The daily business briefing: March 5, 2020

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1. Stock futures drop sharply after Wednesday's huge gains
2. Fed reports that business conditions already taking coronavirus hit
3. GM shows off new stable of EVs
4. U.K. airline Flybe shuts down after coronavirus adds to problems
5. Ikea recalls chests due to tip-over risk

published 5 March 2020

1. Stock futures drop sharply after Wednesday's huge gains

U.S. stocks soared on Wednesday after former Vice President Joe Biden won a string of Super Tuesday presidential primary victories and overtook Sen. Bernie Sanders (I-Vt.) in the delegate count. Investors consider Biden more pro-business. Health-care stocks led the gains, rebounding from losses caused by anxiety about what Sanders' Medicare-for-all plan would mean for the industry. UnitedHealth jumped by 10 percent. The Dow Jones Industrial Average closed up by nearly 1,200 points or 4.5 percent at 27,090.86, while the S&P 500 gained 4.2 percent and the Nasdaq rose by 3.8 percent. The gains lifted the three main indexes out of correction territory, putting them within 10 percent of their recent highs. Dow futures dropped sharply, however, ahead of Thursday's opening bell.

The Federal Reserve on Wednesday released a nationwide survey of business conditions that showed that the coronavirus outbreak had started hurting tourism, and manufacturers whose supply chains were being disrupted. The survey, which is compiled by the Fed's 12 regional banks and is known as the beige book, indicated that the economy continued to grow at a moderate rate in late February despite the impact of the rapidly spreading outbreak. The U.S. central bank this week made an emergency cut to its benchmark short-term interest rate, with some economists expecting a further cut at Fed policy makers' two day meeting that starts March 17.

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General Motors, seeking to show it can take on Tesla, unveiled 10 new electric vehicles on Wednesday in an unprecedented launch of zero-emission vehicles headed for production. The offerings revealed at GM's "EV Day" in Detroit spanned the automaker's Chevrolet, Cadillac, GMC, and Buick brands. The company said the models, with ranges up to 400 miles per charge, would be sold in North America within five years in a new focus on EVs. "This is a historic moment for GM," said CEO Mary Barra. "I believe in my heart that we are going to be leaders in electrification."

Long-struggling British regional airline Flybe collapsed on Thursday due to a sharp drop in demand for flights caused by the coronavirus outbreak. The 41-year-old airline, which connects all parts of the United Kingdom with major European cities, became one of the first major companies to shut down because of the coronavirus crisis. The move threatens 2,400 jobs as well as the economies of regions with affected airports. The news came as airlines around the world cancel flights and warn of financial fallout as the rapidly spreading flu-like virus drags down demand for tickets. The British government had agreed to a rescue deal for Flybe, but said Thursday there was nothing more it could do.

Ikea announced Wednesday that it was recalling 820,000 Kullen three-drawer chests due to the risk the furniture, if not anchored to a wall, could topple over and hurt children. The news, announced jointly with the Consumer Product Safety Commission, came two months after the Swedish retailer agreed to pay $46 million to the parents of a 2-year-old California boy who died when an Ikea Malm dresser toppled onto him in 2017. The CPSC has announced seven furniture recalls since September due to the danger of tip-overs, which have been blamed for 89 deaths from 2014 to 2018. The agency is working on mandatory safety regulations to prevent this kind of accident.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.