The daily business briefing: February 3, 2021
Bezos says he'll step down as Amazon CEO, Google-parent Alphabet reports record sales, and more
Bezos to step down as Amazon CEO
Amazon founder Jeff Bezos is stepping down as CEO later this year, the online retail giant said Tuesday. Bezos has served as the company's chief executive since he founded it in 1995 as an online bookseller. He will become executive chair as Andy Passy, currently CEO of Amazon Web Services, replaces him as CEO. "Being the CEO of Amazon is a deep responsibility, and it's consuming," Bezos wrote in a letter to employees. "When you have a responsibility like that, it's hard to put attention on anything else. As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions." The news came as Amazon reported quarterly sales and profit that beat expectations.
Alphabet shares jump after strong earnings report
Alphabet shares rose by 8 percent in extended trading after the Google parent on Tuesday reported quarterly advertising and cloud business sales that beat analysts' expectations, lifting quarterly sales to a record $56.9 billion. Google makes more money from internet ads than any other company, and its sales surged as coronavirus lockdowns drove shoppers and advertising customers increasingly online. "Google's products and support have been a lifeline for millions of small medium businesses hit hard by the pandemic," Chief Executive Sundar Pichai said in a conference call with analysts. Alphabet's 13 percent 2020 sales growth was its slowest since 2009, but thanks partly to spending reductions, Alphabet added $17 billion to bring its cash hoard to $137 billion.
GameStop stock drops sharply for 2nd straight day
GameStop shares plunged on Tuesday, losing 60 percent after a big fall on Monday as previously hot stocks boosted by traders on the "WallStreetBets" Reddit forum lost momentum. The brick-and-mortar videogame retailer's shares closed at $90, making them worth less than one-fifth of the $483 high they reached last week. Reddit posters lamented the reversal of fortunes for stocks they were boosting in a fight with hedge funds betting the shares would fall. One user posted they bought GameStop at $390 and had "lost so much that I don't even care anymore." "That's the game you play when you do this thing," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "It can work for a while until it stops working and when it stops working, it reverses pretty quickly."
Biden administration sending more coronavirus vaccine to pharmacies
The Biden administration said Tuesday that it would start sending some coronavirus vaccine doses directly to pharmacies. Many pharmacies already are administering vaccine doses distributed through state systems, but the new program will create a direct pipeline from the federal government to pharmacies. It is part of an effort to make vaccines more widely available. The initiative is separate from the federal government's use of Walgreens and CVS to get vaccine doses to long-term care facility residents. White House coronavirus response coordinator Jeff Zients said the government will start by sending one million doses per week to 6,500 pharmacies.
U.S. stock futures rise with boost from tech-giant earnings
U.S. stock index futures rose early Wednesday led by technology stocks boosted by strong earnings from Amazon and Google-parent Alphabet. Futures for the tech-heavy Nasdaq were up by 0.6 percent several hours before the opening bell. Futures for the Dow Jones Industrial Average and the S&P 500 gained 0.1 percent and 0.4 percent, respectively. All three of the main U.S. indexes surged on Monday. The Dow and the Nasdaq closed up by 1.6 percent. The S&P 500 rose by 1.4 percent. The gains were fueled by anticipation of a new round of coronavirus relief spending and a calming of Reddit-fueled trading that made many investors uneasy last week. "The path ahead isn't a smooth one, but we think it is an upward one," said Seema Shah, chief strategist at Principal Global Advisors.