Business briefing

The daily business briefing: July 20, 2022

Netflix loses fewer subscribers than expected, cruise-line stocks gain after the CDC ends COVID program, and more

1

Netflix loses subscribers, but fewer than expected

Netflix on Tuesday reported a second straight quarter of subscriber losses for the first time in its history, although the quarterly loss was smaller than expected. The streaming video company said it lost 970,000 paid subscribers, down from a projected two million. Netflix estimated it would gain one million new subscribers in the new quarter. The news sent Netflix shares rising 6 percent in after-hours trading. The stock has fallen by two-thirds this year as the company lost some of the customers it gained earlier in the coronavirus pandemic, when entertainment options outside the home were limited. Netflix said in a letter to shareholders that it would soon roll out its lower-priced, ad-supported subscription tier in "a handful of markets."

2

Cruise-line shares rise after CDC ends COVID program

Cruise-line stocks jumped on Tuesday, a day after the Centers for Disease Control and Prevention ended its COVID-19 program for cruise ships. The program, which had been voluntary since earlier this year, encouraged vaccinations for crew and passengers, and required guests to be tested. Cruise lines were required to report the number of cases on board their ships. The program also set out quarantine procedures for outbreaks. Now that the program has been lifted, companies can use their own policies to prevent infections. Carnival shares rose 7 percent on Tuesday. Royal Caribbean and Norwegian gained nearly 6 percent and 3.5 percent, respectively.

3

Delaware judge sets October trial for Twitter suit against Musk

A Delaware judge on Tuesday set an October trial date for Twitter's lawsuit seeking to force Tesla CEO Elon Musk to go through with his $44 billion deal to buy the social media company. Twitter requested an expedited trial to start as early as September, while Musk's legal team said the case should wait until early 2023 because it is so complex. Chancellor Kathaleen St. Jude McCormick, the head judge of Delaware's Court of Chancery, said it was important to avoid unnecessary delays because of the "cloud of uncertainty" over Twitter since Musk decided to back out. "Delay threatens irreparable harm," McCormick said. "The longer the delay, the greater the risk."

4

Stock futures rise after Tuesday's rally

U.S. stock futures inched higher early Wednesday after Tuesday's big rally. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.2 percent at 6:30 a.m. ET. Nasdaq futures were up 0.4 percent. The three major U.S. indexes soared on Tuesday, with the Dow and the S&P 500 rising 2.4 percent and 2.8 percent, respectively. The tech-heavy Nasdaq jumped 3.1 percent. Bank stocks such as Goldman Sachs and Bank of America rose after the companies reported stronger-than-expected results. The gains came as investors reacted positively to earnings reports, with some traders betting the market has touched bottom and could be pulled higher by more unexpectedly robust earnings reports

5

Chipotle closes Maine restaurant where workers wanted union

Chipotle said Tuesday it is shuttering a restaurant in Augusta, Maine, where workers recently filed to form a union. The restaurant had been closed since June 17, and Chipotle said it couldn't get enough workers to keep the remote restaurant running. "Because of these ongoing staffing challenges, there is no probability of reopening in the foreseeable future, so we've made the decision to permanently close the restaurant," Laurie Schalow, chief corporate affairs officer at Chipotle, said in a statement. Jeffrey Young, attorney for Chipotle United, the independent union attempting to organize at the Augusta restaurant, said closing the location was "union busting 101," a move "meant to discourage not just the workers here, but ... other Chipotle organizing efforts elsewhere."

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