Business briefing

The daily business briefing: January 17, 2018

Bitcoin and other cryptocurrencies dive, Nestle sells its U.S. candy business for $2.8 billion, and more

1

Bitcoin prices fall as crackdown fears persist

Bitcoin plunged by 25 percent to a six-week low early Wednesday due to growing fears of a regulatory crackdown in South Korea. The cryptocurrency briefly dropped below $10,000. Rival cryptocurrencies also plummeted, some by even greater percentages than bitcoin. South Korea has walked back a vow to ban sales of bitcoin, but the country's finance minister, Kim Dong-yeon, said "the shutdown of virtual currency exchanges is still one of the options" open to the government. Reports last week said South Korea was working on discouraging speculative cryptocurrency trading behind their meteoric rise. South Korea said it wouldn't make a move until it had time for "sufficient consultation and coordination of opinions."

2

Nestle sells its U.S. candy business to Ferrero for $2.8 billion

Nestle said Tuesday that it is selling its U.S. candy business to Italian chocolate and candy maker Ferrero for $2.8 billion in cash. "This move allows Nestle to invest and innovate across a range of categories where we see strong future growth and hold leadership positions, such as pet care, bottled water, coffee, frozen meals, and infant nutrition," CEO Mark Schneider said in a statement. Nestle's American candies include Nestle Crunch, Butterfinger, Baby Ruth, Raisinets, Nips, Skinny Cow, and Laffy Taffy. The business accounts for about $900 million in annual sales, or about 3 percent of U.S. sales for Nestle, the world's largest food company. Ferrero makes Ferrero Rocher chocolates, Nutella, and Tic Tacs.

3

Dow briefly trades above 26,000 for first time

The Dow Jones Industrial Average rose above the 26,000 milestone for the first time on Tuesday, before dropping to close down by 0.04 percent. The S&P 500 and Nasdaq Composite also gave back early gains to close down, by 0.35 percent and 0.51 percent, respectively. For the second day in a row, pre-market U.S. stock futures pointed to a triple-digit gain early Wednesday. Dow futures were up by 100 points or 0.4 percent, suggesting the blue-chip index could make another run at 26,000. S&P 500 and Nasdaq-100 futures were up by 0.2 percent. The three major U.S. equity benchmarks have gained from 22 percent to 30 percent over the last 12 months thanks to economic growth and rising corporate profits.

4

House Republicans unveil stopgap spending proposal to avert shutdown

House Republican leaders proposed a fourth stopgap spending measure to their caucus on Tuesday night, aiming to keep the federal government funded for another month beyond a Friday shutdown deadline. The measure includes delays to several taxes under the Affordable Care Act — a sweetener for conservatives and Democrats alike. It also extends a popular children's health insurance program, a goal for Democrats. The House Freedom Caucus is threatening to sink the bill in the House. Republicans almost surely will need some Democratic votes to get the measure through the Senate, and Democrats are threatening to block it if it doesn't include protections for young undocumented immigrants known as DREAMers. House GOP leaders are aiming for a Thursday vote.

5

Court battle to save net neutrality begins

Attorneys general for 21 states and the District of Columbia sued Tuesday to block a Federal Communications Commission plan to scrap net neutrality. The Obama-era rules prevent companies like AT&T, Comcast, and Verizon from charging for an internet fast-lane and favoring their own sites and apps. FCC Chairman Ajit Pai and other Republicans argue that the rules restrict the industry, while Democrats say they are necessary to protect consumers. Senate Democrats said Tuesday that they have 50 votes to restore net neutrality, putting them one vote shy of being able to force the measure. But even if House Speaker Paul Ryan (R-Wis.) allowed a vote on the measure and it passed, President Trump would likely veto it, despite net neutrality's broad popularity.

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