The daily business briefing: March 2, 2021
Biden urges senators to get behind $1.9 trillion relief package, Zoom shares jump after strong earnings report, and more
Biden rallies Senate support for $1.9 trillion relief package
President Biden on Monday launched a bid to rally Senate Democrats behind his $1.9 trillion coronavirus relief package ahead of a crucial vote this week. Democrats don't have a vote to spare in the evenly divided Senate, where some moderate Democrats have expressed reluctance over the $350 million Biden wants to send state and local governments, and about his plan for special unemployment benefits. "The president's focus this week and in coming weeks, until it's passed, is on the American Rescue Plan," White House Press Secretary Jen Psaki said Monday. "It's absolutely critical Congress act, and we certainly hope they do that as quickly as possible." The House passed its version of the legislation on Saturday, but the Senate is expected to make some changes.
Zoom shares surge after earnings exceed expectations
Zoom shares jumped by as much as 11 percent in after-hours trading after the video-conferencing company reported quarterly earnings and guidance that exceeded Wall Street's expectations. Zoom reported adjusted fourth-quarter earnings of $1.22 per share, beating the 79 cents per share predicted by analysts, according to Refinitiv. Revenue soared by 369 percent year over year as people relied on the company's services more heavily for learning, working, and socializing during the coronavirus pandemic. Zoom said it expected 95 cents to 97 cents in adjusted earnings per share in the first quarter of 2021 on just over $900 million in revenue, exceeding expectations of 72 cents per share on $829.2 million in revenue. Zoom's guidance would amount to revenue growth of about 175 percent.
Texas sues Griddy Energy over sky-high bills
Texas Attorney General Ken Paxton filed a lawsuit on Monday accusing Griddy Energy and Griddy Holdings of "false, misleading, and deceptive advertising and marketing practices" after the company sent exorbitant bills to Texans during the recent winter storm that caused a spike in demand for heat and hobbled the state's deregulated power grid. Griddy "passed skyrocketing energy costs to customers with little to no warning, resulting in consumers paying hundreds or even thousands of dollars each day for electricity," Paxton, a Republican, said in a statement. Paxton said the company misled customers about the risks inherent in its pricing scheme, and he vowed to hold the company "accountable for their escalation of this winter storm disaster." Most Texans pay fixed power rates, but some choose to pay spot prices provided through Griddy.
Stock futures pull back after Monday's surge
U.S. stock index futures fell early Tuesday after Monday's surge. Futures for the S&P 500 were down by 0.5 percent several hours before the opening bell after the index had its best day since June, gaining 2.4 percent on Monday. Futures for the Dow Jones Industrial Average and the tech-heavy Nasdaq were down by 0.3 percent and 0.6 percent, respectively, early Tuesday. The Dow rose by nearly 2 percent on Monday, while the Nasdaq jumped by 3 percent. Stocks fell last week as bond prices dropped and yields surged, rattling many investors. Monday's stock gains came as bond markets stabilized. "We're just taking a breather after yesterday," said Fahad Kamal, chief investment officer at Kleinwort Hambros. "The state of the bond market is driving everything."
Volvo aims for fully electric car lineup by 2030
Volvo announced Tuesday that its car lineup will go fully electric by 2030. The decision by the Swedish company, now owned by China's Zhejiang Geely Holding Group, came after several other automakers launched plans to phase out fossil-fuel engines within a decade, as carmakers facing tougher carbon-emission standards in Europe and China rush to produce more zero-emission models. "I am totally convinced there will be no customers who really want to stay with a petrol engine," Volvo Chief Executive Håkan Samuelsson said. "We are convinced that an electric car is more attractive for customers." Volvo said that by 2025 it expected half of its sales to be electric vehicles, with the rest hybrids.