PM Report abuse rate up rate down Reply
darkfree

I used to love eating at Red Lobster , But nowdays there prices prevent a sane person from eating there more than once or twice a year. More money per meal has ment less for Red Lobster .

October 10 2013 at 12:32 PM Report abuse +2 rate up rate down Reply
1 reply to darkfree's comment
neatair

Have you checked the prices on fish in markets lately ? Out the roof,Tilapa is a bottom fish, could not give it away, now locally it is $7.99 Lb. Flounder etc, more than good quality beef.

October 10 2013 at 1:52 PM Report abuse rate up rate down Reply
vendelavee

Red Lobster should merge with Dick's sporting goods chain then their name would be Red Lobster Dicks.

October 10 2013 at 12:22 PM Report abuse +2 rate up rate down Reply
Envirowatch

Olive Garden Faux whatever they call it...
the merger is like putting LIPSTICK ON
A PIG

October 10 2013 at 11:19 AM Report abuse rate up rate down Reply
toosmart4u

I drive by a red lobster and a olive gardens restaurants every day. Both are packed at noon and evening meals. I do not eat in either one.

October 10 2013 at 11:18 AM Report abuse +2 rate up rate down Reply
1 reply to toosmart4u's comment
pdbliz

TOOSMART4u,,,,I have to agree with you on this one.....I live within 5 miles of both,,,Since,,both are next door to each other..
Both are packed at noon and dinner,,,but,,,I too do not and can not afford to eat there,,,,,,Same meals at Captain D,S.....just as good.
HAVE A GREAT DAY.... PDBLIZ.

October 10 2013 at 12:58 PM Report abuse rate up rate down Reply
christyvefefe

I love Red Lobster and have inquirE about opening a new Red Lobster in the area of Simpsonville, SC. We have many customers who would be interested to just drive nearby to Simpsonville, SC. Fairview Rd. Please this suggestion Moving Forward......new Red Lobster, ASAP!!!!

October 10 2013 at 11:06 AM Report abuse rate up rate down Reply