NEW YORK (AP) — Stocks rose and bond yields fell as investors welcomed new signals that the Federal Reserve is ready to cut interest rates for the first time in a decade.
Fed Chairman Jerome Powell said Wednesday that many Fed officials believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut.
The Dow Jones industrial average was up about 100 points in midday trading. The S&P 500 index briefly traded over 3,000 for the first time.
Technology and communications companies drove much of the gains. Cisco Systems rose 1.7% and Verizon climbed 1.2%.
The dollar fell against other currencies and bond yields dropped as investors anticipated lower interest rates.
Powell signals that rate cut could be coming soon
WASHINGTON (AP) — Chairman Jerome Powell signaled Wednesday that the Federal Reserve is likely to cut interest rates late this month for the first time in a decade in light of a weakening global economy and rising trade tensions.
Delivering the central bank’s semiannual report to Congress, Powell said that since Fed officials met last month, “uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.” In addition, annual inflation has dipped further below the Fed’s annual target level.
Economists suggested that Powell’s message made a quarter-point rate cut a virtual certainty at the Fed’s meeting this month, with many forecasting further rate cuts to come.
Powell told the House Financial Services Committee that rising federal budget deficits will eventually push up interest rates, though it may not happen until “way out in the future.”
^AMERICAN AIRLINES-BOEING PLANE
American: Boeing jet to cut $185 million from 2Q income
FORT WORTH, Texas (AP) — American Airlines says the grounding of its Boeing 737 Max jets led to $185 million in lost income during the second quarter.
American said in a regulatory filing Wednesday that the grounding of its 24 Max jets resulted in about 7,800 canceled flights in the quarter.
The plane has been grounded since March after two deadly crashes.
The world’s biggest airline continues to ride a tide of strong travel demand.
American is raising its estimate for a key figure, revenue for each seat flown one mile, because planes are so full.
The airline now estimates that number will rise 3% to 4% over the same period last year, up from an earlier forecast of up 1% to 3%.
Trump is going to Wisconsin to push for trade deal
WASHINGTON (AP) — President Donald Trump will be traveling to Wisconsin to push for congressional approval of the new trade deal with Mexico and Canada.
The White House said Trump will head to Milwaukee on Friday to visit Derco Aerospace. The company is a subsidiary of Lockheed Martin and provides parts, logistics and repair services to fixed-wing aircraft.
Trump will also attend a fundraiser in Milwaukee and stop in Cleveland for another fundraiser. This will be his sixth visit to Wisconsin, one of three Rust Belt states — along with Michigan and Pennsylvania — that traditionally go Democratic but voted for Trump in 2016.
US, Chinese trade envoys in 1st contact after Trump-Xi truce
BEIJING (AP) — The top U.S. and Chinese trade envoys have spoken by phone in their first contact since Presidents Donald Trump and Xi Jinping agreed to resume stalled talks on ending a tariff war.
The Commerce Ministry said Beijing’s envoy, Vice Premier Liu He, talked Tuesday with Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. It gave no details or timeline for more contacts.
Economists say the trade truce might be fragile because the two sides still face the same disagreements that caused talks to stall in May.
Both sides have raised tariffs on billions of dollars of each other’s goods in the dispute over U.S. complaints about Beijing’s technology ambitions and trade surplus.
China’s June auto sales fall, extending year-old decline
BEIJING (AP) — China says auto sales fell 7.8% in June amid a trade fight with Washington and slower economic growth, extending a year-old contraction that is squeezing automakers as they spend on developing electric cars.
An industry group said Wednesday drivers in the global industry’s biggest market bought 1.7 million SUVs, sedans and minivans.
The China Association of Automobile Manufacturers said total purchases in the first six months of 2019 fell 14 percent from a year earlier to 10.1 million vehicles. That was below industry forecasts of flat to slightly lower growth.
Jittery consumers are less willing to make big purchases amid unease about China’s economic outlook. Growth in the second-largest global economy held steady in the latest quarter but that was supported by government spending and higher bank lending.
Toyota shifts gears, plans to build new SUV at Alabama plant
HUNTSVILLE, Ala. (AP) — Toyota says it will scrap plans to build the Corolla compact car at a new factory under construction in Alabama. Instead it will build a new unspecified SUV at the plant it’s building with Mazda in Huntsville.
The company said Wednesday that the decision is being made in response to growing demand for SUVs and light trucks. For the first half of this year, Corolla sales are down 5.3 percent, to just under 153,000.
Toyota will continue to build Corollas at its factory in Blue Springs, Mississippi.
The new $1.6 billion Alabama plant is expected to start making vehicles in 2021. Mazda also plans to build a new yet-to-be-unveiled SUV there.
The factory will employ up to 4,000 workers.
NY expands pay equity law on day honoring US soccer team
ALBANY, N.Y. (AP) — New York state has expanded a state law prohibiting gender pay discrimination, making it illegal to pay someone less based on factors such as their race, religion or gender identity.
The new law also changes a legal standard for pay equity to make it easier for employees to prove discrimination in court.
Democratic Gov. Andrew Cuomo signed the changes into law Wednesday in Manhattan, just before joining the U.S. women’s soccer team for a parade honoring their World Cup victory. Cuomo says he supports female players in their quest for pay equal to that of male players.
Democratic Senate Leader Andrea Stewart-Cousins says the women’s team’s lesser pay highlights a fundamental economic problem facing women throughout society.
Cuomo also signed legislation Wednesday barring employers from demanding prospective workers’ salary histories.
EU trims economic growth forecasts amid trade tensions
BRUSSELS (AP) — The European Union has trimmed its forecasts for economic growth next year as global trade tensions weigh on the continent’s export-focused manufacturers.
The EU executive commission said Wednesday it was reducing its forecast for next year for both the 19-country eurozone and the wider 27 countries that are due to remain in the block after Britain leaves, which is scheduled to happen in October.
Eurozone growth is expected to pick up from 1.2% this year to just 1.4% in 2020, down from a previous estimate of 1.5%.
The commission said there is a risk that the economy might do worse than that forecast due to “any further escalation of trade tensions.”
The U.S. government has imposed tariffs on several countries, particularly China, which has weighed on global trade and manufacturing.
UK economy bounces back in May in wake of Brexit extension
LONDON (AP) — Official figures show the British economy bounced back in May but fears remain that the country could slip into recession ahead of the revised Brexit deadline.
The Office for National Statistics said Wednesday that the economy grew a monthly 0.3% in May largely because car makers ramped up production again after many went idle in April in case the original Brexit deadline ended up with Britain crashing out of the EU without a deal.
In April, the British economy contracted 0.4%.
In the event, the March 29 Brexit date was extended to Oct. 31.
The delay has done little to lift the cloud of uncertainty surrounding the British economy, with no one sure about what will happen. As such, firms remain wary of investing.
Brexit: Ex-PM vows legal action if UK Parliament suspended
LONDON (AP) — A former British prime minister has threatened to take Conservative Party leadership candidate Boris Johnson to court if he tries to suspend Parliament to deliver a no-deal Brexit.
John Major’s comments follow a televised debate between Johnson and Jeremy Hunt, who are seeking to replace Prime Minister Theresa May. In one of the clashes, Johnson refused to rule out bypassing Parliament to prevent lawmakers from blocking a no-deal departure from the European Union on Oct. 31.
Major told the BBC on Wednesday it would be “utterly and totally unacceptable” for any British leader to shut down Parliament — and that he would seek a judicial review to stop it.
Major said “you cannot and should not bypass Parliament in this fashion.”
Hunt has ruled out such a suspension.
UK health service to use Amazon Alexa to give medical advice
LONDON (AP) — Alexa will see you now.
Britain’s health care service is teaming up with Amazon’s digital voice assistant to help answer medical queries with advice from the service’s official website.
The British government said Wednesday that the system can help senior citizens, blind people and others who find it hard to access the internet.
Using Amazon’s algorithms, Alexa will answer voice questions from users about common maladies such as the flu or chickenpox with information verified by the National Health Service.
Amazon sought to reassure users that their information will be kept confidential and not shared with third parties, adding that voice recordings can be deleted.
Privacy campaigners, however, said they were concerned about the partnership and its implications because Amazon has a worrying track record on handling user data.
UK plan to control online porn is watched as test case
LONDON (AP) — The global push to more tightly regulate the internet is spreading to one of the web’s biggest and least visible corners: porn.
The British government wants to require porn websites to verify their users are adults. The effort is being watched by other countries hoping to better regulate pornographic content but has raised concerns about privacy, censorship and competition. It has run into multiple delays that reflect the confusion surrounding it.
Under the plan, expected to come into force late this year, British porn site visitors will be asked to prove they are 18 or older by buying a card with an access code in a shop, where they will have to show photo ID, or going online to submit a copy of a passport or driver’s license.