The daily business briefing: January 26, 2017
The Dow breaks the 20,000 barrier, Trump Hotels aims for a major U.S. expansion, and more


1. The Dow breaks the 20,000 barrier
The Dow Jones Industrial Average on Wednesday hit 20,000 for the first time in its 120-year history, closing with gains of 155.80 at 20,068.51. The breach of the psychologically significant threshold came after a post-election rally helped the blue-chip index make its second-fastest 1,000-point climb ever. Stocks have risen as investors bet that Trump's promised tax and regulation cuts, along with big spending on infrastructure and other pro-business policies, will give the U.S. economy a boost. The S&P 500 and Nasdaq Composite also hit records, both rising by nearly 1 percent. Global stocks surged on Thursday.
2. Trump Hotels aims for big U.S. expansion
The CEO of President Trump's hotel management business says that the company plans to speed up its U.S. expansion, potentially tripling the number of luxury hotels it operates in the country. Trump Hotels CEO Eric Danziger said that the company has luxury hotels in five of the 26 major U.S. metropolitan areas but he doesn't "see any reason that we couldn't be in all of them eventually." The statement came as Trump Hotels sets aside plans in China, which has been angered over Trump's protectionist trade rhetoric. Ethics experts and Democratic lawmakers have urged Trump to divest his holdings to avoid conflicts of interest, and some said the expansion plans could escalate the controversy.
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3. Johnson & Johnson to buy Swiss biotech Actelion for $30 billion
Johnson & Johnson will buy Swiss biotech company Actelion for $30 billion, both companies announced Thursday. The deal will give the U.S. healthcare giant access to Actelion's expensive medicines for rare diseases, helping it to diversify its drug portfolio as its Remicade arthritis treatment, its biggest product, confronts cheaper rivals. The all-cash deal, which comes to $280 a share, represents a 23 percent premium over Actelion's Wednesday closing price. Actelion shares jumped by 20 percent on news of the deal.
4. Harvard endowment to slash staff, outsource investment management
The new head of Harvard University's endowment fund, N.P. "Narv" Narvekar, said he would lay off half of its 230 employees and shut down internally run hedge funds, moving most of its money to outside managers to boost performance that has lagged behind rivals for years. Harvard's $35.7 billion endowment, the biggest in higher education, has generated average annual returns of just 5.9 percent in the last five years, among the worst in the Ivy League. The new approach is modeled after one used by Yale, which got average returns of 10.3 percent in the last five years, and Columbia, where Narvekar beat Harvard's returns with a staff of 20 before joining Harvard in December.
5. Trump resort doubles initiation fee
The Trump Organization's Palm Beach resort, Mar-a-Lago, reportedly doubled its initiation fee to $200,000 effective Jan. 1, less than three weeks before President Trump's inauguration. The $14,000 annual dues remain unchanged. The club lowered its initiation fee from $200,000 to $100,000 in 2012 due to declining membership. The club reportedly had been considering a fee hike, although the Trump Organization did not immediately comment. Former President Barack Obama's former ethics lawyer, Norm Eisen, said the move was a "not very subtle" attempt to exploit Trump's power. "This type of naked profiteering off of a government office is what I would expect from King Louis XVI or his modern kleptocratic equivalents, not an American president," Eisen said.
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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.
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