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US stock indexes rally following solid retail sales report
NEW YORK (AP) — Stocks are rallying in midday trading on Wall Street after a solid retail sales report injected more optimism into markets.
Consumers have been the backbone of economic growth and the government’s December report on retail sales showed that they continued spending at a healthy pace. Investors are also weighing a mixed bag of corporate earnings.
Technology companies were the clear leaders Thursday. A mix of retailers and consumer product makers also made solid gains, as did financial companies, including banks. Utilities and real estate companies lagged the market in another sign that investors were confidently shifting more money into riskier holdings.
The yield on the 10-year Treasury rose to 1.82% from 1.78% late Wednesday. Bond prices made a significant move lower, sending yields higher, following the encouraging retail sales report.
Nation's largest retail trade group: holiday sales rose 4.1%
NEW YORK (AP) — The nation's largest retail trade group says holiday sales increased 4.1%, the top end of its forecast.
The National Retail Federation had expected growth in a range of 3.8% to 4.2% for the November and December period. The growth is nearly double the 2.1% growth seen during the holiday 2018 period, which was hurt by a government shutdown, stock market volatility and interest rate hikes.
The holiday figures, announced Thursday, follow a report from the Commerce Department that retail sales rose 0.3% in December from the previous month. Excluding sales at car dealers and gas stations, sales rose 0.5%, the best in five months.
The results offer a dose of optimism for the retail industry. Retailers have benefited from a strong economy and a tight job market, but many are struggling to adjust to an increasing shift among its customers toward online. They're also battling the increasing dominance of online behemoth Amazon.com.
Several large stores including Kohl's and Macy's have reported disappointing holiday sales. Target, which has been on a winning streak, also reported a shortfall in its holiday business. A full picture of how consumers spent will be known when retailers report their fiscal fourth quarter results next month.
Senate passes US-Canada-Mexico trade deal, a Trump priority
WASHINGTON (AP) — The Senate overwhelmingly approved a new North American trade agreement Thursday that rewrites the rules of trade with Canada and Mexico and gives President Donald Trump a major policy win before senators turn their full attention to his impeachment trial.
The vote was 89-10.
The measure goes to Trump for his signature. It would replace the 25-year-old North American Free Trade Agreement, known as NAFTA, which tore down most trade barriers and triggered a surge in trade. But Trump and other critics blamed that pact for encouraging U.S. companies to move their manufacturing plants south of the border to take advantage of low-wage Mexican laborers.
Passage of the trade bill came one day after Trump signed a new trade agreement with China, easing trade tensions between the economic powers.
Mexico has approved the revised trade deal. Canada is expected to do so in coming months.
US long-term mortgage rates edge up; 30-year loan at 3.65%
WASHINGTON (AP) — Long-term mortgage rates are up slightly.
Mortgage buyer Freddie Mac said Thursday the average rate for a 30-year fixed-rate mortgage ticked up to 3.65% from 3.64% last week. The benchmark rate was 4.45% a year ago.
The average rate on a 15-year mortgage increased to 3.09% from 3.07% last week.
The average rate for a five-year adjustable-rate mortgage rose to 3.39% from 3.30% last week. The fee was unchanged at 0.3 point.
Group finds aircraft approval process safe, despite crashes
UNDATED (AP) — A government committee asked to review U.S. approval of new passenger planes after two deadly crashes involving the Boeing 737 Max has found that the system is safe and effective but could be improved.
The committee differed sharply with legislators who are investigating Boeing and the Federal Aviation Administration, which approved the Max. Key lawmakers have said they may try to stop the FAA from letting Boeing do some inspections and safety analysis on its own planes.
Thursday’s report came from a committee appointed by Transportation Secretary Elaine Chao in April, after crashes in Indonesia and Ethiopia killed 346 people and led regulators to ground all Max jets worldwide.
The committee said the FAA's system of delegating some safety work to aircraft manufacturers is effective and helps the U.S. aerospace industry thrive.
Lee Moak, a former airline pilot and union leader who co-chaired the committee, said its members did not look at internal communications in which Boeing employees raised safety alarms about the Max while it was being developed, and admitted misleading regulators.
Payless ShoeSource emerges from Chapter 11 bankruptcy
NEW YORK (AP) — Payless ShoeSource has emerged from bankruptcy for the second time, with a focus on international markets.
The Topeka, Kansas-based company said Thursday it wants to reinvigorate its largest business unit, Latin America,
It will also relaunch its U.S. e-commerce site and open some stores in the U.S. but did not offer specific details.
Payless filed for Chapter 11 bankruptcy protection in February 2019 and shuttered the remaining 2,000-plus stores in North America.
The latest bankruptcy filing didn't affect its 710 franchises or stores in Latin America, Southeast Asia and the Middle East.
The chain filed for Chapter 11 for the first time in April 2017.
Microsoft: 'carbon-negative' by 2030 even for supply chain
UNDATED (AP) — Microsoft is pledging to become 100% “carbon-negative” by 2030 by removing more carbon from the environment than it emits.
CEO Satya Nadella said Thursday that the commitment will happen "not just across our direct emissions, but across our supply chain, too.”
It's a major step up from Microsoft's previous green pledges. The tech company had previously said its data centers would be 60% powered by renewable electricity by the end of last year, but environmental groups have said it has fallen short of such rivals as Google and Apple by relying too much on purchasing renewable energy credits to make up for its carbon emissions.
Microsoft had previously set an interim goal of 70% renewable energy by 2023. Google and Apple have already said they reached the 100% milestone. Now, however, Microsoft executives say that their credit-buying approach is not enough.
Starbucks expands presence in low-income communities
DETROIT (AP) — Starbucks is expanding a program that tries to help low-income communities by opening coffee shops and hiring local workers.
The Seattle-based company plans to open or remodel 85 stores by 2025 in rural and urban communities across the U.S. That will bring to 100 the total number of community stores Starbucks has opened since it announced the program in 2015. Each store will hire local staff — including construction crews and artists — and will have dedicated community event spaces.
Starbucks will also partner with local United Way chapters to develop programming for each store, such as youth job training classes or mentorship groups.
Starbucks opened its first community store in Ferguson, Missouri, in 2016, two years after devastating riots that followed the shooting of an unarmed black man by police. It has opened 13 other locations since then, including stores in Baltimore, Chicago, Dallas, New Orleans and Jonesboro, Georgia. Another store will open this spring in Prince George’s County, Maryland. Starbucks estimates the stores have created more than 300 jobs.
HARD ROCK-ATLANTIC CITY
Hard Rock boss: Atlantic City 'going in wrong direction'
ATLANTIC CITY, N.J. (AP) — The CEO of Hard Rock International says Atlantic City “is going in the wrong direction” and is in worse shape than when the global entertainment company bought its casino there nearly three years ago.
Speaking after an employee meeting Thursday where Hard Rock handed out bonuses totaling $2 million to nearly 2,900 full-time employees, Jim Allen said the company is willing to be part of the solution in Atlantic City, but is not encouraged by recent developments.
He said Hard Rock is not part of the move to change Atlantic City's form of government being pushed by the owner of Resorts casino, the head of the city's main casino workers union and a retired state senator, “but we're becoming more aware of it as days go by.”
That plan, to be voted on in a March 31 special election, would replace an elected mayor with an appointed city manager, and would shrink the City Council from nine members to five.
Allen said that after Hard Rock invested $562 million into Atlantic City, “frankly the town's in worse shape today than it was when we bought the building.”
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