The daily business briefing: April 20, 2021
Fatal crash of driverless Tesla prompts an investigation, Altria shares dive on news of possible rule to cut nicotine levels, and more
Regulators investigate fatal crash of driverless Tesla
The National Highway Traffic Safety Administration on Monday vowed to "immediately" investigate a fatal weekend crash in Spring, Texas, involving a Tesla vehicle that apparently had no driver. Two men reportedly were killed when the 2019 Tesla Model S electric car slammed into a tree and caught fire. One of the victims was in the front passenger seat; the other was in the rear passenger seat. The National Transportation Safety Board said it also was sending two investigators to analyze the vehicle's operation and the fire. Tesla's Autopilot and Full Self-Driving technology do not make the cars fully safe for operation without a driver. Tesla shares plunged by more than 3 percent Monday on the news of the case.
Tobacco shares fall on report Biden administration considering nicotine cuts
Shares of Altria, British American Tobacco, and other big tobacco companies dropped sharply on Monday after The Wall Street Journal reported that the Biden administration was considering requiring cigarette makers to cut nicotine to non-addictive levels. Altria and British American Tobacco dropped by more than 6 percent in regular trading. Altria fell another 2 percent in after-hours trading. The Federal Drug Administration and National Institutes of Health funded research that showed when nicotine was almost completely removed from cigarettes, smokers were more likely to quit or turn to alternatives that are less harmful, like lozenges or gum, the Journal reported. The administration is also weighing whether to ban menthol cigarettes, which studies have shown to make it harder for smokers to quit.
United Airlines reports larger-than-expected loss
United Airlines on Monday reported a $2.4 billion adjusted first-quarter net loss driven by rising fuel costs and flight reductions caused by the coronavirus pandemic. The loss exceeded the $2.23 billion loss expected by analysts, according to IBES data from Refinitiv. The carrier's average fuel cost rose to $1.74 per gallon, a 30 percent jump compared to the previous quarter. Passenger traffic dropped by 52 percent compared to the same period last year. United said it expected fuel costs to rise another 5 percent in the second quarter, although it forecast a return to profitability later this year. It also said it expected to increase capacity as more people become willing to travel as coronavirus infection rates fall and more Americans are vaccinated.
Venmo adds feature letting users buy, sell cryptocurrencies
PayPal announced Tuesday that it had launched Crypto on Venmo, a service allowing users to buy and sell cryptocurrency on the payment platform. Venmo users will be able to buy Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, with stakes as small as $1. Crypto also will offer guides on how cryptocurrencies work. The new offering in the Venmo app comes as cryptocurrency prices rise on signs they are gaining broader acceptance as investments and forms of payment. "Crypto on Venmo is a new way for the Venmo community to start exploring the world of crypto, within the Venmo environment they trust and rely on as a key component of their everyday financial lives," said Darrell Esch, senior vice president and general manager at Venmo. PayPal's stock has gained 14.4 percent this year, although it edged down by 0.1 percent in pre-market trading on Tuesday.
Stock futures mixed after Dow, S&P retreat from last week's records
U.S. stock index futures were mixed early Tuesday after the Dow Jones Industrial Average and the S&P 500 pulled back from record highs on Monday. Futures for the Dow and the S&P were down by less than 0.1 percent several hours before the opening bell. Those tied to the Nasdaq were up by 0.1 percent. The major averages fell on Monday as technology stocks continued to struggle. The Dow fell by 0.4 percent and the S&P 500 dropped by 0.5 percent. The tech-heavy Nasdaq lost 1 percent, as Facebook, Amazon, and Microsoft all fell. After last week's records, "People are reassessing, waiting for news flow that might indicate that growth and inflation remain on track," said Caroline Simmons, U.K. chief investment officer at UBS Asset Management.