Business briefing

The daily business briefing: June 13, 2018

A judge approves AT&T's $85 billion purchase of Time Warner, Tesla announces plans to cut 9 percent of its workforce, and more


Federal judge approves AT&T-Time Warner merger

A judge on Tuesday approved AT&T's proposed $85 billion deal to buy Time Warner, rejecting an antitrust challenge by the Justice Department. Judge Richard Leon, who presided over the six-week trial, said the government had failed to prove that the acquisition violates antitrust law. He also rejected government lawyers' request to put the deal on hold pending an appeal, saying that would be "manifestly unjust" because it would force AT&T to miss a deadline to close by June 20 or pay a $500 million penalty. The deal promises to reshape the media landscape by uniting Time Warner's content, which includes movies and TV shows, with AT&T's powerful distribution network, which includes cable, satellite, and mobile phone systems.


Tesla to cut 9 percent of its workforce

Tesla plans to cut several thousand jobs, about 9 percent of its workforce, as part of an effort to "reduce costs and become profitable" without threatening the crucial ramping up of production of the Model 3, its first mass-market vehicle. The company's CEO, Elon Musk, made the announcement in an email to staff on Tuesday. Tesla shares jumped by as much as 7 percent on the news, although the gains fell back to about 3 percent later in the day. "Nine percent job cut is a good number and I don't think there will be more job cuts in the near term," said Efraim Levy, an analyst at CFRA Research. Tesla's stock has recovered most of a 35 percent decline from its September peak as the company made strides toward meeting its output target of 5,000 Model 3 vehicles per week.


Stocks edge up ahead of expected Fed rate hike

U.S. stock futures inched higher early Wednesday ahead of an expected quarter-point interest-rate hike by the Federal Reserve at the end of a two-day meeting later in the day. Investors will be looking for clues from Fed Chair Jerome Powell on the central bank's plans for further hikes over the rest of the year. Futures for the Dow Jones Industrial Average rose by 0.1 percent, while those of the S&P 500 and Nasdaq-100 rose by about 0.2 percent and 0.3 percent, respectively. On Tuesday, The Dow and the S&P 500 were little changed while the Nasdaq Composite rose by 0.7 percent to a record close.


Theresa May wins crucial Brexit vote

British Prime Minister Theresa May on Tuesday won a critical vote in Parliament to block amendments to a bill on the country's exit from the European Union that threatened her authority. Opposition lawmakers were trying to force May's government to resume negotiations if they reject her plans on Britain's exit from the European Union. May's last-minute compromise would give lawmakers "meaningful" input through a vote on the Brexit terms. The British pound gained 0.3 percent against the dollar after the vote, despite weaker-than-expected wage growth that extended a string of data indicating weakness in the British economy.


Guess co-founder Marciano resigns after sexual harassment inquiry

Fashion brand Guess said Tuesday that co-founder Paul Marciano had resigned as executive chairman following a sexual harassment investigation by a special committee. Guess said the allegations against Marciano included "inappropriate comments and texts and unwanted advances including kissing and groping." Marciano reached settlements totaling $500,000 with five accusers, the company said. The people receiving settlements were not identified. Supermodel Kate Upton was one of the women who publicly accused Marciano of inappropriate behavior. She said that he aggressively kissed her and forcibly grabbed a breast during a 2010 Guess lingerie photo shoot, her first modeling job at age 18. "After I pushed him away, he said, 'I'm making sure they're real,'" Upton told Time.


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