The daily business briefing: February 1, 2018

The Federal Reserve left its benchmark interest rate unchanged as expected on Wednesday at the end of its two-day policy meeting, the last under outgoing Chairwoman Janet Yellen. The Fed's Open Markets Committee said it expected the economy and inflation to pick up this year, signaling it would continue raising interest rates this year. The Fed raised rates three times last year. The committee also formally and unanimously approved Jerome Powell, a Fed governor, as Yellen's replacement starting Feb. 3. He is expected to stick closely to Yellen's policies, gradually raising rates that were kept historically low to help the economy recover from the Great Recession. U.S. stocks gained after the Fed statement, then eased back and closed moderately higher.

Facebook said Wednesday that its digital ad business would remain highly profitable despite a drop in the time users spent on the site following changes to its flagship News Feed. Facebook overhauled the feature to address concerns over Russia's use of bogus and sensationalized posts to influence the 2016 election. In its earnings report, the social media company said quarterly revenue was up by 47 percent compared to a year earlier. "I want to be clear: The most important driver of our business has never been time spent by itself. It's the quality of the conversations and connections," Facebook CEO Mark Zuckerberg said.

The director of the Centers for Disease Control and Prevention, Dr. Brenda Fitzgerald, resigned on Wednesday after revelations about her financial investments in tobacco and health-care companies raised questions of conflicts of interest. Alex Azar, the newly appointed secretary of Health and Human Services, announced Fitzgerald's departure. An agency statement said she was leaving because of "complex financial interests that have imposed a broad recusal limiting her ability to complete all her duties as the CDC director." Azar, a former pharmaceutical company executive, accepted Fitzgerald's resignation on his third day on the job, and less than a day after Politico reported that Fitzgerald traded tobacco stocks after taking the job.

Sears, which has been closing stores and selling well-known brands in an effort to turn itself around, announced Wednesday that it would lay off about 220 corporate office employees, "effective immediately." The money-losing retail chain also is trying to renegotiate its debt and cut costs to compete with leaner and stronger rivals such as Amazon and Walmart. Another struggling retailer, Bon-Ton, revealed the locations of 42 stores it plans to close, with liquidation sales starting Thursday. The closing stores operate under the Carson's, Younkers, and Herberger's names in states such as Idaho, New York, and Ohio. "We are taking the next steps in our efforts to move forward with a more productive store footprint," Bon-Ton CEO Bill Tracy said.

A flood of major tech earnings reports kicked off Wednesday, with Microsoft posting better-than-expected quarterly earnings after the market closed. The software giant said its revenue rose by 12 percent year-over-year, thanks partly to growth in its cloud computing business. It took a $13.8 billion one-time charge under the new Republican tax law, resulting in a net loss of $6.3 billion compared to a $6.3 billion profit last year. Shares of computer and internet companies bounced back from after-hour losses after Microsoft and Facebook led the tech earnings wave, which continues Thursday with results from Apple, Amazon, and Google-parent Alphabet.