The daily business briefing: April 4, 2023
Oil prices make biggest one-day jump in a year on production cut plan, Virgin Orbit files for bankruptcy protection, and more
Oil prices rise 6.3 percent on news of OPEC+ production cut
Oil prices rose 6.3 percent on Monday after OPEC+ nations led by Saudi Arabia announced a surprise production cut. It was the biggest one-day price surge since March 2022, when Russia's invasion of Ukraine disrupted energy markets, according to The Wall Street Journal. Oil futures jumped another 0.6 percent early Tuesday. But with a possible U.S. recession threatening to curb demand, industry analysts said it's not clear how high the reduction of more than 1.1 million barrels a day would push the price of crude. International benchmark Brent crude rose to $84.93 a barrel, still well below the high of more than $125 a barrel posted in March 2022.
Virgin Orbit files for bankruptcy protection
Virgin Orbit, Sir Richard Branson's satellite launch company, filed for bankruptcy protection on Tuesday after it failed to secure the funding it needed to keep operating. The company, a spinoff of Branson's Virgin Galactic space tourism company, telegraphed the move last week when it announced that it was laying off 85 percent of its 750 employees. Virgin Orbit, based in Long Beach, California, is now trying to find a buyer for its assets. The Chapter 11 filing "represents the best path forward to identify and finalize an efficient and value-maximizing sale," Virgin Orbit CEO Dan Hart said. The company, which went public in 2021, raised $255 million less than expected.
Starbucks fires a leader of effort to unionize Buffalo store
Starbucks has fired an employee who led the campaign to unionize a Cheektowaga, New York, store, The Buffalo News reported Monday. The longtime shift supervisor, Lexi Rizzo, was dismissed by the company two days after former CEO Howard Schultz faced tough questioning by a Senate committee about alleged labor law abuses by the Seattle-based coffee chain. The company said Rizzo was fired because she was late to work too often. The union, Starbucks Workers United, called the move "payback." "Firing her two days after Schultz was grilled at the hearing about his illegal activity is pretty unbelievable," said Richard Bensinger, a longtime union leader who has served as an adviser to the Starbucks union.
Stock futures rise slightly despite jump in oil prices
U.S. stock futures edged higher early Tuesday, giving the Dow Jones Industrial Average and the S&P 500 a shot at extending a four-day winning streak. Futures tied to the Dow and the S&P 500 were up 0.1 percent and 0.3 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were up 0.5 percent. The Dow and the S&P gained 1 percent and 0.4 percent on Monday. The tech-heavy Nasdaq fell 0.3 percent. Investors are digesting a surge in oil prices that followed an unexpected decision by oil exporters led by Saudi Arabia to cut output. Stocks have been rising as concerns about inflation abate, fueling expectations that the Federal Reserve will be able to ease off on its aggressive interest rate hikes.
Dogecoin surges after Musk's symbolic nod
Dogecoin jumped by as much as 20 percent in value on Monday after Elon Musk replaced Twitter's traditional bird icon with an image of a Shiba Inu, the logo associated with the cryptocurrency. Musk, who bought Twitter last year for $44 billion, is fighting a $258 billion racketeering lawsuit accusing him of supporting Dogecoin as part of a pyramid scheme, according to Reuters. Lawyers for Musk and his electric-car company, Tesla, called the lawsuit by Dogecoin investors a "fanciful work of fiction" trying to turn "innocuous and often silly tweets" by Musk into a nefarious financial scheme. Dogecoin was created in December 2013 by two software engineers as a joke.