Food makers Kellogg Co and Sara Lee Corp forecast 2010 profit above analysts' estimates, but concerns about aggressive price-cutting to gain market share weighed on some stocks. Falling prices for wheat and other commodities have helped foodmakers cut prices and offer one-time promotions.
But with high unemployment and consumers turning more to lower-priced store brands to save money, analysts were concerned that manufacturers were risking profits to chase sales volume. "Even though commodity costs have moderated, I don't know if the level of moderation has warranted the price declines that were passed through," Morningstar analyst Erin Swanson said.