The daily business briefing: February 21, 2018
Walmart stock takes its biggest dive in 30 years, Trump expands access to non-ObamaCare health insurance plans, and more
Walmart stock dives as profits and online sales fall short
Walmart's stock plunged 10 percent lower on Tuesday, its biggest one-day dive in 30 years, after the giant retailer reported profits that fell short of expectations, and a slowdown in online sales growth in the quarter including the crucial holiday season. Walmart's decline dragged down U.S. indexes, breaking a six-day string of gains. Grocery store chains, retailers, health-care companies, and industrial stocks all lost ground. "Investors have been lulled into a false sense that stock markets are not volatile," said Doug Cote, chief market strategist for Voya Investment Management. "Last week was one of the best weeks in years, and as we go back to normal volatility, you're going to see what you would expect: normal ups and downs."
Trump administration expands access to non-ObamaCare health insurance plans
The Trump administration on Tuesday eased restrictions on health insurance plans sold outside ObamaCare. The proposed rules would allow people to buy short-term, less comprehensive health insurance for up to 12 months, rather than the three-month limit set by the Obama administration. Republicans say people need alternatives to the high-cost plans offered under the health law. With the short-term plans, insurers can charge more for people with pre-existing conditions, and they can deny some services required to be covered under ObamaCare. "The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices," Health and Human Services Secretary Alex Azar said in a statement. Democrats said the move was just the latest in a series of GOP efforts to "sabotage" the health law.
Eurozone business activity cools
Business activity in the 19-country eurozone cooled in February but remained near decade highs, according to a closely watched economic survey released Wednesday by financial information firm IHS Markit. The purchasing managers' index, which tracks activity across manufacturing and services, fell to 57.5, down from January's 58.8, a 12-month high. Any number above 50 indicates economic growth. The European Central Bank looks at the monthly survey when it sets policy. IHS Markit's chief business economist Chris Williamson said the region appears headed for quarterly growth of 0.9 percent.
Stock futures inch down ahead of Fed minutes
U.S. stock futures edged lower early Wednesday as investors braced for the release of the minutes from the Federal Reserve's January policy-setting meeting. Analysts say the minutes could provide glimpses of Fed officials favoring a more aggressive approach to raising interest rates as the economy heats up and the central bank unwinds its effort to boost the economy after the Great Recession. Fear of faster rate hikes has fueled the recent volatility of the stock market, because higher interest rates can lure money out of the stock market. The Dow Jones Industrial Average is down 4.5 percent in February.
Donald Trump Jr. calls suggestions of profiteering 'nonsense'
Donald Trump Jr. said Wednesday that it is "nonsense" for critics to suggest that his family is profiting from his father's presidency. Trump Jr., President Trump's eldest son, has faced allegations of conflicts of interest as he visits India to promote a new Trump Tower project. He plans to make a foreign policy speech, and buyers of Trump-branded luxury homes have been promised an opportunity to attend a dinner with him. Trump Jr., who has run the Trump Organization with his brother Eric since President Trump took office, said allegations of "profiteering" are unfair, because the family's critics are overlooking "the opportunity cost of the deals that we were not able to do."