The daily business briefing: February 25, 2021
The Dow hits its 10th record of the year, GameStop shares more than double, and more
Dow hits record in surge after Powell reassurances
U.S. stocks surged on Wednesday after Federal Reserve Chairman Jerome Powell reaffirmed the central bank's commitment to continuing policies to boost the economy, including keeping interest rates near zero. The Dow Jones Industrial Average jumped by nearly 1.4 percent to close at a record high of 31,961.86. It was the blue-chip index's 10th closing high of 2021. The S&P 500 rose by 1.1 percent, snapping a five-day losing streak. The Nasdaq gained about 1 percent. For the second straight day, Wall Street opened lower only to rebound after Powell's testimony to lawmakers on Capitol Hill. U.S. stock index futures were mixed early Thursday, with Dow futures edging higher and those of the S&P 500 and the Nasdaq falling slightly several hours before the opening bell.
GameStop shares soar again
GameStop shares shot up by 103.9 percent on Wednesday after the brick-and-mortar video-game retailer announced that its chief financial officer, Jim Bell, would resign on March 26. Trading was halted with less than 30 minutes left in the trading day. GameStop shares jumped by another 83 percent in after-hours trading. The company said in a filing with the Securities and Exchange Commission that Bell's departure "was not because of any disagreement with the Company." Sources told Business Insider that Bell was pushed out by Ryan Cohen, co-founder of online pet-products retailer Chewy, who invested in GameStop last year and pushed for the company to shift its business online. His appointment to the board helped drive up the heavily shorted stock ahead of its recent trading frenzy.
FDA confirms Johnson & Johnson vaccine is safe and effective
The Food and Drug Administration said Wednesday that its review found that Johnson & Johnson's single-dose COVID-19 vaccine is safe and effective. The determination signaled that the FDA could authorize the vaccine for emergency use by this weekend. The FDA review showed the vaccine in a large clinical trial was 66 percent effective at preventing moderate to severe COVID-19, and 85 percent effective at preventing severe illness. The vaccine in the clinical trial completely protected against COVID-19 hospitalizations and deaths 28 days after vaccination. A committee is set to meet Friday to consider whether the FDA should give the Johnson & Johnson vaccine, which can be stored for three months in a refrigerator, emergency approval.
Texans have paid an extra $28 billion for power under deregulation
Texas' deregulated electricity market resulted in higher electricity costs than those paid by people in the state served by traditional utilities, according to an analysis by The Wall Street Journal. Texas deregulated power generation nearly 20 years ago, shifting away from full-service regulated utilities for power generation. The change was supposed to provide reliable, cheaper power, but it created the dynamics that left millions of Texans without electricity, or with exorbitant power bills, during last week's bitter cold. The roughly 60 percent of Texans who are customers served by the deregulated industry have paid $28 billion more for their power since 2004 than they would have under rates charged by the state's traditional utilities, the Journal found.
Australia passes amended law forcing Google and Facebook to pay for news
Australia's Parliament on Thursday passed final amendments to a law aiming to force Google and Facebook to pay for news content. The amendments were part of an agreement reached Tuesday between Treasurer Josh Frydenberg and Facebook CEO Mark Zuckerberg. In exchange for the changes, Facebook agreed to lift a ban on accessing and sharing news by Australian users. Rod Sims, the competition regulator who drafted the so-called News Media Bargaining Code, said the law, which can now take effect, will help "address the market power that clearly Google and Facebook have." He added: "Google and Facebook need media, but they don't need any particular media company, and that meant media companies couldn't do commercial deals." Google has already reached deals with several major Australian news outlets.