The daily business briefing: May 19, 2022
Futures fall further after Dow's worst day since 2020, U.S. soccer reaches equal-pay deal with men's and women's players, and more
Dow, S&P 500 plunge in worst day since 2020
The Dow Jones Industrial Average fell 1,165 points, or 3.6 percent, on Wednesday in its worst day since June 2020. A disappointing quarterly earnings report from retail giant Target fueled fears that inflation will tip the economy into a recession. The S&P 500 fell just over 4 percent, also its worst single-day decline since 2020. The tech-heavy Nasdaq plummeted 4.7 percent, its worst drop since May 5. Stock futures fell sharply early Thursday. Target is one of many retailers and other large companies seeing their profits eroded by high transport and inventory costs. "It's clear that transportation costs matter and they're impacting [some of] the largest companies," said Kim Forrest, founder of Bokeh Capital. "So I think investors are scratching our heads going, 'So, who's next?"
U.S. Soccer reaches equal-pay deal with men's, women's players
The U.S. men's and women's national soccer teams on Wednesday announced a collective bargaining agreement with the United States Soccer Federation that achieves women players' years-long goal of equal pay. The new contracts, which run until 2028, call for pooling future World Cup earnings, and sharing endorsement money and other revenue 50-50. "To be able to say finally, equal pay for equal work feels very, very good," women's team captain Becky Sauerbrunn told Today. U.S. Soccer and the United States Women's National Team Players Association reached a settlement earlier this year to end a gender discrimination lawsuit filed by the women players, who for years performed better than their male counterparts but made far less.
Biden invokes Defense Production Act to speed baby formula to stores
President Biden on Wednesday invoked the Defense Production Act to accelerate infant formula production as part of an effort to ease a shortage worsened by the shutdown of the largest U.S. formula factory. The Defense Production Act order requires suppliers to fulfill orders from baby formula producers before other customers. Biden also authorized the Defense Department to use commercial aircraft to fly formula from other countries into the U.S. The White House is calling the effort "Operation Fly Formula." Formula supplies were already tight due to global supply-chain disruptions, but the crisis deepened when Abbott Nutrition had to shut down its factory in February and recalled formula produced there over safety concerns.
Tesla booted from S&P 500's ESG Index
The S&P 500 has kicked Tesla out of its ESG Index, which recommends companies to investors based on environmental, social, and governance data. A spokesperson for the index explained in a blog post on Wednesday that Tesla's score suffered due to the electric-car maker's "lack of a low-carbon strategy" and "codes of business conduct," as well as allegations of racism and poor working conditions at its Fremont, California, factory. The change came as part of an annual update to the index. Apple, Microsoft, Amazon, and energy giant Exxon Mobil held on to their spots on the list. Tesla's stated mission is to accelerate the transition to sustainable energy, but it ranked 22nd on last year's Toxic 100 Air Polluters Index.
Ringling Brothers to launch revamped circus
Feld Entertainment announced Wednesday that it will launch a new, revamped version of its Ringling Brothers and Barnum & Bailey Circus starting next year, five years after it said it was shutting down for good. The circus ended its 146-year run as it struggled with declining sales and increasing criticism from animal rights activists for its use of lion, tiger, and elephant acts. The new version of what Ringling Brothers long billed as the "Greatest Show on Earth" will have no animal acts. But the circus is actively recruiting ringmasters, clowns, and acrobats in preparation for a tour of more than 50 cities scheduled to start Sept. 28, 2023.