The daily business briefing: October 25, 2018

1. Stocks plummet, erasing 2018 gains

U.S. stocks plunged on Wednesday, with the Dow Jones Industrial Average closing down 608 points, or 2.4 percent, and the S&P 500 falling by 3.1 percent. The Nasdaq Composite dropped 4.4 percent, entering correction territory as tech stocks fell sharply. Facebook, Amazon, Netflix, and Alphabet all lost ground. The rout wiped out gains for the year. Investors are worried about rising interest rates, and the possibility that President Trump's trade wars will cut into corporate profits. October has brought major losses; it has been the worst month for the S&P since May 2010. Stock-index futures pointed to a slight rebound early Thursday, with futures for the Dow and the S&P up 0.7 percent and those of the Nasdaq-100 rising 1.2 percent.

CNBC MarketWatch

2. Tesla shares soar after surprise quarterly profit

Tesla shares jumped by 9.7 percent in after-hours trading on Wednesday after the electric-car maker reported the third quarterly profit in its eight years as a public company. Tesla reported adjusted earnings of $2.90 per share on $6.82 billion in revenue, blasting past average analyst expectations of losses of 15 cents per share on $6.32 billion in revenue. The company said in a statement that the period marked "a truly historic quarter for Tesla," with its first mass-market car, the Model 3, becoming "the best-selling car in the U.S. in terms of revenue and the 5th best-selling car in terms of volume."

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Yahoo Finance

3. New York sues Exxon, saying it downplayed climate change risk

New York's attorney general sued Exxon Mobil on Wednesday, accusing the energy giant of defrauding investors about its ability to handle the risks of climate change. "Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations," New York Attorney General Barbara Underwood said in a statement. The litigation marks the biggest legal step yet to hold a fossil fuel company accountable for downplaying the threat of human-driven global warming.

The New York Times

4. Microsoft beats earnings forecasts as cloud computing bet pays off

Microsoft on Wednesday reported quarterly revenue and profit that beat Wall Street's expectations, sending its stock up 1.9 percent in after-hours trading. The software giant got a boost from an increase in businesses signing up for its Azure cloud computing services and Office 365 software. The company has been beating analysts' expectations for more than two years as companies move from on-premise data centers to cloud computing. Microsoft's share price has tripled since Satya Nadella took over as chief executive in 2014 and shifted the company's focus to building data center software and services.

Reuters

5. Ford shares jump after earnings beat expectations

Ford shares shot up by more than 6 percent in after-hours trading on Wednesday after the automaker reported quarterly earnings and profit that beat analysts' expectations. The shares had closed down 4.8 percent before the report. Ford earned an adjusted 29 cents per share on $37.6 billion in revenue, as strong truck sales in North America offset a drop in car sales. Analysts polled by FactSet had forecast 28 cents per share on $37 billion in revenue, on average. "This quarter shows that our business remains very strong in key areas," CEO Jim Hackett said in a statement. "We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations, and nimble enough to win in a fast changing world."

MarketWatch