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    Here’s why you may be saving more in your 401(k) — and not even know it

    Many employers that sponsor 401(k) plans have adopted “automatic escalation.”
    The mechanism automatically raises workers’ savings rate over time.
    401(k) investors should ideally save at least 15% of their annual pay, according to one financial advisor.

    Aleksandarnakic | E+ | Getty Images

    You may be saving more money for retirement and not even know it.
    An increasing share of employers are automating how people save in their company 401(k) plans, in a bid to overcome the inertia that often keeps us from building a nest egg.

    “Automatic escalation” — or auto-escalation, for short — is one of those popular mechanisms.
    It automatically raises workers’ savings rate each year, often by 1 percentage point at a time up to a cap. The intent is to help boost savings when workers might not take action on their own.

    However, the amount of additional money coming out of each paycheck may be indiscernible to many people.
    “I have a bet they don’t realize it,” said Ellen Lander, founder of Renaissance Benefit Advisors Group, based in Pearl River, New York.
    However, it’s generally a good thing.

    In an ideal world, workers would be saving at least 15% of their annual pay in a 401(k) plan, Lander said. This includes both their own contributions and employer contributions like a company match. The ideal rate may fluctuate depending on factors like age and outside savings.
    “Philosophically, I think auto-escalation makes perfect sense,” Lander said. “We want people to save as much as they can.”

    Automated 401(k) savings is more widespread

    Auto-escalation has become more widespread alongside automatic enrollment, which is when employers divert a portion of workers’ paychecks into a 401(k) if they don’t sign up voluntarily.
    About 64% of companies with a 401(k) plan automatically enrolled workers in 2022, according to an annual survey by the Plan Sponsor Council of America, a trade group.
    Of those companies, 78% also automatically increased workers’ savings, up from 65% in 2013, according to the poll.
    Most, or 84%, of these 401(k) plans raise workers’ savings rate by 1 percentage point a year.
    More from Personal Finance:U.S. centenarian population will quadruple by 2054Why working longer is a bad retirement planLabor Department cracks down on bad retirement savings advice
    Here’s a basic illustration of how it works: Let’s say a worker earns $75,000 a year, contributes 6% of their annual salary to a 401(k), and is paid twice a month. This person saves $4,500 a year, or $187.50 per paycheck.
    Raising the savings rate to 7% brings annual savings to $5,250, or $218.75 per pay cycle — amounting to just $31.25 more per paycheck.
    (This example doesn’t account for additional financial factors like taxes or annual pay increases.)
    Employees can opt out of the arrangement. Employers are also obligated to send a notice to workers communicating that they are being automatically enrolled into a 401(k) and their savings rate will be increased, but such communiques may go unnoticed.

    Many companies are hesitant to add auto-escalation altogether because they fear it may be “onerous” and place too much of a financial burden on some workers, Lander said.
    Among 401(k) plans that use automatic enrollment, just 40% automatically escalate savings for all workers, according to data from the Plan Sponsor Council of America. About 12% do so only for investors who are “under-contributing.” And 26% make escalation a voluntary choice for workers, while d 22% don’t offer it at all.
    The vast majority of 401(k) plans don’t automatically raise savings beyond a cap, and nearly two-thirds, or 63%, limit those automated worker contributions to 10% or less of annual pay.
    Of course, reaching the cap doesn’t necessarily mean workers are saving enough. Workers can voluntarily set their savings rate higher.

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    Wall Street ponders what happens to booming private credit market when you-know-what hits the fan

    Michael Arougheti, Ares Management Corporation Co-Founder, CEO & President
    Adam Jeffery | CNBC

    The explosion of private credit has been met with a whole host of concerns, but among the louder ones more recently is that the industry has not experienced a downturn at scale. And therefore, what does that mean for borrowers when there’s some kind of crisis?
    When asked about the migration of assets to the non-bank sector during JPMorgan’s Investor Day earlier this week, Chairman and CEO Jamie Dimon said, “we’ll compete. We’re going to be fine.” But he added that the “question they should be asking is, what does it mean for the United States of America?” 

    “A lot of those folks who took private-credit loans will be stranded when [obscenity] hits the fan,” Dimon said. “Banks tend to work with the borrower and the middle-market loan in the crisis…in the mark-to-market world of private credit, they have to, as a fiduciary, book it at par.” 
    In other words, he said, “private credit hasn’t dealt with high interest rates, hasn’t dealt with the recession, and it hasn’t dealt with high spreads.”
    We don’t know how those workouts will…work. 
    The next day, the CEO of one of the largest private-credit firms defended the industry and how it will act in times of stress. When asked on CNBC about Dimon’s recent comments, Ares Management CEO Michael Arougheti responded: “False.” 
    “We’ve been investing in the private markets for 30 years; A loan is a loan whether it’s held on a bank balance sheet or held in a private-credit fund,” Arougheti said. “[Ares has] invested $150 billion into the private-credit market since we founded the firm, and we had a loss rate of one basis point. So everything that we’ve seen over the last 30 years would indicate that the risk people are trying to argue exists in our market just isn’t true.” 

    Stock chart icon

    Ares Management (ARES), 1 year

    Ares’ Executive Chairman Tony Ressler, sitting next to Arougheti in the CNBC interview, said the growth in private credit will “actually reduce systemic risk.” 
    “These assets are going onto the balance sheets of companies that are not highly levered and that do not finance themselves with short-term liabilities or customer deposits,” Ressler said. 

    Private credit default rates

    In January, the Federal Reserve looked at default rates in private credit and how they compare with loans made by traditional banks (leveraged loans and high-yield bonds). Citing KBRA DLD data, the Fed showed, “despite seniority in debt structure, private-credit loans have relatively low recovery rate upon default (or equivalently, exhibit high loss given default) compared to syndicated loans or HY bonds.”
    We obtained updated figures on Thursday from KBRA DLD, which showed more of a mixed picture when it comes to implied recoveries. The average post-default value of a direct loan was about 53.1 percent, below that of syndicated loans, which were 57.5 percent but higher than high-yield bonds, which were 46.3 percent
    The Fed attributes some of that gap to private credit exposure being more tilted to sectors with lower collateralizable or tangible assets, like software, financial services or healthcare services. 
    But the quicker private credit grows, the more interconnected it becomes with the traditional banking space. JPMorgan executives at Investor Day said the firm is the largest financier of private-credit portfolios, and it already has dedicated capital on the balance sheet that it uses in a direct-loan format for corporate borrowers. The firm is also developing a co-lending program to boost the amount of capital it can deploy in this space. 
    So if the eventual downturn does manifest in the economy, it’s likely that you-know-what will hit the fan for everyone. Some borrowers will feel the hit more than others.  More

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    Advertisers boost spending at retailers such as Walmart and Amazon as TV shrinks

    Advertisers are increasingly spending more on retail media networks — the platforms run by companies such as Amazon and Walmart, which show ads in stores, on apps and websites.
    Global retail media ad spending is expected to more than double in the coming years.
    The growth comes as traditional TV advertising dwindles and tech privacy regulations shake up digital ad spending.

    An M&M’s advertisement seen on a gas pump.
    Courtesy: GSTV

    The next frontier for the ad market isn’t on TV — it’s at screens near points of sale.
    Television had long been the key target for advertisers, until tech companies such as Alphabet and Meta-owned platforms like Facebook began to gobble up market share. While ad dollars are rapidly shifting from traditional TV to streaming, retail and consumer product companies are now taking up a significant part of the mix.

    The so-called retail media networks — the advertising publishing platforms — of e-commerce, retail and consumer companies like Amazon, Walmart and Kroger are attracting billions of dollars in advertising, according to data from eMarketer and GroupM, the media investment arm of WPP, the world’s biggest advertising group.
    Global retail media ad spending is expected to more than double from $114.18 billion in 2023 to $233.89 billion in 2027, according to eMarketer. Retail media is expected to represent a larger percentage of digital advertising spending, which has begun to eclipse traditional media spending, growing from 18.9% of that segment in 2023 to 25.7% in 2027, according to eMarketer.
    “What we hear from brands most directly is they no longer wake up with a recipe to buy X amount of TV, X amount of social, X amount of digital. They wake up every day trying to buy growth, trying to buy outcomes for their business,” said Sean McCaffrey, president and CEO of GSTV, an on-the-go media network with over 29,000 screens at refueling points tied to convenience retail stores.
    GSTV screens reach 115 million viewers per month across 49 states.
    Brands are “more open-minded as to where they can find those audiences,” McCaffrey said.

    “It’s the new TV for mass reach advertising,” said Mark Boidman, head of media and entertainment investment banking at Solomon Partners. “If you want to reach someone fast, it’s best to get them in a store or on your app. … It’s a 360-degree approach.”

    Cookies to carts

    Walmart is turning the approximately 170,000 digital screens across its U.S. stores into advertising opportunities. For example, a company that makes a snack or a beauty product can advertise in the TV aisle of the electronics department.

    The kind of advertising purchased through retail media networks is often found on in-store displays and screens, websites, mobile apps, streaming services, smart TVs and social media. Not only is it fertile ground for an advertiser to get their offerings in front of consumers looking to spend, it comes with a lot of first-party data.
    The amount of data that retailers have on customers — from one-time buyers to loyalists — is extremely valuable to advertisers who want to optimize their exposure.
    “If [brands] advertise with a digital ad, for example, and a customer transacts a week later in a store or club, we can connect that up for them and let them know that the ad really worked,” Walmart CEO Doug McMillon told CNBC earlier this year. “That’s the differentiating advantage that we’ve got.”
    Walmart has been a particularly big player. While it’s still a new frontier for the retailer, advertising has propelled profits at the giant retailer in recent quarters. The company also recently agreed to buy TV maker Vizio in a bid to further boost its ad business.
    Of the companies eMarketer tracks, Amazon was considered the biggest retail media network in the U.S., with a roughly 75% share of retail media ad revenue. Other top networks by revenue include Walmart, Instacart, eBay and Etsy.
    The shift toward retail media comes as advertisers are faced with tech privacy changes that has led to a pullback in the collection of data.
    Earlier this year, Google began its revamp of how it and other companies track users online, namely the use of cookies, which keep tabs on the activity of internet users so that advertisers can target them with relevant ads.
    In January, Google began to restrict cookies for 1% of its Chrome browser users, with the goal of completely removing third-party cookies by the third quarter of this year. Advertisers have been grappling with how to make the transition.
    Advertising and media executives note that retail media networks now dominate conversations at conferences and other gatherings, such as the Cannes Lions advertising festival. It’s often a highlight on earnings calls, too.
    “[Retail media networks] have that balance with targeting and privacy and compliance. I think that’s where the money really starts shifting,” Tim Hurd, vice president of media activation at Goodway Group. “I think that’s key. These retailers have that kind of data” 

    Taking away from TV

    Big brands that have in some cases sat out for years the TV advertising frenzy around the biggest US sporting event — the Super Bowl — are returning Sunday and spending big amid record ad prices. It’s been a bumpy couple years marked by pandemic-era restraint and political polarization, but the American football championship offers an increasingly unequalled viewership too big to pass up.
    Olivier Douliery | AFP | Getty Images

    The rise of retail media ads comes against a backdrop of major shifts in the media landscape. Pay-TV customer numbers and traditional TV viewership (outside of sports) continue to decline as more viewers move toward streaming.
    And although ad buying in digital and streaming is rebounding, traditional TV still lags. That much was clear in the first-quarter earnings reports of media giants like Comcast’s NBCUniversal and Warner Bros. Discovery.
    Disney saw a first-quarter decline in ad revenue for its traditional cable networks and Hulu, despite an increase at cable crown jewel ESPN; Warner Bros. Discovery reported a drop in ad revenue; Paramount Global got an expected boost from airing the Super Bowl; and NBCUniversal’s domestic ad revenue was flat. Streaming ad revenue for the legacy media giants, however, showed growth.
    Outside of tentpole moments on TV, such as the Super Bowl and other live sports, advertisers are now strategizing on multiple fronts and divvying up spending across TV, social media, e-commerce and digital, said Goodway Group’s Hurd.
    “Linear TV advertising is still declining,” said Kate Scott-Dawkins, GroupM’s global president of business intelligence, noting the last decade has seen ad revenue shift from print and radio to TV and now toward digital.
    Retail media revenue grew from less than $1 billion in the U.S. a decade ago to a projected $42 billion this year — or $129.4 billion globally, said Scott-Dawkins, citing GroupM’s data, noting that brand advertising budgets may not directly shift from traditional TV into on-site retail advertising.
    She added traditional TV revenue may move to smart TVs, however, informed by the data on customer spending habits that retailers can provide.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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    Frontier Airlines CEO urges crackdown of ‘rampant abuse’ of airport wheelchair service

    Frontier Airlines CEO Barry Biffle said there is “massive, rampant abuse” of special services like wheelchair assistance.
    Travelers in the U.S. can request wheelchair access, which is provided free of charge.
    The imposters are creating delays for other passengers, Biffle said.

    Frontier Airlines plane seen at Cancun International Airport. On Wednesday, December 08, 2021, in Cancun International Airport, Cancun, Quintana Roo, Mexico.
    Artur Widak | Nurphoto | Getty Images

    The 1986 Air Carrier Access Act requires airlines to provide a wheelchair for passengers with disabilities at the airport. The problem, though, is that many travelers are faking it, Frontier Airlines CEO Barry Biffle said.
    “There is massive, rampant abuse of special services. There are people using wheelchair assistance who don’t need it at all,” Biffle said at a Wings Club luncheon on Thursday in New York.

    He said he has seen some Frontier flights where 20 people were brought in wheelchairs at departure, with only three using them upon arrival.
    “We are healing so many people,” he joked.
    Biffle wasn’t talking about travelers’ personal wheelchairs, but rather the service airlines provide when travelers arrive at the airport.
    It costs the airline between $30 and $35 each time a customer requests a wheelchair, Biffle said, and abuse of the service leads to delays for travelers with a genuine need for assistance.
    “Everyone should be entitled to it who needs it, but you park in a handicapped space they will tow your car and fine you,” he told CNBC. “There should be the same penalty for abusing these services.”

    Biffle isn’t the only executive to complain about travelers falsely claiming they need access to a wheelchair at the airport.
    In July 2022, John Holland-Kaye, the then-CEO of London’s Heathrow Airport, told LBC Radio amid staffing shortages that some travelers were “using wheelchair support to try to get fast-tracked through the airport.”
    “If you go on TikTok, that is one of the travel hacks people are recommending,” he said. “Please don’t do that. We need to protect the service for people who need it most.”
    John Morris, a triple amputee and founder of WheelchairTravel.org, noted there are reasons why some travelers might need wheelchairs on their outbound leg but not upon arrival. For example, they could need the help to get through a large airport like in Atlanta or New York City, but not so at smaller facilities.
    “Disability impacts people in a lot of different ways,” he said.
    “I think there’s a good case to be made that abusers should face some consequence but I’m not sure how we do that in a society when our disabilities aren’t [always] visible,” Morris said.
    Earlier this year, the Department of Transportation proposed stricter rules aimed at preventing wheelchair damage by airport ground handlers and ensuring “prompt assistance” to travelers with disabilities when getting on and off the plane.

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    Justice Department sues to break up Live Nation, parent of Ticketmaster

    The U.S. Department of Justice is suing to break up Live Nation, the parent company of Ticketmaster, over alleged antitrust violations.
    The lawsuit follows a DOJ probe launched in 2022 and bolstered by fan complaints after a botched rollout for tickets to Taylor Swift’s Eras Tour.
    Through Ticketmaster, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for concerts, the complaint said.

    The U.S. Department of Justice is suing to break up Live Nation, the parent company of Ticketmaster, over alleged antitrust violations.
    The lawsuit, joined by 30 states and filed Thursday, follows a DOJ investigation into whether Live Nation maintains a monopoly in the ticketing industry, a probe launched in 2022 and bolstered by fan complaints after a botched rollout for tickets to Taylor Swift’s Eras Tour.

    “We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” said Attorney General Merrick Garland in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”
    Shares of Live Nation fell more than 7% on Thursday.
    In a statement, Live Nation said the DOJ’s allegations of a monopoly are “absurd.”
    “The DOJ’s complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies—neither of which control ticket prices—for high ticket prices. It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost,” said Dan Wall, Live Nation executive vice president for corporate and regulatory affairs.

    Venue dominance

    Live Nation and Ticketmaster merged in 2010, creating a dominant entity in the live event industry. The company directly manages more than 400 artists, controls around 60% of concert promotions at major concert venues, operates and manages ticket sales for live entertainment globally, and also owns and operates more than 265 entertainment venues in North America, including over 60 of the top 100 amphitheaters, according to the DOJ lawsuit.

    Through Ticketmaster, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for concerts, the complaint said.
    “Taken individually and considered together, Live Nation’s and Ticketmaster’s conduct allows them to exploit their conflicts of interest — as a promoter, ticketer, venue owner and artist manager — across the live music industry and further entrench their dominant position,” the complaint reads.

    U.S. Attorney General Merrick Garland takes questions from reporters during a news conference at the Department of Justice Building on May 23, 2024 in Washington, DC. 
    Kent Nishimura | Getty Images

    The Justice Department lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses Live Nation of violating the Sherman Act and maintaining a self-reinforcing business model by capturing fees and revenue from concert fans and sponsorships, which it then uses to lock artists into exclusive promotion deals that give the artists access to key entertainment venues across the country. Live Nation then uses that dominance to lock new concert venues into long-term exclusionary contracts, thereby restarting the cycle, the lawsuit claims.
    Live Nation is also accused of threatening financial retaliation against potential competitors and venues that work with rivals; strategically acquiring smaller and regional competitive threats for the purpose of growing their competitive moat; and exploiting a relationship with venue partner Oak View Group, flipping the latter’s contracts over to Ticketmaster and discouraging competition in concert promotions.
    The lawsuit claims that Live Nation has discouraged bidding wars for artists and has unlawfully pressured artists into signing on for promotional services if they want to use the company’s venues, at times sacrificing profits it can earn as a venue owner by preferring to let its venues sit empty rather than have artists with other promotional contracts.
    “In its own words, Live Nation uses its exclusionary conduct as a ‘hedge against significant improvements by the competition or even a new competitor.’ But the cost of that hedge is one that we all pay, for example a broken ticketing website with substandard customer service that still captures your valuable data,” Assistant Attorney General Jonathan Kanter said during a press conference.
    “It is through these exclusive ticketing arrangements that Americans face the dreaded Ticketmaster tax, the seemingly endless set of fees ironically named service fee or convenience fee when they are anything but,” Kanter said.

    Ticket prices

    Live Nation made headlines last year when a surge of demand from 14 million users, including bots, for Taylor Swift concert tickets led to site disruptions and slow queues. A Senate subcommittee issued a subpoena to Live Nation and Ticketmaster in November 2023, following a monthslong probe prompted by the exorbitant inflated ticket prices in Swift’s Eras Tour.
    Steep prices for the U.S. shows led scores of fans to seek out tickets to Swift’s tour in other countries, which could often be cheaper even after international air travel.
    “In other countries where venues are not bound by Ticketmaster’s exclusive ticketing contracts, venues often use multiple ticketing companies for the same event and fans see lower fees and more innovative ticketing products as a result,” Garland said in a news conference.
    Live Nation said Thursday it doesn’t benefit from monopoly pricing, saying that Ticketmaster service charges “are no higher than elsewhere, and frequently lower.” The company noted its overall net profit margin is at the low end of S&P 500 companies.
    Live Nation further argued the lawsuit won’t reduce ticket prices or service fees. It said artist teams set prices for their tickets and the venues set and keep the majority of ticket fees.
    “Some call this ‘anti-monopoly’, but in reality it is just anti-business,” Live Nation’s Wall said. “There is no legal basis for objecting to vertical integration on these grounds.”
    Live Nation earlier this month reported its “biggest Q1 ever,” citing first-quarter revenue that was up 21% from the prior-year period.
    The company has also been in the public eye in the past year over transparency issues regarding hidden fees in ticket pricing.

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    Boeing expects a 2024 cash burn, slow recovery of airplane deliveries amid crisis, CFO says

    Boeing’s CFO forecast the company would have negative free cash flow in 2024 as manufacturing troubles persist.
    The company has slowed production since a door plug blew out of a nearly new 737 Max 9 in January.
    Aircraft deliveries won’t likely improve in the second quarter from the first, CFO Brian West said.

    An American Airlines Boeing 737 MAX 8 flight from Los Angeles approaches for landing at Reagan National Airport shortly after an announcement was made by the FAA that the planes were being grounded by the United States in Washington, U.S. March 13, 2019. 
    Joshua Roberts | Reuters

    Boeing will burn through cash this year and deliveries of new planes won’t improve in the second quarter from the first, as the manufacturer deals with a host of production challenges tied to its bestselling planes, the company’s CFO, Brian West, said Thursday.
    A month ago, West forecast Boeing would generate free cash flow “in the low single-digit billions.” The new forecast shows the mounting costs of the plane maker’s latest crises.

    Boeing burned through nearly $4 billion in cash in the first quarter and West said that figure could be similar or “possibly a little worse” in the second quarter, but that the company would likely return to generating cash in the second half of 2024.
    The company’s aircraft deliveries in the first quarter fell to the lowest level since the pandemic. The bulk of a plane’s price is paid when it’s handed over to a customer.
    Boeing’s shares lost more than 7% on Thursday after West’s comments at a Wolfe Research industry conference, a slide that weighed down the Dow Jones Industrial Average.
    “We have frustrated and disappointed our customers because of some of the production supply chain issues that we’re up against,” West said at the conference. “And while I understand that frustration, the most important thing we can do for our customers and the supply chain in the industry is to focus on the actions that are underway as we speak so that we could stabilize this production system, improve quality, and get more predictable.”
    Boeing CEO Dave Calhoun in March said he would step down by the end of the year, and the company replaced the chairman and chief executive of its commercial airplane unit. Leading up to the shake-up, CEOs of major airline customers complained about delivery delays and difficulty planning flights because of surprise disruptions.

    Boeing’s latest production issues surfaced after a door plug blew out midair from a nearly new 737 Max 9 at the start of the year, just as the company was trying to repair years of reputational damage from two fatal Max crashes in 2018 and 2019.
    The accident increased federal scrutiny of the company, whose executives have vowed to stamp out production flaws and regain the trust of regulators, airline customers and the public.
    Next Thursday, Boeing leaders are set to meet with the Federal Aviation Administration to present the company’s plan to improve its quality control, the FAA said. The agency gave Boeing 90 days to complete the plan starting in late February.
    Other problems have also sprung up, including a pause on deliveries of 737 Max planes to China to review batteries for the cockpit voice recorder. Boeing said in a statement that it is working with “our Chinese customers on the timing of their deliveries as the Civil Aviation Administration of China completes its review of batteries contained within the 25-hour cockpit voice recorder assembly unit.”
    Earlier this month, the FAA said it opened a new probe into the 787 Dreamliner inspections after the company disclosed “misconduct” by some employees. The agency said it was looking into whether employees falsified records.
    Parts shortages have also slowed deliveries of Dreamliners, Boeing has said. American Airlines last month said it would cut some international flights because of delays of the wide-body jets. Other carriers, including United Airlines and Southwest Airlines, said they had to scale back growth and hiring plans because of delayed Boeing jets.

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    Nvidia shares close at record high after forecast signals unwavering demand for AI chips

    Nvidia shares surged to a record high Thursday after the company beat earnings and revenue estimates for the fiscal first quarter.
    The chipmaker also announced a 10-for-1 stock split on Wednesday in its report.
    Wall Street analysts have since grown more bullish following the results.

    Nvidia CEO Jensen Huang delivers a keynote address during the Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California. 
    Justin Sullivan | Getty Images

    Nvidia shares jumped more than 9% on Thursday after the company on Wednesday reported earnings that topped Wall Street estimates and showed that there’s still ferocious demand for its artificial intelligence chips. The company’s data center revenue grew by a whopping 427% during the quarter.
    Shares closed above $1,000 for the first time, reaching a high of $1,037.99. Its previous high of $953.86 was set on May 21.

    First-quarter revenue came in higher than expected at $26.04 billion compared with the LSEG estimate of $24.65 billion. And the demand isn’t wavering.
    The company issued strong guidance, saying it expects $28 billion in revenue for the current quarter, beating the LSEG estimate of $26.61 billion.
    Despite some analysts fearing an “air pocket,” others have grown even more bullish on the company since its results. Bernstein’s Stacy Rasgon increased the firm’s price target to $1,300, writing in a note to investors that the narrative surrounding the company is “clearly nowhere near its end, or likely nowhere near its peak.” He wrote that shares seem inexpensive.
    Jefferies raised its target on the stock to $1,350 due to a strong ramp for its new AI graphics processors called Blackwell and anticipation of an acceleration in “magnitude of beats” later this year when the platform launches.
    Nvidia posted net income of $14.88 billion, or $5.98 per share, a dramatic pop from the $2.04 billion, or 82 cents per share, it reported in the year-ago quarter.
    Nvidia on Wednesday announced a 10-for-1 stock split, with shares set to begin trading on a split-adjusted basis at market open on June 10. More

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    Norfolk Southern agrees to $310 million federal settlement over Ohio train derailment

    Norfolk Southern has agreed to pay $310 million to settle charges over the East Palestine, Ohio, train derailment that occurred in February 2023, with the majority of that going to cleanup costs.
    The company will pay a $15 million fine for alleged violations of the Clean Water Act as part of the federal settlement.
    Norfolk Southern is estimating it will spend $1.7 billion in total costs associated with the incident.

    Officials continue to conduct operation and inspect the area after the train derailment in East Palestine, Ohio, United States on February 17, 2023. 
    EPA | Anadolu | Getty Images

    Norfolk Southern has agreed to pay $310 million to settle charges over a toxic train derailment in East Palestine, Ohio, in February 2023, the company announced on Thursday.
    The majority of the settlement is an estimated $235 million to cover all past and future cleanup costs. Per the agreement, the company will also pay a $15 million civil penalty to resolve alleged violations of the Clean Water Act.

    The agreement resolves a lawsuit filed in March 2023 by the EPA and the U.S. Department of Justice against Norfolk Southern for allegedly violating the Clean Water Act after the derailment of a freight train carrying hazardous substances ignited a dayslong fire that forced local residents to evacuate and contaminated the soil and waterways.
    “We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community’s needs and our mission to be the gold standard of safety in the rail industry,” Alan Shaw, president and CEO of Norfolk Southern, said in a statement. “We will continue keeping our promises and are invested in the community’s future for the long-haul.”

    Smoke rises from a derailed cargo train in East Palestine, Ohio, on February 4, 2023.
    Dustin Franz | Afp | Getty Images

    The settlement, if approved by the U.S. District Court for the Northern District of Ohio, would require Norfolk Southern to not only “take measures to improve rail safety” but also “pay for health monitoring and mental health services for the surrounding communities,” among other actions, the EPA said Thursday. That includes paying an estimated $7 million for remediation projects to curb pre-existing pollution and boost the region’s water quality.
    “No community should have to experience the trauma inflicted upon the residents of East Palestine,” said EPA Administrator Michael Regan in a statement. “Today’s enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again.”

    US President Joe Biden receives an operational briefing from officials on the continuing response and recovery efforts at the site of a train derailment which spilled hazardous chemicals a year ago in East Palestine, Ohio on February 16, 2024. 
    Mandel Ngan | Afp | Getty Images

    Norfolk Southern is estimated to have spent approximately $1.7 billion in total costs associated with the incident. The company said Thursday’s settlement won’t add to that total figure because it had already set aside money and had been anticipating the cost.

    The entire cleanup effort is currently anticipated to conclude on or around November 2024, but that “may change,” according to EPA spokesman Remmington Belford.
    The resolution with the EPA comes one month after the company agreed to pay $600 million in a class-action lawsuit settlement related to the 2023 derailment. More