The daily business briefing: February 14, 2018
Inflation data is expected to steer stocks, Netflix signs Glee creator Ryan Murphy, and more
Inflation data expected to steer stocks aiming for 4th day of gains
U.S. stocks battled back from early losses to close slightly higher on Tuesday, marking a third straight day of gains despite continuing volatility. The Dow Jones Industrial Average rose by 0.2 percent, while the S&P 500 gained 0.3 percent and the Nasdaq Composite advanced by 0.5 percent. U.S. stock futures pointed to a gain for all three major U.S. indexes at the open on Wednesday, as investors braced for the release of January consumer price inflation data Wednesday morning. Some analysts warned that if the inflation numbers were higher than expected, the recent selloff could resume. The fear that rising inflation will prompt the Federal Reserve to speed up interest rate hikes has been blamed for last week's volatility.
Netflix signs Glee creator in $300 million deal
Netflix has signed American Horror Story and Glee creator Ryan Murphy to a five-year, $300 million deal as it invests heavily in expanding its creative team. Netflix wooed Murphy away from 21st Century Fox, intensifying the online streaming powerhouse's battle with Fox and its deal partner Walt Disney Co. The deal with Murphy came after Netflix signed Shonda Rhimes, the former ABC producer behind Grey's Anatomy and Scandal, and comic writer Mark Millar, whose Millarworld company Netflix bought last summer. Murphy's big-money deal is expected to fuel skepticism about the sustainability of Netflix's $8 billion annual programming budget.
IEA says rising U.S. oil production could offset OPEC cuts
The International Energy Agency said Tuesday that surging U.S. shale oil production could disrupt OPEC's attempts to end a stubborn glut with production cuts. After the production cuts helped boost perilously low prices for crude, U.S. government data showed America's oil output topped 10 million barrels a day in November, near a record set in 1970. "Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," IEA said. "This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share."
Applebee's fires three workers over racial profiling complaint
Applebee's said Tuesday that it had fired three employees — a manager, a server, and another worker — at a Missouri mall-based restaurant it found were involved in the alleged racial profiling against two African-American customers falsely accused of leaving without paying their check. The restaurant chain apologized for the Feb. 9 incident, which received wide notice after one of the diners, Alexis Brison, posted a cellphone video of the encounter on Facebook. The Independence, Mo., restaurant has been temporarily closed. "We recognize the hurt and pain caused by the recent incident," the company said in a statement. "We very much regret this occurred and sincerely apologize to our guests and community ... We do not tolerate racism, bigotry, or harassment of any nature."
PepsiCo cuts jobs but issues bonuses
PepsiCo on Tuesday reported revenue of $19.53 billion in the last quarter of 2017, up a hair from $19.52 billion but enough to beat analysts' expectations of $19.44 billion. The company said it would cut some jobs — less that 1 percent of its more than 110,000 employees — but give bonuses of up to $1,000 to workers who make and deliver PepsiCo's snacks and drinks. PepsiCo said the bonuses were a result of savings from the GOP tax overhaul passed late last year. The company said it also would use tax savings to raise its annual dividend by 15 percent, and boost its stock buybacks from $12 billion to $15 billion.