The daily business briefing: January 23, 2017
European stocks fall over fear of Trump protectionism, Samsung blames batteries for Galaxy Note 7 debacle, and more
Global markets struggle over fear of Trump protectionism
European stocks fell and the dollar hit a six-week low on Monday after President Trump launched his presidency with a speech laced with protectionist rhetoric that sent many investors seeking safe havens. Global stocks started the year with gains on expectations that Trump's promised tax and regulation cuts, and infrastructure spending, would boost the U.S. economy. The isolationist views in his inauguration speech, however, triggered a "nervous start" to trading after he took office, said Investec economist Victoria Clarke.
Samsung blames faulty batteries for Galaxy Note 7 debacle
Samsung Electronics said Monday that its internal investigation determined that faulty batteries caused some of its flagship Galaxy Note 7 phones to catch fire. The defects forced Samsung to cancel the production and sale of the phones, its main competitor for Apple's iPhones. The setback cost the South Korean tech giant $5.3 billion in operating profit, but the company said it would take steps to eliminate the possibility that the problem would happen in future devices, including the S8 due out in April or May. Samsung's earnings are due Tuesday.
Foxconn mulls $7 billion investment in U.S. factory
Apple supplier Foxconn Technology Group is considering investing more than $7 billion in a U.S. display-making facility, the company's chairman and chief executive, Terry Gou, said Sunday. The plant could create as many as 50,000 jobs. Gou said that Foxconn, based in Taiwan, had been exploring such a move for years, and that the move still "is not a promise. It is a wish." Foxconn is one of the biggest employers in China, where it cranks out most of Apple's iPhones. President Trump has been threatening to hike tariffs on imports, notably those from China, and he has singled out Apple as he called for companies to bring jobs home to the U.S.
Computer glitch causes United Airlines delays
United Airlines grounded all of its main domestic flights, excluding regional and subsidiary flights, for about an hour on Sunday night due to a computer problem. The airline "issued a ground stop for all domestic mainline flights due to an IT issue," United spokeswoman Maddie King said. The carrier apologized and rushed to resolve the computer issues, which reportedly involved the system United uses to send information to United operations, but the temporary halt caused a cascade of delays. The carrier suffered a similar glitch in October.
Lawyers filing suit saying foreign payments to Trump violate Constitution
A group of lawyers, including former White House ethics attorneys, plan to file a lawsuit on Monday accusing President Trump of violating the U.S. Constitution by letting his businesses take payments from foreign governments. One of the lawyers said the suit would ask for a court order to bar Trump's businesses from receiving any more such payments to avoid violating the Constitution's Emoluments Clause. The case is expected to be the first of many to be filed by liberal advocacy groups against Trump. Eric Trump, the president's son and executive vice president of the Trump Organization, said the company had done more than required to avoid legal problems, and that the lawsuit was "purely harassment for political gain."