The daily business briefing: September 2, 2020

Zoom shares jumped by 40.8 percent on Tuesday after the videoconferencing company reported explosive second quarter growth. Businesses, schools, and individuals have rushed to use Zoom for online work and play during the coronavirus. As a result, the company reported that its revenue quadrupled in the second quarter compared to the same period last year, reaching $663.5 million. Tuesday’s stock surge lifted Zoom’s market value to $129 billion, surpassing that of long-established companies such as Citigroup, Boeing, and Starbucks. After the big second quarter, Zoom raised its revenue projection for its current fiscal year to $2.4 billion from $1.8 billion in June. [The Associated Press]

Treasury Secretary Steven Mnuchin told a House subcommittee on Tuesday that the White House and lawmakers should be able to reach a “bipartisan agreement” to provide a new round of spending to ease the burdens individuals, businesses, and local governments are shouldering in the coronavirus crisis. “We will continue to work with the Senate and House on a bipartisan basis for a phase four relief package,” Mnuchin testified to the Select Subcommittee on the Coronavirus Crisis. Mnuchin said he hoped the package would include money for schools and child care, as well as vaccines. Talks on the new stimulus stalled in early August, with Democrats pressing for $2.4 trillion, while Senate Republicans approved $1 trillion. Democrats reportedly have offered to lower their goal to $2.2 trillion. [CNN, The Associated Press]

House Democrats said in a report released Tuesday that tens of thousands of loans under a $659 billion federal program to help small businesses get through the coronavirus crisis might have been subject to fraud, waste, and abuse. More than $1 billion went to companies that received multiple loans, in violation of Paycheck Protection Program rules, and more than $3 billion went to businesses flagged as problematic by a government-contracting database. “Taxpayers should not have to choose between quickly getting aid to those who need it and wasting federal funds,” Committee Chairman James Clyburn (D-S.C.) said, adding that “simple steps” could have helped prevent fraud. The Trump administration has credited the program with saving 51 million jobs, although economists put the figure between 1 million and 14 million. [Reuters]

President Trump’s payroll tax holiday began on Tuesday. Employers have the option of halting collection of the employee contributions to Social Security and Medicare to boost their take-home pay through the end of the year, to give people a boost during the coronavirus crisis. Trump ordered the change three weeks ago after failing to reach a deal with Congress on a new pandemic relief package. Trump promised to make the cuts permanent if he’s re-elected, but only Congress can do that. Democrats said Trump was undercutting Social Security, and noted that a new IRS guidance makes it clear that the move is essentially just a loan, as taxpayers would have to pay in 2021 to make up for any Social Security contributions they didn’t make in 2020. [NPR]

U.S. stock index futures surged early Wednesday, adding to Tuesday’s strong start to the new month. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.7 percent several hours before the opening bell. Those of the Nasdaq gained nearly 1.1 percent. All three of the main U.S. indexes closed higher on the first day of the month. The Dow gained 0.8 percent on Tuesday, while the S&P 500 and the Nasdaq rose by 0.8 percent and 1.4 percent, respectively. Wall Street was coming off its best August in more than 30 years, although analysts warned that a pullback could be looming. “I think we’re a little bit overcooked,” said Morgan Stanley Chief U.S. Equity Strategist Mike Wilson said on CNBC’s Closing Bell. [CNBC]

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