Daily business briefing

Amazon shares soar to a new record, the Labor Department investigates Wells Fargo's retirement-plan services, and more

Daily business briefing

1. Amazon's stock hits a record after it reports strong earnings Amazon shares shot up by 7 percent in after-hours trading on Thursday, lifting the stock to a new record after the online retail giant reported first quarter earnings and profit that exceeded analysts' estimates. Amazon reported $51.04 billion in revenue, beating an average estimate of $49.78 billion, as its cloud unit continued to drive the company's growth. Revenue for its subscription services, including its Prime service, grew by 60 percent to $3.1 billion. Amazon also announced a $20 price hike for U.S. Prime subscribers, to $119 per year. Amazon's second-quarter guidance put revenue between $51 billion and $54 billion, in line with Wall Street's average estimate of $52.2 billion. Its stock is now up by more than 20 percent this year. [CNBC]

2. Labor Department review Wells Fargo's treatment of 401(k) customers The Labor Department is looking into suspicions that Wells Fargo has urged customers with low-cost corporate 401(k) plans to roll their retirement savings into more expensive individual retirement accounts, The Wall Street Journal reported Thursday, citing a person familiar with the inquiry. Investigators reportedly want to know whether the bank's retirement plan unit tried to steer account holders to in-house funds that generate more revenue for the bank. The news could add to Wells Fargo's troubles as it struggles to recover from several scandals, including one in which Wells Fargo workers created phony accounts without customer consent. The bank last week agreed to pay a $1 billion fine to settle misconduct allegations involving its auto and mortgage lending operations. [The Wall Street Journal]

3. Southwest Airlines says engine explosion hurt second-quarter bookings Southwest Airlines warned on Thursday that its second quarter bookings would suffer as a result of concerns over a mid-air engine explosion that killed one passenger last week. It was the airline's first passenger death ever. The carrier said its second-quarter unit revenue would fall by 1 to 3 percent, mostly due to its decision to pull advertising after the explosion. That translates to a loss of $50 million to $100 million, the company said. Southwest said it expected to restart ads and promotions this week ahead of an anticipated price war with its competitors. [Reuters]

4. Global stocks get a lift from U.S. tech giants and Korean summit Global stocks rose on Friday as rising share prices for such tech giants as Amazon and Facebook calmed investors' nerves. Facebook's shares jumped by 9 percent on Thursday despite recent worries about the impact of criticism over its policies on protecting user privacy. Stocks also got a lift from a historic summit between the leaders of North and South Korea, which raised hopes of a lasting peace and eased recent tensions over Pyongyang's missile and nuclear weapons programs. U.S. stock futures pointed to a mixed open on Friday, with futures for the Dow Jones Industrial Average down by 0.3 percent and those of the S&P 500 down by 0.2 percent, while the tech-heavy Nasdaq-100 was up by 0.2 percent. [Reuters, MarketWatch]

5. Subway to close hundreds of U.S. shops as it expands globally Subway Restaurants said Thursday it expected to close about 500 U.S. locations as it expands globally. The company said it is rolling out a North American revitalization plan that will require investments by franchise owners, and some will choose to close stores instead. The sandwich chain shut down more than 800 stores last year, after closing a smaller number in 2016. The company, which has more than 40,000 locations worldwide, plans to add more than 1,000 sandwich shops in Mexico, the U.K., China, India, and other countries. "Looking out over the next decade, we anticipate having a slightly smaller, but more profitable footprint in North America and a significantly larger footprint in the rest of the world," a spokesman told CNBC in an email. [CNBC, CNN]

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Daily business briefing 1.Amazon's stock hits a record after it reports strong earnings Amazon shares shot up by 7 percent in after-hours trading on Thursday, lifting the stock to a new record after the online retail giant reported first quarter earnings and profit that exceeded analysts' estimates. Amazon reported $51.04 billion in revenue, beating an average estimate of $49.78 billion, as its cloud unit continued to drive the company's growth. Revenue for its subscription services, including its Prime service, grew by 60 percent to $3.1 billion. Amazon also announced a $20 price hike for U.S. Prime subscribers, to $119 per year. Amazon's second-quarter guidance put revenue between $51 billion and $54 billion, in line with Wall Street's average estimate of $52.2 billion. Its stock is now up by more than 20 percent this year. [CNBC] 2.Labor Department review Wells Fargo's treatment of 401(k) customers The Labor Department is looking into suspicions that Wells Fargo has urged customers with low-cost corporate 401(k) plans to roll their retirement savings into more expensive individual retirement accounts, The Wall Street Journal reported Thursday, citing a person familiar with the inquiry. Investigators reportedly want to know whether the bank's retirement plan unit tried to steer account holders to in-house funds that generate more revenue for the bank. The news could add to Wells Fargo's troubles as it struggles to recover from several scandals, including one in which Wells Fargo workers created phony accounts without customer consent. The bank last week agreed to pay a $1 billion fine to settle misconduct allegations involving its auto and mortgage lending operations. [The Wall Street Journal] 3.Southwest Airlines says engine explosion hurt second-quarter bookings Southwest Airlines warned on Thursday that its second quarter bookings would suffer as a result of concerns over a mid-air engine explosion that killed one passenger last week. It was the airline's first passenger death ever. The carrier said its second-quarter unit revenue would fall by 1 to 3 percent, mostly due to its decision to pull advertising after the explosion. That translates to a loss of $50 million to $100 million, the company said. Southwest said it expected to restart ads and promotions this week ahead of an anticipated price war with its competitors. [Reuters] 4.Global stocks get a lift from U.S. tech giants and Korean summit Global stocks rose on Friday as rising share prices for such tech giants as Amazon and Facebook calmed investors' nerves. Facebook's shares jumped by 9 percent on Thursday despite recent worries about the impact of criticism over its policies on protecting user privacy. Stocks also got a lift from a historic summit between the leaders of North and South Korea, which raised hopes of a lasting peace and eased recent tensions over Pyongyang's missile and nuclear weapons programs. U.S. stock futures pointed to a mixed open on Friday, with futures for the Dow Jones Industrial Average down by 0.3 percent and those of the S&P 500 down by 0.2 percent, while the tech-heavy Nasdaq-100 was up by 0.2 percent. [Reuters, MarketWatch] 5.Subway to close hundreds of U.S. shops as it expands globally Subway Restaurants said Thursday it expected to close about 500 U.S. locations as it expands globally. The company said it is rolling out a North American revitalization plan that will require investments by franchise owners, and some will choose to close stores instead. The sandwich chain shut down more than 800 stores last year, after closing a smaller number in 2016. The company, which has more than 40,000 locations worldwide, plans to add more than 1,000 sandwich shops in Mexico, the U.K., China, India, and other countries. "Looking out over the next decade, we anticipate having a slightly smaller, but more profitable footprint in North America and a significantly larger footprint in the rest of the world," a spokesman told CNBC in an email. [CNBC, CNN] MOST POPULAR The last man who knew everything Matthew Walther Kim Jong Un, Moon Jae-in agree to pursue Korean denuclearization, peace treaty in historic summit Peter Weber Bernie Sanders has conquered the Democratic Party Jeff Spross Stephen Colbert recaps Trump's 'insane' Fox & Friends interview, pours one out for Ronny Jackson Peter Weber The lessons of Bill Cosby's dizzying downfall Lili Loofbourow Is this email not displaying correctly? View it in your browser.  Unsubscribe from this list | Update subscription preferences | Privacy Policy © 2015 THE WEEK PUBLICATIONS, INC. ALL RIGHTS RESERVED. THE WEEK ® IS A REGISTERED TRADEMARK OWNED BY FELIX DENNIS. Get 4 Risk-Free issues of The Week TRY IT OUT