WSJ What’s News - What’s News in Markets: Darden’s Discount Boost, KBR Climbs, Buffett’s Picks Gain

Episode Date: December 21, 2024

How are discounts boosting Olive Garden owner Darden Restaurants? And how did an activist investor lift government contractor KBR? Plus, why did Berkshire Hathaway’s bets boost three companies? Host Karen Langley discusses the biggest stock moves of the week and the news that drove them. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Amazon Q Business is the generative AI assistant from AWS because business can be slow, like wading through mud. But Amazon Q helps streamline work, so tasks like summarizing monthly results can be done in no time. Learn what Amazon Q Business can do for you at aws.com slash learn more. Hey, listeners. It's Saturday, December 21st. I'm Karen Langley for The Wall Street Journal, and this is What's News in Markets, our

look at the biggest stock moves of the week and the news that drove them. Let's get to it. This week turned into a rocky one for markets. Things started out steadily enough. Then came Wednesday, when the Federal Reserve signaled it might keep interest rates higher next year than investors had expected. This was not music to investors' ears. The Dow tumbled more than 1,100 points, while the Russell 2000 lost 4.4%.

That made Wednesday the worst day in two and a half years for the Russell, an index of smaller publicly traded companies. Investors had been thinking that additional rate cuts next year would help stocks keep powering higher. So learning that the central bank may make fewer cuts than expected was an unpleasant surprise. While stocks climbed Friday, they still ended the week lower. The S&P 500 fell 2% for the week, while the Dow lost 2.3% and the Nasdaq dropped 1.8%. With the holidays coming up, it's a big time for eating. But this week, food-related stocks were telling different tales.

Shares of Darden restaurants, the owner of Olive Garden, soared almost 15% on Thursday to an all-time high. That was after Darden had better than expected sales last quarter. With consumers still cringing at higher prices after all that inflation, Darden has been prominently advertising its value meals and ran its Olive Garden unlimited pasta deal for longer than last year. Things didn't go so well for French fry maker Lamb Weston. Shares plunged 20% Thursday after the company replaced its CEO and cut its full-year guidance for a second straight quarter. High prices of restaurants have cut into demand for the company's fries and other products. For the week, Darden's Carden's shares rose 13 percent, while Lam Weston's lost 22 percent.

Government contractor KBR's shares jumped nearly 4 percent Thursday after The Wall Street Journal reported that activist investor Irenic Capital Management had built a stake of more than 1% in KBR and plans to push the company to spin off or sell its sustainable technology solutions segment. KBR shares have fallen since early November. Investors worry that calls to slash government spending under the Trump administration will hit government contractors. On Friday, KBR shares slipped, leaving them down 2.5% for the week. When Warren Buffett's Berkshire Hathaway buys a stock, the market pays attention.

Buffett's company revealed late Thursday that it's been in the market this week, boosting its positions in three companies, oil and gas producer Occidental Petroleum, website domain name company VeriSign, and satellite radio company Sirius XM. Berkshire has been a net seller of stocks in the first nine months of the year, so that its buying is intriguing investors. Buffett's company spent roughly $400 million this week on Occidental shares, bringing its stake in the company to more than 28%. Shares of the three companies all jumped Friday, with Occidental gaining 3.9%, VeriSign up

2.8%, and Sirius advancing 12%. They ran ahead of the daily gains in the S&P. And now you know What's News in Markets this week. Today's show was produced by Ariana Asparu with supervising producer Tali Arbel. Tomorrow, What's News on Sunday will be looking at how mergers and acquisitions might fare in the new year. We'll be taking off What's News in Markets next week, and we'll be back with a new episode in the new year. We'll be taking off What's News in Markets next week and we'll be back with a new episode in the new year. I'm Karen Langley. Happy holidays and we'll see you in 2025.