Google has been sued by the Department of Justice as several states in the U.S. prepare for legal action against the company for allegedly abusing its market power.
Traders on Wall Street, expecting a stimulus over the last few weeks, were disappointed again as there was no clarity whether a deal could be sealed before the Presidential election on November 3. Last week saw tech stocks dragged down after Intel’s numbers were announced while the Department of Justice moved ahead with its biggest case since the one it filed against Microsoft two decades ago.
Top Stories this Week
Wall Street slides for the week as worries hold centre stage
Traders were in wait and watch mode for the week as the Dow and S&P 500 made their first loss, albeit a small one, in three weeks. Nasdaq 100 registered its first weekly loss in five weeks, closing at 11692.57 down from last week’s close at 11852.17. With a 1.1 percent gain, the communication services sector was the biggest gainer among the S&P 500. Of the 135 companies that have announced their quarterly numbers so far, 84 percent have beaten street estimates, according to data reported by Refinitiv. Meanwhile, traders who have had an eye on a possible stimulus, have little clarity and the off-again-on-again negotiations that are testing their patience. The overhang of next week’s Presidential elections is keeping traders from taking aggressive positions.
Companies that missed their earnings have witnessed a sharp slide in stock prices. For companies which exceeded the expectations, the gains in stock prices have been largely missing, indicating the worry on the earnings. Next week, markets are looking forward to Apple, Facebook, Google and Amazon announcing their numbers.
DoJ files antitrust case against Google
Google has been sued by the Department of Justice as several states in the U.S. prepare for legal action against the company for allegedly abusing its market power. The complaint claims that the search giant has used exclusive deals costing billions of dollars to dominate search and lock out competition from rivals. Since it controls 90 percent of the market, Google has been called the “unchallenged gateway” to the internet. Several other states are preparing their own case against its digital advertising business where it controls the technology used by publishers and advertisers as well. Google’s search engine drives the fortunes of millions of small businesses online. Google reacted to the case by calling it “deeply flawed”.
The U.S. DoJ case against Google is the biggest antitrust case in the last 20 years. Google is also facing existing and potential antitrust and other cases in Australia, China, India, Japan, South Korea and the EU region. These are cases related to a variety of issues like Android dominance and use of personal data, among others.
USFDA approves remdesivir for covid-19 treatment
The Food and Drug Administration has approved the use of Gilead Sciences’ drug remdisivir as treatment for coronavirus. With the FDA approval, remdisivir is the only approved treatment for covid-19 in the US. The drug can be used for in-patients in hospitals who are at least 12 years old. The drug, administered intravenously, has helped shorten the recovery time for patients hospitalised after testing positive. The company said that nearly 50 countries have now approved of remdisivir treatment for temporary use. The availability of a treatment for the virus has become an election issue in the U.S. and markets have been worried about economic recovery moving ahead.
The FDA had granted permission to use the drug on patients hospitalised for covid-19. Markets have been worried about the surge in daily new cases, particularly in the rocky mountain states across the U.S. Six states, which reported a record level of daily deaths this week while the U.S. is nearing record high cases seen in July-August.
Intel to sell NAND memory business to SK Hynix
Intel will sell its NAND memory chips business to South Korea’s SK Hynix for $9 billion in an all cash deal. The buyout catapults SK Hynix to the second position in the global pecking order, narrowing the gap with market leader Samsung. Intel’s NAND business including its solid-state drive business, NAND component, and wafer operation and its factory in Dalian, China would be sold as part of the deal. The deal allows Intel to take fresh steps to renew focus on its core semiconductor business, used in electronic devices. After the acquisition, SK Hynix’s share in the NAND memory chips business jumped to 23.2 percent behind Samsung’s 31.4 percent share.
Intel’s expansion into the market for smartphone wireless chips, security software and FPGA chips has not quite paid off. Selling the loss making memory business will boost cash flow for Intel at a time when the semiconductor industry is getting realigned after going through consolidation around the globe.
Paypal to open up 26 million merchant-network to cryptocurrencies
Paypal will soon allow its customers to hold cryptocurrencies in its online wallet to let people shop using them across its network. Merchants will receive payments in virtual coins while Paypal will manage the risks associated with the transaction. PayPal has secured the first conditional cryptocurrency licence from the New York State Department of Financial Services. The company will initially allow purchases of only bitcoin and other cryptocurrencies called Ethereum, bitcoin cash and Litecoin. Paypal also plans to expand its service to its peer-to-peer payment app Venmo and some other countries during the first half of 2021. It has 346 million active accounts around the world and processed $222 billion in payments during the second quarter.
This move by Paypal has been the biggest cryptocurrency offering yet that allows customers to use cryptocurrency in daily transactions and could help spread it to the masses. Companies like Square and trading app Robinhood allow users to buy and sell cryptocurrencies. Paypal was a founding member of Facebook’s digital currency Libra project before dropping out.