The daily business briefing: July 13, 2017
Dow sets record after Yellen's upbeat remarks, Google wins tax fight with France, and more
Dow surges to record after Yellen remarks
The Dow Jones Industrial Average surged to a record close on Wednesday, after Federal Reserve Chairwoman Janet Yellen gave an upbeat view of the state of the economy in congressional testimony. U.S. stock futures edged higher early Thursday, pointing to further gains at the open. Yellen indicated that the Fed could continue gradually raising interest rates and start unwinding the massive bond and mortgage-backed securities holdings it accumulated to boost the economy. The news pleased investors and analysts who were concerned that the Fed might change course due to the recent dip in inflation, which had been approaching the Fed's 2 percent target rate. "People were worried about her coming out more hawkish. She said exactly what the market expected and that's why the market was happy with it," said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners in North Carolina.
Google avoids a big tax bill in France
Google on Wednesday won a court fight to avoid a $1.3 billion tax bill in France. The French government accused Google of dodging French taxes by routing sales there through Ireland, but the Paris administrative court rejected the claim, saying, "Google Ireland Ltd. isn't taxable in France over the period 2005-2010." French tax authorities made no immediate comment. Google said the decision "confirmed Google abides by French tax law and international standards," although French prosecutors are investigating a parallel case concerning whether Google's Irish unit has a permanent presence in France and failed to declare income in the country. The court developments came as French President Emmanuel Macron tries to make France "a startup nation" and encourage innovation.
Senate GOP leaders to unveil health plan
Senate Republicans plan to unveil their newly revised health bill on Thursday, with opposition from both GOP moderates and conservatives threatening to prevent supporters from mustering the 50 votes needed to pass it. With just 52 Republicans in the Senate, the GOP can only afford to lose two votes. Sen. Rand Paul (R-Ky.) has said he won't approve the latest version as written because it preserves too much of ObamaCare, and Sen. Susan Collins (R-Maine.) says the problem is that the bill would cut too much. President Trump said he would be "very angry" if Senate Republicans failed to get the bill passed, because the GOP has promised for years to repeal and replace the Affordable Care Act. "I am sitting in the Oval Office with a pen in hand, waiting for our senators to give it to me," Trump said. "It has to get passed. They have to do it. They have to get together and get it done."
FDA panel backs new cancer treatment
A new cancer treatment endorsed Wednesday by the Federal Drug Administration's Oncologic Drugs Advisory Committee is being described by one panel member as "the most exciting thing I've seen in my lifetime." CAR T-cell therapy, made by Novartis, retrains a patient's immune cells so they target and attack cancer; the cells are removed from the body, sent to Novartis' plant so they can be genetically modified, and then shipped back to the patient for infusion. Novartis is seeking approval for use in children and young adults with leukemia who have relapsed despite undergoing chemotherapy. If the FDA approves CAR T-cell therapy, which could happen by the end of September, it would be the first gene therapy cleared for use in the United States.
China trade growth accelerates
China's import and export growth sped up in June for the second straight month, according to trade figures released Thursday. Imports increased by 11.3 percent in June, up from 8.7 percent in May, and imports rose by 17.2 percent, an increase over the 14.8 percent growth posted the month before. The better-than expected figures from the world's No. 2 economy marked a good sign for global demand, but analysts warn that global political risks could undermine the positive trade momentum in coming months.