The daily business briefing: March 10, 2023
Stocks fall ahead of February jobs report, Bitcoin price plunges after Silvergate crypto bank closes, and more
Stocks fall ahead of February jobs report
U.S. stocks plunged Thursday after a weekly report on jobless claims showed that initial claims for unemployment benefits rose last week but remained historically low, indicating that the hiring market remained strong ahead of Friday's February jobs report. The Dow Jones Industrial Average and S&P 500 fell 1.7 percent and 1.9 percent, respectively. The tech-heavy Nasdaq plunged 2.1 percent. The February jobs report will provide an update on the state of the labor market. If hiring comes in stronger than expected, the Federal Reserve could feel more pressure to raise interest rates higher and longer than previously anticipated to slow the economy and bring down inflation. Stock futures dipped further early Friday.
Bitcoin dives after Silvergate shuts down bank
The prices of Bitcoin and other cryptocurrencies fell sharply Thursday after Silvergate Capital, one of the crypto sector's top banks, announced it would shut down. Bitcoin fell 7 percent. The decline might have been bigger, but cryptocurrency investors had time to price in the news ahead of time after Silvergate warned last week it couldn't continue operating its Silvergate Exchange Network trading platform. Silvergate said it will return all deposits, after it was forced to sell billions of dollars worth of assets at a loss to cover a rush of withdrawals. Its stock plunged 42 percent. Pressure intensified on the crypto sector when Silicon Valley Bank, which provides financial services to tech startups, announced it would raise $2 billion by selling stock. Its stock plunged 60 percent.
Shell CEO's pay package increased by half as oil profits soared last year
Ex-Shell CEO Ben van Beurden's pay package increased by 50 percent to $11.5 million last year, the London-based oil giant said Thursday. The big pay bump came as energy companies raked in record profits thanks to soaring fuel costs that drove up the cost of living. Shell's annual profits doubled to $40 billion, an all-time high, in 2022 as Russia's Ukraine invasion pushed up oil and gas prices. Van Beurden was replaced by Wael Sawan at the end of 2022. Major oil and gas companies have come under intensifying pressure to help reduce energy costs to give consumers some relief. British opposition lawmakers are pushing for an expanded windfall profits tax.
Ex-Goldman banker Roger Ng sentenced to 10 years in Malaysia corruption case
A federal judge in Brooklyn sentenced former Goldman Sachs banker Roger Ng to 10 years in prison Thursday for his role looting more than $4 billion from Malaysia's 1MDB sovereign wealth fund. A federal jury found Ng guilty of bribery and money-laundering charges in April. Authorities say the scheme was orchestrated by Malaysian businessman Jho Low, who also was indicted but remains at large. Malaysian officials say he is living in China. U.S. District Judge Margo Brodie said during the sentencing hearing that Ng and his co-defendants "effectively stole money" that was supposed to go toward projects to benefit the Malaysian people. "There is a critical need to deter crimes of pure greed like this one," she said.
GM offers buyouts in effort to cut costs by $2 billion over 2 years
General Motors CEO Mary Barry said Thursday that the automaker is offering buyouts to U.S. salaried employees with at least five years at the company, and some global executives, as part of an effort to cut costs by $2 billion over the next two years. The "voluntary separation program," offered until March 24, is intended to help avoid or limit "involuntary actions." "By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasing competitive market," she said. The move comes as GM, which has 58,000 salaried employees in the United States, transitions to electric vehicles. The company said in 2021 that it planned to make only EVs by 2035.