The daily business briefing: October 12, 2021
Southwest cancels more flights as stock falls, Texas' governor orders businesses not to mandate vaccines, and more
Southwest cancels more flights as stock drops
Southwest Airlines canceled more than 350 flights Monday, adding to major disruptions for its customers and staff after more than 1,800 cancellations over the weekend. The flights scrapped on Monday amounted to 10 percent of Southwest's schedule. At least 1,400 other flights were delayed following a weekend of major disruptions that the company blamed on bad weather and air traffic control issues. The pilots union accused the company of mishandling minor challenges that other airlines easily navigated. The problems started shortly after the Southwest Airlines Pilots Association on Friday asked a federal court to prevent the company from making all employees get vaccinated against COVID-19. Southwest shares dropped by 4.2 percent on Monday.
Texas governor orders businesses not to mandate vaccinations
Texas Gov. Greg Abbott (R) on Monday issued an executive order barring any entity in the state, including private businesses, from mandating coronavirus vaccinations for employees or customers. In August, Abbott ordered Texas government bodies and agencies not to require vaccinations, but said he had no intention to tell executives and entrepreneurs how to run their businesses. But he reversed that position after facing weeks of pressure from GOP primary opponents and others on the right who staunchly oppose President Biden's September decision to require all companies with more than 100 employees to mandate vaccines for workers or test them weekly for coronavirus infections. "The COVID-19 vaccine is safe, effective, & our best defense against the virus, but should always remain voluntary & never forced," Abbott tweeted as he announced his new order.
Whistleblower to discuss allegations with Facebook's Oversight Board
Frances Haugen, the former Facebook employee who told Congress last week the company's products harmed children and weakened democracy, will meet with Facebook's Oversight Board to discuss her "serious claims," the Oversight Board said Monday. The board, an independent body that considers appeals to the platform's decisions on moderating content, said it had invited Haugen to meet with members, and she had agreed to do so in the next few weeks. The whistleblower went public in a 60 Minutes interview after The Wall Street Journal published an article based on internal Facebook documents she provided. She then testified to lawmakers that Facebook knew that misleading content on its platforms, including Instagram, can "harm children, stoke division, and weaken our democracy," but that it has chosen to push growth and profits at the expense of user safety.
Stock futures struggle as inflation fears mount
U.S. stock index futures fluctuated early Tuesday as investors continued to show concerns about rising energy prices' impact on inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down by 0.1 percent or less several hours before the opening bell. Futures for the tech-heavy Nasdaq were up by 0.1 percent. The Dow and the S&P 500 gave back early gains on Monday and closed down by about 0.7 percent as West Texas Intermediate, the U.S. benchmark crude oil, continued to climb. It hit its highest level since 2014 early Tuesday. The Nasdaq fell by 0.6 percent on Monday. Traders are sensitive to any data pointing to slower economic growth. "There are a lot of headwinds out there as we embark on corporate earnings," said Chris Larkin, managing director of trading at E-Trade Financial.
China developer's debt problems spread
China Evergrande Group missed its third round of bond payments in three weeks on Tuesday, with some bondholders saying they hadn't received $148 million in payments on Evergrande's April 2022, April 2023, and April 2024 notes. Evergrande missed two other payments in September. Evergrande's investors now could face huge losses as 30-day grace periods end. Evergrande's latest missed payments stoked fears that its debt problems could spread to other property developers. Shanghai-based Sinic Holdings Group became the latest Chinese developer to warn of a looming default, saying in a Hong Kong stock exchange filing it did not expect to be able to repay a $250 million dollar bond due Oct. 18.