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Business Digest: Yellen: Economy close to achieving Fed goals


ECONOMY

Yellen: Economy close to achieving Fed goals

ANN ARBOR, Michigan — Federal Reserve Chair Janet Yellen says the central bank is moving close to achieving its goals on employment and inflation. Her remarks could be seen as providing support for gradual increases in interest rates.

While expressing satisfaction with how the economy is performing, Yellen did voice concerns about moves in Congress to limit the Fed’s independence.

Yellen told an audience at the University of Michigan that unemployment is actually below the point the Fed views as full employment while a key inflation gauge is moving toward the Fed’s target for price stability.

Yellen did not specifically address the timing for future rate hikes, but her remarks supported the view that future hikes are coming. The Fed last raised rates in March.

TELECOMMUNICATIONS

AT&T says $1.6B acquisition paves way for 5G network

DALLAS — AT&T is racing to build a 5G network with faster speeds and reliability to support video streaming, virtual and augmented reality, connected home, car, and health devices, and self-driving cars.

The Dallas-based telecom giant says it’s getting a step closer by acquiring Straight Path Communications. The Virginia company owns a nationwide portfolio of spectrum, or airwave licenses. The acquisition has a total value of $1.6 billion.

Straight Path shareholders will receive $1.25 billion, or $95.63 per share, paid in AT&T stock, according to AT&T.

The Federal Communications Commission will review the acquisition. AT&T said it expects the deal to close within 12 months.

AUTOMAKERS

Tesla’s stock surging ahead of Model 3 release

SAN FRANCISCO — For months, Tesla stock’s been on a bull run. Now, it’s a stampede.

On Monday, investors sent the electric car maker’s market value into entirely new territory, briefly ripping past General Motors in market value, putting Tesla in first place among U.S. automakers.

It also raises the stakes for the company as it prepares to begin assembling its highly anticipated mass-market electric sedan, the Model 3, which is scheduled for release this summer or fall, or perhaps later. The rise in the company’s stock — up more than 70 percent since December — amps up the pressure on Tesla and its chief executive, Elon Musk, to deliver near-flawless performance.

Tesla stock closed up 3.26 percent at $312.39; GM shares also ticked up slightly to end the day at $33.97. Both companies’ valuation hovered around $51 billion.

Surpassing GM and Ford in market value, justified by financial fundamentals or not, signals a revolution in the global automobile industry as cars and trucks subsume ever more Silicon Valley-style technology and, essentially, evolve into the robots of the roadways.

ELECTRONICS

Vizio’s sale to LeEco called off over ‘regulatory headwinds’

Electronics giant Vizio Inc. has been foiled by the Chinese economy again.

The company said Monday that it has scuttled a proposed $2 billion acquisition by Chinese technology company LeEco. Vizio cited “regulatory headwinds,” including increased scrutiny from the Chinese government on cash outflows. The acquisition had yet to receive approval from Chinese officials.

The deal emerged after Vizio halted plans for an initial public offering. The company, headquartered outside Los Angeles, decided not to go forward because concerns about China’s economic growth had created instability in the stock market.

Vizio said Monday that though the sale isn’t happening, it reached a partnership agreement that will lead to technology collaboration with LeEco. But the company declined to specify financial components and rejected requests to interview executives.

The company had been considering an IPO or acquisition to give employees and manufacturing partners a chance to cash out their stock. What alternative the company might pursue now is unclear.



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