The daily business briefing: February 21, 2020

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Harold Maass
An E-Trade sign
Justin Sullivan/Getty Images

1.

Morgan Stanley to buy E-Trade for $13 billion

Morgan Stanley is buying online brokerage E-Trade Financial in an all-stock deal worth about $13 billion. The acquisition combines the resources of Morgan Stanley, an investment bank that caters to huge investors, with a pioneer of online financial services that helped bring waves of small-time individual stock buyers into the market. E-Trade's low-cost, no-frills offerings helped drive competition that has resulted in no-commission trades as brokerages fight for clients. E-Trade comes with 5.2 million accounts and $360 billion in client assets, giving Morgan Stanley a large pool of potential clients for its full-service offerings. Morgan Stanley has 3 million clients and $2.7 trillion in client assets. [The Associated Press]

2.

Sears lines up financing as struggles continue

Sears has secured $100 million in financing from hedge fund Brigade Capital Management in the struggling department store chain's latest effort to stabilize its finances as losses continue, Reuters reported Thursday, citing people familiar with the matter. Brigade has lent money to other battered retailers, including Barneys New York and Gymboree. Sears' billionaire owner Eddie Lampert engineered a $5.2 billion takeover of the company during bankruptcy proceedings last year, rescuing it from liquidation. Sears last year sold its DieHard car battery business to Advance Auto Parts for $200 million, and secured a $250 million loan from Lampert's ESL Investments hedge fund. Neither Sears, now operating as Transform Holdco, nor Brigade immediately commented on the new lifeline. [Reuters]

3.

Markets struggle as coronavirus risks spook investors

Stocks fell worldwide on Friday as the coronavirus outbreak continued to spread in China and other countries, increasing concerns of economic fallout. Europe's broad Euro STOXX 600 index dropped by 0.3 percent and London's FTSE lost 0.5 percent as investors sold risky assets and fled to the safety of bonds and gold. U.S. stock index futures also fell, pointing to a sharply lower open. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were down by 0.4 percent or more. U.S. stocks dropped on Thursday, with the Dow and the S&P 500 closing down by 0.4 percent and the Nasdaq dropping 0.7 percent. Finance leaders from the Group of 20 major economies are gathering this weekend in Saudi Arabia to discuss the global economic risks from the outbreak. [Reuters, CNBC]

4.

Victoria's Secret founder steps down as CEO

Victoria's Secret founder Leslie Wexner stepped down as chairman and CEO of the women's apparel retail giant on Thursday after facing intense scrutiny over his longtime association with Jeffrey Epstein, the financier who hanged himself in jail while awaiting trial on sex trafficking charges. Wexner, 82, will retain the chairman emeritus title after selling his majority stake in L Brands, which owns Victoria's Secret, PINK, and Bath & Body Works, to Sycamore Partner. "Today is the beginning of an important new chapter in the evolution of the enterprise," Wexner wrote in an email to employees. Ohio Inspector General Randall Meyer has faced calls to investigate allegations that Wexner's wife, Abigail, enabled Epstein to sexually assault a young woman at a Wexner family property, which the Wexners deny. [NBC News]

5.

Women demand $66 million in soccer gender discrimination lawsuit

Members of the U.S. women's national soccer team are requesting $66 million in damages under their gender discrimination lawsuit against the U.S. Soccer Federation, according to papers filed late Thursday in U.S. District Court in Los Angeles. The trial in the case is scheduled to start in early May. Players on the women's national team filed the lawsuit last March saying the fact that players on the men's team were paid more reflected institutionalized gender discrimination. U.S. Soccer said in a statement that the women players "are paid differently because they specifically asked for and negotiated a completely different contract than the men's national team," one that "provides significant additional benefits" the men don't get, including guaranteed annual salaries and paid child-care assistance. [The Associated Press]