- 1. Prices rise but investors shake off inflation fears
- 2. Cisco shares jump after a better-than-expected earnings report
- 3. Intelligence officials warn Americans against using Huawei, ZTE smartphones
- 4. Berkshire Hathaway unveils new Teva stake, sending drugmaker's shares soaring
- 5. L.L. Bean customer sues company for ending unlimited returns
1. Prices rise but investors shake off inflation fears
U.S. consumer prices rose by 0.5 percent in January, above the 0.3 percent expected, marking a 2.1 percent 12-month rise, the Labor Department reported Wednesday. The data suggested that inflation was firming up, increasing pressure on the Federal Reserve to raise interest rates in March to keep the economy from overheating. Last week, fears that rising inflation would prompt the Fed to speed up rate hikes sent stocks plunging, but the slightly higher pace reported Wednesday was not enough to spark a panic. The Dow Jones Industrial Average rose by 253 points or 1 percent, its fourth straight day of gains. The S&P 500 rose by 1.3 percent and the Nasdaq Composite gained 1.9 percent. Global stocks and U.S. futures continued to climb early Thursday.
2. Cisco shares jump after a better-than-expected earnings report
Shares in Cisco Systems shot 7.5 percent higher in after-hours trading after the network gear maker reported earnings Wednesday that beat Wall Street's expectations. Cisco also showed its first rise in quarterly revenue in more than two years. The company said its profit in the current quarter would exceed anaylsts' forecasts as it continues to see benefits of its effort to shift from its traditional switches and routers business to software and subscription services. "We are clearly seeing the results of the strategy we've articulated over the last 10 quarters," CEO Chuck Robbins said. Cisco also said it would repatriate $67 billion from overseas by taking advantage of provisions in the GOP tax reform law approved late last year.
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3. Intelligence officials warn Americans against using Huawei, ZTE smartphones
The leaders of the CIA, NSA, FBI, and the Defense Intelligence Agency warned in testimony before the Senate Intelligence Committee that Americans should avoid using Chinese smartphones made by such companies as Huawei and ZTE, because they could pose a security threat. FBI Director Christopher Wray said it was risky to use smartphones made by any company "beholden to foreign governments" within the U.S. telecommunications network. "It provides the capacity to maliciously modify or steal information," Wray said. "And it provides the capacity to conduct undetected espionage." Such concerns have kept Huawei from gaining market share in the U.S. ZTE pushed back on Thursday, saying it was a trusted partner of U.S. users of its products.
4. Berkshire Hathaway unveils new Teva stake, sending drugmaker's shares soaring
Warren Buffett's Berkshire Hathaway disclosed in a regulatory filing on Wednesday that it had purchased a $358 million stake in Teva Pharmaceutical Industries. The news of the widely respected billionaire investor's seal of approval sent the Israeli generic drugmaker's shares rising by more than 10 percent in after-hours trading. Berkshire also said it had purchased more Apple stock, pushing the iPhone maker past Wells Fargo as Berkshire's largest common stock holding. Berkshire also moved close to completely selling off its investment in International Business Machines, an investment Buffett has conceded was one of his biggest mistakes. "I thought it would do better," he told shareholders last May.
5. L.L. Bean customer sues company for ending unlimited returns
An Illinois man who calls himself a loyal L.L. Bean customer this week filed a lawsuit against the Maine-based outdoor clothing and gear seller for changing its famous return policy. Late last week, Bean announced that it was scrapping unlimited returns because some people were abusing the policy, treating it as a lifetime replacement plan. The company said it would now offer returns within a year, or because of a manufacturing defect. Longtime Bean customer Victor Bondi of Chicago said he hoped others would join him in a class-action lawsuit, saying it was "deceptive and unfair" because the company had used the return policy as "a core component" of its marketing.
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