U.S. Stock Market Indexes Ends Higher
The main U.S. stock market benchmarks ended mostly higher on Tuesday as investors turn to the two-day central-bank meeting. The landmark meeting between United States President Donald Trump and North Korea’s Kim Jong Un was the focus of attention before the members of the Federal Reserve sit down for a crucial decision.
The Dow Jones Industrial Average moved between small gains and losses but failed to register a fifth straight day of gains after closing lower at 25,320.73. Meanwhile, the S&P 500 Index added 4.85 points (+0.2%) while the Nasdaq Composite Index advanced 43.87 points (+0.6%).
Fed’s Rate Hike Announcement Expected Today
The Federal Reserve is expected to announce an interest rate hike today at the conclusion of the central bank’s two-day meeting. Unless the schedule has changed, Fed chairman Jerome Powell will also hold a press conference after the announcement.
Investors are keen on finding out the Fed’s plans to raise interest rates further this year. Chairman Powell said last March, “My colleagues and I are committed to communicating as clearly as possible about what we’re doing and why we’re doing it.” The Fed chairman would likely proceed to announce changes if there are any.
AT&T-Time Warner Merger Gets the Green Light
Judge Richard Leon of the U.S. District Court for the District of Columbia found no compelling reason to block AT&T Inc.’s (T) planned acquisition of Time-Warner Inc. (TWX). On Tuesday, the federal judge approved the $85 billion deal and ended the six-week antitrust trial in which the U.S. Department of Justice filed a case to thwart the merger.
The court ruling paves the way for Comcast Corp. (CMCSA) to pursue its all-cash offer to acquire some of the assets of Twenty-First Century Fox Inc. (FOX) despite the pending all-stock offer of Walt Disney Co. (DIS). AT&T’S main rival, Verizon Communications Inc. (VZ), could also bid for media company UBS’ Hodulik in case they do not proceed with plans to partner with independent media companies.
ZTE Corp. Loses $3 Billion in Market Value
Investors wiped about $3 billion off the market value of ZTE Corp. which is China’s No. 2 telecommunications equipment maker. The Chinese telecommunications giant resumed trading on Wednesday after agreeing to pay the U.S. government $1.4 billion in fines.
ZTE’s operation was crippled when the U.S. imposed a seven-year supplier ban on the company last April. Now that the ban is lifted, ZTE confirmed on Tuesday that its board of directors would be replaced within 30 days of the June 8 U.S. order.
Tesla Announces Job Layoffs
In an attempt to become profitable without jeopardizing the critical production ramp-up for its Model 3 sedan, Tesla Inc. (TSLA) is laying off employees across the company. Approximately 9% of the total workforce would be affected.
The information was contained in an email released on Tuesday and sent to the staff by no less than CEO Elon Musk. The email stated that the cuts were part of a simplification of the electric car maker’s management structure promised last month. The email also said the decision to layoff was difficult but was necessary to reduce costs and become profitable.