Sector Update: Consumer

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Consumer stocks are lower this afternoon, with shares of consumer staples companies in the S&P 500 down less than 0.1%. Shares of consumer discretionary firms in the S&P 500 are off about 0.5%.

In company news, YRC Worldwide ( YRCW ) was higher Thursday after saying it has resumed talks with the International Brotherhood of Teamsters in a bid to revise contract terms that were voted down by union employees last week.

The trucking and logistics company has been seeking to refinance two series of convertible notes in a bid to reduce its debt load by around $300 million. The deal calls on investors to pay $250 million in cash for newly issued YRCW stock priced at $15 a share. The remaining $50 million in debt will be cut by its conversion into stock.

But YRCW creditors conditioned their agreement to refinance the company's debt on the union's accepting a contract extension that would have kept a 15% wage cut in place through 2019 as well as delaying scheduled pay increases and reducing vacation time. Teamster employees at YRCW voted down those terms with 61% of the vote.

"It is clear the Teamsters understand the urgency of the current situation," CEO James Welch said in prepared remarks. "Although the company must achieve operational costs savings in the agreement, we also understand that simply re-voting the same proposal is not an option."

YRCW shares were up 18.6% to $15.16 apiece in recent trading, earlier climbing to an intra-day high of $15.86 a share - although the stock still has considerable distance before recovering all of 32.2% decline from $18.66 a share after the Jan. 8 vote was announced.

In other sector news,

(+) CEC, (+12.4%) The corporate parent of the Chuck E Cheese restaurant chain agrees to $1.3 bln private equity buyout by an affiliate of Apollo Global Management ( APO ), with shareholders receiving $54 per share in cash.

(-) JCP, (-3.4%) Discloses plans to close 33 underperforming stores, eliminating 2,000 jobs. The retailer said the closings should save around $65 million per year, starting in 2014. It will take $26 mln charge in Q4 and $17 mln in future periods.



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This article appears in: Investing , Commodities

Referenced Stocks: APO , YRCW

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