The daily business briefing: July 26, 2018

1. Facebook shares plummet after warning on cost of privacy fixes

Facebook stock plunged by as much as 24 percent in after-hours trading on Wednesday, due to alarm over the social media giant's quarterly report. The company has faced stiff criticism over the Cambridge Analytica data scandal, and executives warned that its revenue growth would slow and its expenses would rise. The company had said it would face higher costs as it addressed concerns over the handling of user data. Total expenses jumped to $7.4 billion, a 50 percent increase over a year earlier. The diving share price reduced Facebook's market capitalization by about $150 billion in less than two hours.

Reuters

2. Trump and European Commission leader back away from a trade war

President Trump and European Commission President Jean-Claude Juncker on Wednesday stepped back from an all-out trade war, promising to work together to lift barriers on trade and eliminate tariffs. Trump announced their agreement in the White House Rose Garden after meeting with Juncker. "We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods," Trump said. Trump has imposed higher tariffs on European steel and aluminum and threatened a 25 percent tariff on European vehicles. European leaders have vowed to retaliate, but Juncker said both sides agreed to "hold off on other tariffs" while they negotiate a mutually beneficial deal.

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CNN

3. Mattel slashes 2,200 jobs as toy industry struggles

Mattel announced Wednesday that it is cutting more than 2,200 jobs, or about 22 percent of its non-manufacturing workers around the world. The toymaker disclosed the news as it reported quarterly earnings that fell short of expectations. Mattel, maker of the iconic Barbie doll, has suffered along with other companies in the industry following the collapse of Toys R Us, a leading retailer that is closing its stores after filing for bankruptcy protection last year. The job reductions are part of a $650 million cost-cutting plan the company announced last year. Mattel's stock price fell by nearly 9 percent in after-hours trading.

Los Angeles Times

4. Stock-index futures mixed after Facebook warning, trade truce

U.S. stock futures were mixed early Thursday, with many tech stocks falling as Facebook shares plunged and investors awaited a barrage of corporate earnings reports. Futures for the S&P 500 fell by 0.2 percent and those for the Nasdaq-100 dropped by 0.9 percent. The Dow Jones Industrial Average was the exception, with its futures inching up by 0.1 percent. On Wednesday, all three of the main U.S. indexes gained after President Trump and European Commission President Jean-Claude Juncker agreed to ease trade tensions. More big names, including McDonald's, American Airlines, and Comcast, report earnings Thursday morning while Amazon, Intel, Starbucks, and several others release their quarterly results after the bell.

MarketWatch CNBC

5. ECB keeps rates steady, plans to unwind bond purchases

The European Central Bank said Thursday it was leaving interest rates unchanged and moving forward with its plan to wrap up its monthly economy-stimulating bond-buying program in December. The announcement was expected. The ECB also said it would keep rates — its key lending rate is 0 percent and the rate paid on deposits parked overnight at the central bank remains at negative 0.4 percent — steady "at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 percent over the medium term."

MarketWatch