The daily business briefing: January 16, 2019

Harold Maass
The Netflix logo in Paris
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Theresa May faces no-confidence vote after humiliating Brexit defeat

British Prime Minister Theresa May suffered a crushing defeat on Tuesday when the House of Commons overwhelmingly rejected her plan for Britain's withdrawal from the European Union. The 432-to-202 vote marked the biggest loss for a prime minister in such a parliamentary vote in recent British history. It thrust the Brexit process into chaos just 10 weeks before the U.K. is supposed to leave the European trading bloc. Immediately after the vote, the opposition Labor Party's leader, Jeremy Corbyn, announced that he was putting forward a motion of no confidence Wednesday due to what he called the "sheer incompetence of this government." May now has to quickly come up with a backup plan, although the EU has said is the only one it will accept. [The New York Times]


Netflix shares soar after price hike, lifting tech stocks

Netflix shares jumped by more than 6 percent on Tuesday after the streaming video powerhouse announced it was raising the price on its most popular U.S. plan to $12.99 per month from $10.99. Netflix's ability to raise fees without losing subscribers has been crucial as it spends heavily on original content. The company spent a record $859 million in cash in the third quarter, with no indications it plans to cut back any time soon. The stock's gains led a rally among tech-related shares. The tech-heavy Nasdaq Composite surged 1.7 percent higher. The S&P 500 gained 1.1 percent, with the tech sector climbing 1.5 percent. The Dow Jones Industrial Average rose by 0.6 percent. [CNBC]


Judge rejects request to make government pay workers during shutdown

A federal judge in Washington on Tuesday declined to force the government to pay federal employees working through the partial government shutdown. Labor unions representing federal workers said the policy violates laws against unpaid work, and the Constitution. Employees deemed essential are working without pay through the shutdown, but like their furloughed colleagues they will receive compensation once spending bills are passed and signed by President Trump. U.S. District Judge Richard J. Leon said it would be "profoundly irresponsible" to issue an order that would force the government to send more employees home. "At best it would create chaos and confusion," Leon said. "At worst it could be catastrophic ... I'm not going to put people's lives at risk." [The Washington Post]


Bank of America shares rise after earnings beat expectations

Bank of America shares jumped up by 4.6 percent in pre-market trading on Wednesday after the banking giant reported quarterly earnings that beat analysts' expectations. The company, which got a boost from rising interest rates and falling tax rates, said its fourth-quarter revenue rose to $22.7 billion from $20.4 billion, between the FactSet consensus estimate of just under $22.4 billion. Profits reached 70 cents per share on an adjusted basis, beating analysts' forecasts of 63 cents a share, according to FactSet. BofA's good news broke a string of disappointing earnings reports from banks. Earlier this week, Citigroup, J.P. Morgan Chase & Co., and Wells Fargo & Co. all fell short of expectations. [MarketWatch, The Associated Press]


Goldman Sachs beats expectations

Goldman Sachs shares surged early Wednesday after the investment bank reported quarterly revenue and profit that exceeded Wall Street's expectations. The New York-based bank made $6.04 per share in profit in the fourth quarter of 2018, soundly beating estimates of $4.30 a share. Revenue reached $8.08 billion; analysts had estimated revenue of $7.55 billion. The news came after Goldman shares lost 34 percent in 2018, the biggest drop among the six biggest banks. The strong fourth-quarter results came thanks partly to higher merger fees. That helped offset weak trading caused by market turmoil. It was the first quarterly result for the company under David Solomon, who took over from Lloyd Blanfein as Goldman's chief executive Oct. 1. [CNBC, MarketWatch]