The daily business briefing: October 16, 2018

1. Microsoft co-founder Paul Allen dies at 65

Microsoft co-founder Paul Allen died Monday from complications of non-Hodgkins lymphoma, his family announced. He was 65. Allen revealed two weeks ago that he had suffered a recurrence of the cancer, which he was treated for several years ago, his company, Vulcan Inc., said. Allen and his childhood friend Bill Gates started Microsoft in 1975, selling software that revolutionized the personal computer industry. Allen later became the owner of the NFL's Seattle Seahawks and the NBA's Portland Trail Blazers. "My brother was a remarkable individual on every level," Allen's sister, Jody Allen, wrote in a statement. "While most knew Paul Allen as a technologist and philanthropist, for us he was a much loved brother and uncle, and an exceptional friend."

The Wall Street Journal ESPN

2. Federal deficit grows to largest in 6 years

The federal government ended the 2018 fiscal year with a $779 billion budget deficit, a 17 percent increase over the same period a year earlier, according to Treasury Department data released on Monday. Economists had warned that last year's Republican tax cuts and rising government spending would widen the spending gap. The rising cost of interest payments on the national debt also was a factor. Borrowing has increased over the last year to make up for reduced revenue due to the tax cuts. Interest rate hikes by the Federal Reserve, which is nudging borrowing costs higher to keep the strengthening economy from overheating, also have contributed. President Trump has criticized the Fed for the rate hikes, saying it has "gone crazy."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Reuters

3. Audi to pay $925 million

Audi said Tuesday it had agreed to pay a $925 million fine set by German prosecutors for selling cars with excessive harmful diesel emissions. Prosecutors said Audi neglected its oversight duties by selling cars with engines made by the company and its group partner Volkswagen that exceeded pollution limits. The case involved about 4.9 million Audi cars sold in Europe, the U.S., and other countries between 2004 and 20018. Parent company Volkswagen three years ago admitted to using software to help about 11 million diesel vehicles, including some Audi models, pass emissions tests. By accepting the fine, VW is taking the latest in a series of steps aiming to move past the scandal, which has cost it billions of dollars. The company still faces a lawsuit from German shareholders.

The Associated Press MarketWatch

4. Bankruptcy judge approves $300 million in Sears financing

A bankruptcy judge on Monday approved $300 million in financing to keep Sears open through the holiday shopping season and give it a chance to stay alive. The decision came on the day Sears Holdings, the parent of Sears and Kmart, filed for bankruptcy protection. The company has closed hundreds of stores since hedge-fund billionaire Eddie Lampert acquired it in 2005 for $11 billion. The company has not turned a profit since 2011 as sales declined in the face of increasing dominance by big-box stores such as Walmart and Target, and online rivals such as Amazon. President Trump said Monday that the fall of the iconic company has been jarring. "For somebody of my generation, Sears Roebuck was a big deal," he said. "Sears has been dying for many years, it has been obviously improperly run for many years, and it's a shame."

Reuters

5. Stock futures edge up as corporate earnings roll in

U.S. stock futures rose early Tuesday, pointing to a modestly higher open following a Monday decline led by technology and internet shares. Futures for the Dow Jones Industrial Average were up by 0.2 percent, while those for the S&P 500 and the Nasdaq-100 gained 0.3 percent and 0.5 percent, respectively. All three of the main U.S. indexes fell on Monday. After days of pressure due to concerns about rising interest rates and trade tensions, corporate earnings are coming into focus. Getting the reports started, Morgan Stanley beat estimates with third-quarter profit rising by 20 percent. Goldman Sachs also reported before the bell, and Netflix posts its results after trading closes.

MarketWatch