The daily business briefing: February 4, 2016
Sumner Redstone steps down as CBS executive chairman, Toyota discontinues its struggling Scion spinoff, and more
Sumner Redstone steps down as CBS executive chairman
CBS announced Wednesday that billionaire media mogul Sumner Redstone is stepping down as its executive chairman. CBS chief executive Les Moonves will replace him. Redstone, 92, controls about 80 percent of voting stock in both CBS and Viacom, the parent company of MTV, Comedy Central, and Paramount Pictures, among other media brands. CBS shares rose 4 percent on the news. Viacom's battered stock jumped by 8 percent in after-hours trading.
Toyota discontinues Scion
Toyota confirmed on Wednesday that it was discontinuing its slumping Scion brand. Toyota launched the small-car brand as a spinoff in 2003. After some missteps, such as the iQ mini car, which critics found cramped, Scion's sales fell by 3 percent in 2015 to 56,187 units, down 68 percent from the brand's high point in 2006. Toyota said that it would sell surviving Scion vehicles as Toyota models starting in the 2017 model year.
Private employers continued healthy hiring pace in January
Private-sector employers added 205,000 in January, short of the 267,000 added in December but still solid, as the labor market sustains steady gains despite the turbulent global economy. The third straight month of job gains above 200,000 suggested that turmoil in global financial markets had not yet dampened hiring in the U.S., said Mark Zandi, chief economist of Moody's Analytics. "The labor market is holding tough," he said, "which is a very good sign."
Service industries post slowest growth in two years
Service industries, which account for 90 percent of the U.S. economy, expanded in January at their slowest pace since February 2014, the Arizona-based Institute for Supply Management reported Wednesday. Service providers, in such businesses as finance and real estate, are generally better insulated from overseas economic trouble than are U.S. manufacturers. The January slowdown could be an indication that weaknesses in manufacturing and consumer spending are starting to take a toll.
Credit Suisse losses drag down its stock
Credit Suisse shares fell by more than 12 percent early Thursday to their lowest level since 1992 after the Swiss bank reported its first full-year loss since 2008. The company's stock has fallen 32 percent since 2016 began. Credit Suisse lost $5.8 billion in the final quarter of 2015 as it booked a goodwill impairment charge of nearly $4 billion linked to its $11.5 billion 2000 acquisition of U.S. investment bank Donaldson, Lufkin & Jenrette. Chief Executive Tidjane Thiam is trying to shift the company's focus from investment banking to wealth management.