© 2020 Dow Jones & Company. All Rights Reserved. ***** THE WALL STREET JOURNAL. Tuesday, December 1, 2020 |B1

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BUSINESS & FINANCE

Former Credit Suisse CEO Tidjane Thiam, shown in 2017. He was
ousted in February after the employee-surveillance scandal.

MICHAEL BUHOLZER/AGENCE FRANCE-PRESSE/GETTY IMAGES

burger AG predate 2019’s

high-profile scandal that in-

volved two employees being

followed, and they weren’t or-

dered by the same people, ac-

cording to people familiar with

the law firm’s findings. The

findings haven’t previously

been reported.

The scandal first emerged

in September 2019 when an ex-

ecutive spotted an investigator

following him and went to the

police. By February, the bank’s

chief executive, Tidjane Thiam,

had been ousted for failing to

contain the reputational dam-

age. Switzerland’s financial

regulator, known as Finma,

opened enforcement proceed-

ings in September 2020 into

the bank’s controls and docu-

mentation of such activities.

The people familiar with

Homburger’s findings said that

in October 2017, the bank sus-

pected an employee in New

Please turn to page B2

Lawyers hired by Credit

SuisseGroup AG’s board in the

aftermath of a spying scandal

last year have found two ear-

lier instances of employees be-

ing followed by private investi-

gators, despite the bank’s

assertions that it doesn’t con-

done physical surveillance.

The additional incidents of

surveillance found byHom-

BYMARGOTPATRICK

ANDPATRICIAKOWSMANN

Credit Suisse Found to Have Spied

On Employees Before Scandal

broad stock-market gauge be-

fore the start of trading Mon-

day, Dec. 21, meaning most in-

dex-tracking funds that follow

the S&P 500 will engage in a

flurry of trading the Friday

before.

Tesla’s market value has

ballooned to about $538 bil-

lion, making it the sixth-larg-

est company in the U.S. stock

market, and it would have

more than a 1% weighting in

the S&P 500. That puts it

ahead of Berkshire Hathaway

Inc. but behind Facebook Inc.

More than $100 billion will

be put into motion in coming

weeks as passive fund manag-

ers and some actively traded

mutual funds all benchmarked

to the S&P 500 adjust their

portfolios to make room for it,

traders and fund managers

say.

Weaving Tesla into the S&P

500 means shifting weightings

of many other stocks to in-

clude the electric-vehicle

maker. The addition also

comes near the end of a year

already marked by huge price

swings during the coronavirus

pandemic.

S&P still hasn’t announced

what stock Tesla will be re-

placing, saying it will release

that decision after the market

closes Dec. 11.

Given Tesla’s size, there

have been concerns that add-

ing it to the benchmark would

stoke volatility in the shares—

already notoriously turbu-

lent—as well as the broader

market, several investors said.

The index giant had taken

Please turn to page B5

S&P Dow Jones Indices said
it will addTeslaInc.’s full
weight to the S&P 500 all at
once in December, shedding
more light on a mammoth ad-
dition that has captivated in-
vestors across Wall Street.
The index company said
Tesla will be added to the

BYGUNJANBANERJI
ANDMICHAELWURSTHORN

Stocks slipped Monday but
closed out November with
hefty gains, capping a furious
monthlong rally fueled by bets
that scientists are closer than
ever to completing Covid-19

BYJOEWALLACE
ANDAKANEOTANI

points, or 0.1%, to 12198.74.

Still, many strategists expect

that investors will ultimately

view any declines as a buying

opportunity.

“We’ve got a lot of very good

vaccine news,” said Daniel Mor-

ris, chief market strategist at

Please turn to page B10

onavirus infections in the U.S.

and the possibility for logistical

hiccups in the distribution of

the shots could lead to further

bouts of selling. Some investors

wonder what will push stocks

higher from here, now that big

question marks, like the elec-

tions and the likelihood of a

successful vaccine, appear to

be in the rearview mirror.

For the day, the Dow fell

271.73 points, or 0.9%, to

29638.64, the S&P 500 slipped

16.72 points, or 0.5%, to

3621.63, and the Nasdaq fell 7.11

had suffered most from the

pandemic, such as energy pro-

ducers, cruise-line operators

and banks, posted steep gains.

Chevronrallied 25% in Novem-

ber, posting its biggest monthly

gain since 1980. Shares of

small, U.S.-focused companies

also outperformed the broader

market. The Russell 2000 index

advanced 18% in November,

scoring its best-ever monthly

gain.

The market’s retreat Mon-

day shows the rally isn’t im-

mune to setbacks. Surging cor-

close to approving the distribu-

tion of multiple vaccines, many

money managers have bet

throughout the month that the

economy will be able to re-

cover lost activity over the

next year. Signs that President-

elect Joe Biden will make a rel-

atively smooth transition into

the White House have also

helped ease some of the politi-

cal uncertainty that had fed

into heightened market volatil-

ity in the fall.

In a sign of investors’ opti-

mism, shares of companies that

vaccines to fight the pandemic.

The market’s momentum

faded on the final trading day

of November, with all three

major indexes ending lower.

But those losses didn’t chip

away much from stocks’ per-

formance for the month. The

Dow Jones Industrial Average

rose 12%, marking its best

month since January 1987. The

S&P 500 soared 11% for its best

showing since April, while the

Nasdaq Composite climbed

12%.

With U.S. officials looking

Dow Finishes Best Month Since 1987

Momentum fades on

last day of November,

but blue chips end

trading period up 12%

guidance of sales reaching as

much as $2.39 billion.

Its shares have surged amid

the Covid-19 outbreak and are

up about sevenfold this year.

But shares were down around

5% in after-hours trading.

Zoom’s global boost in popu-

larity has put it at the center of

a rivalry among tech companies

pushing their services, pitting

it against far larger rivals such

as Microsoft Corp. and Face-

book Inc. The rise of Zoom,

founded nine years ago, hasn’t

been without setbacks. The

Federal Trade Commission in

November said it had settled a

case with the company over

how the videoconferencing

platform handles user privacy.

Zoom also reacted to pressure

to more actively police content

on its platform.

The free-use of its service

also is expected to continue to

be a drag on profitability,

Zoom said. “With the uncer-

tainty of the longevity of the

pandemic, it is unclear how

long gross margins will be im-

pacted as we remain commit-

ted to supporting the global

community,” Chief Financial

Officer Kelly Steckelberg said,

adding they would eventually

improve again.

Zoom also has seen large

growth, though, in its paying

subscriber numbers. It said it

now has 433,700 customers

with more than 10 employees,

up almost six-times from the

previous year’s figure. The

number of its most lucrative

customers, those paying more

than $100,000 a year, has

more than doubled from the

previous year. The company

said it expects sales in the cur-

rent quarter of $806 million to

$811 million and adjusted per-

share earnings of 77 cents to

79 cents. Wall Street is fore-

casting adjusted earnings per

share of 62 cents for the quar-

ter on sales of $728 million.

Zoom Video Communica-

tions Inc. posted another

quarter of record sales and

again lifted its outlook as re-

mote working and distance

schooling drag on during the

pandemic, but the growth has

come with higher costs that

disappointed investors.

Zoom has been providing

some of its services free to us-

ers, including more than

125,000 K-12 schools that be-

gan the new academic year

largely teaching remotely.

That weighed on its profitabil-

ity, Zoom said Monday, with

the gross margin for the quar-

ter falling to 66.7% from 71%

in the prior three-month pe-

riod as the company spends

heavily on cloud-computing

service to facilitate its users.

The company also reported

sales of $777.2 million for the

latest quarter, up from $166.6

million a year earlier, as it

posted a profit of $198.4 mil-

lion. Analysts surveyed by

FactSet had expected sales of

$694 million and net income

of $149 million for the three

months ended Oct. 31.

“We remain focused on the

communication needs of our

customers and communities as

they navigate the current envi-

ronment and adapt to a new

world of work from anywhere

using Zoom,” Chief Executive

Eric Yuan said.

The videoconferencing com-

pany, which went public last

year, raised its full-year out-

look for a third time during

the pandemic, cementing its

position as one of the biggest

corporate winners from the

shift to working from home

and remote schooling.

Zoom said it now expects

sales in the current financial

year ending in January to

reach around $2.58 billion, up

from the previous quarter’s

BYAARONTILLEY

Zoom Posts Record

Sales, Lifts Outlook,

But Costs Increase

INSIDE

S&P to Add Tesla at Full Weight on Dec. 21

A wide range of stocks
powered the November market
rally, a broadening of support
beyond the few highflying
companies that propelled in-
dexes earlier this year.
With a drumbeat of promis-
ing reports on Covid-19 vac-
cines and the easing of U.S.
election uncertainty, stocks
surged in November. The S&P
500 gained 11%, its best month

since April when the market

was rebounding from its coro-

navirus lows. The Dow Jones

Industrial Average, meanwhile,

topped 30000 for the first

time last week and notched its

best month since 1987.

Just as notable is the ex-

pansion of stocks contributing

to the market’s gains in No-

vember, 467 stocks in the S&P

500 rose, the largest share for

any month since the April re-

surgence, according to Dow

Jones Market Data and Fact-

Set. In October, by contrast,

212 stocks in the benchmark

index gained ground. In Sep-

tember, only 153 did so.

The roster of advancing

shares has grown as a bright-

ening economic outlook

helped cyclical sectors outper-

form the dominant technology

stocks. U.S. consumers have

continued to boost spending,

and services and manufactur-

ing activity has grown despite

rising coronavirus infections.

News that several vaccine can-

didates may be highly effec-

tive has bolstered hopes that

industries suffering under the

pandemic could bounce back

in 2021.

“It’s been a source of real

concern to market watchers

that the rally we’ve seen really

over the past few years has

become increasingly narrow,”

said Matt Forester, chief in-

Please turn to page B10

BYKARENLANGLEY

Stock Rally Widens as Worries

Over Election and Pandemic Ease

505

constituents

GAIN

LOSS

AnincreasingnumberofS&P500

stocks are supporting the broad

market's rally, while small stocks

havesurgedtonarrowtheir2020

underperformance.

S&P500stocksby

monthlyperformance

J F M* A M J* J* A* S* O* N

NOV.467stocksmakinggains

S&P500

Russell

2000

9%

12%

Sources: FactSet; Dow Jones Market Data

*Not showing one constituent that ended

the month unchanged.

Indexperformance

1

–4

–3

–2

–1



%

Jan March April May June July Aug Sept Oct Nov

PercentageofS&P500stockstradingabove

their200-daymovingaverage

1



2



7

%

213 ’14 ’1 ’16 ’17 ’18 ’19 ’2

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