Disconnect? Stocks rising despite fears over the coronavirus
NEW YORK (AP) — The coronavirus outbreak has exposed a seeming disconnect between the financial markets and science. Health experts are uncertain how far the virus out of China will spread and how bad the crisis will get, yet stock markets are rallying as if they’re not expecting more than a modest hit to the global economy. Investors aren't pretending to know any more than the scientists. But they're taking into account other factors, such as the economic tools available to governments to counter the financial damage.
How's the economy? Fed increasingly turns to private data
WASHINGTON (AP) — About a year ago, Federal Reserve officials were nervous. Markets were cratering. Fear about a trade war was rising. The officials needed to know if the turmoil was chilling consumer spending. Problem was, a partial shutdown of the government had halted the release of most economic data. So officials did something they couldn't have done during previous shutdowns. They turned to consumer spending figures from First Data, a card payment company whose figures showed that most consumers were shrugging off the upheaval. Weeks later, when the government's data was finally released, it closely tracked First Data's figures. The experience seems to have whetted the Fed's appetite for private sources of data that can help assess the economy's health.
Virus impact: Automakers look at restarting China operations
BEIJING (AP) — Automakers are considering resuming operations in China amid efforts to contain a virus outbreak while the impact on other companies spreads. Some shops and offices reopened this week after the Lunar New Year holiday was extended to keep the public at home. Nissan and Toyota said they were considering reopening factories, while Hong Kong's Cathay Pacific Airways asked 27,000 employees to take unpaid leave while it struggles with falling revenue. Many factories, restaurants, cinemas and other businesses still are closed. Worldwide, trade shows and other activity has been affected by virus concerns and the absence of Chinese participants.
What for W-4? Why you should care about the new tax form
The IRS has introduced a new Form W-4 that must be used by all employers in 2020 to better accommodate recent changes to the tax law. It's the biggest overhaul of the form in decades. The new form can require a bit more legwork but in return, the IRS says it will yield more accurate results for withholdings. Anyone who has a new job or wants to update their tax information with their employer should take a look. The more accurate your W-4, the more accurate your withholdings are and that can make a big difference at tax time.
Merck to spin off assets with $6.5B in sales; 4Q profit up
Drugmaker Merck beat Wall Street's fourth-quarter profit expectations. Investors weren't as happy, though, with Merck's plan to spin off its women's health division and some other drugs with $6.5 billion in annual revenues. The maker of cancer blockbuster Keytruda said the two resulting companies each can grow faster and develop more new medicines, benefiting patients. But investors sold off shares, pushing their price down more than 3%. Merck posted a 29% jump in fourth-quarter profit, with net income of $2.36 billion. That's up from $1.83 billion a year earlier. Revenue was $11.87 billion, up 8%.
YouTube, Venmo: AI firm must stop scraping faces from sites
Payment service Venmo has joined YouTube and Twitter in demanding that a facial recognition company stop harvesting user images to identify the people in them. The companies have been sending cease-and-desist letters to New York-based Clearview AI, which works with law enforcement agencies. The small company has drawn scrutiny following investigative reports that detailed its practice of scraping social media for images. Clearview's CEO told CBS that it has a First Amendment right to the 3 billion images it has collected. A company attorney later added that its use of publicly available information is analogous to Google's search engine.
LinkedIn CEO steps aside after 11 years, says time is right
NEW YORK (AP) — The LinkedIn professional networking service is getting a new CEO. Jeff Weiner will become executive chairman after 11 years as CEO of the Microsoft-owned business. Weiner says the timing feels right personally and professionally, with a ready successor. Ryan Roslansky, senior vice president of product, will become CEO as of June 1. Roslansky says LinkedIn's priority of serving the world's professionals isn't going to change. Weiner has been CEO of LinkedIn since 2008. Microsoft bought the company for $26 billion in 2016. Roslansky has been at LinkedIn for more than 10 years and will report to Microsoft CEO Satya Nadella.
US stocks extend rally; S&P 500, Nasdaq at all-time highs
NEW YORK (AP) — Health care and financial companies led a broad rally on Wall Street Wednesday, giving the market its third straight gain. The S&P 500 and the Nasdaq closed at all-time highs. The latest gains came as another batch of solid corporate earnings reports and more encouraging economic data overshadowed concerns about economic fallout from the virus outbreak that originated in China. Bond prices fell, pushing yields higher. Crude oil prices jumped.
The S&P 500 index rose 37.10 points, or 1.1%, to 3,334.69. The Dow climbed 483.22 points, or 1.7%, to 29,290.85. The Nasdaq gained 40.71 points, or 0.4%, to 9,508.68. The Russell 2000 index of smaller company stocks picked up 25.15 points, or 1.5%, to 1,681.92.