The daily business briefing: June 14, 2017
Stocks hit records ahead of the Fed's rate decision, Uber's CEO takes leave and board member steps down, and more
Tech rebound lifts U.S. stocks to record highs ahead of Fed decision
Technology stocks bounced back Tuesday after two days of losses, lifting the S&P 500, the Dow Jones Industrial Average, and the Russell 2000 indexes to the latest in a string of record highs. The S&P 500 technology sector rose by 0.9 percent, shaking off its biggest two-day decline in almost a year, and S&P 500 futures added another 0.1 percent before the start of trading Wednesday. "I think the fall the last two days has been due to psychology not to any fundamentals, and today you’re seeing some people step back in and buy again," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "Fundamentals look good." The gains indicated that the markets feel good about an expected announcement from the Federal Reserve that it will hike its benchmark interest rate by a quarter point Wednesday at the end of a two-day meeting.
Uber CEO takes leave, board member steps down
Embattled Uber CEO Travis Kalanick said Tuesday that he would take a leave of absence in the latest fallout from an investigation that concluded that the ride-hailing company needs to reform its corporate culture. Kalanick's move was part of a list of actions Uber announced Tuesday and adopted by Uber's board on Sunday on the recommendation of the law firm of former Attorney General Eric Holder after a months-long investigation sparked by a sexual harassment complaint. Kalanick said he would use his leave of absence to work on his own performance and actions, and to figure out how to build a "world class leadership team" for Uber. On the same day, David Bonderman of the private equity firm TPG resigned from Uber's board after making an "inexcusable" sexist remark. Fellow board member Arianna Huffington said that once there is one woman on a board, more women tend to join, and Bonderman responded by saying that including women on boards results in "more talking."
Macron says ahead of Brexit talks that U.K. can still 'reopen the door'
French President Emmanuel Macron said Tuesday that he respected British voters' decision to leave the European Union, but that "there is always a chance to reopen the door" until Brexit negotiations end. "As the negotiations go on it will be more and more difficult to go backwards," he said. Macron made the remarks in a joint news conference with British Prime Minister Theresa May in Paris ahead of the start of talks on Brexit terms next week. May, making her first foreign trip since snap elections she called resulted in the loss of her majority in Parliament, was asked whether the setback would lead the U.K. toward a softer Brexit, and she replied that she remained committed to Brexit but hoped to maintain the "deep and special partnership" between Britain and the EU.
Sears announces 400 job cuts in corporate office
Sears announced Tuesday that it is cutting 400 full-time jobs at its Illinois corporate offices as part of the struggling department store chain's ongoing cost-cutting efforts started in February. The company is aiming to cut annualized costs by $1.25 billion, and said it had made about $1 billion of the reductions so far. Sears said in a filing with the Securities and Exchange Commission that its president of online operations, Stephen Zoll, was stepping down. CEO Eddie Lampert said in an internal memo that David Pastrana, president of Sears' apparel division, and Eric Jaffe, senior vice president of Shop Your Way, also would be leaving. "We remain focused on realigning our business model in an evolving and highly competitive retail environment," Lampert said. "This requires us to optimize our store footprint and operate as a leaner and simpler organization."
Report: Trump real estate sales became more secretive after nomination
In the year since President Trump sealed the Republican nomination, most of the real estate sold by his company has been purchased by secretive shell companies, USA Today reported after a six-month investigation into every condo or other property owned by Trump or his businesses. In the last 12 months, about 70 percent of Trump property buyers were limited liability companies that can hide owners' names. In the two previous years, 4 percent of buyers were LLCs. USA Today found that Trump's businesses owned more than 430 properties worth more than $250 million, and had sold 28 U.S. properties for $33 million since Election Day. The report came as Trump faces questions and lawsuits over foreign payments to his businesses. The Trump Organization declined to comment on the sales shift.