Company News in Brief

Intel shares slump 26% as turnaround struggle deepens

Intel shares sank 26% on Friday in their worst day since 1974 after the chip manufacturer suspended its dividend and slashed its workforce to fund a costly turnaround after losing its once-dominant global position.

The company lost more than $30 billion in market value after it gave a disappointing forecast and said it would cut 15% of its workforce, deepening worries about its ability to catch up with Taiwan's TSMC and other chipmakers.

The stock ended the day at $21.48, its lowest since 2013.

"Intel's issues are now approaching the existential in our view," Bernstein analyst Stacy Rasgon said.

Rasgon said Intel could add $40 billion in cash to its balance sheet by the end of 2025 through the moves, as well as subsidies and partner contributions.

While Intel's manufacturing setbacks are specific to the Santa Clara, California-based company, other chipmakers also sank for a second straight day.

-REUTERS-

Tech-heavy Nasdaq in correction as equity selloff deepens

Worries over tech earnings and a slowing U.S. economy slammed the Nasdaq Composite index on Friday as it extended recent declines to fall 10% below its record high, confirming it was in correction territory.

The tech-heavy index fell 2.4% on Friday after a softer-than-expected jobs report spurred worries over whether the Federal Reserve will need to deliver hefty interest rate cuts at its next meeting to prevent the U.S. economy from falling into recession. Disappointing earnings from Amazon and Intel also have spooked investors.

The Nasdaq has dropped 10% from its record close of 18,647.45 points on July 10. An index or stock is widely considered to be in a correction when it closes 10% or more below its previous record closing high.

"This is an old-fashioned correction going on," said Tom Plumb, chief executive and portfolio manager at Plumb Funds. "We passed the economic torch from the perception of growth to the perception of needing government intervention with lower interest rates to stabilize the economy."

-REUTERS-

Amazon shares drop on slowing online sales growth

Shares of Amazon.com fell more than 12% on Friday after the company reported slowing online sales growth in the second quarter and said consumers were seeking out cheaper options for purchases.

The commentary from the online shopping behemoth is in line with recent value-conscious consumer behavior, ahead of retail giant Walmart's quarterly results later this month.

Amazon CEO Andy Jassy said on a post-earnings call that customers were trading down on price when they could.

The company's shares were trading at about $165, with the stock among the biggest drags on the Nasdaq. Amazon was set to lose about $188 billion in market value, if losses hold.

"Consumer spending trends facing retail peers appear to have finally caught up with Amazon's P&L," MoffettNathanson analyst Michael Morton said.

Amazon's online stores sales rose 5% in the second quarter to $55.4 billion, compared with growth of 7% in the first quarter.

-REUTERS-

Singer Akon’s multibillion-dollar futuristic city in Africa gets final notice

A single arched concrete block juts out of a field in Senegal where R&B singer Akon first laid the foundation stone for his $6 billion metropolis four years ago.

The West African nation granted the artist 136 acres of land on its Atlantic Coast in 2020 to build his Akon City — envisioned as a real-life Wakanda, the fictional country from Marvel Studios’ Black Panther films.

Akon got the notice after missing several payments to Sapco, two people familiar with the matter said. A spokesperson for Akon declined to comment. A member of his staff said he wasn’t aware of any notice when reached by phone. Sapco declined to answer further questions.

In addition to the luxury apartments and seaside resort, Akon, 51, also envisioned hospitals, a police station and a university equipped with cutting-edge technology.

Akon City was to be solar-powered and environmentally friendly, the artist said in 2020. Residents and visitors would use Akoin cryptocurrency launched that year.

-BLOOMBERG-

Apple, Amazon results are crucial for Nasdaq 100’s next leg

Earnings from Apple Inc and Amazon.com Inc will be critical to give direction to the Nasdaq 100 after a volatile period marked by some of the benchmark’s worst — and best — days this year.

The pair are the last megacaps to release results until Nvidia Corp at the end of August, and will set the tone for tech investors for the coming month. The reports, due after the close, will be scrutinized for how artificial intelligence is driving growth for Amazon’s cloud-computing unit and how the new technology is expected to boost demand for the next iPhone. They’ll also give investors some insight into the health of consumer spending.

Apple is under pressure to give more information about expected demand for its next iPhone models, which will include AI. The shares have rallied more than 10% since the firm unveiled long-awaited new AI features in June, and more than 25% since last quarter’s estimate-beating results, even after the recent rotation out of the tech sector. Amazon shares are up about 20% this year.

Amazon and Apple shares each slipped more than 2% in mid-day trading Thursday.

-BLOOMBERG-