Discord and Microsoft Said to Discuss Deal That Could Top $10 Billion

SAN FRANCISCO — Discord, a social media company popular with gamers, has held deal talks with Microsoft for a transaction that could top $10 billion, according to people briefed on the situation.

The talks were preliminary and no deal is imminent, said one of the people, who declined to be identified because the discussions are confidential. The talks have taken place as video gaming has boomed in the pandemic and as Microsoft, one of the world’s most valuable tech companies, has bolstered its gaming business with deal making.

Many of Microsoft’s acquisitions in recent years have focused on online communities, such as its purchases of LinkedIn, GitHub, and the gaming developer that created Minecraft. Last summer, Microsoft was in talks to buy the video app TikTok in what would have been a blockbuster acquisition; the discussions later fell apart. In September, Microsoft also bought ZeniMax Media, the parent company of several large gaming studios, for $7.5 billion.

Discord, which counts more than 100 million monthly active users, has been highly popular in the pandemic, as people have used the service to chat with one another while playing games. The San Francisco-based company, which has raised nearly $600 million in funding since 2014, has had preliminary deal talks with various suitors over the years, said another person with knowledge of the matter.

previously reported that Discord was holding deal discussions, and Bloomberg reported Microsoft’s involvement.

Joost van Dreunen, a New York University professor who studies the business of video games, said that if a deal were to happen, Discord “would be a natural fit” with Microsoft’s Xbox video gaming business. He said Microsoft has been “building hardware, buying software, and is now stitching it all together with the connective tissue of a community layer.”

Microsoft has said it wants to make it easier for people to play games at home on its Xbox consoles, or on-the-go on their phones. In the last three months of 2020, its gaming business generated $5 billion in revenue for the first time, following the release of new Xbox consoles.

Discord was founded in 2015 by Jason Citron and Stan Vishnevskiy, programmers and entrepreneurs, as a platform for video game players to chat and hang out while gaming. It gained mainstream attention as a gathering ground for the far right, who used Discord to organize the white nationalist Charlottesville, Va., rally in 2017.

Discord has since implemented stricter content moderation rules and banned alt-right communities. The app, which allows people to create private servers — in essence, small communities — features audio, text and video chat options.

Last year, Discord announced plans to expand beyond gaming into everyday usage among online groups of all kinds. It has been used for activities like college classes and organizing events like the Black Lives Matter protests.

The company crossed $100 million in revenue last year, one of the people said. Discord makes money by selling subscriptions to a premium version of the service.

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China Punishes Microsoft’s LinkedIn Over Lax Censorship

LinkedIn has been the lone major American social network allowed to operate in China. To do so, the Microsoft-owned service for professionals censors the posts made by its millions of Chinese users.

Now, it’s in hot water for not censoring enough.

China’s internet regulator rebuked LinkedIn executives earlier this month for failing to control political content, according to three people briefed on the matter. Though it isn’t clear precisely what material got the company into trouble, the regulator said it found objectionable posts circulating in the period around an annual meeting of China’s lawmakers, said these people, who asked for anonymity because the issue isn’t public.

As a punishment, the people said, officials are requiring LinkedIn to perform a self-evaluation and offer a report to the Cyberspace Administration of China, the country’s internet regulator. The service was also forced to suspend new sign-ups of users inside China for 30 days, one of the people added, though that time period could change depending on the administration’s judgment.

The C.A.C. did not immediately respond to a faxed request for comment.

LinkedIn’s presence in China has long drawn interest across Silicon Valley as a potential path into the country’s walled-off internet, home to the world’s largest group of web users. The punishment underscores deep divisions between the United States and China over how the internet should work.

such barriers are symptomatic of China’s unwillingness to follow global norms governing the internet and technology more broadly.

LinkedIn’s China service, which has more than 50 million members, makes it vulnerable to tensions between the two powers. The run-in with the regulator came just weeks before Thursday’s scheduled meeting between Chinese and American officials in Alaska, the first face-to-face sit down of the Biden administration.

Competition over technology has been a key sticking point between the two countries. The Biden administration has said it will turn to allies to help pressure China on tech policies it deems unfair. Chinese officials have pushed new plans for technological self-reliance, which involve developing its own versions of everything from computer chips to jetliners.

Anxieties in Washington were recently heightened by a hack that Microsoft has tentatively linked to China aimed at businesses and government agencies that used the company’s email services.

On March 9, LinkedIn posted a statement saying it had “temporarily” stopped registering new users in China. “We’re a global platform with an obligation to respect the laws that apply to us, including adhering to Chinese government regulations for our localized version of LinkedIn in China,” the statement added.

opening a Chinese site nearly seven years ago, LinkedIn drew curiosity from a U.S. internet industry perennially banned by the country’s Great Firewall, as China’s censorship system is nicknamed. To ensure its presence, LinkedIn sold a stake to well-connected Chinese venture capital partners and pledged to follow local laws, including censorship guidelines.

The company has used a combination of software algorithms and human reviewers to flag posts that could offend Beijing. Users who run afoul of the speech rules have generally received emails informing them that their post is not viewable by LinkedIn members in China.

Its early efforts drew ire from users whose content was blocked even if they had been posting from outside the country. Still, unlike its peers, LinkedIn has remained in China and offered a tantalizing case study in market access.

That perseverance hasn’t always translated into success. LinkedIn has had a hard time competing with WeChat, the ubiquitous Chinese chat and social media service, and remains a relatively small player.

The environment has become more difficult, too. Since he took the reins of the Communist Party in late 2012, Xi Jinping, China’s leader, has implemented a series of crackdowns on the internet. Mr. Xi’s policies have also called for deeper economic self-sufficiency and eschewing Western culture, a blow to a service whose appeal has been to connect Chinese professionals to the world.

Mr. Xi has presided over the rising power of the C.A.C., the regulator that punished LinkedIn. It has become a de facto ministry of censorship, poring over memes and complaints across the country’s internet, and calling for takedowns when companies’ censors miss something.

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Who Is Making Sure the A.I. Machines Aren’t Racist?

Hundreds of people gathered for the first lecture at what had become the world’s most important conference on artificial intelligence — row after row of faces. Some were East Asian, a few were Indian, and a few were women. But the vast majority were white men. More than 5,500 people attended the meeting, five years ago in Barcelona, Spain.

Timnit Gebru, then a graduate student at Stanford University, remembers counting only six Black people other than herself, all of whom she knew, all of whom were men.

The homogeneous crowd crystallized for her a glaring issue. The big thinkers of tech say A.I. is the future. It will underpin everything from search engines and email to the software that drives our cars, directs the policing of our streets and helps create our vaccines.

But it is being built in a way that replicates the biases of the almost entirely male, predominantly white work force making it.

especially with the current hype and demand for people in the field,” she wrote. “The people creating the technology are a big part of the system. If many are actively excluded from its creation, this technology will benefit a few while harming a great many.”

The A.I. community buzzed about the mini-manifesto. Soon after, Dr. Gebru helped create a new organization, Black in A.I. After finishing her Ph.D., she was hired by Google.

She teamed with Margaret Mitchell, who was building a group inside Google dedicated to “ethical A.I.” Dr. Mitchell had previously worked in the research lab at Microsoft. She had grabbed attention when she told Bloomberg News in 2016 that A.I. suffered from a “sea of dudes” problem. She estimated that she had worked with hundreds of men over the previous five years and about 10 women.

said she had been fired after criticizing Google’s approach to minority hiring and, with a research paper, highlighting the harmful biases in the A.I. systems that underpin Google’s search engine and other services.

“Your life starts getting worse when you start advocating for underrepresented people,” Dr. Gebru said in an email before her firing. “You start making the other leaders upset.”

As Dr. Mitchell defended Dr. Gebru, the company removed her, too. She had searched through her own Google email account for material that would support their position and forwarded emails to another account, which somehow got her into trouble. Google declined to comment for this article.

Their departure became a point of contention for A.I. researchers and other tech workers. Some saw a giant company no longer willing to listen, too eager to get technology out the door without considering its implications. I saw an old problem — part technological and part sociological — finally breaking into the open.

talking digital assistants and conversational “chatbots,” Google Photos relied on an A.I. system that learned its skills by analyzing enormous amounts of digital data.

Called a “neural network,” this mathematical system could learn tasks that engineers could never code into a machine on their own. By analyzing thousands of photos of gorillas, it could learn to recognize a gorilla. It was also capable of egregious mistakes. The onus was on engineers to choose the right data when training these mathematical systems. (In this case, the easiest fix was to eliminate “gorilla” as a photo category.)

As a software engineer, Mr. Alciné understood the problem. He compared it to making lasagna. “If you mess up the lasagna ingredients early, the whole thing is ruined,” he said. “It is the same thing with A.I. You have to be very intentional about what you put into it. Otherwise, it is very difficult to undo.”

the study drove a backlash against facial recognition technology and, particularly, its use in law enforcement. Microsoft’s chief legal officer said the company had turned down sales to law enforcement when there was concern the technology could unreasonably infringe on people’s rights, and he made a public call for government regulation.

Twelve months later, Microsoft backed a bill in Washington State that would require notices to be posted in public places using facial recognition and ensure that government agencies obtained a court order when looking for specific people. The bill passed, and it takes effect later this year. The company, which did not respond to a request for comment for this article, did not back other legislation that would have provided stronger protections.

Ms. Buolamwini began to collaborate with Ms. Raji, who moved to M.I.T. They started testing facial recognition technology from a third American tech giant: Amazon. The company had started to market its technology to police departments and government agencies under the name Amazon Rekognition.

Ms. Buolamwini and Ms. Raji published a study showing that an Amazon face service also had trouble identifying the sex of female and darker-​skinned faces. According to the study, the service mistook women for men 19 percent of the time and misidentified darker-​skinned women for men 31 percent of the time. For lighter-​skinned males, the error rate was zero.

New York Times article that described it.

In an open letter, Dr. Mitchell and Dr. Gebru rejected Amazon’s argument and called on it to stop selling to law enforcement. The letter was signed by 25 artificial intelligence researchers from Google, Microsoft and academia.

Last June, Amazon backed down. It announced that it would not let the police use its technology for at least a year, saying it wanted to give Congress time to create rules for the ethical use of the technology. Congress has yet to take up the issue. Amazon declined to comment for this article.

Dr. Gebru and Dr. Mitchell had less success fighting for change inside their own company. Corporate gatekeepers at Google were heading them off with a new review system that had lawyers and even communications staff vetting research papers.

Dr. Gebru’s dismissal in December stemmed, she said, from the company’s treatment of a research paper she wrote alongside six other researchers, including Dr. Mitchell and three others at Google. The paper discussed ways that a new type of language technology, including a system built by Google that underpins its search engine, can show bias against women and people of color.

After she submitted the paper to an academic conference, Dr. Gebru said, a Google manager demanded that she either retract the paper or remove the names of Google employees. She said she would resign if the company could not tell her why it wanted her to retract the paper and answer other concerns.

Cade Metz is a technology correspondent at The Times and the author of “Genius Makers: The Mavericks Who Brought A.I. to Google, Facebook, and the World,” from which this article is adapted.

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White House Weighs New Cybersecurity Approach After Failure to Detect Hacks

The question is how to set up such a system.

After revelations in 2013 by the former intelligence contractor Edward J. Snowden that set off a debate about government surveillance, American technology companies are wary of the appearance of sharing data with American intelligence agencies, even if that data is just warnings about malware. Google was stung by the revelation in the Snowden documents that the National Security Agency was intercepting data transmitted between its servers overseas. Several years later, under pressure from its employees, it ended its participation in Project Maven, a Pentagon effort to use artificial intelligence to make its drones more accurate.

Amazon, in contrast, has no such compunctions about sensitive government work: It runs the cloud server operations for the C.I.A. But when the Senate Intelligence Committee asked company officials to testify last month — alongside executives of FireEye, Microsoft and SolarWinds — about how the Russians exploited systems on American soil to launch their attacks, they declined to attend.

Companies say that before they share reporting on vulnerabilities, they would need strong legal liability protections.

The most politically palatable headquarters for such a clearinghouse — avoiding the legal and civil liberties concerns of using the National Security Agency — would be the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. Mr. Gerstell described the idea as “automated computer sensors and artificial intelligence acting on information as it comes in and instantaneously spitting it back out.”

The department’s existing “Einstein” system, which is supposed to monitor intrusions and potential attacks on federal agencies, never saw the Russian attack underway — even though it hit nine federal departments and agencies. The F.B.I., lawmakers say, does not have broad monitoring capabilities, and its focus is divided across other forms of crime, counterterrorism and now domestic extremism threats.

“I don’t want the intelligence agencies spying on Americans, but that leaves the F.B.I. as the de facto domestic intelligence agency to deal with these kinds of attacks,” said Senator Angus King, a Maine independent, member of the Senate Intelligence Committee and co-chairman of the cyberspace commission. “I’m just not sure they’re set up for this.”

There are other hurdles. The process of getting a search warrant is too cumbersome for tracking nation-state cyberattacks, Mr. Gerstell said. “Someone’s got to be able to take that information from the N.S.A. and instantly go take a look at that computer,” he said. “But the F.B.I. needs a warrant to do that, and that takes time by which point the adversary has escaped.”

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Microsoft takes aim at Google as it supports bill to give news publishers more leverage over Big Tech.

Lawmakers on Friday debated an antitrust bill that would give news publishers collective bargaining power with online platforms like Facebook and Google, putting the spotlight on a proposal aimed at chipping away at the power of Big Tech.

At a hearing held by the House antitrust subcommittee, Microsoft’s president, Brad Smith, emerged as a leading industry voice in favor of the law. He took a divergent path from his tech counterparts, pointing to an imbalance in power between publishers and tech platforms. Newspaper ad revenue plummeted to $14.3 billion in 2018 from $49.4 billion in 2005, he said, while ad revenue at Google jumped to $116 billion from $6.1 billion.

“Even though news helps fuel search engines, news organizations frequently are uncompensated or, at best, undercompensated for its use,” Mr. Smith said. “The problems that beset journalism today are caused in part by a fundamental lack of competition in the search and ad tech markets that are controlled by Google.”

The hearing was the second in a series planned by the subcommittee to set the stage for the creation of stronger antitrust laws. In October, the subcommittee, led by Representative David Cicilline, Democrat of Rhode Island, released the results of a 16-month investigation into the power of Amazon, Apple, Facebook and Google. The report accused the companies of monopoly behavior.

This week, the committee’s two top leaders, Mr. Cicilline and Representative Ken Buck, Republican of Colorado, introduced the Journalism and Competition Preservation Act. The bill aims to give smaller news publishers the ability to band together to bargain with online platforms for higher fees for distributing their content. The bill was also introduced in the Senate by Senator Amy Klobuchar, a Democrat of Minnesota and the chairwoman of that chamber’s antitrust subcommittee.

Global concern is growing over the decline of local news organizations, which have become dependent on online platforms for distribution of their content. Australia recently proposed a law allowing news publishers to bargain with Google and Facebook, and lawmakers in Canada and Britain are considering similar steps.

Mr. Cicilline said, “While I do not view this legislation as a substitute for more meaningful competition online — including structural remedies to address the underlying problems in the market — it is clear that we must do something in the short term to save trustworthy journalism before it is lost forever.”

Google, though not a witness at the hearing, issued a statement in response to Mr. Smith’s planned testimony, defending its business practices and disparaging the motives of Microsoft, whose Bing search engine runs a very distant second place behind Google.

“Unfortunately, as competition in these areas intensifies, they are reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests,” wrote Kent Walker, the senior vice president of policy for Google.

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Faulty Software Snarls Vaccine Sign-Ups

When coronavirus vaccines first became available, state health officials in Virginia turned to software recommended by the Centers for Disease Control and Prevention to schedule appointments. But people complained that the software, called VAMS, was too confusing for older adults to use.

So the state switched to another system, PrepMod — but that had problems, too. Links sent to seniors for their appointments were reusable and found their way to Facebook, leading to one vaccination event in Richmond with dozens of overbookings. Some of those people threatened health care workers when they were turned away.

“It was a nightmare scenario,” said Ruth Morrison, the policy director for the Richmond and Henrico County health district. “People showing up confused, irate, thinking they had an appointment.”

State and local health departments around the country continue to face delays dispensing shots, in part because flaws remain in the appointment software tools like those used in Richmond. The problems threaten to slow the vaccine rollout even as supplies and distribution are picking up quickly across the country.

crashed early on. But the issues with the vaccine sites have an added sense of urgency because health officials are trying to vaccinate as many people as possible, as fast as possible.

On Thursday, President Biden said that his administration would send out technical teams to help states improve their websites. He also said the federal government would open a website by May 1 that would allow Americans to find out where the vaccine is available.

Many state officials have switched software providers, only to see little or no improvement. In California, tech mishaps have allowed ineligible people to snatch up appointments. Massachusetts residents have been stymied by crashing websites. Some North Carolina residents are eschewing online sign-ups entirely, instead engaging in a vaccine free-for-all.

PrepMod is being used by 28 states and localities, after many states shunned the $44 million VAMS tool built by Deloitte. Salesforce and Microsoft have developed vaccine software, too, with their customers being similarly frustrated. Smaller tech companies have pitched their own scheduling tools as well.

decided after the failed PrepMod trial that her county would try something else. “Some of these systems have strengths, but they all have weaknesses, too.”

Some sites do not support appointment scheduling at all, but allow people to browse databases to find available vaccines or get on wait lists. Often, the systems cannot communicate with one another.

frustrated New Jersey with its system, and in late February, after days of website crashes in the nation’s capital, the company admitted it had “fallen short.”

Microsoft said in a statement that it was “focused on helping governments manage their Covid-19 vaccination programs as quickly, safely and efficiently as possible.”

PrepMod’s woes have led to delays in vaccine rollouts in places like Washington State and Pennsylvania. When the vaccine appointment website in Massachusetts went down for several hours after a surge in demand, PrepMod took responsibility and apologized.

Andrew Therriault, a Boston data scientist, said he was “astounded” by the extent of PrepMod’s shortcomings. One problem he found was that the system did not reserve an appointment slot as people filled out their information, so they could be booted out at any time if someone else beat them to that particular slot.

“I try to imagine somebody doing this who’s not so tech savvy — that basically means they have no opportunity to compete,” Mr. Therriault said.

aiming to reach Black and Latino communities that had low vaccination rates issued MyTurn appointment codes to those groups that ended up being shared widely, including among more affluent, white communities. Because the codes did not expire after a single use, those people were able to use them to get vaccinated before it was their turn.

Ms. Tate of PrepMod said health care workers and others who were improperly sharing the links were at fault.

“That’s not a problem with our system. That’s a problem with people who should be responsible,” she said. The company, she said, has added an option for unique links.

Salesforce declined to comment, but Darrel Ng, a California health department spokesman, said MyTurn had also added unique links.

forcing the site to close for several days because it ran out of doses.

“The MyTurn system is fraught with issues,” Dr. Ghazala Sharieff, Scripps’s chief medical officer, said. “These challenges are adding another layer of unnecessary stress to our team.”

Health officials said the reliance on outside companies’ imperfect tools underscored the need to invest in technology for public health departments, many of which still use paper and fax machines to keep records.

State registries that keep track of residents’ vaccination histories — known as immunization information systems — could have been adapted to schedule appointments, said Mary Beth Kurilo, a senior director at the American Immunization Registry Association. But the federal government never asked them to, she said, and they would have needed more money and time to prepare.

Some regions have elected to avoid technology entirely.

In Johnston County, N.C., southeast of Raleigh, the Health Department decided it would have been too much of a strain on the staff to manage appointments online, so shots are first come first served.

The policy has been efficient, said Lu Hickey, the Health Department’s spokeswoman, but it means the county — which also does not require in-person identification — does not know whether people are being vaccinated in the proper order and has to rely on the honor system.

In Richmond, Ms. Morrison said officials were searching for solutions and even thinking about trying VAMS again.

“We’re cobbling it together at the local level through a lot of manual effort and workarounds we’ve put in place to put Band-Aids on,” she said.

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Faulty Software Snarls Coronavirus Vaccine Sign-Ups

When coronavirus vaccines first became available, state health officials in Virginia turned to software recommended by the Centers for Disease Control and Prevention to schedule appointments. But people complained that the software, called VAMS, was too confusing for older adults to use.

So the state switched to another system, PrepMod — but that had problems, too. Links sent to seniors for their appointments were reusable and found their way to Facebook, leading to one vaccination event in Richmond with dozens of overbookings. Some of those people threatened health care workers when they were turned away.

“It was a nightmare scenario,” said Ruth Morrison, the policy director for the Richmond and Henrico County health district. “People showing up confused, irate, thinking they had an appointment.”

State and local health departments around the country continue to face delays dispensing shots, in part because flaws remain in the appointment software tools like those used in Richmond. The problems threaten to slow the vaccine rollout even as supplies and distribution are picking up quickly across the country.

crashed early on. But the issues with the vaccine sites have an added sense of urgency because health officials are trying to vaccinate as many people as possible, as fast as possible.

On Thursday, President Biden said that his administration would send out technical teams to help states improve their websites. He also said the federal government would open a website by May 1 that would allow Americans to find out where the vaccine is available.

Many state officials have switched software providers, only to see little or no improvement. In California, tech mishaps have allowed ineligible people to snatch up appointments. Massachusetts residents have been stymied by crashing websites. Some North Carolina residents are eschewing online sign-ups entirely, instead engaging in a vaccine free-for-all.

PrepMod is being used by 28 states and localities, after many states shunned the $44 million VAMS tool built by Deloitte. Salesforce and Microsoft have developed vaccine software, too, with their customers being similarly frustrated. Smaller tech companies have pitched their own scheduling tools as well.

decided after the failed PrepMod trial that her county would try something else. “Some of these systems have strengths, but they all have weaknesses, too.”

Some sites do not support appointment scheduling at all, but allow people to browse databases to find available vaccines or get on wait lists. Often, the systems cannot communicate with one another.

frustrated New Jersey with its system, and in late February, after days of website crashes in the nation’s capital, the company admitted it had “fallen short.”

Microsoft said in a statement that it was “focused on helping governments manage their Covid-19 vaccination programs as quickly, safely and efficiently as possible.”

PrepMod’s woes have led to delays in vaccine rollouts in places like Washington State and Pennsylvania. When the vaccine appointment website in Massachusetts went down for several hours after a surge in demand, PrepMod took responsibility and apologized.

Andrew Therriault, a Boston data scientist, said he was “astounded” by the extent of PrepMod’s shortcomings. One problem he found was that the system did not reserve an appointment slot as people filled out their information, so they could be booted out at any time if someone else beat them to that particular slot.

“I try to imagine somebody doing this who’s not so tech savvy — that basically means they have no opportunity to compete,” Mr. Therriault said.

aiming to reach Black and Latino communities that had low vaccination rates issued MyTurn appointment codes to those groups that ended up being shared widely, including among more affluent, white communities. Because the codes did not expire after a single use, those people were able to use them to get vaccinated before it was their turn.

Ms. Tate of PrepMod said health care workers and others who were improperly sharing the links were at fault.

“That’s not a problem with our system. That’s a problem with people who should be responsible,” she said. The company, she said, has added an option for unique links.

Salesforce declined to comment, but Darrel Ng, a California health department spokesman, said MyTurn had also added unique links.

forcing the site to close for several days because it ran out of doses.

“The MyTurn system is fraught with issues,” Dr. Ghazala Sharieff, Scripps’s chief medical officer, said. “These challenges are adding another layer of unnecessary stress to our team.”

Health officials said the reliance on outside companies’ imperfect tools underscored the need to invest in technology for public health departments, many of which still use paper and fax machines to keep records.

State registries that keep track of residents’ vaccination histories — known as immunization information systems — could have been adapted to schedule appointments, said Mary Beth Kurilo, a senior director at the American Immunization Registry Association. But the federal government never asked them to, she said, and they would have needed more money and time to prepare.

Some regions have elected to avoid technology entirely.

In Johnston County, N.C., southeast of Raleigh, the Health Department decided it would have been too much of a strain on the staff to manage appointments online, so shots are first come first served.

The policy has been efficient, said Lu Hickey, the Health Department’s spokeswoman, but it means the county — which also does not require in-person identification — does not know whether people are being vaccinated in the proper order and has to rely on the honor system.

In Richmond, Ms. Morrison said officials were searching for solutions and even thinking about trying VAMS again.

“We’re cobbling it together at the local level through a lot of manual effort and workarounds we’ve put in place to put Band-Aids on,” she said.

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Futures jump on calmer bonds as inflation worries ease

(Reuters) – Futures tied to the Nasdaq 100 index jumped on Thursday as U.S. bond yields retreated to one-week lows on ebbing concerns over a strong pick up in inflation, while investors awaited data that is likely to show a dip in weekly jobless claims.

FILE PHOTO: Dividers are seen inside a trading post on the trading floor as preparations are made for the return to trading at the New York Stock Exchange (NYSE) in New York, U.S., May 22, 2020. REUTERS/Brendan McDermid

Mega-cap stocks Apple Inc, Microsoft Corp, Amazon.com Inc and Tesla Inc gained between 1.5% and 4.3% premarket as the benchmark Treasury yields dipped below the key 1.5% mark after shooting to a one-year high above 1.6% last week.

High-growth tech stocks, which are attempting to regain their footing after a recent pullback, are sensitive to increasing interest rates as they are valued on earnings expected years into the future.

The Nasdaq is now about 7% below its Feb. 12 record close after falling as much as 12% last week.

The Dow on Wednesday hit a record closing high for the first time since February as tepid inflation numbers allayed fears that the economy is running too hot.

A sweeping $1.9 trillion COVID-19 relief bill, which includes $1,400 direct payments, received a final nod from Congress on Thursday and is expected to surpercharge the economic recovery from a pandemic that has killed more than 528,000 people and thrown millions out of work.

The Labor Department’s data at 8:30 a.m. ET is expected to show the number of Americans filing for jobless benefits fell to 725,000 in the latest week from 745,000, amid an improving public health environment.

At 6:35 a.m. ET, Dow E-minis were up 67 points, or 0.21%, S&P 500 E-minis were up 26.5 points, or 0.68% and Nasdaq 100 E-minis were up 233 points, or 1.83%.

Investors will now eye an auction of U.S. 30-year debt later in the day. A weak seven-year auction in late February fuelled inflation concerns and sent yields higher.

JD.com Inc climbed about 8% premarket after the Chinese e-commerce company reported a jump in fourth-quarter revenue as it benefited from a broader shift to online shopping triggered by the COVID-19 pandemic.

Bumble Inc jumped about 10% after it reported a bigger-than-expected rise in fourth-quarter revenue and said it expected pent-up demand from people who had been avoiding dating in person due to the pandemic.

A so-called “meme” stock AMC Entertainment Holdings Inc gained 7.5% as the cinema chain said the roll-out of COVID-19 vaccines and the release of major movies, including “Black Widow”, would boost sales this year.

Reporting by Shashank Nayar in Bengaluru; Editing by Maju Samuel

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Dow hits record high as inflation fears recede after data

(Reuters) – The blue-chip Dow index hit a record high on Wednesday after tepid consumer prices data for February eased concerns about a spike in inflation and elevated bond yields.

FILE PHOTO: Dividers are seen inside a trading post on the trading floor as preparations are made for the return to trading at the New York Stock Exchange (NYSE) in New York, U.S., May 22, 2020. REUTERS/Brendan McDermid

Accelerated vaccine rollouts and a monster fiscal stimulus on the horizon have raised bets on higher inflation, triggering a spike in Treasury yields that pushed the tech-heavy Nasdaq down as much as 12% from its Feb. 12 record close last week.

On Wednesday, the 10-year U.S. Treasury yield slipped from its session highs after data indicated the core consumer prices index, which excludes volatile items such as food and energy, rose less than expected last month.

Focus is on an auction of U.S. 10-year bonds later in the day for clues to where yields in the recently volatile market may be headed.

“Markets are rising on three factors – tame inflation, passage of the coronavirus aid package and a strong rally in tech stocks in the previous session,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“We have a bond auction up ahead which is expected to go well. If it’s a sloppy auction we could see yields rise again and that could take some enthusiasm out of the market.”

Meanwhile, bank strategists are raising their estimates for U.S. corporate profitability this year following surprisingly strong fourth-quarter earnings and growing optimism about an economic rebound.

At 11:46 a.m. ET, the Dow Jones Industrial Average rose 376.12 points, or 1.18%, to 32,208.86, the S&P 500 gained 23.42 points, or 0.60%, to 3,898.86 and the Nasdaq Composite gained 28.50 points, or 0.21%, to 13,102.33.

The Nasdaq extended gains after logging its best one-day percentage jump in four months on Tuesday, helped by a rise in momentum stocks that had recently taken a beating due to higher yields.

Amazon.com Inc, Microsoft Corp and Tesla Inc extended gains by 0.3% to 1.7% from the previous session, while economy-linked industrial, materials and financial indexes hovered near record highs.

The chunk of a $1.9 trillion relief aid, which could win final approval at the U.S. House of Representatives on Wednesday, could end up in the stock market and could provide a boost for GameStop and other stocks popular among retail investors active in online social media forums.

Shares of GameStop jumped another 33%, setting the videogame retailer on track for its longest streak of daily gains in six months and extending a rally that has already doubled the company’s market value.

Among other “meme” stocks, Koss Corp and AMC Entertainment jumped 104% and 13%.

Advancing issues outnumbered decliners by a 2.6-to-1 ratio on the NYSE and by a 1.9-to-1 ratio on the Nasdaq.

The S&P 500 posted 30 new 52-week highs and no new lows, while the Nasdaq recorded 302 new highs and 27 new lows.

Reporting by Medha Singh and Shashank Nayar in Bengaluru; Editing by Maju Samuel

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