NEW YORK (AP) — Stocks are higher as the latest government data showed continued economic growth and investors reviewed another batch of mostly positive corporate earnings reports.
Investors were underwhelmed by the public debut of online brokerage Robinhood, which was trading below its IPO price.
Insight by Verizon: Learn about the progress that the Pentagon is making in finding real value out of 5G and its future across DoD.
The Commerce Department said the U.S. economy grew at a solid 6.5% annual rate last quarter, while the Labor Department gave investors an encouraging update on declining claims for unemployment.
Yum Brands and Ford rose after reporting solid results. Internet retail giant Amazon will report its results after the market closes. Treasury yields edged higher.
US economy surpasses pre-pandemic size with 6.5% Q2 growth
WASHINGTON (AP) — Fueled by vaccinations and government aid, the U.S. economy grew at a solid 6.5% annual rate last quarter in the clearest sign to date that the nation has achieved a sustained recovery from the pandemic recession.
The report from the Commerce Department estimated that the nation’s gross domestic product — its total output of goods and services — accelerated in the April-June quarter from an already robust 6.3% annual growth rate in the first quarter of the year.
For all of 2021, the economy is expected to expand about 7%. That would be the strongest calendar-year growth since 1984. And it would mark a sharp reversal from last year’s 3.5% economic contraction — the worst in 74 years — as a result of the pandemic.
Revisions show slightly smaller GDP drop last year
WASHINGTON (AP) — The U.S. economy contracted by a slightly smaller amount last year than previously reported and grew slightly more in 2019 and slightly less in 2018. Those are the results from the government’s annual benchmark revisions of the gross domestic product, the economy’s total output of goods and services.
This year, the government took the revisions all the way back to 1999 but the new GDP estimates, based on updated source data, showed only small changes or in many years, no changes at all to GDP growth.
For 2020, the GDP shrank by 3.4%, slightly less than the 3.5% reported before the revisions. The slight upward revision reflected newfound strength in such areas as state and local government spending which offset downward revisions to business investment and exports.
VIRUS OUTBREAK-UNEMPLOYMENT BENEFITS
US jobless claims down 24,000 to 400,000 as economy recovers
WASHINGTON (AP) — The number of Americans collecting unemployment benefits slid last week, another sign that the job market continues to recover rapidly from the coronavirus recession.
The Labor Department reports Thursday that jobless claims dropped by 24,000 to 400,000 last week. The weekly applications have fallen more or less steadily this year — from a peak of 904,000 in early to January. But they remain high by historic standards.
Robinhood makes Wall Street debut, stumbles at start
NEW YORK (AP) — Robinhood has made its own leap into the stock market, the one it helped reshape by bringing millions of new investors to Wall Street, and its shares were falling in their first day of trading. They were down 4.7% from the initial price of $38 set late Wednesday.
It’s a disappointing opening for the highly anticipated offering, but the stock could swing sharply given Robinhood’s unusual move to reserve a big chunk of shares for its own smaller-pocketed customers rather than big professional firms.
Robinhood has created plenty of passion, both by users and critics alike.
Nikola founder Milton to face securities fraud charges
NEW YORK (AP) — The founder of Nikola Corp. has been arrested on securities fraud charges alleging he made false and misleading statements to investors about the electric and hydrogen-powered truck startup.
Trevor Milton surrendered Thursday. A Manhattan federal court indictment accuses him of making the false and misleading statements that particularly harmed novice investors looking to replace or supplement income during the coronavirus lockdown. A message seeking comment was left with his lawyer.
Milton resigned from Nikola in September amid allegations of fraud. At the time, Milton said he would defend himself against accusations the company made false claims about its vehicles, allegations Nikola rejects.
VIRUS OUTBREAK-J&J VACCINE-FACTORY
Emergent: FDA letting troubled COVID vaccine factory restart
UNDATED (AP) — The U.S. Food and Drug Administration is allowing the problem-plagued factory of contract manufacturer Emergent BioSolutions to resume production of COVID-19 vaccine.
The Baltimore factory was shut down by the FDA in mid-April due to contamination problems that forced the company to trash the equivalent of tens of millions of doses of vaccine it was making under contract for Johnson & Johnson. The bulk vaccine was contaminated with an ingredient for AstraZeneca’s COVID-19 vaccine, which was being made in the same factory.
Emergent on Thursday said it will take time for the factory to ramp up and reach the production level of before the shutdown.
AstraZeneca to seek US approval of COVID vaccine in 2nd half
LONDON (AP) — AstraZeneca said it intends to seek U.S. approval for its COVID-19 vaccine later this year, further delaying the application even as the company announced it had already delivered more than 1 billion doses to other countries.
The Anglo-Swedish drugmaker says the application has been delayed because it has decided to ask the U.S. Food and Drug Administration for full regulatory approval, rather than the fast-track emergency use authorization originally anticipated.
AstraZeneca’s vaccine has already received authorization from more than 170 countries. It is the second drugmaker to say it has delivered more than 1 billion doses of COVID-19 vaccine, following U.S.-based Pfizer’s announcement on Wednesday.
Mask sales rising again
UNDATED (AP) — NEW YORK — A spot check of U.S. stores and other data sources shows mask sales are rising again amid concerns about surging coronavirus cases from the delta variant.
Retail analysts expect mask sales will increase further after The Centers for Disease Control and Prevention this week recommended vaccinated people return to wearing masks indoors in parts of the U.S. where the cases are surging.
Sales of masks rose 24% for the week ending Tuesday, compared to the prior week, reversing weekly declines since May, according to the Adobe Digital Economy Index.
The coronavirus is especially surging among the unvaccinated and in states with low vaccination rates.
Yum Brands beats Q2 sales forecasts on new stores, traffic
UNDATED (AP) — KFC and Taco Bell parent Yum Brands posted better-than-expected sales in the second quarter thanks to stronger customer demand and a record store building spree.
Yum said it built 603 net new stores during the quarter, including 522 KFC outlets in 62 countries. Louisville, Kentucky-based Yum said its sales rose 34% in the April-June period to $1.6 billion. That was ahead of Wall Street’s forecast, according to analysts polled by FactSet. Yum’s same-store sales, or sales at locations open at least a year, jumped 23%.
Last year, the company’s sales dropped 12% in the second quarter as the pandemic slowed customer traffic.
Merck weighed down by charges in Q2, but drug sales rebound
UNDATED (AP) — Merck’s second-quarter profit dove 49%, mainly due to a big charge for an acquisition and a higher tax rate, though sales of its vaccines and medicines used in hospitals rebounded from the effects of the pandemic.
The company narrowly missed Wall Street’s profit expectations, and Merck shares fell slightly in early trading.
The maker of cancer blockbuster Keytruda said it believes patients and health care systems have adapted to COVID-19 and the pandemic should reduce 2021 revenue by less than 3%. Meanwhile, the drug giant slimmed down a bit with a June 2 spinoff that included its Organon women’s health unit.
Merck on Thursday reported second-quarter net income of $1.55 billion.
American plans to invest in a budget airline based in Chile
DALLAS (AP) — American Airlines is planning to invest in a small South American budget airline as part of a deal that will include selling seats on each other’s flights.
American announced the proposed deal with JetSmart on Thursday. JetSmart operates mostly in Chile and Argentina, but it’s controlled by a U.S. private equity firm.
Officials at American Airlines won’t say how much they plan to invest in JetSmart other than saying it will be a minority stake. If the companies close the deal and win government approval, travelers could earn and spend American frequent-flyer points on JetSmart flights.
Bayer takes additional $4.5 billion charge for Roundup suits
FRANKFURT, Germany (AP) — German pharmaceutical and chemical company Bayer says it will take a provision of $4.5 billion against second-quarter earnings to put the company on what it said would be a path to closure of thousands of lawsuits over a weedkiller containing the chemical glyphosate in the US.
The company said would continue to pursue legal appeals at the U.S. Supreme Court and was hopeful of success. But it set aside the money to account for a second scenario in which it has to manage the costs of the remaining claims through a mix of litigation and settlement.
The company has faced thousands of legal actions claiming that glyphosate causes non-Hodgins lymphoma, a type of cancer. The company says glyphosate is safe.
PORK DEALER SANCTIONED
Hog dealer fires Iowa-based employees over buying violations
IOWA CITY, Iowa (AP) — An influential hog dealer sanctioned twice for defrauding pork producers out of hundreds of thousands of dollars says it has fired employees responsible for its latest violations and paid restitution to affected sellers.
Lynch Livestock, based in Waucoma, Iowa, also announced that pork industry veteran Dan Sutherland would lead the company going forward “as a further safeguard against future violations.”
Lynch announced those moves in a press release posted online Wednesday, after The Associated Press reported that the U.S. Department of Agriculture had taken enforcement action against the company for illegal buying practices for the second time since 2017.
Esports arena in the works near Ohio amusement park
SANDUSKY, Ohio (AP) — Amusement park operator Cedar Fair Entertainment is planning to build a new 1,500-seat esports arena close to its flagship park in Ohio.
The company hopes to begin construction later this year near Cedar Point in Sandusky. Plans call for the arena to have 200 gaming stations and host tournaments year-round.
The Ohio-based amusement park chain believes the $28 million arena will be a draw for gamers across the Midwest. Cedar Fair says it also could be used for concerts and other events. The company hopes to open the esports arena in the first half of 2023.
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