The daily business briefing: September 23, 2020

1.

The Pentagon used $1 billion Congress allocated for medical equipment to pay defense contractors for such things as jet engine parts, body armor, and dress uniforms, The Washington Post reported on Tuesday. The money was approved earlier this year as part of the Cares Act to help the Defense Department "prevent, prepare for, and respond to coronavirus." The Pentagon diverted the money even though health officials believe the nation has gaps in funding needed for the pandemic response. Many hospitals face N95 mask shortages, and Robert Redfield, director of the Centers for Disease Control and Prevention, told the Senate last week that states need $6 billion to be able to get vaccines to Americans in early 2021. Pentagon officials said they tried to strike a balance between supporting U.S. medical production and supporting the defense industry. [The Washington Post]

2.

Ralph Lauren Corp. confirmed Tuesday that it planned to cut about 15 percent of its jobs after suffering a decline in revenue linked to store closures during the coronavirus crisis. The fashion retailer had about 24,900 workers globally in late March, 13,800 of them in the United States. The company's finance chief, Jane Nielsen, said last month that the downturn was expected to hurt the year's revenue and profit. Ralph Lauren last month reported that it lost $127.7 million in the second quarter, down from a $117.1 million profit in the same period last year. It said most stores in big markets were closed eight to 10 weeks during the second three months of the year, hurting foot traffic and demand. [The Wall Street Journal]

3.

Tesla shares plunged after CEO Elon Musk said Tuesday that it will take three years to make good on his promise to slash battery costs enough to make his company's electric cars as inexpensive as gas-powered vehicles. The stock dropped by 5.6 percent on Tuesday, and another 6.9 percent overnight. "In three years ... we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car," Musk said at the company's "Battery Day." Tesla is aiming to develop a "million mile" battery good for at least 10 years. Analysts said the murky promise disappointed investors who had expected firm announcements. "Nothing Musk discussed about batteries is a done deal," said Roth Capital Partners analyst Craig Irwin. "There was nothing tangible." [Reuters]

4.

U.S. stock index futures rose early Wednesday following Tuesday's gains. Futures for the Dow Jones Industrial Average gained 0.8 percent, while those of the S&P 500 and the Nasdaq were up by nearly 0.6 percent several hours before the opening bell. Wall Street is getting a lift from better-than-expected earnings reports released after the bell Tuesday by Nike and KB Home. Nike shares gained after the athletic footwear and apparel maker reported an 82 percent quarterly surge in digital sales. The S&P 500 snapped a four-day losing streak on Tuesday, jumping by 1 percent as "dip buyers" emerged after the index reached the official correction zone with a 10 percent decline, Jim Paulsen, chief investment strategist at The Leuthold Group, told CNBC. The Dow rose by 0.5 percent, while the tech-heavy Nasdaq surged by 1.7 percent as Amazon shares jumped by nearly 6 percent. [CNBC]

5.

The NFL has fined three head coaches $100,000 each for failing to wear face masks Sunday in violation of the football league's COVID-19 precautions, ESPN reported Tuesday. In addition to the penalties against Denver's Vic Fangio, Seattle's Pete Carroll, and San Francisco's Kyle Shanahan, the league reportedly imposed $250,000 fines against each of the teams. The NFL sent teams a memo last week threatening discipline if teams didn't follow the requirement that all coaches wear masks on the sidelines during games. The stern warning came after spotty compliance with the rule on the first Sunday of the 2020 season. Both coaches in Monday night's game between the Las Vegas Raiders and the New Orleans Saints violated the rule, as did New England Patriots coach Bill Belichick, so more fines could be coming. [ESPN]