The daily business briefing: March 1, 2019

1. Gap and Old Navy to split into 2 companies

Gap announced Thursday that it planned to split into two publicly traded companies, spinning off Old Navy and keeping the Gap, Athleta, Banana Republic, Intermix, and Hill City brands within another firm. The struggling clothing retailer also said it would close about 230 Gap stores over two years in the latest sign of turmoil in the retail industry, as iconic chains such as Sears battle to stay alive in the face of online competition and other challenges. "It's clear that Old Navy's business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward," Gap Chairman Robert Fisher said.

NPR

2. Musk says Tesla to get Model 3 price to targeted $35,000

Tesla CEO Elon Musk said Thursday that the electric-car maker probably would not post a profit in the first quarter, but that it would finally get the price of its first mass-market car, the Model 3, down to its target of $35,000. Musk said the company would reach the cost-cutting landmark by closing stores, trimming more jobs, and "significantly reducing" spending on sales and marketing. While falling short on predictions that the company would make money from now on, Musk did say he believed Tesla would make a profit in the second quarter of 2019. Tesla shares had gained as Musk teased an announcement, but they fell by as much as 4.1 percent in after-hours trading after the news.

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Bloomberg

3. Economic growth slower, but better than expected

The U.S. economy grew at a better-than-expected 2.6 percent rate in the fourth quarter of 2018, down from 3.4 percent in the third quarter and 4.2 percent in the second quarter, the Commerce Department said on Thursday. The government pointed to slow consumer spending as the reason for the decline. The 35-day partial government shutdown, which began in December, may have played a role, too. The annual growth rate for 2018 as a whole was 2.9 percent, the highest since 2015 and above 2017's 2.3 percent. The growth rate still fell slightly short of President Trump's goal of 3 percent. The Federal Reserve expects a growth rate of 2.3 percent in 2019.

The Associated Press The Washington Post

4. U.S. stock index futures rise with economic growth, China trade in focus

U.S. stock index futures rose early Friday after government data showed slower but better-than-expected economic growth. The Dow Jones Industrial Average appeared headed for triple-digit gains at the open, with futures rising by 0.7 percent. Futures for the S&P 500 and the Nasdaq were up by 0.7 and 0.8 percent respectively. Trade relations between the U.S. and China remained a key market focus. President Trump said Thursday that the U.S. could walk away from a possible deal to end its trade war with Beijing if the terms weren't fair to the U.S. White House economic advisor Larry Kudlow, however, said last week's high-level talks had been "fantastic," and negotiators for the world's two biggest economies were on the path to a "remarkable, historic deal."

CNBC

5. Oregon puts first mandatory, statewide rent control into effect

Oregon Gov. Kate Brown (D) on Thursday signed the nation's first mandatory statewide rent control measure, handing a victory to housing advocates who say rising rents have been fueling homelessness. Brown said the legislation offered "some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market." The measure limits landlords to increases of no more than 7 percent plus any change in the consumer price index, once per year. Landlords and developers opposed the legislation, saying it did nothing to create more affordable housing. A state report estimated that renters had to work 77 hours weekly at minimum wage to afford a two-bedroom apartment.

The Wall Street Journal The Associated Press