Category: Stock Market News

U.S. tech companies could end up paying billions of dollars in new taxes under a plan the European Commission is considering, according to a report by the Financial Times late Wednesday. According to a draft report seen by the FT, a “digital tax” would be be assessed against companies’ revenues rather than profits. The tax, which the FT said was likely to be set at 3%, would apply to tech companies with more than 100,000 users in Europe, and cover everything from ad revenue from Alphabet Inc.’s Google and Facebook Inc. to subscription fees for companies such as Apple Inc. and Spotify AB. The tax, which may be announced next week in Brussels, is estimated to raise about 5 billion euros a year, the FT reported. The tax is likely to face stiff opposition from U.S. tech groups, but a number of EU member states, such as the U.K., France and Germany, complain tech companies don’t pay their fair share in EU taxes.

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The Senate approved a bipartisan bill to roll bank some crisis-era banking regulations Wednesday. The bill would exempt many small and midsize banks from parts of the Dodd-Frank banking reform bill passed in 2010, following the financial crisis. The plan, which was sponsored by Sen. Mike Crapo, R-Idaho, passed 67-31, with the support of 17 centrist Democrats. Supporters say it would free smaller banks from burdensome rules and encourage more lending, while critics says it will hurt consumers and increase risk in the banking industry. The bill will now move to the House, where it is likely to face revisions that could delay its final passage.

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Sears Holdings Corp. shares rose 7.4% in the extended session Wednesday after the company reported earnings. The company reported fiscal fourth-quarter net income of $182 million, or $1.69 a share, compared with losses of $607 million, or $5.67 a share, in the year-ago period. Fourth quarter net income included a $470 million benefit due to the U.S. tax overhaul, and a $72 million charge related to the impairment of the Sears trade name. The company had previously guided for losses of $200 million to $300 million. Revenue fell to $4.38 billion from $6.05 billion in the year-ago period. Sears stock has dropped 73% in the past year, with the S&P 500 index rising 16%.

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Police in Evanston, Ill., have determined that the reported shooting incident at a Northwestern University graduate-student residence hall Wednesday afternoon was a “swatting” hoax. Such hoaxes typically center on an attempt among people connected via online groups or otherwise to outdo one another by drawing massive responses to fictitious reports of criminal activity. The university community had been notified just before 2:40 p.m. local time via text message and on Twitter that a person on campus was in possession of a gun. Recipients of the messages were advised to take shelter in a safe place and await further information and avoid the campus if not already on the premises. The Evanston Police Department said the department was investigating “shots fired” and later added that that it had not immediately located a perpetrator or victim or crime scene but that municipal and university police were continuing to search and secure the area. Just hours earlier, students across the country had participated in a nationwide walkout against gun violence to mark the passage of a month since the massacre at Marjory Stoneman Douglas High School in Parkland, Fla.

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Solid Biosciences Inc. shares plunged in the extended session Wednesday, following a halt, after the muscular dystrophy treatment maker announced a clinical trial had been put on hold. Solid Biosciences shares sank 50%, after closing down 0.5% at $26.31 Wednesday. The company, which focuses on treatments for Duchenne muscular dystrophy, said a study of its treatment SGT-001 was placed on clinical hold by the Food and Drug Administration following an unexpected adverse reaction in one of the patients on the treatment. Following the treatment, the patient was hospitalized for a reduced blood platelet and red blood cell count, and is now without symptoms, Solid said. In late January, gene therapy researcher James Wilson quit Solid Biosciences’s advisory board and the company revealed the FDA had placed a “partial clinical hold” on the SGT-001 study just before Solid priced its initial public offering.

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Oil prices settled higher Wednesday, getting a boost as gasoline prices rose on the back of a weekly drop in U.S. supplies of the fuel. The Energy Information Administration reported a bigger-than-expected 5 million-barrel climb in last week’s crude inventories, but also showed a hefty decline of 6.3 million barrels in gasoline stockpiles. April West Texas Intermediate crude rose 25 cents, or 0.4%, to settle at $60.96 a barrel on the New York Mercantile Exchange. April gasoline settled at $1.924 a gallon, up 3.8 cents, or 2%.

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Tesla Inc. is making “a surprisingly high ratio of flawed parts and vehicles”, contributing to delays with the production of Model 3 sedans and hurting morale, according to a CNBC report Wednesday that cited unnamed current and former Tesla employees. Tesla told CNBC it subjects every vehicle to hundreds of inspections and tests. Tesla shares lost more after the report was published, and were recently down 3% compared with losses under 1% for the S&P 500 index and the Dow Jones Industrial Average.

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Stitch Fix Inc. stock is down 6% to $21.85 in afternoon trading Wednesday after the company’s lock-up period expired, adding more than 37 million shares to the float. The additional shares represent about 35% of the total number of shares outstanding and are mostly held by executives and other early investors. Prior to the lock-up expiring there were 10 million shares available to trade in public markets. The e-commerce company’s lock-up agreement with its underwriters was set to expire in May, but the company met the conditions necessary to allow insiders to sell stock Wednesday, after the company reported its December-quarter results earlier this week. Stitch Fix stock is down 15% since the beginning of the year, as the S&P 500 index has gained 3.4%.

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The Dow Jones Industrial Average traded firmly lower on Wednesday afternoon, amid a broad downturn in U.S. equities led by sharp fall in industrial giant Boeing Co. amid worries of a potential trade war. Shares of the Dow component were cutting about 90 points from the blue-chip benchmark, with the industrial company’s stock down about 4% or $13.21. Most recently, the Dow was off 260 points, or 1%, at 24,747. A $1 move in any one of the Dow’s 30 components equates to a 6.89-point swing in the average. Shares of Boeing Co.’s decline puts them on course to suffer their first official correction in nearly two years, amid continued worries over the impact of President Donald Trump’s plan to impose tariffs on steel and aluminum, which some fear could spark retaliation from China. The stock has now shed 11.4% since the Feb. 27 record close of $364.64. Meanwhile, the S&P 500 index [: SPX] was down 0.6% at 2,747, while the Nasdaq Composite Index was down 0.5% at 7,476.

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The Securities and Exchange Commission filed charges on Wednesday against Theranos Inc., its founder and CEO Elizabeth Holmes, and the former company president Ramesh ”Sunny” Balwani for raising more than $700 million from investors through an elaborate, years-long fraud. The SEC alleged that Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry. The Silicon Valley-based private company Theranos and Holmes have already settled the charges against them. Holmes has agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos. Theranos and Holmes neither admitted nor denied the allegations in the SEC’s complaint and the settlements are subject to court approval. The SEC’s litigation with Balwani is ongoing.

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