Company Highlights: Amazon Data Treasure, Tesla Stock Split
Tesla hopes new investors will jump in after stock split
NEW YORK — Unlike its cars, Tesla shares are about to get cheaper. Tesla is splitting its stock 3-for-1, so after markets close on Tuesday, investors will receive two additional Tesla shares for each one they held on Aug. 17. In theory, this should send Tesla’s stock price down about two-thirds before trading begins Wednesday at around $290. Stock splits don’t make a company more valuable or profitable, but the hope is that the stock seems affordable to more investors. Tesla joins stock market heavyweights Amazon and Alphabet, Google’s parent company, in splitting their high-priced shares this year.
Whistleblower accuses Twitter of cybersecurity negligence
SAN FRANCISCO — A former Twitter security chief has alleged the company misled regulators about its weak cybersecurity defenses and its negligence in trying to root out fake accounts that spread misinformation, according to a whistleblower complaint filed with US officials. Peiter Zatko, Twitter’s chief security officer until his firing earlier this year, filed the complaints last month with the U.S. Securities and Exchange Commission, Federal Trade Commission and Department of Justice. . A whistleblower group says Zatko has exhausted all attempts to address his issues at the company. Several members of Congress are calling for an investigation.
Stocks plunge as stabilizing yields calm Wall Street after fall
NEW YORK — Stocks posted modest losses on Wall Street as stabilizing Treasury yields helped calm the market after its worst fall in months. The S&P 500 slipped 0.2% on Tuesday. The margin decline follows Monday’s sharp 2.1% decline, following its first losing week in the past five. Volatility has returned to Wall Street after what had been a strong summer as concerns grow over how aggressively the Federal Reserve will raise interest rates. Recent comments from Fed officials have dampened hopes for a less aggressive Fed. Returns were mixed on Tuesday after weaker than expected readings on the economy.
New tax credits for electric vehicles raise talk of a trade war
WASHINGTON — A new tax credit for U.S. buyers of qualifying North American-made electric vehicles in the Cut Inflation Act has sparked allegations of unfair trade practices overseas. The Climate Change and Health Care Bill was signed into law last week. It includes a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. The vehicle must contain a battery made in North America with 40% of the metals mined or recycled on the continent. The European Commission says the new tax credit discriminates against foreign producers and calls the credits “a potential new transatlantic trade barrier”. And battery rules are getting tougher over time, with only a few US automakers able to produce qualifying vehicles.
Biden administration projects $1.03 billion deficit, down $400 billion
WASHINGTON — The Biden administration expects this year’s budget deficit to be nearly $400 billion lower than it estimated in March, in part due to higher-than-expected revenue, reduced spending and an economy that has recouped all of the jobs lost during the multi-year pandemic. In full, this year’s deficit will decline by $1.7 trillion, representing the largest nominal decline in the federal deficit in the American history, according to the Office of Management and Budget. Despite the gains, the administration said Tuesday it is forecasting a deficit of $1.03 trillion for the budget year ending Sept. 30. This figure means a move away from the record deficit in 2020, which reached $3.13 trillion.
Macy’s and Nordstrom cut earnings and stock views
NEW YORK — Nordstrom joined Macy’s in cutting its full-year earnings and sales outlook despite second-quarter results that beat Wall Street forecasts. Both retailers suffer from an affliction that plagues most of their competitors: a glut of unsold inventory that they resort to pricing at deep discounts to move. Almost all major retailers have said in recent weeks that shoppers are heading to the store less, and when they do, they are looking for deals. Some are turning to cheaper alternatives. Last week, Kohl cut its sales and profit forecast for the year, following intensified price cuts to get rid of unwanted goods. Target and Walmart also said last week that shoppers were cutting back and sticking to the basics.
Yelp to add more flags to anti-abortion pregnancy centers
SAN FRANCISCO — Online review site Yelp announced Tuesday that it is rolling out a new feature to protect users seeking abortions from being misled about the anti-abortion pregnancy centers listed on its platform. These centers are generally affiliated with religions and discourage clients from having abortions. On Tuesday, Yelp said it would place a consumer notice on the listings informing users that centers “generally provide limited medical services and may not have licensed medical professionals on site.” In 2018, moderators at the San Francisco-based company began recategorizing lists of organizations as “crisis pregnancy centers” or “faith-based crisis pregnancy centers.” The organizations had previously categorized themselves as reproductive health services and medical centers, among others.
The S&P 500 slipped 9.26 points, or 0.2%, to 4,128.73. The Dow Jones Industrial Average fell 154.02 points, or 0.5%, to 32,909.59. The Nasdaq eased 0.27 points, or less than 0.1%, to 12,381.30. The Russell 2000 Small Business Index rose 3.40 points, or 0.2%, to 1,919.14.