The daily business briefing: September 1, 2022
Bed Bath & Beyond shares plunge on news of share sale, Biden announces plan to hike federal pay to compete with private employers, and more
Bed Bath & Beyond plan to sell shares sends stock tumbling
Bed Bath & Beyond said Wednesday it will close about one-fifth of its stores, cut its workforce, and sell up to 12 million shares of its common stock to raise money to stabilize its business. Bed Bath & Beyond shares plunged 22 percent after the announcement. The home-goods retailer is trying to turn around falling sales ahead of the crucial holiday season. Its leaders said in a business update that the company had secured commitments for more than $500 million in financing, and would overhaul its inventory by offering more national brands after investing heavily in developing private-label goods. "While there is much work ahead, our road map is clear," said Sue Grove, a board member serving as interim CEO.
Biden announces plan to hike federal workers' pay
President Biden announced Wednesday in a letter to House Speaker Nancy Pelosi (D-Calif.) that his administration plans to raise civilian federal employees' pay 4.6 percent, on average, in 2023. Biden said the plan would help the government compete with the private sector in recruiting and retaining workers by narrowing "a substantial pay gap" that widened in recent years of low raises. "The American people rely on federal agencies being managed and staffed by skilled, talented, and engaged employees, including those possessing critical skills sets, which requires keeping federal pay competitive," Biden wrote. About 2.1 million executive branch employees would be covered under the plan, but the 600,000-plus U.S. Postal Service workers would not. Their pay is set through collective bargaining.
California urges energy conservation as heat wave hits
California issued a statewide flex alert Wednesday, urging voluntary energy conservation during what is expected to be the state's worst heat wave this year. Coastal highs could reach 80 to 95 degrees Fahrenheit through Saturday, then rise to 100 degrees Sunday and Monday, possibly hitting record highs, according to the National Weather Service. The state government called for people to cut power use especially in peak hours, from 4 p.m. to 9 p.m., to offset increased demand. "With excessive heat in the forecast across much of the state and Western U.S., the grid operator is expecting high electricity demand, primarily from air conditioning use," the California Independent System Operator said in a press release.
Stock futures fall after Wall Street ends August with losses
U.S. stock futures fell early Thursday after the major U.S. indexes fell, ending August with four straight days of losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.6 percent and 0.7 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were down 1.1 percent. The Dow fell 0.9 percent on Wednesday, closing the month down 4.1 percent. The S&P 500 dropped 0.8 percent, ending August down 4.2 percent. The tech-heavy Nasdaq fell 0.6 percent Wednesday to finish the month down 4.6 percent. Recent hawkish comments by Federal Reserve leaders have renewed concerns that aggressive interest-rate hikes to fight inflation could tip the economy into a recession.
Nvidia says U.S. told it to halt exports of 2 AI chips to China
Nvidia announced Wednesday that the U.S. government had ordered it to stop exporting two top artificial-intelligence computing chips to China. The move would mark an escalation in a U.S. crackdown on Chinese technology firms as tensions rise over Taiwan, a self-governing island the U.S. supports but China views as part of its territory. The ban could hamper Chinese firms working on image recognition and other advanced technology. Nvidia said blocking Chinese sales of its A100 and H110 chips, which accelerate machine learning tasks, could hamper completing development of its flagship H100 chip. Nvidia shares fell 6.6 percent in after-hours trading. Shares of rival chipmaker Advanced Micro Devices, which said new licensing requirements could stop sale of one of its chips, dropped 3.7 percent.