US stocks balance strong earnings with serious economic challenges

By CNN Business

Updated 5:01 p.m. ET, October 20, 2021
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12:37 p.m. ET, October 20, 2021

United CEO says its vaccine mandate will help avoid service meltdowns

From CNN Business' Chris Isidore

When Southwest Airlines canceled more than 2,000 flights between October 8 and October 11, inconveniencing hundreds of thousands of passengers, some suggested it was caused by pilots refusing to fly in protest over the airline's vaccine rules.

The pilots unions at Southwest and American are on record opposing recently announced vaccine mandates for those airlines' employees. But Southwest and its pilots union both insisted that those objections had nothing to do with the service disruptions, in which the airline was left without the crews it needed to operate its full schedule for several days. They point to statistics on absenteeism and pilots volunteering for flights that they said show there was no sick-out.

But United Airlines CEO Scott Kirby threw some shade on those rivals and their pilots, saying in an interview Wednesday that the fact that about 97% of United employees already have been vaccinated or applied for an exemption from the mandate means it doesn't have to worry about those kinds of service meltdowns.

"This is largely a rear-view mirror issue for us," he said about vaccine mandates in an interview on CNBC. "That winds up meaning that over the holidays, customers can book with confidence at United. I suspect that some of the noise and issues you’re seeing elsewhere could lead to [service] challenges."

Later, speaking with investors, Kirby clarified that he thinks it is a risk for airlines to allow employees to choose Covid testing or getting vaccinated, rather than requiring the vaccine for everyone, as United has done.

"Other airlines ... they're likely to have tens of thousands of employees that need to be tested every week," he said. "Can you imagine, you have tens of thousands of employees, people forget to get their tests, people do the test wrong, people don't get it done, people test positive. And if you think weather in one state can lead to a meltdown, imagine if you have thousands of employees a day calling in and saying, "For some reason, my test didn't pass."

10:45 a.m. ET, October 20, 2021

Bitcoin soars to new record high above $66,000

From CNN Business' Paul R. La Monica

What a month it has been for bitcoin! The cryptocurrency hit a new all-time high of more than $66,000 Wednesday morning. Prices have surged in October thanks to more support from top institutional investors like George Soros and the launch of the first exchange-traded fund tied to bitcoin futures.

The ProShares Bitcoin Strategy ETF (BITO) began trading Tuesday and it is likely to be the first of many bitcoin ETFs that will hit Wall Street in the coming months.

Read more on bitcoin's record surge.

11:07 a.m. ET, October 20, 2021

United Airlines says recovery in air travel back 'on track'

From CNN Business' Chris Isidore

United Airlines reported an operating loss in the third quarter, but said that the recovery in air travel that started earlier this year is back "on track."

United also said that a rebound in international and business travel, two of the most lucrative sources of revenue for airlines, is particularly encouraging.

Rules were announced to reopen US-European air travel for fully-vaccinated passengers as of Nov. 8. United executives told investors Wednesday that bookings on those trans-Atlantic routes the final two months of the year are now above where they were in the same period of 2019, ahead of the pandemic. United now plans to increase capacity on international routes, adding 10% more seats on those flights compared to 2019. Domestic capacity should remain roughly equivalent to 2019 levels.

CEO Scott Kirby said that rise of Covid cases delayed the office re-openings that had been expected to boost business travel after Labor Day. The airline now believes the surge in business travel will occur in January.

Kirby also said in an interview on CNBC that leisure travelers are likely to pack into planes during the upcoming holiday travel season.

"Airplanes are going to be full," he said. "The demand for the holidays is really robust."

10:16 a.m. ET, October 20, 2021

Chili's parent company tells investors that the labor shortage is hurting its bottom line

From CNN Business' Jordan Valinsky

Shares of Brinker International (EAT), which owns Chili's and Maggiano’s Little Italy, sank 10% in early trading after it told investors that staffing challenges and increasing food costs is eating into its bottom line.

"Brinker's first quarter delivered positive sales and continued to significantly outpace the industry in traffic," said CEO Wyman Roberts. "But the Covid surge starting in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and bottom line more than we anticipated."

Same-store sales at Chili's and Maggiano's both declined in August before rebounding in September.

9:32 a.m. ET, October 20, 2021

Stocks inch higher

From CNN Business' Anneken Tappe

US stocks rose modestly at Wednesday’s opening bell.

The Dow opened 0.1%, or 33 points, higher, while the S&P 500 rose 0.2%. The Nasdaq Composite also opened up 0.2%.

The economic calendar is quiet with the exception of the Federal Reserve’s Beige Book report on economic conditions in the different Fed districts, which is due at 2pm.

As for earnings season, Tesla (TSLA) and IBM (IBM) are among the companies reporting results after the closing bell today.

9:00 a.m. ET, October 20, 2021

This is the secret to dealing with inflation

From CNN Business' Julia Horowitz

Procter & Gamble (PG), the consumer goods giant that makes Pampers diapers, Crest toothpaste and Tide detergent, says that running its business is far from simple right now.

"Supply chains are under pressure from tight labor markets, tight transportation markets and overall capacity constraints," Chief Financial Officer Andre Schulten told analysts this week. "Inflationary pressures are broad-based and sustained."

But it does have confidence that it can weather the storm, thanks to its size, its ability to raise prices and a flood of consumer spending.

"These costs and operational challenges are not unique to P&G, and we won't be immune to the impact," Schulten said. "However, we think the strategies we've chosen, the investments we've made and the focus on executional excellence have positioned us well to manage through this volatility over time."

Strategy 1: Be big.

Strategy 2: Charge more.

Strategy 3: Ride the wave.

Read the full story here.

6:38 a.m. ET, October 20, 2021

US stocks are sleepy ahead of the open

US stock futures were flat Wednesday as investors continue to balance stronger-than-expected earnings with labor shortages, a global supply chain crisis, surging prices and a slowing economic rebound. 

Here's where things stand as of 6:25 am ET:

  • Dow futures were down 2 points or 0.1%
  • S&P 500 futures fell 0.02%.
  • Nasdaq futures were 0.01% higher.

6:23 a.m. ET, October 20, 2021

Facebook is planning to change its name, report say

From CNN Business' Charles Riley

Facebook (FB) is planning to rebrand itself with a new name focused on the metaverse, the Verge reported on Tuesday, as the tech giant comes under fire from regulators around the world over its business practices.

The company plans to announce the new name next week, the Verge reported, citing a source with direct knowledge of the matter. Facebook wants to be known for more than social media, according to the tech publication.

Facebook does not comment on rumor or speculation, a company spokesperson said in response to a question about the potential name change.

Read more here.

6:24 a.m. ET, October 20, 2021

Netflix adds 4.4 million subscribers, praises 'Squid Game'

From CNN Business' Frank Pallotta

Netflix now has 213.5 million subscribers globally, having added 4.4 million subscribers in the third quarter of 2021, the company reported on Tuesday.

That number beat the streaming service's own expectations as well as those of analysts. The company also forecast that it would have 222 million subscribers for the next quarter.

The results immediately sent the company's stock up by as much as 2% in after hours trading before going negative nearly as much as the night went on.

Netflix's third quarter profit was $1.4 billion, up from $790 million in the year-earlier quarter. Revenue jumped 16%, to $7.4 billion.

Read more here.