The daily business briefing: August 6, 2019

Traders on the NYSE during a stock plunge

(Image credit: Spencer Platt/Getty Images)

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1. Markets see worst drop of 2019 as trade war heats up
2. Treasury Department designates China a currency manipulator
3. Newspaper companies GateHouse Media and Gannett to merge in $1.4 billion deal
4. Luxury retailer Barneys files for bankruptcy, will close 15 stores
5. Trump hits Venezuelan government with full embargo

published 6 August 2019

1. Markets see worst drop of 2019 as trade war heats up

The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 all saw their biggest percentage drops of 2019 on Monday, following a string of declines that started Thursday. The drops all came after President Trump announced new tariffs on China, and after China responded by devaluing its currency Monday morning to its weakest level in a decade. The Dow closed down 767 points at the end of the day for a 2.9 percent drop. The tech-heavy Nasdaq meanwhile closed down 278 points, or 3.5 percent, and the S&P 500 went down a total of 87 points, or 3 percent. Stock futures mostly rebounded Tuesday morning when China's central bank stabilized the yuan after setting its reference rate lower than the psychologically important level of 7 per dollar.

The trade war between the United States and China escalated on Monday evening when the U.S. Treasury Department designated China a currency manipulator after Beijing allowed its currency to slide to its lowest level in a decade. It's been 25 years since the United States last designated China a currency manipulator. The People's Bank of China, the country's central bank, said the yuan dropped due to President Trump's "unilateralism and trade protectionism measures and the imposition of increased tariffs on China." Monday was rough for America's three top stock indexes, with the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 all seeing their biggest percentage drops of 2019, due to tensions between the U.S. and China. China's central bank made moves to stabilize the yuan on Tuesday, relieving markets.

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Gannett, publisher of USA Today and one of the largest newspaper companies in the United States, is being acquired by GateHouse Media in a deal worth roughly $1.4 billion. The merger will create the largest U.S. newspaper company, with a print circulation of 8.7 million, media expert Ken Doctor told The Associated Press on Monday. Combined, Gannett and GateHouse Media have more than 260 daily newspapers and more than 300 weeklies. GateHouse Media is owned by the New Media Investment Group, and said it will work on a digital transformation of its newspapers. The new company will operate under the Gannett name, and its headquarters will remain in McLean, Virginia.

Barneys New York announced early Tuesday that it has filed for Chapter 11 bankruptcy and will close 15 of its 22 stores, including locations in Seattle, Las Vegas, and Chicago. Barneys CEO Daniella Vitale said the "iconic luxury specialty retailer" has seen its financial position "dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand." Vitale added that Barneys has secured $75 million "to facilitate a going concern sale process," as "pursuing a sale under the court's supervision provides the quickest and most efficient means of maximizing value while ensuring we continue serving both new and loyal customers."

President Trump issued an executive order late Monday freezing all U.S.-based assets of Venezuela's government, sharply escalating economic measures aimed at removing President Nicolás Maduro from power. The executive order immediately applies to all property and assets of Venezuela's government and its officials, prohibits any U.S. companies or individuals from dealing with them, and threatens retaliation for any foreign company or individual that does business with them. Currently, China and Russia conduct significant business with Venezuela. Under the new order, Venezuela joins Cuba, Iran, North Korea, and Syria as the only countries under full U.S. embargo. Maduro accused the U.S. of trying to sabotage ongoing talks with the opposition sponsored by Finland.

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