Business Highlights: Microsoft 3Q; First Republic plunges


Microsoft reports boost in profits, revenue, as it pushes AI

REDMOND, Wash. (AP) — Microsoft on Tuesday reported a 9% increase in profit for the January-March quarter, as growth in cloud computing sales helped bolster its plans to expand its use of artificial intelligence. The company reported quarterly profit of $18.3 billion, or $2.45 per share, beating Wall Street expectations for earnings of $2.24 a share. The software maker posted revenue of $52.9 billion in the period, its third fiscal quarter, up 7% from the same period a year ago. Analysts polled by FactSet expected Microsoft to post revenue of $51.02 billion for the quarter.


Coronation gives tourism boost, but UK economy still reeling

LONDON (AP) — The coronation of King Charles III is luring royal fans fascinated by the pageantry, spectacle and drama of the monarchy and far-flung visitors eager to experience a piece of British history. Tour companies, shops and restaurants are rolling out the red carpet, whether it’s a decked-out bus tour of London’s top sights with high tea or merchandise running from regal to kitschy. The weekend of events starting May 6 will bring a welcome cash infusion to central London businesses, especially hotels, pubs and restaurants. But it won’t do much for U.K. residents struggling with an economy on the precipice of recession and a cost-of-living crisis that has stirred months of disruptive strikes.


First Republic Bank stock plunges as depositors flee

NEW YORK (AP) — First Republic Bank’s stock plunged Tuesday after it said depositors withdrew more than $100 billion during last month’s crisis, with fears swirling that it could be the third bank to fail after the collapse of Silicon Valley Bank and Signature Bank. The San Francisco bank said late Monday that it was only able to stanch the bleeding after a group of large banks stepped in to save it by depositing $30 billion in uninsured deposits. But investors remained deeply skeptical on what path forward exists for First Republic either as an independent firm or as an acquisition target. The bank likely will have lower profits for years, and if the bank is bought, any purchase would come with an immediate loss to any buyer.


GM boosts outlook as sales in US fuel strong first quarter

DETROIT (AP) — Strong U.S. sales helped General Motors increase its first-quarter net profit 19% over a year ago, leading the company to raise its full-year earnings guidance on expectations that people will keep buying new vehicles. The Detroit automaker said Tuesday that it made $2.37 billion from January through March, up from $1.99 billion a year ago. Excluding a $900 million charge for severance packages that went to about 3,000 white-collar workers who took buyouts during the quarter, GM made $2.21 per share. That soundly beat analysts’ estimates of $1.72 a share.


US officials seek to crack down on harmful AI products

The federal government will “not hesitate to crack down” on harmful business practices involving artificial intelligence, the head of the Federal Trade Commission warned Tuesday in a message partly directed at the developers of widely-used AI tools such as ChatGPT. FTC Chair Lina Khan joined top officials from U.S. civil rights and consumer protection agencies to put businesses on notice that regulators are working to track and stop illegal behavior in the use and development of biased or deceptive AI tools. Amid a fast-moving race between tech giants such as Google and Microsoft in selling advanced AI tools, Khan also raised the possibility of the FTC wielding its antitrust authority to protect competition.


Big Tech crackdown looms as EU, UK ready new rules

LONDON (AP) — TikTok, Twitter, Facebook, Google, and Amazon are facing rising pressure from European authorities as London and Brussels advanced new rules Tuesday to curb the power of digital companies. They’re among those on a list of the 19 biggest online platforms and search engines that the European Union’s executive arm said Tuesday must meet extra obligations for cleaning up illegal content and disinformation and keeping users safe online. It’s part of the 27-nation bloc’s landmark digital rules taking effect later this year. The U.K. government, meanwhile, unveiled draft legislation that would give regulators more power to protect consumers from online scams and fake reviews and boost digital competition.


Stock market today: Stocks tumble on profit, economy worries

NEW YORK (AP) — Wall Street had its biggest drop in a month as investors worried about company profits and the state of the economy. The S&P 500 fell 1.6% Tuesday. The Dow Jones Industrial Average lost 1% and the tech-heavy Nasdaq composite fell twice as much. First Republic Bank lost half its value after disclosing details for the first time about the exodus of customers it suffered in March. UPS fell after saying a challenging economy could crimp its revenue over the course of the year. Reports on the economy were mixed, with consumer confidence falling again.


Driver in fatal Uber autonomous crash set for June trial

PHOENIX (AP) — An Uber driver involved in the first death connected to a fully autonomous vehicle faces a June trial. The trial date was set Tuesday. Rafaela Vasquez was previously scheduled to be tried next month in the 2018 crash that killed Elaine Herzberg in Tempe, Arizona. Vasquez has pleaded not guilty to a charge of negligent homicide. She told police Herzberg “came out of nowhere” and that she didn’t see her prior to the collision. Authorities say Vasquez was streaming the television show “The Voice” on a phone and looking downward in the moments before Uber’s Volvo XC-90 SUV collided with Herzberg.


The S&P 500 fell 65.41 points, or 1.6%, to 4,071.63. The Dow Jones Industrial Average fell 344.57 points, or 1%, to 33,530.83. The Nasdaq composite fell 238.05 points, or 2% to 11,799.16. The Russell 2000 index of smaller companies fell 42.92 points, or 2.4%, to 1,745.95.

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