Tesla hopes new investors go for the ride after stock split
NEW YORK — Unlike its cars, Tesla shares are about to get less expensive. Tesla is splitting its stock 3 for 1, so after the close of trading Tuesday, investors will receive two additional Tesla shares for every one they owned as of Aug. 17. In theory, that should drop Tesla’s share price by about two-thirds before trading starts on Wednesday to around $290. Stock splits don’t make a company more valuable or more profitable, but the hope is the stock looks affordable to more investors. Tesla joins stock market heavyweights Amazon and Google parent Alphabet in splitting their high-priced shares this year.
Whistleblower accuses Twitter of cybersecurity negligence
SAN FRANCISCO — A former head of security at Twitter alleged that the company misled regulators about its poor cybersecurity defenses and its negligence in attempting to root out fake accounts that spread disinformation, according to a whistleblower complaint filed with U.S. officials. Peiter Zatko, Twitter’s security chief until he was fired early this year, filed the complaints last month with the U.S. Securities and Exchange Commission, the Federal Trade Commission and the Department of Justice. A whistleblower group said Zatko exhausted all attempts to get his concerns resolved inside the company. Several members of Congress are calling for an investigation.
Stocks dip as steadying yields calm Wall Street after fall
NEW YORK — Stocks drifted to modest losses on Wall Street, as steadying Treasury yields helped calm the market following its worst tumble in months. The S&P 500 slipped 0.2% Tuesday. The edge lower follows up on Monday’s sharp 2.1% drop, which came on the heels of its first losing week in the last five. Volatility has returned to Wall Street following what had been a strong summer as worries rise about how aggressively the Federal Reserve will raise interest rates. Recent comments from Fed officials have cooled hopes for a less forceful Fed. Yields were mixed Tuesday following some weaker-than-forecast readings on the economy.
New electric vehicle tax credits raise talk of trade war
WASHINGTON — A new tax credit for U.S. buyers of qualifying electric vehicles made in North America in the Inflation Reduction Act has prompted unfair trade practice allegations overseas. The climate change and health care bill was signed into law last week. It includes a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. The vehicle must contain a battery built in North America with 40% of the metals mined or recycled on the continent. The European Commission says the new tax credit discriminates against foreign producers and calls the credits a “new, potential, trans-Atlantic trade barrier.” And the rules on the battery tighten over time, with only a few American manufacturers able to produce vehicles that would qualify.
Biden administration forecasts $1.03T deficit, down $400B
WASHINGTON — The Biden administration is forecasting that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all of the jobs lost during the multi-year pandemic.In full, this year’s deficit will decline by $1.7 trillion, representing the single largest nominal decline in the federal deficit in American history, the Office of Management and Budget says.Despite the gains, the administration said Tuesday that it is forecasting a deficit of $1.03 trillion for the budget year that ends Sept. 30. That number signifies a movement away from the record deficit in 2020, which reached $3.13 trillion.
Macy’s, Nordstrom cut profit views along with inventories
NEW YORK — Nordstrom has joined Macy’s in cutting its annual outlook for profit and sales despite second-quarter results that topped Wall Street forecasts. Both retailers are suffering from an affliction plaguing most of their competitors: A glut of unsold inventory that they’re resorting to pricing at deep discounts to move. Almost every major retailers has said in recent weeks that shoppers are making fewer trips to the store and when they do, they’re looking for deals. Some are trading down to cheaper alternatives. Kohl’s last week slashed its sales and profit expectations for the year, a result of its stepped up price cutting to shed unwanted merchandise. Both Target and Walmart also said last week that shoppers are cutting back and sticking to essentials.
Yelp to add more flags to anti-abortion pregnancy centers
SAN FRANCISCO — The online reviews site Yelp said Tuesday it is rolling out a new feature to protect users seeking abortions from being misled about anti-abortion pregnancy centers listed on its platform. Such centers are typically religiously affiliated and deter clients from having an abortion. On Tuesday, Yelp said it will place a consumer notice on the listings informing users that the centers “typically provide limited medical services and may not have licensed medical professionals onsite.” In 2018, moderators for the San Francisco-based company began recategorizing listings for such organizations as “crisis pregnancy centers” or “faith-based crisis pregnancy centers.” The organizations had previously categorized themselves as reproductive health services and medical centers, among others.
The S&P 500 slipped 9.26 points, or 0.2%, to 4,128.73. The Dow Jones Industrial Average lost 154.02 points, or 0.5%, to 32,909.59. The Nasdaq eased 0.27 points, or less than 0.1%, to 12,381.30. The Russell 2000 index of smaller companies rose 3.40 points, or 0.2%, to 1,919.14.