The daily business briefing: November 17, 2020
Wall Street surges to record highs after more good vaccine news, Tesla set to join the S&P 500, and more
1. Wall Street hits record highs after 2nd COVID-19 vaccine proves effective
The Dow Jones Industrial Average and S&P 500 surged to close at record highs on Monday after drug maker Moderna announced that its potential COVID-19 vaccine proved nearly 95 percent effective in late-stage trials. The Dow jumped by 1.6 percent. The S&P 500 rose by 1.2 percent, adding to gains that lifted it to a record close on Friday. The tech-heavy Nasdaq closed up by 0.8 percent. The three main U.S. indexes were mixed early Tuesday, with the Dow slipping by 0.5 percent. Stocks rose last week after Pfizer reported that its vaccine was highly effective in trials. "2020 is a year we won't ever forget and yet somehow equity markets have completely erased it from their memory," said Seema Shah, chief strategist at Principal Global Investors.
2. Tesla to join S&P 500
S&P 500 Dow Jones Indices said Monday that electric-car maker Tesla would be added to the benchmark S&P 500 stock index on Dec. 21. Tesla shares spiked, rising by as much as 13 percent in after-hours trading following the announcement. The move came as analysts expected the company to log its first calendar year of profit in 2020. Tesla has posted profits in the first three quarters of the year, even after California briefly ordered the company to close its only U.S. car plant due to the coronavirus pandemic. Tesla has reported profits in five consecutive quarters for the first time in its history. Inclusion in the S&P 500 is "the cherry on top of a very successful year" for Tesla founder and CEO Elon Musk, said Toni Sacconaghi, an analyst with Bernstein Research.
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3. Trump administration to rush through drilling contracts
The Trump administration is rushing to auction off oil and gas drilling contracts for parts of Alaska's Arctic National Wildlife Refuge before President-elect Joe Biden takes office in January. A "call for nominations" being published Tuesday in the Federal Register will let companies pick tracts they want to bid on in an upcoming lease sale covering the refuge's nearly 1.6 million acre coastal plain. The Interior Department plans to complete the sales before Inauguration Day. Trump has pushed to open public lands to drilling, mining, logging, and grazing. Biden strongly opposes the policies. A Republican-controlled Congress in 2017 authorized drilling in the Arctic refuge.
4. Home Depot earnings beat expectations as pandemic spending continues
Home Depot on Tuesday reported quarterly earnings that exceeded Wall Street's expectations as customers continued to spend more on home improvement during the coronavirus pandemic. Home Depot said its sales jumped by more than 24 percent over the same period last year. Profit jumped by 24 percent to $3.4 billion or $3.18 per share in the third quarter, up from $2.8 billion or $2.53 per share a year earlier. Analysts had forecast earnings of $3.06 per share, according to Refinitiv. Home Depot said it would make temporary employee compensation programs it started during the pandemic permanent, which would increase its compensation costs by $1 billion this year. CEO Craig Menear said these investments "are critical in enabling market share growth in any economic environment."
5. Bezos gives $791 million from $10 billion Earth Fund
Amazon founder and CEO Jeff Bezos on Monday announced that he is giving $791 million to 16 groups dedicated to fighting climate change. The grants are the first to be distributed from Bezos' $10 billion Earth Fund. Bezos said the initial grants are just the beginning of his "commitment to fund scientists, activists, NGOs, and others." More than half of the donations are going to established environmental groups, with $100 million donations each going to The Environmental Defense Fund, the Natural Resources Defense Council, the Nature Conservancy, the World Resources Institute, and the World Wildlife Fund. Smaller grants will go to environmental justice organizations.
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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.
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