The daily business briefing: October 26, 2021
Tesla becomes the first trillion-dollar automaker, Facebook reports higher profits as it faces fallout over leaked documents, and more
Tesla's market cap hits $1 trillion for 1st time
Tesla shares jumped by nearly 13 percent on Monday, vaulting the electric-car maker's market capitalization above $1 trillion for the first time. The spike followed car rental company Hertz's announcement that it planned to buy 100,000 Tesla cars by the end of 2022. After the purchase, electric vehicles will make up 20 percent of the Hertz fleet worldwide. Tesla shares, which bottomed out below $100 in the early days of the pandemic, settled above $1,000 for the first time, closing at $1,024.86. Tesla, the world's first trillion-dollar automaker, is now worth more than General Motors, Toyota Motor, Ford, Volkswagen, BMW, Honda, and several other automakers combined. The surge appeared to surprise Tesla CEO Elon Musk. "Strange that moved valuation," he said via Twitter, "as Tesla is very much a production ramp problem, not a demand problem."
Facebook reports profit increase as it faces fallout from leaked documents
Facebook reported Monday that its profit rose by 17 percent in the third quarter to $9.19 billion, up from $7.85 billion a year earlier. Revenue rose by 35 percent. The social media giant said it got a boost from strong advertising income. Facebook shares gained 2.5 percent in after-hours trading after rising 1 percent on Monday. The quarterly report came as Facebook contends with fallout from the Facebook Papers documents fueling allegations that the company put growth ahead of user safety, which Facebook CEO Mark Zuckerberg denies. "For now, the revenue picture for Facebook looks as good as can be expected," said eMarketer analyst Debra Aho Williamson, although she said the revelations from a Facebook whistleblower were "unsettling and stomach-churning." Zuckerberg said he welcomes "good-faith criticism," but the leaked documents are being used to paint a "false picture" of Facebook.
U.S. provides details on new rules for vaccinated foreign travelers
The Biden administration on Monday unveiled the specific changes in travel rules for foreign visitors set to take effect on Nov. 8. The new rules will let fully vaccinated adults enter the country. They have to show proof of vaccination before boarding their flight to the U.S. They must have received a vaccine approved by the Food and Drug Administration or the World Health Organization. They also will have to show proof of a negative COVID-19 test taken within three days of their departure. "The airlines will verify vaccination status in same way they have been, and will continue to do, with pre-departure negative COVID test results," a senior Biden administration official told reporters Monday. Children under 18 will be exempted from the vaccine requirement, largely because vaccines aren't yet available to children in many parts of the world, but those over 2 will have to show a negative COVID test.
Stock futures rise after Dow, S&P 500 hit records
U.S. stock index futures rose early Tuesday after the Dow Jones Industrial Average and the S&P 500 closed at record highs on Monday. Futures tied to the Dow and the S&P 500 were up by 0.2 percent and 0.3 percent, respectively, several hours before the opening bell. Futures for the tech-heavy Nasdaq gained 0.7 percent ahead of a flurry of earnings reports from big technology companies. Facebook rose by 2.5 percent in after-hours trading on Monday after the social media giant beat analysts' earnings expectations but fell short on revenue and active monthly users. Google-parent Alphabet, Microsoft, and Twitter are due to report earnings after the bell on Tuesday, part of a big day and week for corporate earnings. Analysts expect Microsoft to show a strong third quarter, boosted by its Azure cloud-computing business.
Blue Origin announces plan for private space station
Blue Origin on Monday announced plans for a privately-owned space station that will serve as a "mixed-use business park" orbiting the Earth. The news came after the company, owned by Amazon founder Jeff Bezos, successfully completed its first human space flight missions with its New Shepard launch vehicle, which carried its first paying customer into space. Blue Origin, which is partnering with Sierra Space and Boeing on the project, said it aimed to have the space station, called Orbital Reef, in low Earth orbit by the end of the decade. "The station will open the next chapter of human space exploration and development by facilitating the growth of a vibrant ecosystem and business model for the future," the company said.