The daily business briefing: April 29, 2016

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1. Amazon smashes expectations and its stock takes off
2. Comcast to buy Dreamworks Animation for $3.8 billion
3. U.S. economy starts 2016 with slowest growth in two years
4. Icahn pessimism on Apple scares investors
5. Priceline CEO Darren Huston steps down over relationship with employee

published 29 April 2016

1. Amazon smashes expectations and its stock takes off

Amazon shares soared in pre-market trading Friday after the online retail powerhouse reported quarterly profits that far exceeded expectations. The stock gained 12 percent after hours Thursday. Earnings per diluted share reached $1.07, nearly double the 59 cents per share forecast by analysts polled by S&P Global Market Intelligence. Amazon's sales increased by 28 percent to $29.1 billion, beating forecasts of $28 billion thanks partly to its fast-growing cloud services business and brisk North American sales.

Cable giant Comcast, which owns NBCUniversal, said on Thursday that it would buy DreamWorks Animation for $3.8 billion. Comcast's Universal Pictures, maker of such popular films as Despicable Me, will add to its family fare with the deal, making it a stronger competitor for Disney. DreamWorks Animation made the Shrek, How to Train Your Dragon, and Kung Fu Panda franchises, and owns rights to iconic characters such as Lassie and Casper the Friendly Ghost. "It's a sensible strategy," Moffett Nathanson analyst Craig Moffett said. "They are buying characters."

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U.S. economic growth slowed in the first quarter to a seasonally adjusted annual rate of 0.5 percent, its slowest pace in two years, the Commerce Department reported Thursday. Global economic turmoil has been blamed for a cutback in U.S. business activity. U.S. businesses have cut investment as weak global demand hurt sales. The labor market's strength is fueling expectations for a rebound, however. "The economy essentially stalled in the first quarter, but that doesn't mean it is faltering," said Joel Naroff of Naroff Economic Advisors.

U.S. stocks dropped by about 1 percent on Thursday in an afternoon sell-off, the Dow's worst day in two months. Tech stocks lost early gains after billionaire activist investor Carl Icahn revealed that he had sold his Apple stake because he feared China's government could put restrictions on Apple's business there, dragging Apple stock close to 2016 lows. "Apple is in many different kinds of portfolios, it's in the Dow. When it takes a beating it's going to pressure markets," said Prudential's Quincy Krosby.

Priceline CEO Darren Huston resigned Thursday, effective immediately, after an in-house investigation concluded that he had a "personal relationship" with an employee that violated Priceline's code of conduct. The company said Huston had acknowledged the conduct and "expressed regret." Huston said he was getting no severance. Priceline's stock fell by 1.4 percent on Thursday afternoon. Chairman and former CEO Jeffery Boyd will take over as interim CEO and president until the board finds a permanent successor.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.