Business Highlights: Fed rate hike, Sprint-Frontier deal

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Fed unleashes another big rate hike in bid to curb inflation

WASHINGTON (AP) — The Federal Reserve raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation. The Fed’s move will raise its key rate, which affects many consumer and business loans, to its highest level since 2018. The central bank’s decision follows a jump...

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Fed unleashes another big rate hike in bid to curb inflation

WASHINGTON (AP) — The Federal Reserve raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in three decades to tame high inflation. The Fed’s move will raise its key rate, which affects many consumer and business loans, to its highest level since 2018. The central bank’s decision follows a jump in inflation to 9.1%, the fastest annual rate in 41 years. By raising borrowing rates, the Fed makes it costlier to take out a mortgage or an auto or business loan. Consumers and businesses then presumably borrow and spend less, cooling the economy and slowing inflation.

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US stocks jump after Fed rate hike; tech shares surge

NEW YORK (AP) — Stocks jumped on Wall Street Wednesday after the Federal Reserve ratcheted up its campaign against surging inflation by raising its key interest rate three-quarters of a point. The Fed’s latest hike lifts the benchmark short-term rate to its highest level since 2018. The S&P 500 gained 2.6% and the technology heavy Nasdaq jumped by the most in over two years. The Dow Jones Industrial Average also closed higher. Strong earnings from Google’s owner Alphabet, Microsoft and other companies helped lift investors’ mood.

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With Frontier deal dead, Spirit ponders sale to JetBlue

NEW YORK (AP) — Spirit Airlines and Frontier Airlines agreed Wednesday to abandon their merger proposal, opening the way for JetBlue Airways to acquire Spirit. Spirit, the largest budget carrier in the United States, said it was still in discussions with JetBlue “and expects to provide a further update in the near future.” The decision by Spirit and Frontier to terminate their deal was announced while Spirit shareholders were still voting on the proposal. It was apparent that despite the support of Spirit’s board, shareholders were prepared to reject the Frontier deal. The Frontier offer was worth more than $2.6 billion in cash and stock, far short of JetBlue’s all-cash bid of $3.7 billion.

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US economy sending mixed signals: Here’s what it all means

WASHINGTON (AP) — The U.S. economy is caught in an awkward, painful place. A confusing one, too. Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers keep spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month. In the midst of it all, prices have accelerated to four-decade highs, and the Federal Reserve is desperately trying to douse the inflationary flames with higher interest rates. That’s making borrowing more expensive for households and businesses. The Fed hopes to pull off the triple axel of central banking: Slow the economy just enough to curb inflation without causing a recession.

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Report: Federal debt lower in 2022; still poised to climb

WASHINGTON (AP) — The Congressional Budget Office says the end of pandemic-era spending, fast economic growth and higher tax revenues have caused the federal debt this year to be lower than forecast. But the non-partisan office also includes a warning in its 30-year outlook. Debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy. Accumulated debt held by the public will be equal to 98% of U.S. gross domestic product this year. That’s four points lower than the 2021 forecast. But this would be a brief respite from rising levels of debt that will surpass the historical high in 2031 and climb by 2052 to 185% of GDP.

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Facebook parent Meta posts first revenue decline in history

SAN FRANCISCO (AP) — Facebook and Instagram’s parent company Meta posted its first revenue decline in history Thursday, dragged by a drop in ad spending as the economy falters — and as competition from rival TikTok intensifies. The company earned $6.69 billion, or $2.46 per share, in the April-June period. That’s down 36% from $10.39 billion, or $3.61 per share, in the same period a year ago. Revenue was $28.82 billion, down 1% from $29.08 billion a year earlier. The results were below Wall Street’s expectations and Meta’s stock fell after-hours.

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DOJ: Buffett company discriminated against Black homebuyers

NEW YORK (AP) — The Justice Department says a Pennsylvania mortgage company owned by billionaire businessman Warren Buffett’s company discriminated against potential Black and Latino homebuyers in Philadelphia, New Jersey and Delaware. Officials are calling it the second-largest redlining settlement in history. Trident Mortgage Co. deliberately avoided writing mortgages in minority-majority neighborhoods in West Philadelphia, Camden, New Jersey and in Wilmington, Delaware. That’s according to a Justice Department Consumer Financial Protection Bureau settlement with Trident. As part of the agreement with the government agencies, Trident will have to set aside $20 million to make loans in underserved neighborhoods.

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Senate passes bill to boost computer chip production in US

WASHINGTON (AP) — The Senate has passed a bill that’s designed to encourage more semiconductor companies to build chip plants in the United States. The $280 billion measure, which awaits a House vote, includes federal grants and tax breaks for companies that construct their chip facilities in the U.S. It also directs Congress to significantly increase spending on high-tech research programs that lawmakers say will help the country stay economically competitive in the decades ahead. Senate passage came by a 64-33 vote Wednesday. The House vote is expected later this week as lawmakers try to wrap up business before returning to their home states and districts in August.

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Ford 2Q profit up 19% on strong prices, sales increase

DETROIT (AP) — Ford Motor Co.’s net income rose 19% in the second quarter as the company pulled together enough computer chips to boost factory output and sales. The Dearborn, Michigan, automaker said it made $667 million from April through June. Adjusted earnings per share were 68 cents, beating Wall Street estimates of 45 cents, according to FactSet. Revenue was $40.19 billion, also beating analyst estimates of $36.87 billion. The company stuck with its full-year outlook for pretax earnings of $11.5 billion to $12.5 billion. The company still expects 10% to 15% growth in vehicle sales to dealers for the full year. It made $561 million in the second quarter of last year.

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The S&P 500 jumped 102.56 points, or 2.6%, to 4,023.61. The Dow Jones Industrial Average gained 436.05 points, or 1.4%, to 32,197.59. The Nasdaq surged 469.85 points, or 4.1%, to 12,032.42. The Russell 2000 index of smaller companies rose 43.09, or 2.4%, to 1,848.34.

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