Tech Stocks Lift Wall Street to New Highs: Live Updates
Stocks on Wall Street rose on Wednesday, led higher by a rally in technology companies. The S&P 500 rose 1.02 percent, and the tech-heavy Nasdaq composite gained 1.73 percent, extending record-setting streaks for both indexes.
Shares of big technology companies like Apple, Alphabet, Amazon and Microsoft, which influence the broader market because of their sheer size, were all higher. Salesforce was the best performing stock in the S&P 500, surging about 25 percent after the maker of cloud software reported a jump in revenue in the second quarter as customers turned to its tools in the coronavirus pandemic. Netflix and Adobe and Facebook were also sharply higher.
Tuesday’s announcement by American Airlines that it would cut up to 19,000 workers this fall sent a chill through the airline industry, where there has been little sign that the pandemic-induced reluctance to travel was diminishing. The statement may also add to the pressure on Congress and the Trump administration to strike a deal on another coronavirus stimulus package.
In Germany, lawmakers agreed late Tuesday to extend benefits for furloughed workers through next year, and continue other relief measures, as the country prepared for additional months of economic pain caused by the pandemic.
Investors are also keeping an eye on an annual conference of central bankers, where the Federal Reserve chair, Jerome H. Powell, is set to speak Thursday. Some expect that he will propose a monetary policy that will accommodate higher inflation, allowing the Fed to keep interest rates low for a longer period of time.
Two Black-led banks are merging in a deal that will create the nation’s largest Black-owned depository institution insured by the federal government and the first with assets of more than $1 billion.
Broadway Federal Bank, a Los Angeles-based lender founded in 1946, will combine with City First Bank in Washington, which opened in 1998, the banks announced on Wednesday.
Brian E. Argrett, chief executive of City First, will be chief executive of the combined company, which will use City First as its banking brand but will keep the publicly traded Broadway Financial Corporation as its bank holding company. Wayne-Kent A. Bradshaw, Broadway’s chief executive, will be the chairman of the combined company.
The newly enlarged bank will specialize in three areas of financing: multifamily affordable housing, small businesses and nonprofit development, Mr. Argrett said in an interview.
“We need to scale up our impact,” he said. “Having a larger capital base is important so we can direct more resources into underserved communities.”
Both Broadway and City First are Community Development Financial Institutions, which are lenders that focus on low- and moderate-income communities and typically serve minority borrowers and entrepreneurs who lack the assets to get traditional loans. The new company will be designated a Minority Depository Institution, a federally insured institution that is majority owned by minority shareholders.
There are 143 Minority Depository Institutions in the United States, according to the government’s latest data, but just 20 are Black-led.
The desire to grow and create an organization with a larger capital base inspired the merger, Mr. Argrett said. The company plans to maintain a major presence in Southern California and Washington.
Broadway recently fended off a hostile takeover attempt by the Capital Corps, another minority-focused lender.
Community lenders have been especially prominent lately in dealing with the economic shocks of the coronavirus crisis and the protests that roiled many cities this summer. They were a vital link in getting government relief funds and other resources to businesses and entrepreneurs in areas neglected by larger banks.
“In the midst of a global pandemic, unprecedented unemployment and the very important social unrest going on in our country, C.D.F.I.s are the answer,” Mr. Argrett said. “By building a bicoastal and national platform, we have the opportunity to become a very attractive platform for impact investors looking to join this space.”
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Bicycles, golf and at-home fitness helped fuel a record quarter for Dick’s Sporting Goods, a bright spot in a challenged retail environment, as Americans sought to stay active and play outdoors amid travel restrictions and social-distancing measures.
“We are in a great lane for what’s going on right now in the country from an outdoor standpoint — the golf business, the camping business, kayaking, fitness, running,” Edward W. Stack, chief executive of Dick’s, said Wednesday on an earnings call.
Dick’s, which also owns Golf Galaxy stores, has benefited especially from a newfound national interest in golfing, which is a particularly pandemic-friendly pastime.
“There’s a number of young people who have come into the game because they’re not playing football or soccer or some other sports,” Mr. Stack said. “So they’re out playing, guys are out playing golf because they’re not at their kids’ games. Men, women, and kids all really have jumped into this game, and we expect that to continue through the balance of the year, too.”
Dick’s net sales rose 20 percent to about $2.7 billion in the second quarter, which ended Aug. 1, and it posted a net profit of $278 million, its highest-ever quarterly sales and earnings, it said on Wednesday. Store sales jumped, despite temporary closures, and e-commerce sales, which include a booming curbside pickup operation, nearly tripled.
The company will continue to lose sales tied to team sports in the fall and the typical back-to-school shopping season, but that was being offset by the interest in its other merchandise. Dick’s, based in Pittsburgh, operates more than 700 U.S. stores.
The World Economic Forum is pushing back its annual summit in Davos, Switzerland, from January to early next summer, it announced on Wednesday.
The annual gathering of the global elite in the Alps brings together about 3,000 of the world’s most prominent executives and political leaders to discuss the pressing issues facing the world economy — and to do deals on the sidelines (and the ski slopes).
In a statement to the media, Adrian Monck, a managing director of the forum, said the decision “was not taken easily, since the need for global leaders to come together to design a common recovery path and shape the ‘Great Reset’ in the post-COVID-19 era is so urgent.”
Organizers made the decision to postpone on the advice of experts, who said the gathering could not convene safely in January. Instead, a virtual event dubbed “Davos Dialogues” will run during the week of Jan. 25, 2021, the forum’s originally scheduled time.
The event’s organizers previously said they would hold a “twin summit” for the 2021 edition, with about half the number of official delegates that attended in person last year and a simultaneous online event. If the severity of the pandemic reduces enough by the summer, the summit could resemble something more like its previous editions, minus the skiing.
— Lauren Hirsch
Nearly two years ago, the British government seemed to be on the verge of doing something truly novel about racial and ethnic inequality.
Theresa May, the prime minister at the time, had suggested the government require companies and other large employers to report the disparities in pay among their employees based on ethnicity, as they had recently been made to do for gender.
But after a three-month public comment period closed in January 2019, little more was heard about it, until a surge of anti-racism protests this summer, provoked by the killing of George Floyd while in the custody of the Minneapolis police, revived the idea. In June, a petition to make ethnicity pay gap reporting mandatory amassed more than 100,000 signatures. In response, the government said that it would publish an update by the end of the year, having received more than 300 comments from businesses and other organizations.
The failure to demonstrate progress for a year and a half was not lost on David Isaac, the departing chairman of the government’s Equality and Human Rights Commission.
Amid mounting outrage about inequalities, ethnicity pay gap reporting is something that could be done quickly, Mr. Isaac said in an interview with The New York Times in early August, in part because of the work already done by Ms. May’s government to collect data about ethnic disparities across society.
Kemi Badenoch, the equalities minister in Prime Minister Boris Johnson’s government, said it was “just simply not true” that the government had dragged its heels on the issue. For example, she said, policymakers were working toward adopting most of the recommendations from a 2017 review of how “Black, Asian and minority ethnic individuals” were treated in the criminal justice system. Among the proposals was collecting more complete ethnicity data across the system and recruiting a more diverse prison staff.
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Germany’s governing coalition agreed late on Tuesday to extend benefits for furloughed workers and otherwise prepare the country for additional months of economic pain caused by the pandemic.
The decision came amid signs that although the German economy is rebounding, a full recovery will take years. The number of infections is also rising as Germans return from vacations abroad.
Employees placed on furlough or working reduced hours will be able to receive partial reimbursement for lost income until the end of 2021, under the measures agreed by Chancellor Angela Merkel’s Christian Democrats and their governing partners, the Social Democrats. Previously “short work” benefits were limited to one year.
The political parties also agreed that, until the end of the year, troubled businesses would be exempt from regulations requiring them to file for insolvency if they cannot pay their bills. The exemption was to have expired at the end of September.
Other measures extend financial aid to small and midsize businesses, provide basic income to artists and freelancers, and provide lunches for children whose schools or kindergartens are closed.
How did the talks between Microsoft and ByteDance, the parent company of TikTok, turn into a soap opera? Mike Isaac and Andrew Ross Sorkin spoke with more than a dozen people to understand what happened as the Trump administration began scrutinizing popular app:
To reduce the U.S. pressure, Zhang Yiming, ByteDance’s chief executive, began consulting with a small group of investors in his internet company, including Sequoia Capital and General Atlantic. ByteDance, which is privately held, has been valued at about $100 billion.
Doug Leone, one of Sequoia’s partners, and Bill Ford, chief executive of General Atlantic, became Mr. Zhang’s bridge to the White House, the people with knowledge of the talks said. The firms needed a major U.S. tech partner to get the deal done, the people close to the talks said. Mr. Zhang and the investors figured that Facebook, Google and Amazon were under too much antitrust scrutiny. But Microsoft, with its cash hoard of $137 billion, cloud expertise and strong government relationships, could work.
By July, Microsoft joined the talks. At the time, the discussions centered on Microsoft making a minority investment in TikTok, the people said. Between the U.S.-China tensions and the pressures of operating a social media company, Microsoft executives were hesitant about a big deal, said people briefed on the conversations. ByteDance and Mr. Zhang also wanted to retain some ownership of TikTok, they said.
Yet as the talks progressed, Microsoft grew warmer on a potentially larger deal with TikTok. While Microsoft has lots of data about industries like gaming and workplace software, it has little information about people’s social media behavior. TikTok’s user interaction information could strengthen Microsoft’s data science operation, the people briefed on the talks said.
TikTok could also be linked to Microsoft’s $7 billion advertising business. Together, that could make a meaningful difference to Microsoft’s growth, they said.
President Trump’s plan to replace the $600-a-week emergency federal unemployment supplement originally called for unemployed workers to receive $400 each week, with $100 to be supplied by the states. Here’s what we know now about the supplement.
Most workers will receive just $300 per week — the administration ultimately said the states’ basic benefit payments could be counted toward their share. Montana is the only state so far to choose the $400 option, according to the Federal Emergency Management Agency. And there is only enough funding to last only four or five weeks. Mr. Trump set the program up to draw from federal disaster funds — a limited pool — and the administration said that no more than $44 billion would be spent.
The supplement will only be available to workers who are eligible for at least $100 per week in benefits, either through the regular state program or a federal pandemic assistance program. States must apply for the funds — 30 have already done so, and the rest have until Sept. 10 — and South Dakota has already opted out.
It could take some states up to six weeks to figure out how to get a program up and running, John P. Pallasch, assistant secretary for employment and training at the Labor Department, told reporters on Thursday. States must update and reprogram computer systems and train staff members while they keep existing benefits flow and process new claims.
— Patricia Cohen and
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If you decided to ride out the pandemic at your out-of-state vacation house or with your parents in the suburbs, you may be in for an unpleasant reality: a hefty tax bill.
Given the complexity of state tax laws, accountants are advising their clients to track the number of days they spend working out of state. Some states impose income tax on people who work there for as little as a single day.
Even before the pandemic, conflicting state tax rules were creating issues for the increasing number of people who were working remotely, said Edward Zelinsky, a tax professor at Yeshiva University’s Cardozo School of Law.
“In the last six months, this has gone from a big problem to a humongous problem,” Mr. Zelinsky said. He knows from personal experience: He lives in Connecticut but works in New York and has paid tax on his New York-based salary to both states.
Here are some answers to common questions about how moving to work remotely could affect your taxes.
Bed, Bath & Beyond will cut about 2,800 jobs across its corporate headquarters and retail stores, the company said Tuesday, as it tries to move more of its business online. The layoffs will save the retailer about $150 million a year before taxes, it said in a statement.
Salesforce, a maker of cloud software, saw surging revenue and profit in the second quarter as customers have increasingly turned to its tools in the coronavirus pandemic. The company’s revenue rose to $5.15 billion, up 29 percent from a year ago, driven by the demand for its customer-relations software and new Work.com tools, which help people return to work. Profit jumped to $2.6 billion, up from $91 million a year ago, helped by a change to its international corporate structure that created tax benefits.
The Trump administration may levy additional penalties on Vietnam for undervaluing its currency in a trade case over tires. It would be the first application of a novel trade rule that is designed to prevent foreign competitors from trying to unfairly undercut American producers and allows the administration to impose a so-called countervailing duty when other countries “subsidize” their products by weakening their currencies. The Treasury Department said that Vietnam had undervalued its currency by about 4.7 percent against the U.S. dollar.
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