The daily business briefing: January 31, 2018
U.S. stocks struggle to stabilize after a two-day plunge, Fujifilm takes over Xerox in a $6.1 billion deal, and more


1. The Dow plunges for second day but stock futures stabilize
The Dow Jones Industrial Average dropped by as much as 400 points on Tuesday, closing down 362 points, or 1.4 percent. The plunged capped a two-day, 540-point Dow selloff ahead of President Trump's Tuesday night State of the Union address touting economic and market gains as signs of the success of Trump's tax and regulation cuts, and other policies. Health-care stocks led the declines, with UnitedHealth plunging by 3.4 percent after Amazon, JPMorgan Chase, and Berkshire Hathaway announced a partnership to form a health-care company to give employees access to better, cheaper coverage. "I think people are looking for an excuse to sell," SlateStone Wealth's chief investment strategist, Robert Pavlik, told CNBC. Global stocks were mixed Wednesday, and U.S. stock futures stabilized, edging higher.
2. Fujifilm takes over Xerox
Japan's Fujifilm is buying control of Xerox Corp. in a $6.1 billion deal that will fold Xerox into a joint venture it has operated with Fujifilm in Asia. The acquisition marks the end of the independence of an iconic U.S. corporation and makes it a more global company. "In the past, Fuji Xerox only operated in the Asia-Pacific region, and Xerox targets the Americas and Europe," said Simon Chan, an analyst at Bloomberg Intelligence. "With the combined company, they can share cost on research, product development, and potentially manufacturing capacity." The joint venture will cut 10,000 jobs in Asia in the coming restructuring.
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3. Nintendo profits soar as Switch sales beat expectations
Nintendo on Wednesday reported its biggest third-quarter operating profit in eight years, thanks to better-than-expected demand for its new Switch games console. The Japanese video game maker also said its annual earnings would likely beat its previous estimate. Rising demand for the Switch, a hybrid home-portable console, has helped Nintendo's stock nearly double since its March launch, to a nine-year high. Nintendo now expects Switch sales to hit 15 million in its first full year and climb to 20 million in its second year, putting it on track to match the success of its predecessor, the Wii.
4. VW suspends chief lobbyist after reports of diesel tests on monkeys, humans
Volkswagen on Tuesday suspended its chief lobbyist, Thomas Steg, as the company faces a backlash over revelations about tests conducted for VW and other German automakers on the effects of diesel fumes on monkeys and humans. The New York Times first reported on the tests on Jan. 25. In a test in Albuquerque, the European Research Group on Environment and Health in the Transport Sector, which was launched by VW, BMW, and Daimler, put monkeys in airtight containers and made them breathe exhaust from a VW Beetle. German media outlets also reported that the research group tested diesel exhaust's effect on 25 people at a German university. Volkswagen CEO Matthias Muller said the company was investigating the tests, which he called "unethical and repulsive."
5. Fed expected to leave interest rates unchanged
The Federal Reserve's Open Market Committee is expected to leave interest rates unchanged when it concludes a two-day policy meeting with a statement at 2 p.m. Wednesday. The Fed's benchmark short-term rate ranges between 1.25 percent and 1.5 percent. Investors will be looking to see whether the leaders of the U.S. central bank upgrade their economic assessment to reflect strengthening economic data, which would bolster expectations that the Fed will hike rates at its next meeting, in late March. This week's meeting is the last for Fed Chairwoman Janet Yellen, who will be replaced by board member Jerome Powell this weekend.
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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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