U.S. Stocks Waver After Tech Selloff – Wall Street Journal, 2/26/2021

• U.S. stocks struggled to right themselves Friday, one day after a sharp selloff in technology stocks amplified fears that equity valuations got overheated on the back of low bond rates and central-bank policy.
• The Dow Jones Industrial Average fell 0.9%, or 273 points, and the S&P 500 was down 0.1%.
• The Nasdaq Composite rose 0.5%, while equities markets overseas were down as well.
• A wave of selling in U.S. government bonds on Thursday, combined with the Nasdaq Composite’s biggest fall since October, took some investors by surprise this week.
• Yields on U.S. Treasurys, considered among the safest assets to own, have been rising in recent days as money managers bet on a rapid economic rebound.
• The rollout of Covid-19 vaccines, a fresh fiscal stimulus package promised by President Biden, and the Federal Reserve’s pledge to keep its easy-money policies in place have buoyed sentiment for many weeks.
• But the improving returns from bonds and the technology sector’s sharp rally in recent years is now fueling concerns that valuations of some stocks are too high.
• In bond markets, the yield on the 10-year Treasury ticked down to 1.49%, from 1.513% on Thursday, its highest closing level in a year.
• Fresh data released Friday showed that U.S. consumer spending increased 2.4% in January after household incomes got a boost from the latest round of stimulus checks. Investors expect Congress to pass another fiscal aid package in the coming weeks.

Coronavirus Live Updates: New U.S. Cases Top 70,000 for Third Day in a Row – Wall Street Journal, 2/26/2021

• Newly reported coronavirus cases in the U.S. topped 70,000 for the third consecutive day, but hospitalizations continued to decline as vaccination campaigns across the country ramped up.
• The U.S. reported just over 75,000 new cases for Thursday, according to data compiled by Johns Hopkins University that was published early Friday on the East Coast.
• Hospitalizations fell further, with 52,669 Covid-19 patients requiring treatment in hospitals as of Thursday, the lowest level since Nov. 4, according to the Covid Tracking Project.
• The number of Covid-19 patients in intensive care units declined to 10,846, 48% lower than levels a month earlier.
• Nearly 14% of the U.S. population has now been given at least one dose of a Covid-19 vaccine, according to a Wall Street Journal analysis of data from the Centers for Disease Control and Prevention.
• A committee of independent medical experts is convening Friday to review Johnson & Johnson’s single-dose Covid-19 vaccine, the final step before U.S. health regulators decide whether to authorize use of a third shot.
• The panel, which includes 22 medical specialists in fields like internal medicine, pediatrics, vaccines and epidemiology, regularly advises the U.S. Food and Drug Administration about experimental vaccines.
• It voted to recommend shots from Pfizer and Moderna before the agency authorized them in December.
• If the panel votes to endorse the J&J shot, the agency is expected to permit the product’s wide use as soon as Saturday.

Salesforce full-year profit forecast disappoints, shares drop – Reuters, 2/25/2021

• Salesforce.com on Thursday forecast full-year profit that was below market expectations, sending the shares of the online software company down 3.9% in extended trading.
• Revenue in the quarter ended Jan. 31 rose to $5.82 billion from $4.85 billion a year earlier, driven by increased demand for its cloud-based software.
• Analysts on average expected revenue to be $5.68 billion, according to IBES data from Refinitiv.
• Excluding items, the company earned $1.04 per share, beating estimates of 75 cents.
• The company raised its fiscal 2022 revenue forecast slightly to between $25.65 billion and $25.75 billion, above analysts’ average estimate of $25.42 billion.
• The largest provider of customer relationship management software forecast full-year adjusted earnings per share between $3.39 and $3.41, below estimates of $3.49 per share.

Airbnb bookings rebound as lockdown-weary Americans step out for short trips – Reuters, 2/25/2021

• Airbnb reported better-than-expected gross bookings on Thursday in its first quarterly earnings report since going public, indicating a strong rebound in demand for vacation rentals in North America as COVID-19 pandemic curbs ease.
• Airbnb’s overall revenue fell 22% to $859 million, while adjusted loss before interest, taxes, depreciation and amortization shrank to about $21 million from $276.4 million, a year earlier, helped by cost cuts.
• Analysts on average expected Airbnb to post revenue of $747.4 million and adjusted loss before interest, taxes, depreciation, and amortization of $122 million.
• Leisure travelers in the company’s biggest market stepped out to nearby locations that could be accessed by a car and are within 50 miles, lifting daily booking rates up by 13%, Airbnb said.
• The company’s gross bookings fell 31% to $5.9 billion in the fourth quarter ended Dec. 31, but beat market expectation of $5.17 billion, according to IBES data from Refinitiv.
• Nights and experiences booked at Airbnb dropped 39% to 46.3 million units, but was better than the Wall Street’s estimate of a 47% drop.
• Airbnb expects wider vaccine rollouts in 2021 to help a significant rebound in travel. It said both nights booked as well as gross bookings in the current quarter are expected to be higher than a year ago, but lower than the same period in 2019.

DoorDash sees orders slowing on vaccine rollouts; shares tumble – Reuters, 2/25/2021

• Food delivery company DoorDash expects fewer customer orders in the back half of the year as the vaccine rollouts embolden more people to venture out to restaurants and cafes, after nearly a year of staying indoors.
• Fourth-quarter revenue rose more than three-fold to $970 million.
• But net loss widened to $312 million from $134 million a year earlier.
• DoorDash said the vaccine rollouts and consumers returning to stores would coincide with the seasonally softer second and third quarters.
• The company forecast 2021 marketplace gross order value between $30 billion and $33 billion and in the range of $8.6 billion to $9.1 billion for the current quarter. In the fourth quarter ended Dec. 31, they rose 227% to $8.2 billion.
• First-quarter adjusted earnings before interest, taxes, depreciation, and amortization are expected to take a hit from recently imposed caps on fees it collects from restaurants and the passage of Proposition 22, a law that classifies its drivers or “dashers” as contractors.

Dell beats revenue estimates on buoyant demand for desktops, notebooks – Reuters, 2/25/2021

• Dell Technologies beat Wall Street estimates for holiday-quarter revenue on Thursday, helped by demand for its desktops and notebooks as most offices continued to work remotely during the COVID-19 health crisis.
• Total revenue rose 9% to $26.1 billion in the three months ended Jan. 29, while analysts had estimated $24.5 billion, according to IBES data from Refinitiv.
• Revenue from its client solutions group, which includes desktop PCs, notebooks and tablets, was $13.8 billion, up 17% from a year earlier. The company said it had shipped a record 50.3 million units during 2020.
• Revenue from its data center business was $8.8 billion in the quarter, in line with a year earlier, while sales at VMware was $3.3 billion. Dell plans to spin off its 81% stake in the software unit to help reduce debt.
• Net income attributable to the company rose to $1.2 billion from $408 million a year earlier, as it shaved off administrative costs by 19% in the quarter.

Beyond Meat Signs Supply Deals With McDonald’s, Yum – Wall Street Journal, 2/26/2021

• Beyond Meat said it struck deals to supply plant-based meat imitations to McDonald’s, KFC and Pizza Hut, a victory in the company’s effort to take meat alternatives into the American dining mainstream.
• Beyond’s sales for 2020’s fourth quarter increased 3.5% to $102 million, despite its U.S. food service sales dropping 43% from the same quarter a year ago.
• The company’s quarterly loss of $25.1 million came in bigger than analysts projected and grew from the third quarter of 2019, when Beyond reported a $19 million loss.
• Under separate agreements announced Thursday, California-based Beyond said it would be the preferred supplier for a new plant-based burger from McDonald’s, while helping develop new plant-based menu items for Yum Brands chains KFC, Pizza Hut and Taco Bell.
• Yum’s partnership with Beyond will focus on creating new menu items that expand on the companies’ earlier introductions, which included Beyond-made fried chicken tested by KFC in 2019, and Beyond-made toppings launched in 2020 at Pizza Hut.

AT&T Carves Out Pay-TV Business in Deal With TPG – Wall Street Journal, 2/25/2021

• AT&T agreed to sell a stake in its pay-TV unit to private-equity firm TPG and carve out the struggling business, pulling the telecom giant back from a costly wager on entertainment.
• The transaction would move the DirecTV and AT&T TV services in the U.S. into a new entity that will be jointly run by the new partners. AT&T will retain a 70% stake in the business. TPG will pay $1.8 billion in cash for a 30% stake.
• The deal values the new company at $16.25 billion with about $6.4 billion of debt. That is well below the $49 billion—about $66 billion including debt—that the Dallas company paid to buy international satellite operator DirecTV in 2015.
• AT&T said it would get about $7.8 billion in cash from the transaction to help pay down debts.
• Those proceeds include $5.8 billion that the new company will borrow from banks and pay back to AT&T.

Costco to Raise Minimum Hourly Wage to $16, as Congress Debates $15 – Wall Street Journal, 2/25/2021

• Costco Wholesale will pay its U.S. workers at least $16 an hour starting next week, the company’s chief executive told Congress on Thursday as lawmakers debate raising the federal minimum to $15 an hour.
• The warehouse retail chain’s minimum U.S. wage has been $15 an hour, the same as the starting wage at Amazon.com and Target. Rival Walmart recently said it would raise wages for some workers but keep its starting wage at $11 an hour.
• Costco has long paid its store workers more than most competitors, in part to reduce turnover as part of its low-cost operating model.
• Costco Chief Executive Craig Jelinek said at the hearing Thursday that Costco’s average wage for hourly workers is $24 an hour.
• “This isn’t altruism,” Mr. Jelinek said. “It helps in the long run by minimizing turnover, maximizing employee productivity, commitment and loyalty.” In the U.S., employees average more than 9 years with the company, he said.
• Walmart’s average U.S. wage after recent increases take effect will be more than $15 an hour, the company has said.

Tesla Temporarily Halted U.S. Production Over Parts Shortage – Wall Street Journal, 2/26/2021

• Tesla Chief Executive Elon Musk said the company paused activity at its lone U.S. car plant in Fremont, Calif., because of parts shortages but has restarted operations.
• “Fremont shut down for two days (parts shortages) & restarted yesterday,” Mr. Musk tweeted Thursday.
• The auto industry has been grappling with a global shortfall of semiconductors that has caused production-line shutdowns.
• Companies such as General Motors., Ford Motor and Volkswagen have idled some of their production capacity as they await critical parts.
• Mr. Musk didn’t elaborate on the nature of the parts shortages. Tesla didn’t immediately respond to a request for comment.

Fisker mulls battery cell manufacturing in Europe, U.S. with major supplier – Reuters, 2/26/2021

• Fisker CEO said on Thursday that the electric vehicle startup is considering setting up a battery cell manufacturing facility with an unidentified major supplier in Europe or the United States, to secure stable supplies of the key component.
• Fisker, which was once a rival to Tesla Motors in the nascent market for electric luxury cars, struggled with the recall of batteries made by its previous supplier, A123, which later filed for bankruptcy.
• Fisker, which is yet to produce saleable vehicles, has been partnering with companies for manufacturing its electric cars to speed up vehicle development and production.
• On Wednesday, Fisker said it would work with Apple supplier Foxconn to produce more than 250,000 vehicles a year beginning in late 2023.
• Fisker’s production is on track to start in the fourth quarter of next year, with a starting price of $37,499.

Australia lifts ban on Boeing 737 MAX, among first in Asia-Pacific – Reuters, 2/26/2021

• Australia said on Friday it would lift a near two-year ban on flights involving Boeing Co 737 MAX planes, becoming among the first in the Asia-Pacific region to do so.
• “We … are confident that the aircraft are safe,” Graeme Crawford, acting chief of the Civil Aviation Safety Authority, said in a statement.
• The regulator has accepted comprehensive return-to-service requirements set by the U.S. Federal Aviation Administration (FAA) for the 737 MAX, he added.No Australian airlines operate the 737 MAX, but Virgin Australia has 25 of the planes on order. Singapore Airlines Ltd and Fiji Airways operated them on flights to Australia.