Stocks drift lower
NEW YORK (AP) — Wall Street is drifting lower after mixed reports on the economy highlighted its uncertain path, including one showing that layoffs continue at a stubbornly steady pace.
The S&P 500 was 0.6% lower in early afternoon trading, following up on declines across Europe and Asia, as a worldwide rally for markets fades. Roughly as many stocks were up in the S&P 500 as down, but the drops were sharp enough to pull the index toward its first loss in three days. Tech stocks and travel-related companies were down.
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Treasury yields also sank in a sign of increased caution.
Surge in infections fuels new jobless claims
WASHINGTON (AP) — More than a million Americans sought unemployment benefits for the 17th consecutive week as infections began surging in some of the nation’s most populous states.
Layoffs in places like Florida, Georgia and California rose by tens of thousands of people.
Hope early this month that the country had made it through the worst of the pandemic has been shaken and the rising number of infected Americans threatens to push what appeared to be a recovering nation into critical condition.
The Labor Department said Thursday that the number of workers seeking unemployment benefits remained stuck at 1.3 million last week.
Retail sales post solid gains
BALTIMORE (AP) — U.S. retail sales climbed a solid 7.5% in June, a sign that the economy was healing right before infections from the coronavirus spiked again and dragged down hopes for a steady recovery.
The Census Bureau reported Thursday that retail sales are 1.1% higher than their levels from a year ago, after a brutal plunge in March and April was offset by a decent rebound in May and June.
Spending at restaurants and bars jumped 20% last month, but it’s still down 26% from last year. Sales at clothiers more than doubled between May and June, yet they’ve collapsed 23% from a year ago.
VIRUS OUTBREAK-TARGET-MASK MANDATE
Target joins retailers imposing mask mandate
NEW YORK (AP) — Target is joining the list of the nation’s largest retailers that will require customers to wear masks as cases of COVID-19 spike.
The policy will go into effect Aug. 1. More than 80% of Target’s 1,800 stores already require customers to wear masks due to local and state regulations. Target said Thursday that it will hand out masks at entrances to those who need them.
The nation’s largest retailer, Walmart, announced this week that masks would be mandatory in all stores starting Monday. Starbucks, Best Buy, Kohl’s and Kroger Co. also have put mandatory face shield rules in place.
Barr says US has become too reliant on Chinese goods
WASHINGTON (AP) — Attorney General William Barr says the United States has become overly reliant on Chinese goods and services. Examples include face masks, medical gowns and other protective equipment designed to curb the spread of coronavirus.
Barr is also accusing hackers linked to the Chinese government of targeting American universities and companies to steal research related to vaccine development. The attorney general spoke just hours after Western agencies made similar claims against Beijing.
Barr’s address at the Gerald R. Ford Presidential Museum is part of a full-court press by the Trump administration to outline what officials see as Beijing’s burgeoning economic threat to the U.S.
Senate Democrats seek aid for Black Americans in virus bill
WASHINGTON (AP) — Senate Republicans are poised to come out with their next COVID-19 aid bill as early as next week. And before then, the top Senate Democrat is weighing in with a plan to shift $350 billion from an untapped Treasury Department virus relief program to help Black Americans and other people of color during the pandemic and beyond.
Sen. Chuck Schumer says moving some of the $500 billion previously approved would make immediate and long-term changes to address systemic racism.
Senate Majority Leader Mitch McConnell is readying the GOP’s $1 trillion package that’s a counteroffer to the $3 trillion proposal that House Democrats approved in May.
Rates reach new record lows
WASHINGTON (AP) — Average rates on long-term mortgages continue to fall to new record lows, as the key 30-year loan dropped below 3% for the first time in 50 years.
The stagnant economic recovery in the face of the coronavirus pandemic is keeping inflation tamped down despite pent-up homebuying demand.
Mortgage buyer Freddie Mac says the average rate on the 30-year home loan fell this week to 2.98% from 3.03% last week. These are the lowest levels since Freddie Mac began tracking averages in 1971. The rate averaged 3.81% a year ago.
The average rate on the 15-year fixed-rate mortgage declined to 2.48% from 2.51%, from last week.
American, JetBlue in new partnership
DALLAS (AP) — American Airlines and JetBlue are striking a new partnership designed to help them both in New York and Boston. The deal allows them to sell seats on each other’s flights in the Northeast.
American says the deal will allow new international flights from JFK Airport and help it compete in New York against Delta and United.
Labor groups at American questioned the timing of the deal, which is being announced one day after American said it will send furlough warnings to 25,000 employees.
The deal is similar to one that American struck with Alaska Airlines around Seattle. American and JetBlue say the deal announced Thursday will let them recover more quickly from the coronavirus pandemic once air travel picks up.
BANK OF AMERICA-RESULTS
Bank of America sees recessionary impacts ‘deep into 2022
NEW YORK (AP) — Consumer banking giant Bank of America says its profits dropped by more than half in the second quarter, as the bank set aside billions of dollars to cover potentially bad loans caused by the pandemic.
The results from BofA are the latest dire sign that Americans and businesses are struggling to keep up with their debts, with many parts of the country’s economy shut down.
Together the five big Wall Street banks that have reported this quarter have set side more than $30 billion to cover these loans, on top of the tens of billions they set aside in the first quarter when the pandemic just started.
VIRUS OUTBREAK-JOHNSON & JOHNSON
J&J, after surprisingly strong 2Q, ups outlook for the year
NEW BRUNSWICK, N.J. (AP) — Johnson & Johnson beat Wall Street’s second-quarter expectations and bumped up its 2020 forecast even though COVID-19 contributed to a 40% drop in U.S. medical device sales.
Growing U.S. pharmaceutical sales helped the world’s biggest health products maker counter the impact from the pandemic, which prompted patients to delay surgeries that use the company’s medical devices.
J&J also raised its forecast a few months after surprising investors by cutting its expectations for the year due to the pandemic.
Overall, J&J’s net income fell 35% in the second quarter to $3.63 billion, while total revenue dropped 11%.
EU court cancels US data-sharing pact over snooping concerns
UNDATED (AP) — The European Union’s top court has ruled that an agreement that allows big tech companies to transfer data to the United States is invalid, and that national regulators need to take tougher action to protect the privacy of users’ data.
Thursday’s ruling does not mean an immediate halt to all data transfers outside the EU, as there is another legal mechanism that some companies can use. But it means that the scrutiny over data transfers will be ramped up and that the EU and U.S. may have to find a new system that guarantees that Europeans’ data is afforded the same privacy protection in the U.S. as it is in the EU.
European central bank leaves stimulus efforts unchanged
FRANKFURT, Germany (AP) — The European Central Bank has left its stimulus programs unchanged after providing in recent weeks up to $1.7 trillion in monetary support.
The stimulus has helped avoid panic in financial markets during the coronavirus outbreak.
The focus for now is on a big meeting by European Union leaders on Friday. Germany’s Angela Merkel and France’s Emmanuel Macron will try to make progress on agreeing on a coronavirus economic recovery plan. Meanwhile, investors will look to a news conference by ECB President Christine Lagarde for an updated outlook on the economy.
UK job losses set to rise sharply as numbers on payroll sink
LONDON (AP) — Unemployment across the U.K. has held steady during the coronavirus lockdown as a result of a government salary support scheme, but there are clear signals emerging that job losses will skyrocket over coming months.
The Office for National Statistics said Thursday there were 649,000 fewer people, or 2.2%, on payroll in June when compared with March when the lockdown restrictions were imposed. That’s an indication that the country’s unemployment rate is set to rise from the still historically low level of 3.9% recorded in May.
So far, Britain has been spared sharp rises because of the Job Retention Scheme, whereby the government has paid the majority of the salaries of workers who have not been fired.
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