The daily business briefing: May 17, 2017
U.S. stock futures slip as concerns over Trump grow, Twitter co-founder Biz Stone announces return to company, and more
Stock futures slide as concerns over Trump grow
U.S. stock futures fell early Wednesday on concerns over political turmoil in Washington after The New York Times reported that President Trump had asked then-FBI director James Comey to drop the agency's investigation into former National Security Adviser Michael Flynn's ties to Russia. The report sparked critics to raise questions about whether Trump could be charged with obstruction of justice, dampening investors' confidence in Trump's ability to push through his promised stimulus program and other policies that have lifted markets since Trump's election in November. Dow Industrial Average, S&P 500, and Nasdaq-100 futures were all down 0.3 percent or more early Wednesday after paring earlier losses. "Worries about European politics and North Korea have receded. The earnings are mostly over. But now we have worries about the Trump administration," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
Twitter co-founder Biz Stone to return to company
Twitter co-founder Biz Stone said Tuesday in a Medium post that he was returning to the company full-time. Another co-founder, Jack Dorsey, invited Stone back to fill "the Biz-shaped hole" left when Stone parted ways with the social-media company, Stone said. "My top focus will be to guide the company culture, that energy, that feeling," Stone wrote. "You might even say the job description includes being Biz Stone." After selling his latest start-up, the Jelly Industries "human-powered" search engine, to Pinterest in March, Stone will return to Twitter at a time when it is dealing with a wave of departures by top staffers.
A better-than-expected quarterly report sends Target shares soaring
Target shares jumped by 7.1 percent in pre-market trading on Wednesday after the retailer reported higher-than-expected quarterly profit and sales. Target said it owed the strong quarter to efforts to boost business that it announced earlier this year. Those measures included "aggressive promotional activities," as well as store upgrades and investments in new brands and technology. Sales at existing stores dropped by 1.3 percent, which was better than the 3.6 percent decline analysts had expected. A drop in customer visits and average purchases was partially offset by strong demand for popular products, such as swimwear, Nintendo's new Switch gaming console, and celebrity-branded products including Victoria Beckham's line.
Rue21 files for bankruptcy protection
Teen apparel retailer Rue21 announced Tuesday that it is filing for Chapter 11 bankruptcy protection as it restructures to focus on online sales. Rue21 announced last month that it was closing 400 stores. The company will still have more than 700 stores in 48 states, but it said it might have to close more before exiting bankruptcy, which it hopes to do in the fall. The Pennsylvania-based company said it had reached agreements with some of its creditors to restructure some of its debt and obtain $175 million in financing it needs for various expenses, including paying workers and vendors.
New home construction drops to lowest level in 5 months
Housing starts dropped by 2.6 percent in April to a seasonally adjusted 1.17 million units, their lowest point in five months, the Commerce Department reported on Tuesday. Economists had expected 1.26 million starts. The decline followed a 6.6 percent drop in March. Despite the weakness, which was especially notable in construction of new apartments, home building has been a bright spot for the economy. Also, economists expect the industry to bounce back in coming months as potential buyers benefit from rising employment.