Business briefing

The daily business briefing: October 29, 2021

Facebook changes company name to Meta, the Commerce Department reports economic growth slowed during Delta surge, and more

1

Facebook announces rebranding under the name Meta

Facebook is changing its corporate name to Meta, CEO Mark Zuckerberg announced Thursday. The rebranding comes as Facebook contends with a backlash over its handling of misinformation and harmful posts, following whistleblower allegations that the company put profits above user safety. Under the new branding, Facebook and its other apps, such as Instagram and WhatsApp, will keep their names, but all under the Meta umbrella. "It is time for us to adopt a new company brand to encompass everything that we do," Zuckerberg said. Skeptics said the name change makes it look like Facebook has something to hide. "Zuckerberg and his lieutenants can't shed the Facebook albatross with a clever brand adjustment," said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights.

2

Economic growth slowed in the last quarter amid Delta surge

The U.S. economy slowed down in the third quarter, growing at an annualized rate of 2 percent, the Commerce Department reported Thursday. Economists surveyed by Dow Jones on average had predicted a rate of 2.8 percent. The slowdown came as the coronavirus surge fueled by the Delta variant caused Americans to curb spending, dragging economic growth to its slowest pace yet in the recovery from last year's pandemic lockdowns. Consumer spending increased at a 1.6 percent pace, down from 12 percent in the second quarter. Spending on long-lasting goods such as appliances and autos plunged by 26.2 percent. Government spending dropped by 4.7 percent as pandemic-era aid expired. "Overall, this is a big disappointment," wrote Paul Ashworth, chief U.S. economist at Capital Economics.

3

Supply-chain problems hurt Apple, Amazon earnings

Apple and Amazon reported disappointing quarterly results on Thursday, as supply-chain problems and tight labor markets hurt sales and raised costs. Apple had record 12-month profit of nearly $100 billion, but warned that supply-chain disruptions were hampering production of iPhones and other products ahead of the crucial holiday shopping season. Amazon reported lower-than-expected third-quarter sales as it struggled to meet demand due to labor and supply-chain problems, which increased its costs by $2 billion. The results marked a shift in the fortunes of the tech giants, which were among the companies that thrived during pandemic lockdowns as people depended on their products and services to work, study, and play more from home. Shares of both companies dropped by about 3 percent in after-hours trading.

4

Stock futures fall after Apple, Amazon earnings disappoint

U.S. stock index futures fell early Friday after Apple and Amazon reported disappointing earnings as supply-chain disruptions made it harder for them to meet demand. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down by 0.2 percent and 0.6 percent, respectively, several hours before the opening bell. Futures for the tech-heavy Nasdaq fell by 1 percent. The news came after the S&P 500 and the Nasdaq closed at record highs on Thursday despite disappointing third-quarter economic growth, which came in at a 2 percent annualized pace rather than the 2.8 percent economists expected. "GDP told us what we already knew, the economy slowed down considerably in the third quarter," said Ryan Detrick, chief market strategist at LPL Financial. "The good news is we see the next few quarters more than making up for the slowdown, as COVID trends continue to improve."

5

ExxonMobil CEO denies concealing climate-change threat

ExxonMobil CEO Darren Woods told lawmakers Thursday that his company "does not spread disinformation regarding climate change." House Democrats accused Woods and other oil company leaders of concealing the dangers of human-caused climate change from carbon emissions. Woods said ExxonMobil has long acknowledged the risks of climate change and "devoted significant resources" to fighting the problem. The much-anticipated House Oversight Committee meeting was compared by some political analysts to a 1990s hearing in which tobacco executives were grilled about their argument that nicotine wasn't addictive. "For far too long, Big Oil has escaped accountability for its central role in bringing our planet to the brink of a climate catastrophe. That ends today," said Rep. Carolyn Maloney (D-N.Y.), who chairs the Oversight panel.

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