Dow Jones Up but Broader Market Struggles
On Thursday, the Dow Jones surged nearly 300 points in early trading before closing at 24,873.66 (+115.54). United Health contributed to the gains but Boeing was hit for the third straight session. The S&P 500 and Nasdaq closed lower as the market continues to assess the impact of the looming trade war.
The White House is looking at the possibility of imposing tariffs of at least $30 billion on Chinese importations that will form part of anti-China measures. Investors fear the retaliatory trade actions by countries to be affected by Trump’s tariff drive.
Trump Mulls Sanctions vs. Russia
U.S. President Donald Trump is hinting that the country will take a tougher stance on Russia by imposing new sanctions. The hint was accompanied with a condemnation of the recent chemical attack in Britain where many allege that Moscow is behind it.
Trump joined the leaders of Britain, France, and Germany in issuing a statement that said they “abhor the attack” on aformer Russian double agent in Salisbury, England.
Meanwhile, the U.S. Treasury said sanctions are forthcoming and directly blamed Russia for the cyberattacks that targeted U.S. power grids and nuclear facilities. Moscow has denied any involvement in the chemical attack.
Broadcom to Pursue Smaller Chipmakers
After failing in its takeover bid to acquire Qualcomm Inc. (QCOM), Broadcom Ltd. (AVGO), would be pursuing smaller targets. They missed out on what could have been the blockbuster merger in the tech sector after U.S. President Donald Trump blocked its $117 billion bid for Qualcomm due to national security concerns.
Broadcom announced on Thursday they are moving on and likely to pursue smaller acquisitions of chipmakers. The company also advised investors that its smart phone chip business would see a drop in demand this quarter from a North American customer and an increase from South Korea. Most analysts point to Apple Inc. (AAPL) as the North American customer and Samsung Electronics as the Korean client.
Euro Comm Wants to Impose Tax on U.S. Tech Firms
Based on the draft seen by Reuters, the European Commission is set to present a proposal to impose a 3% tax on the turn over by large companies with significant digital revenues. Facebook and Google could be facing the said tax.
The proposal is still subject to changes although it is expected to be adopted by next week. If it gets the support of theEU states and its lawmakers, the tax would only apply to companies with annual worldwide revenues above 750 million euros ($924 million) and annual “taxable” revenues above 50 million euros in the EU. The new levy would apply across the 28 EU countries.
Laid-Off Toys ‘R’ Us Employees Won’t Get Severance Pay
About 31,000 U.S. employees will be out of jobs when the stores of the Toys “R” Us chain closes down. Many employees told CNN the closure caught them by surprise, even though the bankruptcy was filed since September last year.
Typically, severance packages accompany mass layoffs but in cases of bankruptcy and stipulations in bankruptcy laws, laid-off employees won’t get any. Thus, Toys ‘R’ Us employees will only get benefits such as health insurance and matching 401(k) payments from the company.