The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
BED BATH & BEYOND DEFAULTS
Bed Bath & Beyond is keeping investors on the edge of their seats. Roughly a week after admitting that bankruptcy was a real possibility, the long-struggling home goods retailer has defaulted on sizable lines of credit with JPMorgan and lender Sixth Street. Now the company is trying to figure out what's next. In an SEC filing, it said bankruptcy is one option. It's also seeking an acquisition and negotiating with landlords to lower its rent burden. "These measures may not be successful," the firm admitted. Shares of Bed Bath & Beyond shot up around 5 percent following the news but are down more than 20 percent for the week.
HIRING AND FIRING
There was another round of high-profile layoffs this week and not just from Big Tech. Spotify is cutting 6 percent of its global workforce and overhauling its corporate structure to make up for growing too fast earlier in the pandemic. IBM is cutting 3,900 employees or 1.5 percent of its workforce in anticipation of declining cash flow in 2023, and toy manufacturer Hasbro rounded out the week with plans to terminate 1,000 employees or about 15 percent of its workforce. On the upside, Chipotle announced plans to hire 15,000 workers ahead of "burrito season," the period between March and May that culminates in Cinco de Mayo. The Commerce Department also released the latest gross domestic product numbers, and the U.S. economy grew 2.9 percent in the fourth quarter of 2022, marking a deceleration but still a healthy level of growth.
ACTIVIST INVESTOR VS. SALESFORCE
Activist investors have piled into Salesforce, sparking speculation about the future of the software giant. Both Elliott Investment Management and Inclusive Capital bought large stakes in the company. Right now, the new investors are trying to put a positive spin on the development.
"We look forward to working constructively with Salesforce to realize the value befitting a company of its stature," tweeted Jesse Cohn, managing partner at Elliott. However, these kinds of relationships can often be contentious. In addition, the company is in a sensitive position. It cut about 10 percent of its workforce earlier this month after admitting to over hiring.
WINNERS AND LOSERS
Earnings season is well underway, so there were several companies that got either a boost or a ding this week based on the results. On Friday, shares of Intel sank after a report showing declining revenues, profits, and outlook projections. Microsoft shares, meanwhile, popped around 3 percent for a mix of reasons, with one being excitement around Buzzfeed's announcement that it plans to use artificial intelligence for content. Just last week, the software giant announced plans to cut staff and double down on its investments in AI. Shares of Tesla also shot up at the end of the week more than 10 percent as investors continued to process its strong earnings.
Ford is recalling more than 355,000 of its pickup trucks across the U.S. because of an instrument panel display failure that’s resulted in critical information, like warning lights and vehicle speed, not showing up on the dashboard.
Nvidia reported a 56% increase in second-quarter revenue and a 59% rise in net income compared to a year ago.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Netflix CEO Ted Sarandos claims audiences don't want to watch Netflix movies in theaters, but that seems not to be the case recently.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
