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Tag: Financial Markets

  • Walgreens plans to sell another slice of its Cencora stake for $1.1 billion

    Walgreens plans to sell another slice of its Cencora stake for $1.1 billion

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    The struggling drugstore chain Walgreens will get about $1.1 billion for selling another slice of its stake in drug distributor Cencora.

    Walgreens said after markets closed Thursday that it will use the proceeds mostly to pay down debt and for general corporate purposes. The deal reduces Walgreens’ stake in Cencora to about 10% from 12%.

    Walgreens also said in May that it was selling some Cencora shares for $400 million. That deal shaved its stake in the company down from 13%.

    Leaders of Walgreens Boots Alliance Inc. said in late June that they were finalizing a plan to turnaround its U.S. business. That push could result in the closing of hundreds of underperforming stores in the next few years.

    The company, like its competitors, has been struggling for years with tight reimbursement for the prescriptions it sells as well as other challenges like rising costs to operate its stores.

    The Deerfield, Illinois, company also has been backing away from a plan to add primary care clinics next to some if its stores.

    The company started 2024 by cutting the dividend it pays shareholders to get more cash to grow its business. Walgreens reported quarterly results at the end of June that missed analyst earnings expectations. The company cut its forecast for its fiscal year, which ends this month.

    Shares of Walgreens have shed more than half their value so far this year while broader indexes have climbed. In premarket trading the shares edged down 9 cents to $11.72.

    Cencora shares fell 1.3% to $241.24.

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  • Markets tumble, led by 5.8% drop in Tokyo following a tech-driven retreat on Wall Street

    Markets tumble, led by 5.8% drop in Tokyo following a tech-driven retreat on Wall Street

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    BANGKOK — Shares in Europe and Asia tumbled Friday, with Japan’s Nikkei 225 index slumping 5.8% as investors panicked over signs of weakness in the U.S. economy.

    Bracing for a highly anticipated employment report coming on Friday, the future for the S&P 500 was down 1.3%, while that for the Dow Jones Industrial Average sank 0.9%.

    The declines followed a retreat on Wall Street after weak manufacturing data raised worries the Federal Reserve may have waited too long to cut interest rates, raising risks of a recession. After the U.S. central bank held steady at a meeting this week, Fed Chair Jerome Powell said a cut could come in September.

    “The short-lived satisfaction of Fed Chief Powell communicating decent odds of a September rate cut has turned sour as investors are now panicking that the central bank isn’t trimming soon enough,” José Torres, a senior economist at Interactive Brokers, said in a report.

    A nearly 19% decline in Intel’s shares in aftermarket trading deepened the gloom. The chipmaker said it was cutting 15% of its massive workforce — about 15,000 jobs — to better compete with more successful rivals like Nvidia and AMD.

    In early European trading, Germany’s DAX shed 1.5% to 17,806.65, while the CAC 40 slipped 1% to 7,298.81. In London, the FTSE 100 fell 0.6% to 8,233.49.

    Japan’s market retreated to where it was trading in January before it surged to an all-time high last month of over 42,000. The Nikkei 225 lost 2,216.63 points Friday to 35,909.70, with banks’, technology-related and manufacturers’ shares hit by heavy selling.

    The Nikkei has lost 6.2% in the past three months.

    Japanese shares were pummeled after the central bank raised its benchmark interest rate on Wednesday, to 0.25% from 0.1%. That pushed the value of the Japanese yen higher against the U.S. dollar, potentially hurting overseas earnings of major manufacturers and deflating a boom in tourism.

    The dollar fell to 148.77 yen early Friday from 149.37 yen late Thursday. It had recently traded above 160 yen. The euro rose to $1.0820 from $1.0789.

    Elsewhere in Asia on Friday, Hang Seng in Hong Kong dropped 2.1% to 16,945.51, while the Shanghai Composite index saw a more modest loss, of 0.9% to 2,905.34.

    Chinese shares have extended losses this week as investors registered disappointment with the government’s latest efforts to spur growth through various piecemeal measures, instead of hoped-for infusions of broader stimulus.

    The Kospi in Seoul dropped 3.7% to 2,676.19 and Taiwan’s Taiex sank 4.4%. Both markets tend to be hit hard by weakness in technology shares.

    South Korea’s Samsung Electronics dropped 4.2% while another maker of computer chips and other components, SK Hynix, dropped 10.4%. Taiwan Semiconductor Manufacturing Co., the world’s largest chip maker, lost 5.9%.

    Elsewhere in Asia, Australia’s S&P/ASX gave up 2.1% to 7,943.20 and the Sensex in India was down 1.1%. Bangkok’s SET fell 0.7%.

    It has been a nerve wracking week for markets even as central banks in Japan, the United States and England acted much as had been expected. Japan raised its benchmark, the Fed stood pat, and the Bank of England lowered its key rate by 0.25%, to 5%, its first cut in more than four years.

    Commodity prices have also had a rough ride, with oil prices surging after the killings of leaders of Hamas and Hezbollah that fueled fears conflict in the Middle East might escalate into a wider war. But prices fell back Thursday and were only marginally higher early Friday.

    Benchmark U.S. crude oil gained 12 cents to $76.43 per barrel. Brent crude, the international standard, was up 12 cents at $79.64 per barrel.

    The price of gold, a traditional refuge for investors in uncertain times, has surged to over $2,500 an ounce.

    Meanwhile, other commodities sank on concerns that weakness in the U.S. and other major economies will hurt demand. The price of nickel dropped 2.4%, aluminum dropped 1% and copper traded in New York dropped 2.3%.

    Worry is mounting that the Fed has kept its main interest rate at a two-decade high for too long in its zeal to stifle inflation by making it more costly to borrow. A rate cut could take months to a year to filter through the economy.

    On Thursday, the S&P 500 sank 1.4% after a report from the Institute for Supply Management showed U.S. manufacturing activity is still shrinking. The Dow fell 1.2%, and the Nasdaq composite dropped 2.3%. The small stocks in the Russell 2000 index dropped 3%.

    Other reports Thursday showed the number of U.S. workers applying for jobless benefits hit its highest level in about a year and that productivity for U.S. workers improved in the spring. The data are likely to relieve pressure on inflation and give the Fed more leeway to cut rates.

    Employment growth does appear to be slowing more than expected, Philip Marey, senior U.S. strategist for Rabobank, said in a commentary.

    “This suggests that the Fed’s strategy to bring better balance between labor demand and supply through restrictive interest rates is working, but of course the risk is that employment growth is brought to a halt and the economy slides into a recession.”

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  • Chipmaker Intel to cut 15,000 jobs as tries to revive its business and compete with rivals

    Chipmaker Intel to cut 15,000 jobs as tries to revive its business and compete with rivals

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    Chipmaker Intel says it is cutting 15% of its huge workforce — about 15,000 jobs — as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD.

    In a memo to staff, Intel Corp. CEO Pat Gelsinger said Thursday the company plans to save $10 billion in 2025.

    “Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” he wrote in the memo published on Intel’s website. “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low.”

    The job cuts come in the heels of a disappointing quarter and forecast for the iconic chip maker founded in 1968 at the start of the PC revolution.

    Next week, Gelsinger wrote, Intel will announce an “enhanced retirement offering” for eligible employees and offer an application program for voluntary departures.

    “These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career,” he said. The bulk of the layoffs are expected to be completed this year.

    The Santa Clara, California-based company is also suspending its stock dividend as part of a broader plan to cut costs.

    Intel reported a loss for its second quarter along with a small revenue decline, and it forecast third-quarter revenues below Wall Street’s expectations.

    Its stock plunged 19% in after-hours trading, indicating that Intel could lose roughly $24 billion of its market value when the stock market opens Friday.

    The company posted a loss of $1.6 billion, or 38 cents per share, in the April-June period. That’s down from a profit of $1.5 billion, or 35 cents per share, a year earlier. Adjusted earnings excluding special items were 2 cents per share.

    Revenue slid 1% to $12.8 billion from $12.9 billion.

    Analysts, on average, were expecting earnings of 10 cents per share on revenue of $12.9 billion, according to a poll by FactSet.

    “Intel’s announcement of a significant cost-cutting plan including layoffs may bolster its near-term financials, but this move alone is insufficient to redefine its position in the evolving chip market,” said eMarketer analyst Jacob Bourne. “The company faces a critical juncture as it leverages U.S. investment in domestic manufacturing and the surging global demand for AI chips to establish itself in chip fabrication.”

    Gelsinger noted in a conference call with analysts that Intel has previously said that its investments in the AI PC market would pressure its profit margins over the short term but should benefit the company in the long term.

    “We believe the trade-offs are worth it. The AI PC will grow from less than 10% of the market today to greater than 50% in 2026,” he said.

    Unlike its rivals like Nvidia, Intel manufactures chips in addition to designing them. It has been working to build up its foundry business making semiconductors in the U.S., competing with rivals such as market leader Taiwan Semiconductor Manufacturing Co. or TSMC.

    Helped by Gelsinger’s lobbying efforts since he took the company’s helm in 2021, Intel has been a major beneficiary of the 2022 CHIPS and Science Act. The Biden administration helped shepherd that through Congress amid concerns after the pandemic that the loss of access to chips made in Asia could plunge the U.S. economy into recession.

    In March, President Joe Biden celebrated an agreement to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants around the country, talking up the investment in the political battleground state of Arizona and calling it a way of “bringing the future back to America.” At the time, Gelsinger called the CHIPS Act “the most critical industrial policy legislation since World War II.”

    In September 2022, Biden praised Intel as a job creator with its plans to open a new plant near Columbus, Ohio. The president praised the company for plans to “build a workforce of the future” for the $20 billion project, which he said would generate 7,000 construction jobs and 3,000 full-time jobs set to pay an average of $135,000 a year.

    “The U.S. government wants to reinvigorate domestic manufacturing, especially this is the area of advanced computer chips,” Bourne said. “And Intel has been kind of earmarked for this money. But there’s a lot of infrastructure that goes into this, there’s the building of these facilities, which are really highly specialized — and then you also need to upskill the local workforce where these plants are located. And so it takes time. This is not something that happens overnight.”

    ——

    Associated Press Writer Josh Boak contributed from Washington.

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  • Boeing names its next CEO while posting a quarterly loss of more than $1.4 billion

    Boeing names its next CEO while posting a quarterly loss of more than $1.4 billion

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    Boeing named an aerospace industry veteran with a background in mechanical engineering as its next chief executive Wednesday, looking to open a new chapter at a company rocked by legal, regulatory and production problems and mounting financial repercussions.

    Robert “Kelly” Ortberg, a former CEO at aerospace manufacturer Rockwell Collins, will succeed David Calhoun as CEO and president effective Aug. 8, the company said. Calhoun said in March that he would retire at the end of the year, and analysts generally praised the quicker transition.

    “There is much work to be done, and I’m looking forward to getting started,” Ortberg said in a statement issued by Boeing.

    Boeing announced its new CEO as it reported a loss of more than $1.4 billion on falling revenue during the second quarter. The loss was wider and the company’s revenue lower than Wall Street’s dismal expectations, as both Boeing’s commercial-airplanes business and defense unit lost money.

    The disappointing results came at a tumultuous time for Boeing, which is the subject of multiple investigations into its safety culture and manufacturing quality.

    The American aerospace giant agreed to plead guilty this month to a federal fraud charge in connection with its 737 Max jetliner and two crashes that killed 346 people. The Federal Aviation Administration increased its oversight of the company and limited the number of planes it could produce after a panel blew off an Alaska Airlines Max flying at an altitude of 16,000 feet. No one was seriously hurt, but the frightening incident and subsequent scrutiny have damaged Boeing’s reputation.

    Boeing Chairman Steven Mollenkopf said Ortberg was chosen after a “thorough and extensive search process” and “has the right skills and experience to lead Boeing in its next chapter.” Ortberg has earned a reputation for running complex engineering and manufacturing companies, Mollenkopf said.

    Calhoun, who said he wasn’t involved in the hiring decision, is expected to serve as a special adviser to Boeing’s board of directors until next March. He suggested that Ortberg would support Boeing’s current executives instead of bringing in his own team.

    “I don’t think he’s coming in with a notion to want to change a lot of folks,” Calhoun said on a call with analysts. “He knows full well we’re in recovery mode, and he knows full well that we’ve got to complete the recovery mode and we’ve got to get this thing stable and move forward.”

    Ortberg plans to be based in Seattle, according to a person familiar with the decision who was not authorized to discuss the situation publicly. That would put him in closer contact with Boeing factories that produce several of its planes, notably the 737 Max.

    Boeing was founded in Seattle but moved to Chicago in 2001 and then, to be closer to government officials and regulators, the headquarters moved to the Virginia suburbs of Washington, D.C., in 2022.

    Ortberg emerged as a leading candidate only recently. Others who were reportedly considered for the job included Patrick Shanahan, a former Boeing executive and now CEO of its most important supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the commercial airplanes division.

    Ortberg led Rockwell Collins from 2013 to 2018. The company, which developed electronics and other equipment for commercial and military planes, then merged with United Technologies and wound up as part of RTX, formerly known as Raytheon. He retired from RTX in 2021.

    Richard Aboulafia, a longtime aerospace analyst and consultant and recently a harsh critic of the company, said the hire is great news for Boeing.

    “He is a deeply respected leader in the aerospace industry, and brings more hope for a better future than the company has enjoyed in decades,” Aboulafia said.

    Ortberg, who has a background in both commercial and defense aerospace, “was probably on a relatively short list of people that are qualified to take on this challenge,” Jeff Windau, an analyst for financial advising company Edward Jones, said.

    The new CEO’s first task, Windau said, will be working with the FAA to help Boeing reach its goal of increasing production of Max jets.

    The company waived the mandatory retirement age of 65 for Ortberg, a spokesperson said. Boeing did the same for Calhoun days after he turned 64 in 2021.

    Like Calhoun, who took over as CEO in the wake of the two Max crashes, Ortberg inherits the leadership of a company facing ongoing crises and criticism from inside and outside the company.

    Boeing, based in Arlington, Virginia, is pushing back against whistleblower allegations of manufacturing shortcuts that crimp on safety. It is dealing with supply-chain problems that are hindering production, which it hopes to fix in part by re-acquiring Spirit AeroSystems, a key contractor. It faces a threatened strike this fall by its largest union, the International Association of Machinists.

    The company is still trying to persuade regulators to approve two new models of the Max and a bigger version of its two-aisle 777 jetliner. And it faces a multi-billion-dollar decision on when to design a new single-aisle plane to replace the Max.

    Its reputation took another hit recently when thruster failures and helium leaks on Boeing’s new Starliner capsule prompted NASA and Boeing to keep two astronauts at the International Space Station until engineers finish working on the problems.

    The quarterly earnings reported Wednesday reflected the scope of Boeing’s challenges. The reported loss of $1.44 billion for the second quarter compared with a loss of $149 million a year earlier. Since the start of 2019, Boeing has lost more than $25 billion.

    Excluding special items, the second-quarter loss worked out to $2.90 per share. Analysts expected a loss of $1.90 per share, according to a FactSet survey.

    Revenue dropped 15%, to $16.87 billion, falling short of Wall Street’s average forecast of $17.35 billion. The commercial airplanes division had an operating loss of $715 million, and revenue plunged 32% as Boeing delivered fewer passenger jets to airlines — 92 planes, compared with 136 a year earlier.

    The FAA limited Boeing’s production of Max jetliners shortly after the Alaska Airlines incident, but Boeing hasn’t even hit the FAA limits as it seeks to fix its manufacturing process. The company said Wednesday that it is sticking with its plans to boost production of the Max to 38 per month by year end.

    Boeing took a charge of $244 million to cover a fine it agreed to pay as part of its plea deal with the Justice Department in connection with development of the Max. A federal judge in Texas will soon consider whether to approve the agreement, which also calls for the appointment of an independent compliance monitor and for Boeing to invest at least $455 million “in its compliance, quality, and safety programs.”

    Many families of the people who died in the two Max crashes, which took place off the coast of Indonesia in 2018 and in Ethiopia less than five months later, oppose the deal and plan to ask the judge to reject it.

    Boeing’s defense and space unit lost $913 million because of $1 billion in setbacks to four fixed-price government contracts, including a deal to build two new Air Force One presidential jets. The smaller services business earned $870 million.

    Boeing shares rose 4% in afternoon trading.

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  • Stock market today: Wall Street drifts in mixed trading at the start of a frenetic week

    Stock market today: Wall Street drifts in mixed trading at the start of a frenetic week

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    NEW YORK — U.S. stock indexes are drifting in mixed trading Monday ahead of a week full of earnings reports from Wall Street’s most influential companies and a Federal Reserve meeting on interest rates.

    The S&P 500 was up 0.2% in early trading, coming off its first back-to-back weekly losses since April. The Dow Jones Industrial Average was down 102 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.

    ON Semiconductor helped lead the market and jumped 9.4% after the supplier to the auto and other industries reported stronger profit for the spring than analysts expected. McDonald’s drifted between gains and losses after reporting profit and revenue for the latest quarter that fell shy of forecasts. Analysts said its performance at U.S. restaurants wasn’t as bad as some investors feared.

    Even bigger names are set to report later this week: Microsoft on Tuesday, Apple and Amazon on Wednesday and Meta Platforms on Thursday. Their stock movements carry more weight on Wall Street than anyone else’s because they are the largest by market value.

    Such Big Tech stocks had been screaming consistently higher, in part due to investors’ frenzy around artificial-intelligence technology, but they’ve run out of momentum this month amid criticism that they’ve grown too expensive, and as alternatives begin to look more attractive. Last week, profit reports from Tesla and Alphabet that investors found underwhelming raised concerns that other stocks in what’s known as the “Magnificent Seven” could also fail to impress.

    What’s helped to support the U.S. stock market even as these behemoths weaken is strength from areas that had earlier been beaten down by high interest rates meant to get inflation under control. Smaller stocks in particular have soared with expectations that slowing inflation means the Federal Reserve will begin cutting interest rates soon.

    The smaller stocks in the Russell 2000 index added 0.1% Monday to bring its gain for the month to a market-leading 10.5%.

    The Fed will hold its latest policy meeting on interest rates this week, with an announcement coming on Wednesday. Virtually no one expects a move then, but the widespread expectation is that it will begin easing at its following meeting in September.

    The yield on the 10-year Treasury fell to 4.16% from 4.19% late Friday and from 4.70% in April.

    In stock markets abroad, Japan’s Nikkei 225 index jumped 2.1%. Its central bank will also announce a decision on interest rates this week. Expectations there, though, are for it to raise interest rates.

    Indexes rose 1.3% in Hong Kong and were roughly flat in Shanghai after official data on Saturday showed industrial profits rose 3.5% in the first half of 2024 from a year earlier. That was a glimmer of positive news following recent cuts to interest rates and other piecemeal stimulus that followed a top-level policy meeting of the ruling Communist Party earlier this month.

    The FTSE 100 rose 0.7% in London ahead of a meeting for the Bank of England where some investors expect to see a cut in interest rates.

    ___

    AP Business Writer Matt Ott contributed.

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  • Small stocks are about to take over? Wall Street has heard that before.

    Small stocks are about to take over? Wall Street has heard that before.

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    NEW YORK (AP) — Suddenly, smaller stocks seem to be making bigger noise on Wall Street.

    After getting trounced by their larger rivals for years, some of the smallest stocks on Wall Street have shown much more life recently. Hopes for coming cuts to interest rates have pushed investors to look at smaller stocks through a different lens.

    Smaller companies, which often carry heavy debt burdens, can feel more relief from lower borrowing costs than huge multinationals. Plus, critics said the Big Tech stocks that had been carrying the market for years were looking expensive after their meteoric rises.

    The small stocks in the Russell 2000 index leaped a stunning 11.5% over five days, beginning on July 11. The surge looked even more eye-popping when compared with the tepid gain of 1.6% for the big stocks in the S&P 500 over the same span. Investors pumped $9.9 billion into funds focused on small U.S. stocks last week, the largest amount since 2007, according to strategists at Deutsche Bank.

    They were all encouraging signals to analysts, who say a market with many stocks rising is healthier than one dependent on just a handful of stars.

    If this all sounds familiar, it should. Hope for a broadening out of the market has sprung up periodically on Wall Street, including late last year. Each time, it ended up fizzling, and Big Tech resumed its dominance.

    Of course, this time looks different in some ways. Some of the boost for small stocks may have come from rising expectations for a Republican sweep in November’s elections, following President Joe Biden’s disastrous debate performance last month. That pushed up U.S. stocks seen as benefiting from a White House that could be hostile to international trade, among other things.

    Traders are also thinking cuts to interest rates are much more imminent than before, with expectations recently running at 95% confidence that the Fed will make a move as soon as September, according to data from CME Group

    But some professional investors still aren’t fully convinced yet.

    “Fade the chase in small caps, which is likely unsustainable,” according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

    She points to how 60% of the companies in the small-cap index struggle with profitability, in part because private-equity firms have already taken many money-making ones out of the stock market. Smaller stocks also tend to be more dependent on spending by consumers than larger companies, and consumers at the lower end of the income spectrum are already showing the strain of still-high prices.

    Cuts to interest rates do look more likely after Federal Reserve officials talked about the danger of keeping rates too high for too long. But the Fed may not pull rates down as quickly or as deeply as it has in past cycles if inflation stays higher for longer, as some investors suspect.

    Small stocks, which have struggled through five quarters of shrinking earnings due to higher rates, also are less likely to get a boost in profits delivered by the artificial-intelligence wave sweeping the economy, according to strategists at BlackRock Investment Institute.

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  • Global shares tumble after a wipeout on Wall Street as Big Tech retreats

    Global shares tumble after a wipeout on Wall Street as Big Tech retreats

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    NEW YORK — U.S. stocks are stanching the bleeding on Thursday, a day after their worst losses since 2022 led to a wipeout for financial markets circling the world.

    The S&P 500 was edging down by 0.1% in morning trading, as highly influential Big Tech stocks steadied themselves following a sell-off triggered by profit reports from Tesla and Alphabet.

    The Dow Jones Industrial Average was up 165 points, or 0.4%, as of 9:55 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.

    The mixed trading on Wall Street followed sharp drops elsewhere in the world. Stock indexes dropped 3.3% in Tokyo, 1.8% in Hong Kong and 1.7% in Paris as worries spread about whether companies globally would meet expectations for profit growth and about potential moves by central banks on interest rates. Tesla’s and Alphabet’s underwhelming profit reports had raised concerns the huge run for Big Tech stocks had gone overboard amid Wall Street’s frenzy around artificial-intelligence technology.

    But a report showing the U.S. economy may have grown much more strongly during the spring helped support the market. Mixed profit reports from IBM, Hasbro and other big companies also kept stock indexes close to flat.

    The U.S. economy grew at an estimated 2.8% annual rate from April through June, double the rate from the prior quarter and easily topping economists’ forecasts for 1.9%. That eases worries about a possible recession, or at least delays them further, even though interest rates remain high and are grinding down on the economy.

    Perhaps just as importantly for Wall Street, the report on the economy wasn’t so hot that it fanned worries about upward pressure on inflation.

    Because inflation has largely resumed its slowdown following a rough start to the year, traders are largely expecting the Federal Reserve to begin cutting its main interest rate in September, according to data from CME Group.

    Such cuts would release pressure that’s built up on both the economy and financial markets, and investors are thinking it could offer a particularly big boost to smaller stocks and other areas of the market that have been left behind by Big Tech in recent years.

    The Russell 2000 index of smaller stocks was up 0.9%, doing better than other market indexes. It’s up 8.2% this month, versus a 0.7% dip for the big stocks in the S&P 500, and has flipped the market’s leaderboard.

    In the bond market, the yield on the 10-year Treasury slipped to 4.23% from 4.28% late Wednesday. It’s down significantly from its perch above 4.70% reached in April, which gives a strong boost to stock prices.

    Hasbro jumped 5.8% after reporting stronger profit and revenue for the latest quarter than analysts expected, in part because of growth at its Wizards of the Coast business, which sells Magic: The Gathering and other games.

    On the losing side of Wall Street was Ford Motor, which tumbled 16.7% after reporting profit that fell short of analysts’ expectations. Its second-quarter net income fell 4.7% as its combustion-engine unit posted a pretax loss because of rising warranty and recall costs.

    ___

    AP Business Writers Yuri Kageyama and Matt Ott contributed.

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  • Burberry appoints a new CEO as the fashion house warns it expects a first-half operating loss

    Burberry appoints a new CEO as the fashion house warns it expects a first-half operating loss

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    LONDON (AP) — British luxury fashion house Burberry said Monday it has appointed Joshua Schulman, formerly head of Michael Kors and Coach, as its new chief executive officer as the company warned it expected to record an operating loss in the first half of the year amid slumping retail sales.

    Burberry said Schulman, 52, replaces Jonathan Akeroyd, who would step down and leave the firm with immediate effect “by mutual agreement with the board.”

    The unexpected announcement came as Burberry said its first-quarter revenue was down 21%, with sales declining in all regions — including China, the Americas and Europe — except in Japan. It said full-year earnings will also be lower than expected, and suspended its shareholder dividend payouts.

    Burberry shares plunged more than 11% soon after markets opened Monday.

    “Our first-quarter performance is disappointing,” chair Gerry Murphy said. “We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.”

    “The weakness we highlighted coming into 2024-25 has deepened and, if the current trend persists through our second quarter, we expect to report an operating loss for our first half,” he added.

    Akeroyd, formerly head of Gianni Versace, took the top job at Burberry in April 2022. Within months, the company saw the departures of Burberry’s chief financial and operating officer as well as its creative director, Riccardo Tisci, who was replaced by Daniel Lee in 2022.

    The heritage brand, best known for its checked pattern and classic trench coats, said it now hoped to reconnect with its “core customer base,” emphasizing the appeal of its timeless products while “delivering relevant newness.”

    Global sales of luxury goods are projected to be flat this year following a pent-up post-pandemic spending surge.

    Murphy said Schulman is a “proven leader with an outstanding record of building global luxury brands and driving profitable growth. His extensive experience in luxury and fashion will be key to realising Burberry’s full potential.”

    Schulman was credited with driving sales and brand transformation at handbag brand Coach. Before that he was president of New York department store Bergdorf Goodman and had also headed luxury shoemaker Jimmy Choo.

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  • Domino’s Pizza, Beyond Meat fall; Chuy’s, Warner Bros. rise; Thursday, 7/18/2024

    Domino’s Pizza, Beyond Meat fall; Chuy’s, Warner Bros. rise; Thursday, 7/18/2024

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    Stocks that traded heavily or had substantial price changes on Thursday:

    Chuy’s Holdings Inc. (CHUY), up $12.07 to $37.34.

    The Tex-Mex chain agreed to be acquired by Darden Restaurants in a deal valuing the company at $605 million.

    Domino’s Pizza Inc. (DPZ), down $64.23 to $409.04.

    The pizza chain suspended a forecast of the number of stores it will open globally over the long term.

    D.R. Horton Inc. (DHI), up $15.91 to $173.42.

    The homebuilder reported stronger profit and revenue for the spring than analysts expected.

    Beyond Meat Inc. (BYND), down 74 cents to $6.43.

    The plant-based food maker is discussing a balance-sheet restructuring with bondholders, according to a Wall Street Journal report.

    Discover Financial Services (DFS), up $1.48 to $142.89.

    The credit card company’s quarterly results easily surpassed analysts’ estimates.

    Warner Bros. Discovery Inc. (WBD), up 20 cents to $8.52.

    The owner of CNN and HBO is drafting a plan to split up, the Financial Times reported.

    Alaska Air Group Inc. (ALK), down $2.78 to $37.25.

    The airline lowered its full-year earnings forecast.

    Leslie’s Inc. (LESL), down $1.25 to $2.83.

    The pool and spa care company predicted results for its current quarter that were far below what the market was expecting.

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  • Burberry appoints a new CEO as fashion house warns about losses

    Burberry appoints a new CEO as fashion house warns about losses

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    LONDON — British luxury fashion house Burberry said Monday it has appointed Joshua Schulman, formerly head of Michael Kors and Coach, as its new chief executive officer as the company warned it expected to record an operating loss in the first half of the year amid slumping retail sales.

    Burberry said Schulman, 52, replaces Jonathan Akeroyd, who would step down and leave the firm with immediate effect “by mutual agreement with the board.”

    The unexpected announcement came as Burberry said its first-quarter revenue was down 21%, with sales declining in all regions — including China, the Americas and Europe — except in Japan. It said full-year earnings will also be lower than expected, and suspended its shareholder dividend payouts.

    Burberry shares plunged more than 11% soon after markets opened Monday.

    “Our first-quarter performance is disappointing,” chair Gerry Murphy said. “We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.”

    “The weakness we highlighted coming into 2024-25 has deepened and, if the current trend persists through our second quarter, we expect to report an operating loss for our first half,” he added.

    Akeroyd, formerly head of Gianni Versace, took the top job at Burberry in April 2022. Within months, the company saw the departures of Burberry’s chief financial and operating officer as well as its creative director, Riccardo Tisci, who was replaced by Daniel Lee in 2022.

    The heritage brand, best known for its checked pattern and classic trench coats, said it now hoped to reconnect with its “core customer base,” emphasizing the appeal of its timeless products while “delivering relevant newness.”

    Global sales of luxury goods are projected to be flat this year following a pent-up post-pandemic spending surge.

    Murphy said Schulman is a “proven leader with an outstanding record of building global luxury brands and driving profitable growth. His extensive experience in luxury and fashion will be key to realising Burberry’s full potential.”

    Schulman was credited with driving sales and brand transformation at handbag brand Coach. Before that he was president of New York department store Bergdorf Goodman and had also headed luxury shoemaker Jimmy Choo.

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  • Stock market today: Global stocks mostly rise, with Japan’s Nikkei 225 index logging record close

    Stock market today: Global stocks mostly rise, with Japan’s Nikkei 225 index logging record close

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    TOKYO — Global shares were mostly higher Tuesday, with Tokyo’s benchmark hitting another record.

    France’s CAC 40 lost 0.5% in early trading to 7,590.35, while Germany’s DAX fell 0.3% to 18,418.81. Britain’s FTSE 100 rose 0.2% to 8,209.03. The future for the Dow Jones Industrial Average was up 0.1% and that for the S&P 500 rose 0.2%.

    Japan’s benchmark Nikkei 225 jumped 2.0% to finish at a record high 41,580.17. It briefly topped previous intraday trading highs.

    Technology-related shares led gains, with computer chip maker Tokyo Electron surging 3.8% and chip testing equipment maker Advantest up 4.1%. Precision tools maker Disco Corp. rose 2.5% and Shin-Etsu Chemical, which supplies silicon for chips, among other materials, was up 2.7%.

    Australia’s S&P/ASX 200 gained 0.9% to 7,829.70. South Korea’s Kospi edged up 0.3% to 2,867.38. Hong Kong’s Hang Seng index was little changed, inching down less than 0.1% to 17,523.23, while the Shanghai Composite surged 1.3% to 2,959.37.

    “Risk-taking will still likely be more measured ahead of the Federal Reserve Chair’s testimony and the key U.S. inflation release this week,” Yeap Jun Rong, a market analyst at IG, said in a commentary.

    On Monday, stocks wavered to a mixed close on Wall Street, nudging the S&P 500 and the Nasdaq composite to more records. The Dow gave up an early gain and fell 0.1%.

    Traders are looking ahead to several earnings reports this week including updates from Delta Air Lines on Thursday.

    Federal Reserve Chair Jerome Powell addresses Congress on Tuesday and Wednesday. The central bank has kept its benchmark interest rate at its highest level in more than two decades in an effort to tame inflation.

    The Fed’s goal is to cool inflation back to 2% without slowing economic growth too much. Inflation is still squeezing consumers, but it has fallen significantly from its peak two years ago. Economic growth has slowed this year, but it remains relatively strong amid a solid jobs market and consumer spending.

    “The first day of the testimony is always the most important day as we will get to catch the overall tone and the key messages. Some expect Powell to sound cautious regarding the progress on inflation and tell the U.S. politicians to be patient until the Fed gathers enough evidence that inflation is on a solid path toward their 2% target,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

    The central bank will get more updates on inflation at the consumer level on Thursday. Wall Street expects the latest government report to show inflation easing to 3.1% in June from 3.3% in May.

    A report for inflation at the wholesale level, before costs are passed on to consumers, is expected Friday.

    In energy trading, benchmark U.S. crude fell 44 cents to $81.89 a barrel. Brent crude, the international standard, edged down 40 cents to $85.35 a barrel.

    In currency trading, the U.S. dollar edged up to 161.02 Japanese yen from 160.80 yen.

    The euro cost $1.0818, down from $1.0827.

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  • Stock market today: Japan’s Nikkei 225 hits new record close, leading Asian shares higher

    Stock market today: Japan’s Nikkei 225 hits new record close, leading Asian shares higher

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    BANGKOK — Japan’s benchmark Nikkei 225 surged Thursday to a record close of 40,913.65, leading markets in most of Asia higher.

    Shares fell in Chinese markets, while U.S. futures edged higher.

    Investors worldwide are keen to see the Federal Reserve cut rates that it has been keeping at two-decade highs to slow growth and tame inflation, and hopes have been reviving that price pressures are easing enough to make that possible.

    The Nikkei 225 gained 0.8% to 40,913.65, with buying of automakers’ shares and other export oriented stocks pushing the benchmark to an all-time high.

    Toyota Motor Corp.’s shares jumped 2% and Honda Motor Co. climbed 3%. Nissan Motor Corp. rallied 4.5% and shares in computer testing equipment maker Advantest Corp. gained 2.1%.

    The Nikkei 225’s all-time high during intraday trading is 41,087.75, on March 22. Its previous record close was 40,888.43, also set on March 22.

    Investors have piled into the Japanese market partly due to the cheapness of the Japanese yen, which is trading at 34-year lows against the dollar. A weak yen tends to push the profits of exporters higher when they are repatriated to Japan.

    Changes in regulations on investment accounts have also boosted share purchases.

    The Nikkei 225 index has gained 22.4% so far this year. The index surged in the late 1980s during Japan’s bubble economy, when asset prices soared. But it collapsed when that financial bubble imploded in early 1990 after hitting its earlier record of 38,915.87.

    Elsewhere in Asia, Hong Kong’s Hang Seng recovered from early losses, rising 0.2% to 18,018.72, and the Shanghai Composite index shed 0.8% to 2,957.57.

    Taiwan’s Taiex jumped 1.5% as chip maker and market heavyweight Taiwan Semiconductor Manufacturing Corp. gained 2.7%.

    In Australia, the S&P/ASX 200 surged 1.2% to 7,831.80, while the Kospi in Seoul advanced 1.1% to 2,824.94.

    Bangkok’s SET jumped 0.9%.

    On Wednesday, U.S. stocks kept rising in a holiday-shortened session after weak reports on the economy kept the door open for possible cuts to interest rates.

    U.S. markets will be closed Thursday for the Independence Day holiday.

    On Wednesday, the S&P 500 rose 0.5% to set an all-time high for a second straight day and for the 33rd time this year. It closed at 5,537.02.

    The Dow Jones Industrial Average dipped 0.1% to 39,308.00, and the Nasdaq composite gained 0.9% to 18,188.30.

    Tesla again helped boost the market and rose 6.5% a day after reporting a milder drop in sales for the spring than analysts feared. It was one of the strongest forces pushing upward on the S&P 500, along with Nvidia. The darling of Wall Street’s rush into artificial-intelligence technology climbed 4.6% to bring the chip company’s gain for the year so far to 159%.

    The action was stronger in the bond market, where Treasury yields slid following a flurry of reports that came in weaker than expected on both the job market and U.S. services companies.

    That followed reports from earlier in the morning showing a slowing job market.

    The hope on Wall Street is that the economy will soften by just enough to keep a lid on upward pressure on inflation, but not so much that it throws workers out of their jobs and triggers a recession.

    A much more anticipated report will arrive on Friday, when the U.S. government will give its comprehensive update about how many workers employers added to their payrolls during June.

    The yield on the 10-year Treasury dropped to 4.35% from 4.44% late Tuesday, a notable move for the bond market, and much of the slide came after the report on U.S. services businesses. It’s been generally sinking since April on hopes that inflation is slowing enough to get the Federal Reserve to lower its main interest rate from the highest level in more than two decades.

    In other dealings, U.S. benchmark crude oil gave up 73 cents to $83.15 per barrel in electronic trading on the New York Mercantile Exchange.

    Brent crude, the international standard, lost 67 cents to $86.67 per barrel.

    The U.S. dollar fell to 161.44 Japanese yen, reflecting expectations that U.S. interest rate cuts might narrow the gap in rates with Japan, where the benchmark lending rate is near zero. It was at 161.67 late Wednesday.

    The euro rose to $1.0792 from $1.0787.

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  • Stock market today: Japan’s Nikkei 225 hits new record close, leading Asian shares higher

    Stock market today: Japan’s Nikkei 225 hits new record close, leading Asian shares higher

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    BANGKOK — Japan’s benchmark Nikkei 225 surged Thursday to a record close of 40,913.65, leading markets in most of Asia higher.

    Shares fell in Chinese markets, while U.S. futures edged higher.

    Investors worldwide are keen to see the Federal Reserve cut rates that it has been keeping at two-decade highs to slow growth and tame inflation, and hopes have been reviving that price pressures are easing enough to make that possible.

    The Nikkei 225 gained 0.8% to 40,913.65, with buying of automakers’ shares and other export oriented stocks pushing the benchmark to an all-time high.

    Toyota Motor Corp.’s shares jumped 2% and Honda Motor Co. climbed 3%. Nissan Motor Corp. rallied 4.5% and shares in computer testing equipment maker Advantest Corp. gained 2.1%.

    The Nikkei 225’s all-time high during intraday trading is 41,087.75, on March 22. Its previous record close was 40,888.43, also set on March 22.

    Investors have piled into the Japanese market partly due to the cheapness of the Japanese yen, which is trading at 34-year lows against the dollar. A weak yen tends to push the profits of exporters higher when they are repatriated to Japan.

    Changes in regulations on investment accounts have also boosted share purchases.

    The Nikkei 225 index has gained 22.4% so far this year. The index surged in the late 1980s during Japan’s bubble economy, when asset prices soared. But it collapsed when that financial bubble imploded in early 1990 after hitting its earlier record of 38,915.87.

    Elsewhere in Asia, Hong Kong’s Hang Seng recovered from early losses, rising 0.2% to 18,018.72, and the Shanghai Composite index shed 0.8% to 2,957.57.

    Taiwan’s Taiex jumped 1.5% as chip maker and market heavyweight Taiwan Semiconductor Manufacturing Corp. gained 2.7%.

    In Australia, the S&P/ASX 200 surged 1.2% to 7,831.80, while the Kospi in Seoul advanced 1.1% to 2,824.94.

    Bangkok’s SET jumped 0.9%.

    On Wednesday, U.S. stocks kept rising in a holiday-shortened session after weak reports on the economy kept the door open for possible cuts to interest rates.

    U.S. markets will be closed Thursday for the Independence Day holiday.

    On Wednesday, the S&P 500 rose 0.5% to set an all-time high for a second straight day and for the 33rd time this year. It closed at 5,537.02.

    The Dow Jones Industrial Average dipped 0.1% to 39,308.00, and the Nasdaq composite gained 0.9% to 18,188.30.

    Tesla again helped boost the market and rose 6.5% a day after reporting a milder drop in sales for the spring than analysts feared. It was one of the strongest forces pushing upward on the S&P 500, along with Nvidia. The darling of Wall Street’s rush into artificial-intelligence technology climbed 4.6% to bring the chip company’s gain for the year so far to 159%.

    The action was stronger in the bond market, where Treasury yields slid following a flurry of reports that came in weaker than expected on both the job market and U.S. services companies.

    That followed reports from earlier in the morning showing a slowing job market.

    The hope on Wall Street is that the economy will soften by just enough to keep a lid on upward pressure on inflation, but not so much that it throws workers out of their jobs and triggers a recession.

    A much more anticipated report will arrive on Friday, when the U.S. government will give its comprehensive update about how many workers employers added to their payrolls during June.

    The yield on the 10-year Treasury dropped to 4.35% from 4.44% late Tuesday, a notable move for the bond market, and much of the slide came after the report on U.S. services businesses. It’s been generally sinking since April on hopes that inflation is slowing enough to get the Federal Reserve to lower its main interest rate from the highest level in more than two decades.

    In other dealings, U.S. benchmark crude oil gave up 73 cents to $83.15 per barrel in electronic trading on the New York Mercantile Exchange.

    Brent crude, the international standard, lost 67 cents to $86.67 per barrel.

    The U.S. dollar fell to 161.44 Japanese yen, reflecting expectations that U.S. interest rate cuts might narrow the gap in rates with Japan, where the benchmark lending rate is near zero. It was at 161.67 late Wednesday.

    The euro rose to $1.0792 from $1.0787.

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  • Stock market today: Wall Street drifts after French market jumps on election results

    Stock market today: Wall Street drifts after French market jumps on election results

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    NEW YORK — U.S. stocks are drifting higher Monday after the French market rallied, as elections continue to drive swings in financial markets worldwide.

    The S&P 500 rose 0.2% in afternoon trading as it kicked off a shortened, four-day week that includes the Fourth of July holiday. The Dow Jones Industrial Average was up 65 points, or 0.2%, as of 12:51 p.m. Eastern time, and the Nasdaq composite was 0.7% higher.

    Some of the world’s strongest action was across the Atlantic, where the CAC 40 index in Paris jumped as much as 2.8% before settling to a gain of 1.1%. Results from France suggested a far-right political party may not win a decisive majority in the country’s legislative elections. That opens the door for France to avoid a worst-case scenario for financial markets, where such a victory could yield policies that would greatly increase the French government’s debt and other challenges.

    This is a big year for elections worldwide, with voters heading to the polls in the United Kingdom later this week and soon elsewhere. In the United States, pollsters are measuring the fallout from last week’s debate between President Joe Biden and former President Donald Trump. It all underscores “political polarisation and how elections are determining economics, rather than vice versa,” according to Nick Gentle and other members of the product management group at Barclays.

    Trump Media & Technology Group, whose stock has been rising and falling with Trump’s White House chances, climbed 2.6% to $33.58. Shares of the company behind Trump’s Truth Social platform, though, are still well below their perch of roughly $70 reached earlier this year.

    In the bond market, Treasury yields rose, as they did Friday immediately following the Biden-Trump debate. Increased prospects for a Republican sweep in November sent traders back to moves from 2016, according to strategists at Morgan Stanley. Besides pushing rates higher, traders also piled into stocks of oil-and-gas and financial companies, among other moves.

    The yield on the 10-year Treasury climbed to 4.48% from 4.39% late Friday and from 4.29% late Thursday. It’s provided a modest reversal of the general trend since the spring, when the 10-year Treasury yield topped 4.70% in late April.

    Yields have been largely easing on hopes inflation will slow enough to convince the Federal Reserve to cut its main interest rate later this year, down from the highest level in more than two decades. High rates have been slowing the U.S. economy by making it more expensive to borrow for a house, car or anything else.

    Hopes for rate cuts strengthened after a report on Monday showed U.S. manufacturing weakened last month by more than economists expected. Perhaps even more importantly for Wall Street, the report from the Institute for Supply Management also said price increases are decelerating, even if prices are still rising. Taken together, the data could offer more of the evidence of lessening pressure on inflation that the Federal Reserve wants before it will cut rates.

    This week’s highlight for economic reports will likely arrive on Friday, when the U.S. government will say how many workers got hired to payrolls during June. Economists predict overall hiring slowed to 190,000 from May’s 272,000. That would get the number closer to what Bank of America calls the “Goldilocks” figure of roughly 150,000, give or take 25,000.

    At that level, the U.S. economy could continue to grow and avoid a recession without being so strong that it puts too much upward pressure on inflation.

    On Wall Street, Chewy swung from a big early gain to a loss of 5.8% after a widely followed trader named Keith Gill revealed he owned just over 9 million shares of the pet supply company. That’s about 6.6% of the entire company, according to a filing made Monday with the Securities and Exchange Commission.

    Gill came to fame during the original meme-stock craze of 2021 that saw GameStop rally to market-bending heights. Gill, who goes by “Roaring Kitty” and other nicknames, became the face of fans pushing GameStop ever upward. Gill had returned to talking about GameStop again recently, which helped its stock rally. But it fell 6% Monday following his disclosure about Chewy.

    Elsewhere on Wall Street, Spirit AeroSystems rose 3.8% after Boeing said it would buy the maker of fuselages and other airplane parts for $4.7 billion in stock and assume about $3.6 billion of its debt.

    Boeing, which rose 2.5%, has been facing tougher scrutiny from the government and the airlines who buy its planes over worries about safety and quality. Boeing previously owned Spirit AeroSystems, and the purchase reverses a longtime company strategy of outsourcing key work on its passenger planes.

    Meta Platforms fell 0.4% after European Union regulators accused it of breaching the bloc’s new digital competition rulebook by forcing Facebook and Instagram users to choose between seeing ads or paying to avoid them.

    In stock markets abroad, Japan’s Nikkei 225 added 0.1% after a quarterly survey by the Bank of Japan called the “tankan” showed a modest improvement in confidence among the country’s largest manufacturers in April through June.

    Stocks in Shanghai rose 0.9% following mixed data on the world’s second-largest economy.

    ___

    AP Writers Matt Ott and Zimo Zhong contributed.

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  • Stock market today: Asian shares advance ahead of U.S. inflation report

    Stock market today: Asian shares advance ahead of U.S. inflation report

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    TOKYO — Asian shares gained Friday as traders looked ahead to a key report on inflation that could influence the Federal Reserve’s next move on interest rates.

    Japan’s benchmark Nikkei 225 rose 0.4% to 39,583.08. Australia’s S&P/ASX 200 rose 0.1% to 7,768.00. South Korea’s Kospi edged 0.1% higher to 2,787.51. Hong Kong’s Hang Seng added 0.3% to 17,767.93, while the Shanghai Composite surged 0.9% to 2,971.18.

    In Japan, the government reported industrial production was stronger than forecast in May at 2.8% and the unemployment rate was unchanged from the previous month at 2.6%.

    On Thursday, the S&P 500 eked out a 0.1% gain. The benchmark index has been hovering near the all-time high it set last week.

    The Nasdaq composite rose 0.3% and remains just below its all-time high. The Dow Jones Industrial Average closed 0.1% higher.

    All told, the S&P 500 rose 4.97 points to 5,482.87. The Dow added 36.26 points to 39,164.06. The Nasdaq gained 53.53 points to close at 17,858.68.

    Gains in retailers and communications services companies helped outweigh losses in consumer goods makers, financial stocks and elsewhere in the market. Amazon.com rose 2.2% and Meta Platforms added 1.3%.

    Walgreens Boosts Alliance plunged 22.2% for the biggest drop in the S&P 500. Its reported results that fell shy of forecasts and cut its outlook. The company said it could close hundreds more stores in the next three years.

    Jeans maker Levi Strauss sank 15.4% after its latest quarterly revenue results fell short of analysts’ expectations, along with its current earnings forecast for the year.

    Spice maker McCormick rose 4.3% for one of the biggest gains in the market after beating analysts’ earnings forecasts.

    Chipmaker Micron Technology fell 7.1% after its latest forecast left investors disappointed.

    Treasury yields fell in the bond market. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, fell to 4.28% from 4.33% late Wednesday. The yield on the two-year Treasury fell to 4.71% from 4.75%.

    The stock market has been listless this week in the lead up to Friday’s release of the next influential inflation report from the government. The personal consumption expenditures index, or PCE, is the Fed’s preferred measure of inflation.

    Economists expect the report to show a modest easing of inflation to 2.6% in May, following a 2.7% reading in April. That’s down from the PCE’s peak of 7.1% in the middle of 2022. Other measures of inflation, including the consumer price index, have also eased significantly over the last two years.

    The latest updates on inflation could influence the central bank’s decision on when to begin cutting interest rates, which remain at their highest level in more than 20 years and which are having an impact worldwide. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.

    An update from the government said the American economy expanded at a 1.4% annual pace from January through March. The figure is a slight revision from a prior estimate of 1.3%. It marks the slowest quarterly growth since spring 2022.

    A slowdown in consumer spending could help further ease inflation, but too much of a slowdown could result in a more painful hit to the economy. The Federal Reserve is trying to time its efforts tame inflation back to its 2% target without slowing the economy so much that it slips into a recession.

    The S&P 500 is on pace to notch its fourth straight winning week. With one more trading day left this month, the index is up just under 4% for June and up about 15% so far this year.

    In energy trading, benchmark U.S. crude rose 47 cents to $82.21 a barrel. Brent crude, the international standard, added 46 cents to $86.85 a barrel.

    In currency trading, the U.S. dollar rose to 161.00 Japanese yen from 160.72 yen. The euro cost $1.0693, down from $1.0709.

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  • Stock market today: Asian stocks are mixed ahead of this week’s Fed meeting

    Stock market today: Asian stocks are mixed ahead of this week’s Fed meeting

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    HONG KONG — Asian stocks were mixed on Tuesday in a busy week with several top-tier reports on U.S. inflation due along with a policy meeting of the Federal Reserve.

    U.S. futures and oil prices fell.

    In Tokyo, the Nikkei 225 index was up 0.1% at 39,092.32 as investors awaited the outcome of a meeting by the Bank of Japan. The central bank raised its benchmark interest rate in March to a range of 0 to 0.1% from minus 0.1%, in its first such increase in 17 years.

    Analysts said markets were leaning toward two rate hikes by the end of this year, with broad expectations of further rate increases as soon as July.

    Hong Kong’s Hang Seng sank 1.1% to 18,165.21, and the Shanghai Composite lost 0.9% to 3,023.46 after reopening from a public holiday. Markets remained cautious ahead of a report on inflation in China due out Wednesday.

    Australia’s S&P/ASX 200 slipped 1.4% to 7,748.30. South Korea’s Kospi was 0.3% higher to 2,709.87.

    On Monday, the S&P 500 rose 0.3% to 5,360.79, topping its all-time high set last week. The Nasdaq composite also set a record after rising 0.3% to 17,192.53, while the Dow Jones Industrial Average gained 0.2% to 38,868.04.

    Data on the economy have come in mixed recently, and traders are hoping for a slowdown that stops short of a recession and is just right in magnitude. A cooldown would put less upward pressure on inflation, which could encourage the Federal Reserve to cut its main interest rate from its most punishing level in more than two decades.

    But the numbers have been hard to parse, with Friday’s stronger-than-expected jobs report coming quickly on the heels of weaker-than-expected reports on U.S. manufacturing and other areas of the economy. Even within U.S. consumer spending, the heart of the economy, there is a sharp divide between lower-income households struggling to keep up with still-high inflation and higher-income households doing much better.

    Companies benefiting from the AI boom are continuing to report big growth almost regardless of what the economy and interest rates are doing.

    Nvidia, for example, is worth roughly $3 trillion and rose 0.7% Monday after reversing an early-morning loss. It was the first day of trading for the company since a 10-for-one stock split made its share price more affordable to investors, after it ballooned to more than $1,000 amid the AI frenzy.

    Treasury yields were mixed in the bond market ahead of reports later in the week that will show whether inflation improved last month at both the consumer and wholesale levels.

    On Wednesday, the Federal Reserve will announce its latest decision on interest rates. Virtually no one expects it to move its main interest rate then. But policy makers will be publishing their latest forecasts for where they see interest rates and the economy heading in the future.

    The last time Fed officials released such projections, in March, they indicated the typical member foresaw roughly three cuts to interest rates in 2024. That projection will almost certainly fall this time around. Traders on Wall Street are largely betting on just one or two cuts to rates in 2024, according to data from CME Group.

    In the bond market, the yield on the 10-year Treasury rose to 4.46% from 4.43% late Friday. The two-year yield, which more closely tracks expectations for the Fed, slipped to 4.88% from 4.89%.

    In other dealings, U.S. benchmark crude oil gave up 3 cents to $77.71 per barrel in electronic trading on the New York Mercantile Exchange.

    Brent crude, the international standard, was down 14 cents to $81.49 per barrel.

    The U.S. dollar rose to 157.25 Japanese yen from 157.04 yen. The euro climbed to $1.0770 from $1.0766.

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  • Stock market today: Asian markets mixed following hotter-than-expected US jobs report

    Stock market today: Asian markets mixed following hotter-than-expected US jobs report

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    HONG KONG — Asian markets were mixed on Monday after a jobs report released Friday came in hotter than expected, while the euro fell after French President Emmanuel Macron dissolved the National Assembly following a setback in Sunday’s parliamentary election.

    U.S. futures fell and oil prices rose.

    Markets in China, Hong Kong, Australia and Taiwan were closed for holidays.

    In Tokyo, the Nikkei 225 index was up 0.9% at 39,038.16 after government data on Monday showed Japan’s economy contracted at an annualized 1.8% pace in January-March, an upward revision from the previously announced 2% drop.

    South Korea’s Kospi slipped 0.4% to 2,711.43.

    Meanwhile, in Europe, far-right parties made major gains in parliamentary elections Sunday, leading French President Emmanuel Macron to announce that he was dissolving the National Assembly and calling a snap legislative election. This caused the euro to drop to its lowest price in nearly a month. The euro was trading at $1.0752 early Monday, down from $1.0778.

    On Friday, the S&P 500 fell 0.1% to 5,346.99, the Nasdaq composite slipped 0.2% to 38,798.99, and the Dow Jones Industrial Average slipped 0.2% to 38,798.99.

    U.S. employers added 272,000 jobs in May, up from April and more than economists expected. The report also showed the unemployment rate rising for a second straight month. Overall, that signals continued strength in the jobs market, with some minor signs of weakening. The strong jobs market has supported consumer spending and the broader economy, but it has also been complicating the Federal Reserve’s path ahead for interest rates.

    The yield on the 10-year Treasury jumped to 4.43% from 4.29% just before the jobs report was released. The two-year yield, which more closely tracks expectations for the Fed, jumped to 4.89% from 4.74% prior to the report’s release.

    Wall Street is hoping for at least one cut to the Fed’s benchmark interest rate before the year ends. The central bank raised its interest rate to its highest level in more than two decades in an attempt to cool inflation to its target of 2%. However, inflation has been stubbornly hovering around 3% after dropping sharply over the last two years. A strong economy could keep fueling price increases.

    A cooler economy can pull inflation lower and prompt the Fed to deliver the cuts to interest rates that traders desire. The danger is if the slowdown overshoots and turns into a recession, which would ultimately hurt stock prices.

    Economic data from last week hinted that the economy could be cooling. The latest reports show that manufacturing contracted in May, worker productivity isn’t as strong as economists thought and job openings are dropping.

    Fed officials are expected to hold interest rates steady at their meeting later in this week. After the jobs report came out, investors took even more bets off the table that the Fed would cut rates at its July meeting, according to data from CME Group.

    Wall Street has also been monitoring earnings from retailers, which have shown that customers have been pulling back on items that aren’t essentials. Consumer spending has been the main support for the economy, but stubborn inflation is hurting consumers, especially those with lower incomes.

    GameStop, the troubled video game retailer at the center of the meme stock craze, slumped 39.4% after reporting another quarterly loss and saying it planned to sell up to 75 million more shares.

    In other dealings, U.S. benchmark crude oil gained 20 cents to $75.73 per barrel in electronic trading on the New York Mercantile Exchange.

    Brent crude, the international standard, was up 16 cents to $79.78 per barrel.

    The U.S. dollar rose to 157.08 Japanese yen from 156.83 yen.

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  • Stock market today: Asian stocks are mixed ahead of key U.S. jobs data

    Stock market today: Asian stocks are mixed ahead of key U.S. jobs data

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    HONG KONG — Asian stocks were mixed Friday after a steady Thursday on Wall Street as markets anticipated the release of key U.S. jobs data later in the day.

    U.S. futures and oil prices rose.

    Japan’s benchmark Nikkei 225 edged 0.1% lower to 38,683.93 after Friday data showed household spending in April was up 0.5% year-on-year. This was the first increase since February 2023 and is a key indicator in assessing the country’s economy as central bank officials prepare to hold a policy meeting next week.

    Hong Kong’s Hang Seng index declined 0.6% to 18,369.83, while the Shanghai Composite index was up 0.2% at 3,053.36 as China trade data showed that exports in May rose faster than expected at 7.6% compared to a year earlier, while imports were weaker than market forecasts.

    Australia’s S&P/ASX 200 climbed 0.5% to 7,860.00. South Korea’s Kospi surged 1.2% to 2,720.97.

    The S&P 500 barely budged on Thursday, a day after leaping to a record high for the 25th time this year. It dipped less than 0.1% to 5,352.96. The Dow Jones Industrial Average added 0.2% to 38,886.17, while the Nasdaq composite slipped 0.1% to 17,173.12 after hitting its own record.

    Big Lots tumbled 18.2% after reporting a larger loss for the latest quarter than expected. The retailer said it missed targets for sales because its customers are continuing to pull back on spending, particularly for things that aren’t essentials.

    Stock for another retailer, Five Below, fell 10.6%. Its profit and revenue last quarter fell short of analysts’ expectations, and CEO Joel Anderson said struggles for the company’s core lower-income customers dragged on results, even as it saw strong growth from higher-income customers.

    Many retailers and other companies have been highlighting a split between their customers making lower and higher incomes. Inflation is particularly hurting those at the lower end, who are struggling to keep up with a cost of living that’s still rising, even if inflation is not as fast as before. That threatens to crack a linchpin that’s kept the U.S. economy out of a recession despite high interest rates: strong spending by U.S. households.

    Another factor that’s helped U.S. consumer spending stay so strong has been a remarkably solid job market. A report on Thursday showed some potential softening there as well.

    Later Friday, the U.S. government is to release its monthly update on the job market. Economists expect it to show a slight acceleration in hiring and average hourly wage gains from the month before.

    In other dealings, U.S. benchmark crude oil gained 15 cents to $75.70 per barrel in electronic trading on the New York Mercantile Exchange.

    Brent crude, the international standard, was up 5 cents to $79.92 per barrel.

    The U.S. dollar fell to 155.28 Japanese yen from 155.68 yen. The euro climbed to $1.0891 from $1.0888.

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  • American Airlines, Advance Auto Parts fall; Chewy, Dick’s Sporting Goods rise, Wednesday, 5/29/2024

    American Airlines, Advance Auto Parts fall; Chewy, Dick’s Sporting Goods rise, Wednesday, 5/29/2024

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    Stocks that traded heavily or had substantial price changes on Wednesday: American Airlines, Advance Auto Parts fall; Chewy, Dick’s Sporting Goods rise

    NEW YORK — Stocks that traded heavily or had substantial price changes on Wednesday:

    ConocoPhillips, down $3.71 to $115.25.

    The energy company is buying Marathon Oil in an all-stock deal valued at approximately $17.1 billion.

    Robinhood Markets Inc., up 62 cents to $21.09.

    The online broker announced a $1 billion stock buyback plan.

    Dick’s Sporting Goods Inc., up $31.03 to $226.03.

    The sporting goods retailer raised its earnings forecast for the year.

    American Airlines Group Inc., down $1.82 to $11.62.

    The airline cut its earnings forecast for the current quarter and said its chief commercial officer is leaving the company.

    Chewy Inc., up $4.59 to $21.50.

    The online pet store beat analysts’ first-quarter earnings forecasts and announced a $500 million buyback.

    Advance Auto Parts Inc., down $7.70 to $62.48.

    The auto parts retailer’s first-quarter earnings and revenue fell short of analysts’ forecasts.

    Box Inc., up $2.16 to $27.20.

    The online storage provider’s first-quarter earnings and revenue beat Wall Street forecasts.

    Abercrombie & Fitch Co., up $37.06 to $189.45.

    The teen clothing retailer beat analysts’ first-quarter earnings and revenue forecasts.

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  • Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

    Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

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    BUENOS AIRES, Argentina — Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

    Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.

    Although praised by the International Monetary Fund and cheered by market watchers, Milei’s cost-cutting campaign and deregulation have in the short term been squeezing families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation is at 289.4%

    “People are in pain,” said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand.”

    Milei’s social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the IMF announcing Monday it would release another $800 million loan — a symbolic vote of confidence in Milei’s overhaul.

    “The important thing is to score goals now,” Milei said at an event at the presidential palace Tuesday. “We are beating inflation.”

    Even so, some experts warn that falling inflation isn’t necessarily an economic victory — rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.

    “You’ve had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. “People are worse off than they were before. That leads them to spend less.”

    Signs of an economic slowdown are everywhere in Buenos Aires — the lines snaking outside discounted markets, the empty seats in the city’s typically booming restaurants, the growing strikes and protests.

    At an open-air market in the Liniers neighborhood, Lidia Pacheco is drawn to a garbage dump near the vegetable section. The 45-year-old mother of four rummages through the pungent pile to salvage the tomatoes with the least mold.

    “This place saves me,” Pacheco said. Sky-high prices have forced her to change her diet and habits to the point of giving up yerba mate, Argentina’s ubiquitous national drink brewed from bitter leaves. “Whatever I earn from selling clothes goes to eating,” she said.

    Retail sales in the first quarter of 2024 fell nearly 20% compared to the year before, a clip comparable to that of the 2020 pandemic lockdowns. The consumption of beef in Argentina — once a hallowed staple — dropped to its lowest level in three decades this quarter, the government reported, prompting panicked editorials about the fate of Argentina’s national psyche.

    “Now I buy pork and chicken instead,” said Leonardo Buono, 51-year-old hospital worker. “It’s an intense shock, this economic adjustment.”

    Milei, a self-proclaimed “anarcho-capitalist” and former TV personality, warned everyone his policies would hurt at first.

    He campaigned brandishing a chainsaw to symbolize all the cutting he would do to Argentina’s bloated state, a dramatic change from successive left-leaning Peronist governments that ran vast budget deficits financed by printing money.

    Promising the pain would pay off, he slashed spending on everything from construction and cultural centers to education and energy subsidies, from soup kitchens and social programs to pensions and public companies. He has also devalued the Argentine peso by 54%, helping close the chasm between the peso’s official and black-market exchange rates but also fueling inflation.

    Prices in shops and restaurants doubled in the first three months of 2024, the government statistics agency reported, reaching levels comparable to the U.S. and Europe.

    But Argentine wages have remained stagnant or declined, with the monthly minimum wage for regulated workers just $264 as of this month, with workers in the informal economy often paid less. Today that sum can buy a few nice meals at Don Julio, a famous Buenos Aires steakhouse. Some 60% of the country’s 46 million people now live in poverty, a 20-year high, according to a study in January by Argentina’s Catholic University.

    Despite rising discontent among many Argentines, the president’s approval ratings have remained high, around 50%, according to a survey this month by Argentine consulting firm Circuitos — possibly a result of Milei’s success blaming his predecessors for the crisis.

    “It’s not his fault, it’s the Peronists who ruined the country, and Milei is trying to do his best,” said Rainer Silva, a Venezuelan taxi driver who fled his own country’s economic collapse for Argentina five years ago. “He’s like Trump, everyone’s against him.”

    Argentina’s powerful trade unions and leftist political parties have pushed back against Milei with weekly street protests, but haven’t managed to galvanize a broad swath of society. That could change — a massive protest against budget cuts to public universities visibly hit a nerve, drawing hundreds of thousands of people and rattling the government.

    ___

    Associated Press writer Almudena Calatrava contributed to this report.

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