The daily business briefing: August 16, 2019

1. Stock indexes fight to stabilize after huge drop

Stocks stabilized Thursday after Wednesday's huge losses as strong retail sales data helped ease fears that a recession could be looming. Walmart helped lead the Dow Jones Industrial Average up by 0.4 percent. Walmart's stock gained 6 percent after the retail giant reported better-than-expected earnings and upgraded its outlook for the full year. The Dow, the S&P 500, and the Nasdaq plunged by about 3 percent on Wednesday on concerns triggered when the yields for long-term bonds fell below those of short-term bonds, a rare occurrence that signals falling confidence in the economy and often precedes a recession. Futures for all three of the main three U.S. indexes rose by about 1 percent early Friday as investors remained focused on developments in the bond market and U.S.-China trade tensions.

CNBC

2. Cathay Pacific CEO resigns after Hong Kong protest controversy

Cathay Pacific CEO Rupert Hogg and another top executive of the Hong Kong-based airline said they "take responsibility" following criticism from China's aviation regulator over company employees' involvement in anti-government protests. Hogg and one of his deputies, chief customer and commercial officer Paul Loo, stepped down following a week in which Cathay Pacific fired two pilots and two airport employees over their involvement in actions related to the protests that have disrupted flights at the Chinese-controlled, semi-autonomous financial hub's airport. "These have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company," Hogg said. Cathay said it was fully committed to Hong Kong's "One Country, Two Systems" principle.

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South China Morning Post Reuters

3. Trump tells supporters U.S. has 'hottest economy in the world'

President Trump dismissed recession fears that sparked a stock-market plunge this week, telling supporters at a Thursday rally in New Hampshire that the U.S. has "the hottest economy in the world" right now. Trump said stocks would have crashed if he had lost the 2016 election and warned that Americans' retirement accounts will go "down the tubes" if he loses in 2020. "Whether you love me or hate me you have to vote for me," Trump said. He defended his tariffs on Chinese imports, even though many economists say his trade war with Beijing threatens to drag down the global economy. Trump said China wants to reach a trade deal because it is losing jobs. "I don't think we're ready to make a deal," Trump said.

The Associated Press

4. Hundreds of Google employees urge company not to work with ICE

More than 700 Google employees have signed a petition calling for the tech giant to pledge not to work with U.S. Customs and Border Protection or Immigration and Customs Enforcement. A group called Googlers for Human Rights posted the petition to urge the company not to bid on a CBP cloud computing contract. Bids were due Aug. 1 and it wasn't immediately clear whether Google followed through on its reported interest in the job. The petition said the federal agencies with responsibility for enforcing immigration policies presided over a "system of abuse" that has separated children from their parents. The petition calls for Google to avoid providing them services until they "stop engaging in human rights abuses."

MarketWatch

5. GE shares plunge after whistleblower makes fraud charge

General Electric shares dropped by 11 percent on Thursday after Harry Markopolos, the whistleblower who uncovered Bernie Madoff's Ponzi scheme, accused the company of accounting fraud in a case he claims is "far more serious" than Enron. Markopolos said in a lengthy report that GE's "cash situation is far worse than disclosed," and that it has been "running a decades long accounting fraud" to hide allegedly undisclosed costs. General Electric denied the report. GE CEO H. Lawrence Culp Jr. said the company "will always take any allegation of financial misconduct seriously. But this is market manipulation — pure and simple." The Wall Street Journal, which first reported the research, said Markopolos is "working with an undisclosed hedge fund, which is betting GE's share price will decline."

The Wall Street Journal Read more