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TALKING POINTS

With new division, State Street dives into digital assets and currencies

Financial services firms such as State Street and Fidelity Investments have been getting into crypto and digital currencies.
Financial services firms such as State Street and Fidelity Investments have been getting into crypto and digital currencies.Eva Marie Uzcategui/Bloomberg

FINANCE

With new division, State Street dives into digital assets and currencies

State Street Corp. has become the latest financial services giant to try to cash in on the cryptocurrency craze. The Boston-based company on Thursday announced the launch of a new division, dubbed State Street Digital, that will focus on digital assets and technologies such as cryptocurrency, blockchain, and tokenization — essentially digital alternatives to cash and other traditional currencies. The 425-person group will be based in Boston, and led by executive vice president Nadine Chakar, who previously led global markets for State Street. The workers in the division have been drawn from State Street’s existing workforce, in numerous geographies, but a spokesman said new roles will be added in the coming months. “We see digital assets as one of the most significant forces impacting our industry,” said Ron O’Hanley, State Street’s chief executive. “It is critical we have the tools in place to provide our clients with solutions for both their traditional investment needs as well as their increased digital needs.” ― JON CHESTO

BIOTECH

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Vertex tumbles after halting development of liver-disease drug

Vertex Pharmaceuticals ended a closely watched effort to develop a therapy for liver disease, a setback in the biotech’s quest to broaden its offerings beyond cystic fibrosis drugs. The shares plunged in post-market trading. After reporting results from a mid-stage trial, Vertex said its experimental treatment, VX-864, isn’t likely to substantially benefit patients. The company discontinued development of a similar compound last fall due to safety issues. Both were aimed at treating alpha-1 antitrypsin deficiency, an inherited disease where the patient’s liver doesn’t make a protein needed to protect itself and the lungs. The shares fell as much as 15 percent after US markets closed Thursday. They had lost 8.3 percent this year through the 4 p.m. close. Vertex has become a biotech darling based on sales of highly successful therapies for cystic fibrosis, a progressive genetic condition that leaves patients vulnerable to lung infections. The failure raises pressure to diversify beyond those core drugs and bolster its pipeline of new medications. ― BLOOMBERG NEWS

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CYBERSECURITY

Electronic Arts hit by hackers who took source code, tools

Electronic Arts, the video-game giant behind the Battlefield, Sims, and Madden NFL franchises, said that hackers stole game source code and related internal tools. The loss wasn’t extensive and isn’t expected to affect games or Electronic Arts’ business, the company said Thursday by e-mail. The company didn’t provide other details of the attack. “We are investigating a recent incident of intrusion into our network where a limited amount of game source code and related tools were stolen,” the Redwood City, California-based company said. “No player data was accessed, and we have no reason to believe there is any risk to player privacy.” Hackers going by the name Kickass on the XSS cybercrime forum claim to have stolen a trove of data from Electronic Arts. They first advertised the stolen data in a locked chatroom on XSS earlier this week, claiming to have the original software-development kit for Microsoft’s Xbox console, along with keys to crack FIFA 21, FIFA 22, and other EA game frameworks. In all, the hackers are trying to sell about 780 gigabytes of game data, according to the post. Electronic Arts has tightened security since the incident and is “actively working with law-enforcement officials and other experts as part of this ongoing criminal investigation,” the company said. ― BLOOMBERG NEWS

OFFICES

Amazon softens stance on employees returning to its offices

Amazon.com Inc. wants corporate employees to return to the office at least three days a week, according to an e-mail sent to employees Thursday, a softer stance from the company’s earlier position that it has an office-centric culture. Amazon said it expects office workers in the United States, Britain, and several other countries to resume working mostly from the office the week of Sept. 7. “Like all companies and organizations around the world, we’re managing every stage of this pandemic for the first time, learning and evolving as we go,” according to the e-mail. “We’ve been thinking about how to balance our desire to provide flexibility to work from home with our belief that we invent best for customers when we are together in the office.” News of the e-mail was reported earlier in The Seattle Times. ― BLOOMBERG NEWS

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ENTERTAINMENT

Netflix opens an online shop to hawk items from popular shows

Netflix is branching into toys, games, and clothing based on its popular shows, looking to mine popular characters for added revenue much like Walt Disney Co. The streaming service is launching Netflix.shop, a retail arm that will sell curated products from its catalog of shows and movies. As part of the launch, Netflix is introducing a collection of anime-inspired products, according to a statement Thursday. Products from other programs are in the works, too. The move into merchandising is a logical extension for Netflix. Other major studios generate billions of dollars in revenue from toys, collectibles and other goods based on popular characters and shows. Disney’s “Star Wars” films and shows alone have generated tens of billions in merchandise sales. The initial items from Netflix include streetwear and action figures from the anime series “Yasuke” and “Eden,” along with apparel and decorative items inspired by the show “Lupin.” The shop will open in the United States before expanding to other countries, Netflix said. ― BLOOMBERG NEWS

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BANKING

Mortgage rates fall, marking two months below 3 percent

Despite an economy that appears to be strengthening, mortgage rates continued to hover below 3 percent this week. They have not been above 3 percent the past two months. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average fell to 2.96 percent with an average 0.7 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 2.99 percent a week ago and 3.21 percent a year ago. Freddie Mac, the federally chartered mortgage investor, aggregates rates from around 80 lenders across the country to come up with weekly national averages. It uses rates for high-quality borrowers with strong credit scores and large down payments. Because of the criteria, these rates are not available to every borrower. The survey is based on home purchase mortgages, which means rates for refinances may be higher. The price adjustment for refinance transactions that went into effect in December is adding to the cost. The adjustment, which applies to all Fannie Mae and Freddie Mac refinances, is 0.5 percent of the loan amount. That works out to $1,500 on a $300,000 loan. The 15-year fixed-rate average slid to 2.23 percent with an average 0.6 point. It was 2.27 percent a week ago and 2.62 percent a year ago. The five-year adjustable rate average dropped to 2.55 percent with an average 0.2 point. It was 2.64 percent a week ago and 3.1 percent a year ago. ― WASHINGTON POST

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AUTOMOTIVE

GM’s EV gamble could be Toyota’s gain as carmakers place bets

General Motors Co.’s plan to bring out the most electric vehicles in the United States over the next three years may end up ceding market share to the likes of Toyota Motor Corp. and Honda Motor Co., which are choosing to emphasize refreshing their more-profitable gasoline-burning vehicles, according to a report from Bank of America. GM will replace only 14 percent of its annual sales volume with new models from 2022 to 2024, about half the rate Honda will freshen its cars. Toyota will replace its lineup at a rate of 26 percent, beating the industry average of 21 percent. Ford will replace 17 percent of its volume with new vehicles while pushing more EVs, according to the annual Car Wars study produced by BofA analyst John Murphy. Because EVs sell in limited numbers, the new models GM that plans to introduce could result in lower overall market share if consumers don’t embrace the technology quickly. Under chief executive Mary Barra, GM has pushed for an electric future that means developing battery-powered pickup trucks and SUVs, while conventional models wait longer for a refresh. If Barra’s bet wins, she will cede market share for a few years and then emerge as a leader around mid-decade if consumers end up embracing electric vehicles quickly. Barra has said in investor presentations that developing electric vehicles could help GM win in coastal markets, where plug-ins sell well and GM’s brands are the weakest. ― BLOOMBERG NEWS