The stock market finally gave up some ground on Tuesday morning, taking a pause from what’s been an impressive performance in January to start the year. Earnings season continued to produce some new readings on the state of the U.S. economy, and investors kept an eye on presentations from the World Economic Forum in Switzerland for hints of what the future might bring. As of 11 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) had dropped 94 points to 29,254, the S&P 500 (SNPINDEX:^GSPC) had lost 9 points to 3,321, and the Nasdaq Composite (NASDAQINDEX:^IXIC) had fallen 16 points to 9,373.
Tesla (NASDAQ:TSLA) has seen huge gains in recent months, and that has perhaps emboldened the car company to stand up to federal regulators in denying allegations regarding its vehicles. Meanwhile, Uber (NYSE:UBER) has also seen a sizable recovery since November following poor performance after the ridesharing specialist’s IPO, and some see strategic moves that it’s making as potentially building more positive momentum.
Tesla to regulators: “Completely false”
Shares of Tesla rose 6% after the electric vehicle specialist took an aggressive approach in responding to allegations that its cars are unsafe. In addition to challenging the validity of claims made in a regulatory petition, Tesla asserted that the person making the claim was a short-seller of the company’s stock.
Tesla’s Cybertruck under a spotlight. Image source: Tesla.
The National Highway Traffic Safety Administration (NHTSA) received a petition last September requesting that the regulator recall Tesla vehicles made in 2013 or later. The petition alleged that the electric cars have higher rates of unintended acceleration than other vehicles. Last Friday, the NHTSA said it would formally review the petition.
A Tesla blog post responded by noting that the car company had already discussed with the agency most of the past incidents that the petition cited. In all those cases, Tesla said, the vehicle functioned properly. Moreover, the manufacturer noted that proprietary Tesla technology offers advantages over other vehicles with respect to accelerator function.
Investors have seen similar allegations before, and the way that Tesla handled this latest assertion without undue drama seems to reflect changes that the company has made internally. With some stock analysts seeing considerably more upside for Tesla, shareholders have a lot to be excited about.
Uber makes a sale
Meanwhile, shares of Uber rose 5%. The company made a strategic move with some of its operations in India, and it’s also testing a feature to give some of its drivers more autonomy to set prices.
On the strategic side, Uber announced that it would sell off its Uber Eats business in India to industry peer Zomato. Rather than continuing to compete in the hotly contested market in that country, Uber will take a nearly 10% stake in Zomato. It will also support Zomato by including some operational assets as part of the deal.
Elsewhere, Uber is offering a test that allows some of its drivers in California to charge fares that they set themselves, rather than requiring them to charge whatever fare Uber determines is appropriate. The move will affect airport trips in Palm Springs, Sacramento, and Santa Barbara, giving the flexibility to charge up to five times the normal Uber-provided rate. The test is intended to demonstrate to California regulators that Uber is respecting the independent-contractor status of its drivers rather than imposing employee-like restrictions on them.
By culling weak-performing businesses and answering regulatory challenges, Uber is looking to get back some momentum. Its stock has already seen the positive effects, but there needs to be more progress in order to satisfy IPO investors who still have losses on their positions.