The daily business briefing: May 27, 2022
Macy's and Dollar Tree report strong sales despite inflation, Broadcom agrees to acquire VMware in potential $61 billion deal, and more
Macy's, Dollar Tree report strong sales
Shares of major retailers surged on Thursday after Macy's and Dollar Tree reported strong quarterly sales despite high inflation. Shoppers increased spending on clothes for work and special occasions, and bought necessities at discount stores to save as fuel and food costs jumped. Dollar General reported flat sales but raised its full-year outlook. Shares of Dollar General and Dollar Tree jumped 14 percent and 22 percent, respectively. Retailers said despite the strong quarter, rising prices remained a growing threat. "Consumers are still spending, but headwinds are getting increasingly fierce," Macy's Chief Executive Jeff Gennette told The Wall Street Journal.
Broadcom agrees to buy VMware in $61 billion deal
Semiconductor maker Broadcom announced Thursday it has agreed to buy the software company VMware. The $61 billion deal would be the world's second-biggest proposed acquisition of the year behind Microsoft's $75 billion offer for video game maker Activision Blizzard, according to Dealogic data. Buying VMware would give Broadcom computing tools popular with many corporations, and give it a strong position in data-center and cloud computing technology. VMware has more than 500,000 global customers, including cloud-computing giants Amazon, Microsoft, and Google.
Stock futures rise as Wall Street aims to break losing streak
Stock futures rose early Friday as all three of the main U.S. indexes remained on track to finish the week with gains, aiming to break a seven-week losing streak. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.1 percent and 0.3 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were up 0.5 percent. The Dow and the S&P 500 were up 4.4 percent and 4 percent on the week as of Thursday's close, after jumping 1.6 percent and 2 percent, respectively, on Thursday. The tech-heavy Nasdaq surged by 2.7 percent and was up 3.4 percent on the week, although it's still 27.6 percent below its record high. The S&P 500 is 15.8 percent below its record.
N.Y. court denies Trump appeal to avoid testimony on business
A New York state appeals court ruled Thursday that former President Donald Trump and two of his adult children, Donald Trump Jr. and Ivanka Trump, must submit to questioning under oath as part of a civil investigation into their business practices. Trump's lawyers had sought to block the testimony, arguing that the investigation being conducted by New York Attorney General Letitia James' office was politically motivated. Trump's legal team also said he and his children shouldn't have to talk to James' investigators because the operations of the family property business, the Trump Organization, also are the subject of a criminal investigation. The court found that the Trumps are not being unfairly singled out.
Home supply rises as owners rush to sell before market cools
The supply of homes for sale increased by 9 percent last week compared to the same time a year ago as sharply higher mortgage rates triggered a sudden drop in home sales, according to Realtor.com. "Rising mortgage rates have caused the housing market to shift, and now home sellers are in a hurry to find a buyer before demand weakens further," said Daryl Fairweather, chief economist at real estate brokerage Redfin. Numerous signs have indicated recently that the market is softening after people seeking more space during the pandemic took advantage of low mortgage rates and drove prices higher. Pending home sales dropped nearly 4 percent in April compared to March.