Friday, February 4, 2022
Stocks Mark 2nd Weekly Gain in a Row. U.S. stocks mostly closed higher Friday, as investors focused on large-capitalization companies’ quarterly results, which helped ease concerns about a more aggressive Federal Reserve following a much stronger-than-expected January jobs report. The Dow Jones Industrial Average closed down 21 points, or less than 0.1%, to reach 35,090. The S&P 500 index rose 23 points, or 0.5%, to end near 4,501. The Nasdaq Composite index advanced 219 points, or 1.6% to 14,098. For the week, the Dow rose 1.1%, the S&P 500 advanced 1.6%, and the Nasdaq climbed 2.4%.
U.S. Added 467,000 Jobs in January. Omicron’s Impact Was Less Than Feared.
The U.S. economy created 467,000 jobs last month, the Labor Department reported on Friday, beating economists’ expectations and suggesting the Omicron coronavirus variant may have caused less damage to the labor market than anticipated.
The new data underscore how each successive wave of the coronavirus has had an increasingly milder effect on the economy, as many American consumers learn to live with the virus. It suggests the U.S. labor market is stronger than previously thought—economists had been expecting a gain of only 150,000 jobs in January—and will bolster the Federal Reserve’s hawkish pivot, as the central bank gears up to raise interest rates, likely next month.
Job-growth estimates for November and December were revised significantly upward in the Friday report, showing the creation of an additional 709,000 more jobs than what was previously reported. The unemployment rate rose slightly to 4% from 3.9% as the labor-force participation rate ticked upward as well, to 62.2% from 61.9%.
Amazon Reports Strong Results, Raises Price of Prime
Amazon.com reported strong fourth-quarter results this week, driven by strong growth in both its AWS cloud unit and its growing advertising business.
Amazon also said it is increasing the price of its Amazon Prime membership for the first time since 2018. Amazon will now charge $14.99 a month, up from $12.99, or $139 on an annual basis, up from $119. The increase will be effective on Feb. 18 for new members, and starting March 25 for current members on the date of their renewal.
U.S. Deploying 3,000 Troops to European Allies in Russia-Ukraine Crisis
President Biden is directing the Pentagon to deploy more than 3,000 American troops to bolster the defense of European allies in the first major movement of U.S. forces in Russia’s military standoff with Ukraine, U.S. officials said.
Biden is sending roughly 2,000 troops from Fort Bragg, N.C., to Poland and Germany this week and also repositioning about 1,000 troops that are part of a Germany-based infantry Stryker squadron to Romania, on the North Atlantic Treaty Organization’s eastern flank closest to Russia, the officials said.
Government Funding Runs Out in February. Can a Shutdown Be Averted?
Congress has a little more than two weeks to pass legislation that funds government and avoids a shutdown, adding pressure to a jam-packed February. Current government funding expires Feb.18.
Democrats are rushing to put the finishing touches on a long-term omnibus spending bill, which would fund the government throughout the 2022 fiscal year. This could be their last chance to amend spending in line with their priorities before the midterm elections, when they may lose control of Congress.
Alphabet Stock Split Could Permit Tech Giant to Join Dow Industrials
Alphabet‘s surprise move to split its shares 20-for-1 could pave the way for the tech giant to enter the Dow Jones Industrial Average.
Alphabet announced the split this week in conjunction with its fourth-quarter earnings, which topped analyst estimates. Alphabet earned $30.69 a share in the period, against the FactSet consensus of $27.80.
Southwest Airlines to Bring Back In-Flight Alcohol Sales on Feb. 16
Southwest Airlines plans to resume alcohol sales on most of its flights this month, nearly two years after suspending the service because of a spike in disruptive passenger behavior.
The move means that American Airlines is now the only major U.S. airline still not serving alcohol in coach.
GM and Ford Are Talking Up EV Plans. The Biggest Beneficiary Might Be Tesla.
Anyone watching the NFL’s league championship games this past Sunday might have noticed that auto makers are starting to pushing their EV products hard.
The industrywide embrace of electric vehicles brings competition for EV leader Tesla, but the push brings some benefits, too.
Kohl’s Adopts a Poison Pill, Saying Offers Are Too Low
Kohl‘s believes the terms of a potential sale would-be acquirers have floated fall short of the company’s value. It is imposing a shareholder rights plan, also known as a poison pill, so that the board can consider proposals in an orderly manner.
“We have a high degree of confidence in Kohl’s transformational strategy, and we expect that its continued execution will result in significant value creation,” said Kohl’s Chairman Frank Sica. “The board is committed to acting in the best interest of shareholders and will continue to closely evaluate any opportunities to create value.”
Hertz Names Former Goldman Executive Stephen Scherr as CEO
Rental car company Hertz Global named Stephen Scherr, a former chief financial officer at Goldman Sachs, as its new chief executive officer.
Scherr, who has worked at Goldman for more than 28 years, will succeed Mark Fields, a former Ford Motor CEO who has been the interim chief at Hertz since October.
Royal Caribbean Pushes Back Profitability Forecast Amid Omicron
Royal Caribbean‘s losses moderated in the fourth quarter, but bookings took a hit from the Omicron coronavirus variant late last year.
Looking ahead, newly appointed CEO Jason Liberty said in a release Friday morning that “we expect 2022 will be a strong transitional year,” adding that 50 of the company’s 61 ships had returned to operations as of Dec. 31.
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