The daily business briefing: July 31, 2020

1. Economy took a record plunge in the second quarter

The Commerce Department reported Thursday that U.S. gross domestic product fell by 32.9 percent in the second quarter, compared to the same period last year, and by 9.5 percent from the previous quarter. The decline was the steepest since the 1940s, and the Great Depression's larger decline occurred over a longer period. The second quarter decline was slightly better than the 34.5 percent annualized drop that economists had predicted for the first full quarter of the coronavirus crisis. The report "just highlights how deep and dark the hole is that the economy cratered into," said Mark Zandi, chief economist at Moody's Analytics. Concerns about the economy intensified as partisan fighting in the Senate delayed efforts to extend extra federal unemployment benefits that expire on Friday.

CNBC Politico

2. Tech giants beat expectations despite coronavirus crisis

Amazon, Apple, Facebook, and Google-parent Alphabet on Thursday reported stronger than expected quarterly results even as the coronavirus crisis caused the worst U.S. economic downturn on record. Amazon's sales jumped by 40 percent compared to a year ago as coronavirus lockdowns prompted Americans to shop more online. The company's profit doubled. Facebook's profit nearly doubled, too. Apple shares jumped by more than 5 percent in after-hours trading after it reported better-than-expected revenue and announced a four-for-one stock split to make its shares "more accessible." Alphabet also beat expectations, although by less than the others. The news came a day after the CEOs of all four companies testified to Congress as part of an investigation into their market power, which some lawmakers accused them of using to squelch competition.

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The New York Times MarketWatch

3. Jobless claims increase for 2nd straight week

The number of Americans filing initial claims for jobless benefits rose last week, the second straight weekly increase, the federal government reported on Thursday. A seasonally adjusted 1.4 million people filed for initial jobless claims last week, an increase of 12,000 from the revised figure for the previous week, when unemployment claims rose for the first time in 16 weeks. Continued claims by those already unemployed came in at 17 million, an increase of 867,000 from the previous week. In addition to traditional unemployment claims, nearly 830,000 Americans filed for first-time pandemic unemployment assistance last week, a decrease of 106,000 compared to the previous week. "Right now, temporary layoffs are turning into permanent job losses and families across the country are facing a looming child-care crisis in the fall," said the Atlantic Council's Josh Lipsky.

CNN

4. Stock futures gain as tech giants thrive

U.S. stock index futures remained in positive territory early Friday despite giving back bigger overnight gains that were fueled by better-than-expected earnings reports by tech giants Amazon, Apple, Alphabet, and Facebook. Futures for the Dow Jones Industrial Average and the S&P 500 were up by 0.2 percent, while those of the Nasdaq gained 0.9 percent. Google-parent Alphabet, which along with Facebook reported slowing ad growth, was up only slightly. Apple and Amazon shares jumped by 5 percent in after-hours trading. Facebook was up by more than 7 percent. The Dow and S&P 500 both closed lower on Thursday after the Commerce Department reported that gross domestic product took its sharpest quarterly dive on record in the April through June quarter.

CNBC The Associated Press

5. Dunkin' to close 800 locations

Dunkin' announced Thursday that it will permanently close 8 percent of its doughnut shops in the United States. That amounts to about 800 restaurants. The company said as it reported second-quarter earnings that the closures affected "low-volume sales locations" that accounted for just 2 percent of its U.S. sales. More than half of the outlets shutting down are in Speedway convenience stores. Dunkin' said another 350 locations might close abroad. The news came as restaurants across the country are struggling as customers stay home due to the coronavirus crisis. California Pizza Kitchen filed for bankruptcy protection on Thursday. The company said it would close about 200 locations as it joined a growing list of struggling chains pushed to the brink of financial disaster by the pandemic.

CNN The Wall Street Journal