The daily business briefing: September 14, 2022
Inflation rises despite falling gas prices, Twitter shareholders approve $44 billion takeover, and more
Inflation rises despite falling gas prices
The Labor Department reported Tuesday that the consumer price index rose 8.3 percent in August compared to a year earlier, down from 8.5 percent in July and 9.1 percent in June. Prices rose 0.1 percent month-to-month, picking up after holding steady in July. Economists had expected falling gas prices and other factors to pull down inflation a little more. Excluding volatile food and energy costs, core prices increased 0.6 percent from July to August, up sharply from July's 0.3 percent figure. Core prices were up 6.3 percent compared to a year earlier. They rose 5.9 percent in July. The news sent stocks plunging on expectations of even more aggressive interest rate hikes by the Federal Reserve, hurting economic growth.
Twitter shareholders approve takeover as whistleblower testifies to senators
Twitter shareholders on Tuesday approved Elon Musk's $44 billion takeover, despite the Tesla CEO's effort to back out of the deal. The vote came on the same day that whistleblower Peiter Zatko, Twitter's former security chief, testified to the Senate Judiciary Committee that the social media company's leaders' "incentives led them to prioritize profits over security." Zatko made similar allegations in his whistleblower complaint. Twitter has responded by saying Zatko's claims were misleading. But senators from both parties expressed concerns. "The whistleblower disclosures paint a very disturbing picture of a company that's solely focused on profits at any expense, including at the expense of the safety and security of its users," Sen. Chuck Grassley (R-Iowa) said.
Google loses challenge of record Android antitrust fine
The European Court of Justice's General Court on Wednesday rejected most of Google's appeal of the European Union's record fine for the internet giant's abuse of its Android mobile operating system's market dominance. The 2018 decision by the European Commission said Google restricted competition and limited Android mobile phone users' choices. The company has said the free and open-source Android increased competition with its main rival, Apple, and has driven down phone costs. The appellate court said a $4 billion fine, down from the original $4.3 billion, reflected "the gravity and duration of the infringement." Google said it was "disappointed" the court didn't overturn the decision in full, saying "Android has created more choice for everyone, not less."
Stock futures rise after Tuesday's rout
U.S. stock futures rose early Wednesday after a hotter-than-expected inflation report sent the major indexes plummeting Tuesday, in their worst day in two years. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.3 percent and 0.4 percent, respectively, at 6:45 a.m. ET. Nasdaq futures were up 0.5 percent. The Dow and the S&P 500 plunged 3.9 percent and 4.3 percent, respectively, on Tuesday after the Labor Department reported that the consumer price index rose 0.1 percent month-to-month in August despite falling gas prices. Economists had expected it to edge lower. The news spurred fears the Federal Reserve might raise interest rates more than previously expected to fight inflation. "It caught the market off guard," said LPL Financial's Quincy Krosby.
NBA suspends Phoenix Suns, Phoenix Mercury majority owner Robert Sarver
The NBA suspended Robert Sarver, majority owner of the Phoenix Suns and Phoenix Mercury, for one year and fined him $10 million for "workplace misconduct and organizational deficiencies." The basketball league announced the penalties Tuesday as it released the results of a 10-month investigation launched in response to racism and misogyny allegations, and claims Sarver created a "toxic" work environment over 17 years as Suns owner. Sarver denied the allegations from the start. On Tuesday, he said he disagreed with details in the NBA report, but took full responsibility and apologized for his actions. "Good leadership requires accountability," Sarver said in a statement released Tuesday afternoon by the Suns. "For the Suns and Mercury organizations, that begins with me."