The daily business briefing: August 24, 2021
Walmart launches a last-mile delivery service, deadly offshore platform fire, and more
Walmart launches last-mile delivery service
Walmart on Tuesday launched a delivery service called Walmart GoLocal that offers other merchants deliveries across the United States. The opening of the service ahead of the crucial holiday shopping season will let the world's largest retailer broaden its business. Walmart GoLocal will send workers from Walmart's Spark delivery network to pick up items from other businesses and deliver them to shoppers. In the past year, Walmart has doubled Spark's coverage to more than 500 cities. Walmart has this year started test runs for its first company-branded "last-mile" delivery vans, following the lead of online retail giant Amazon. Walmart's move came after e-commerce demand left delivery companies struggling to keep up last holiday season.
Factory, service sector growth slows in August
U.S. factories and service providers reported a sharp slowdown in growth in August as they struggled with labor shortages and supply bottlenecks, the forecasting firm IHS Markit said Monday in its surveys of purchasing managers. The index indicated that service-sector activity dropped to 55.2 in August, an eight-month low, from 59.9 in July. An index of factory activity dropped from 63.4 in July to 61.2 in August, a four-month low. Economists said the figures showed that the surge in coronavirus cases driven by the highly infectious Delta variant was hurting the global economy. "The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth," said Chris Williamson, chief business economist at IHS Markit.
FDA grants full approval for Pfizer-BioNTech vaccine
The Food and Drug Administration on Monday granted full, formal approval for the coronavirus vaccine developed by Pfizer and BioNTech. The decision made the Pfizer vaccine the first to win the designation in the United States, potentially making more businesses and schools likely to impose vaccine mandates. Previously, the vaccine had only emergency-use authorization, which vaccine skeptics cited as a reason not to take it. FDA regulators have been under pressure to make a decision since the drugmakers submitted the application for full approval in May. FDA scientists concluded that it met their "high standards for safety, effectiveness, and manufacturing quality," acting FDA Commissioner Janet Woodcock said in a statement, adding that "the FDA approval of a vaccine may now instill additional confidence to get vaccinated."
Deadly offshore platform fire reduces Pemex oil production
Mexico's state-run energy company, Petroleos Mexicanos or Pemex, has cut oil production by 444,000 barrels per day due to a deadly fire on an offshore platform it operates, a company document showed Monday. Pemex blamed the reduction on a lack of natural gas to re-inject into crude fields. The fire started from a Sunday explosion at Pemex's E-Ku-A2 platform, which is part of a gas-processing center of the Ku-Maloob-Zaap complex in the Gulf of Mexico's Bay of Campeche. At least one person was killed, and five others were missing. The fire was the second at a Pemex offshore platform in less than two months, raising concerns about the company's safety protocols. The blaze was brought under control within hours.
U.S. stock futures rise slightly after Monday's rally
U.S. stock index futures edged higher early Tuesday after a Monday rally fueled by the Food and Drug Administration's full approval of the Pfizer-BioNTech COVID-19 vaccine. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by about 0.2 percent several hours before the opening bell. Nasdaq futures gained about 0.4 percent. The Dow and the S&P 500 closed up by 0.6 percent and nearly 0.9 percent, respectively, on Monday. The tech-heavy Nasdaq gained nearly 1.6 percent as investors bet that the vaccine's formal approval would clear the way for companies and other institutions to impose more mask and vaccination mandates to fight the spread of the highly infectious Delta variant of the coronavirus.