Business briefing

The daily business briefing: October 20, 2022

Tesla shares fall despite profit surge, Spirit shareholders approve JetBlue's $3.8 billion takeover, and more


Tesla reports profit surge, but shares fall

Tesla said Wednesday that its quarterly profit jumped as sales of its electric cars surged. The company said strong vehicle pricing helped it bring in nearly $3.3 billion in the third quarter, just short of a record it set in the first quarter. Tesla said revenue reached $21.5 billion, up from $13.8 billion in the same period last year but just short of expectations. Tesla shares fell 5.4 percent in pre-market trading. The automaker said this month it manufactured more than 365,000 cars in the third quarter. That's 50 percent more than a year earlier, but Wall Street is growing skeptical that Tesla can meet its growth targets moving forward as higher prices and rising interest rates make vehicles more expensive.


Spirit shareholders approve JetBlue takeover

Spirit Airlines shareholders have approved a $3.8 billion takeover by JetBlue Airways, Spirit announced Wednesday. The merger must now go through the final regulatory steps, and Spirit said it expects the transaction to close "no later than the first half of 2024." The deal, which would create the fifth-largest U.S. airline, is expected to face intense scrutiny by antitrust regulators. Sen. Elizabeth Warren (D-Mass.) wrote in a letter to Transportation Secretary Pete Buttigieg that the merger would reduce competition and "harm American consumers." JetBlue argues that the deal will benefit the public by helping the combined airline compete with the four carriers responsible for two-thirds of domestic air travel.


Moderna says new booster provides 'superior' Omicron protection for months

New data from Moderna indicates that its updated COVID-19 booster vaccine triggers a "superior" immune response against the Omicron coronavirus variant versus the drugmaker's original vaccine. The company said the bivalent vaccine, designed to target both the initial version of the coronavirus and Omicron variants, produced higher antibody levels than the original vaccine when given as a fourth dose. "Clinical trial data now indicates that the superior immune response produced by our bivalent booster has durability for at least three months," Moderna Chief Executive Officer Stephane Bancel said in a statement. The company said bivalent boosters offer "optimal protection" for fall booster campaigns designed to help fight a potential winter surge.


Stock futures struggle as Tesla falls, Treasury yields rise

U.S. stock futures struggled early Thursday, with the tech-heavy Nasdaq fluctuating as Tesla's stock dipped after it reported quarterly earnings. Nasdaq futures were up 0.1 percent at 7 a.m. ET. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.4 percent and 0.2 percent, respectively. A two-day rally earlier in the week faded Wednesday as the 10-year Treasury yield jumped to a fresh 14-year high. The Dow and the S&P 500 fell 0.3 percent and 0.7 percent, respectively, on Wednesday. The Nasdaq dropped 0.9 percent. The benchmark 10-year Treasury yield touched a high of 4.18 percent on Thursday. Stocks have struggled as the Federal Reserve aggressively raises interest rates to fight the highest inflation in decades.


Taxpayer group asks Supreme Court to block Biden's student loan forgiveness plan

The Brown County Taxpayers Association in Wisconsin on Wednesday asked the Supreme Court to block President Biden's federal student loan forgiveness program. The group, which says it promotes taxpayer rights, argues that the program circumvents Congress' control over government spending and would cost taxpayers more than $1 trillion. "The blow to the United States Treasury and taxpayers will be staggering," the group said in its application for high court intervention. The nonpartisan Congressional Budget Office estimated last month that the program would cost $400 billion. The Education Department puts the expected cost at $379 billion. The Biden administration opened applications for the program this week. It would cancel up to $10,000 in debt for many borrowers earning less than $125,000, with another $10,000 in relief for Pell Grant recipients.


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