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FINANCIAL MARKETS
Stocks turn mixed at midday
NEW YORK (AP) — Stock indexes have turned mixed in midday trading on Wall Street after starting the day broadly lower.
Industrial and health care companies were leading the losses. Travel-related businesses also fell broadly after China reported a spike in cases of the new virus.
Investors headed for safer investments. Utilities and real estate companies held up better than most of the market as investors headed for safer investments.
CONSUMER PRICES
US consumer prices up 0.1% in January; gasoline prices fall
WASHINGTON (AP) — U.S. consumer prices rose modestly last month, held down by falling gasoline prices.
The Labor Department said Thursday that its consumer price index blipped up 0.1% in January after rising 0.2% in December. Over the past year, consumer inflation is up 2.5%, biggest gain since October 2018.
Excluding volatile food and energy prices, so-called core consumer inflation rose 0.2% in January and 2.3% over the past year. Gasoline prices dropped 1.6% in January after surging 3.1% in December. They are up 12.8% over the past year.
Consumer inflation is running close to the Federal Reserve’s 2% annual target.
The Fed last year cut its benchmark interest rate three times to the current historically low range of 1.5% to 1.75%. The cuts were partly meant to protect a record-breaking economic expansion from the fallout from President Donald Trump’s trade war with China.
The central bank has called the current rates “appropriate to support sustained expansion of economic activity” and a strong labor market.
MORTGAGE RATES
US mortgages flat to slightly higher; 30-year loan at 3.47%
WASHINGTON (AP) — U.S. long-term mortgage rates were flat to slightly higher this week after three straight weeks of declines, as the historically low levels continue as an incentive for potential homebuyers.
Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year fixed-rate mortgage edged up to 3.47% from 3.45% last week. The key rate stood at 4.37% a year ago.
The average rate on a 15-year mortgage was unchanged from last week at 2.97%.
401K RECORD BALANCES
401(k)s hit records as workers sock away more, stocks jump
NEW YORK (AP) — How's your 401(k) doing?
President Donald Trump likes to ask that question around the country, sometimes throwing out big gains like 90% or 95%. The average 401(k) did indeed hit a record last year, although its growth was considerably less than that.
The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400.
Those figures are averages, not medians, and the typical 401(k) might be closer to a quarter of that. The top 1% of 401(k) savers has more than $1 million in each of their accounts, which skews the average higher.
Surging markets around the world were a big reason for growth across accounts in 2019: The S&P 500 index had one of its best years in decades with a 31.5% return. Investments of all types logged gains, from junk bonds to stocks from developing economies.
But workers' better savings habits also played a big role. Fidelity said the average worker set aside 8.9% of their pay in their 401(k) in the fourth quarter, a record. Combined with employer matches, the average total savings rate was 13.5% in the quarter, tying its record last reached in the spring of 2019.
OIL DEMAND
Virus outbreak blamed for forecast fall in oil demand
FRANKFURT, Germany (AP) — The International Energy Agency expects demand for oil to fall in the first quarter as a result of the virus outbreak that emanated in China. Any fall would represent the first quarterly decline in a decade.
The Paris-based agency said Thursday in its oil market report for February that demand in the first quarter was expected to fall by 435,000 barrels per day compared with the same period a year ago. The agency also cut its 2020 demand growth forecast by 365,000 barrels per day to 885,000.
The agency said that the consequences of the outbreak for oil demand “will be significant.”
While the brief SARS epidemic of 2003 has at times been used as a reassuring point of comparison, China’s economy has changed enormously since then. Its oil demand has almost doubled since 2003 and represented more than three-quarters of global oil demand growth last year.
The outbreak of the disease, which has been named COVID-19, from the city of Wuhan threatens to disrupt supply chains that are central to the global economy.
JUSTICE DEPARTMENT-HUAWEI
US brings new charges against Chinese tech giant Huawei
WASHINGTON (AP) — The Justice Department has added new criminal charges against Chinese tech giant Huawei (WAH'-way) and two of its U.S. subsidiaries.
The U.S. is accusing the company in a plot to steal trade secrets. The indictment was announced Thursday by federal prosecutors in Brooklyn. They had previously accused the company of bank fraud.
The case was unsealed as the Trump administration is raising national security and surveillance concerns about Huawei, which is the world's largest telecommunications equipment manufacturer.
TESLA-STOCK OFFERING
Tesla offers $2B in added shares, discloses SEC subpoena
DETROIT (AP) — Tesla says that it is selling $2 billion worth of additional stock, that its U.S. revenue fell last year and that securities regulators are scrutinizing its finances.
All of the developments Thursday were disclosed in filings with U.S. Securities and Exchange Commission, which in December subpoenaed financial data and contracts, including the company’s financing arrangements.
The surprise sale taps into Tesla's rocketing stock price over the past eight months, but comes just two weeks after CEO Elon Musk said the company had enough cash to fund its capital programs and it didn't need to raise any more money.
In a prepared statement, Tesla said Musk will buy $10 million worth of the stock while billionaire board member and Oracle co-founder Larry Ellison will buy shares worth $1 million.
The electric car and solar panel maker will use the proceeds to strengthen its balance sheet and for general corporate purposes.
In the Thursday filing, Tesla Inc. said underwriters of the share sale have a 30-day option to buy another $300 million in common stock. The company estimated that the net proceeds from the sale would be $2.31 billion if the underwriters exercise the options.
FEDERAL RESERVE-SHELTON
Trump Fed nominee Shelton faces skepticism at Senate hearing
WASHINGTON (AP) — One of President Donald Trump's nominees for the Federal Reserve came under sharp questioning Thursday from senators who expressed skepticism at her unorthodox economic views, including two Republicans who raised doubts about her nomination.
The nominee, Judy Shelton, sought to make those views an asset by promising to bring “intellectual diversity” to the Fed. Shelton has previously expressed support for a wide range of out-of-the-mainstream views, including tying the dollar's value to gold. She has also raised the concerns of economists and Fed watchers by questioning the need for the central bank's independence.
During the hearing, Senator Pat Toomey, a Republican from Pennsylvania, criticized Shelton's view that the Fed should consider acting to lower the value of the dollar if other nations appeared to be manipulating their own currencies. Toomey called that “a very, very dangerous path to go down.” Likewise, Sen. Richard Shelby, Republican from Alabama, said he remained “concerned” about Shelton's nomination. Shelby is the former chairman of the Banking Committee and recently became its longest-serving member.
Besides Shelton, Trump has nominated Christopher Waller, director of research at the St. Louis Federal Reserve Bank, for a second vacancy on the seven-member Fed board. Waller is seen as a much more conventional choice than Shelton.
US-ISRAEL SETTLEMENTS
Pompeo 'outraged' by UN list of firms with settlement ties
JERUSALEM (AP) — U.S. Secretary of State Mike Pompeo on Thursday said he is “outraged” by the U.N.'s publication of a list of companies accused of violating Palestinian human rights by operating in Israel's West Bank settlements.
In a statement, Pompeo said the list supports a Palestinian-led boycott movement and “delegitimizes” Israel. He urged other countries to join the U.S. in rejecting the effort.
The database, released Wednesday after years of delays, listed 112 companies that the U.N. human rights office said are complicit in rights violations by bolstering Israeli settlements in the occupied West Bank and Israeli-annexed east Jerusalem.
The list is dominated by Israeli companies, including major banks, construction companies, supermarkets and gas stations. But it also includes a number of global brands, including American firms Airbnb, General Mills and Motorola Solutions.
The Palestinians seek the West Bank and east Jerusalem — captured by Israel in the 1967 Mideast war — as parts of an independent state, and the vast majority of the world considers Israeli settlements to be illegal. President Donald Trump, however, has taken a more lenient position, tolerating continued Israeli settlement construction and releasing a Mideast plan last month that envisions giving Israel permanent control over all of its settlements.
SOUTHWEST-BOEING-PLANE
Southwest again delays expected return date for Boeing Max
DALLAS (AP) — Southwest Airlines said Thursday it has removed the grounded Boeing 737 Max from its schedule for another two months during the peak summer travel season and will drop about 9% of its planned flights as a result.
Southwest said it took the plane out of the schedule through Aug. 10.
It was the latest move by airlines to acknowledge that the plane won't be ready to fly as soon as they — or Boeing — had expected. Southwest had previously removed the Max from its schedule through June 6.
Southwest was flying 34 Maxes and expected to receive more when the planes were grounded worldwide last March after crashes in Indonesia and Ethiopia killed 346 people. Without the planes, Southwest said it will remove about 371 weekday flights from its schedule of more than 4,000 flights per day.
Dallas-based Southwest is the world's biggest operator of Boeing 737s, with about 750 in its fleet. Almost all are earlier versions than the Max and don't have the same flight-control software implicated in the crashes.
AMERICAN AIRLINES-ALASKA AIRLINES
American and Alaska strike deal around Seattle flights
DALLAS (AP) — American Airlines and Alaska Airlines say they will cooperate more closely on West Coast service, including new American flights from Seattle to India's technology hub in Bangalore.
The airlines already share revenue by selling seats on each other's flights, but they had planned to reduce that partnership next month.
Instead, they announced Thursday that they will expand revenue-sharing to cover international flights in Seattle and Los Angeles.
American said it will begin flying to Bangalore in October. No U.S. airline currently flies there. Both American and Alaska say customers who travel for their jobs at U.S. technology companies are keenly interested.
American said it will also launch Seattle-London service next year, and could add other international destinations from Seattle.
Alaska will become a full-fledged member of oneworld, one of the three global alliances that dominate the industry. American is already a member.
MCCLATCHY-BANKRUPTCY
McClatchy files for bankruptcy protection
UNDATED (AP) — The publisher of the Miami Herald, The Kansas City Star and dozens of other newspapers across the country has filed for bankruptcy protection.
The newspaper industry has been devastated by changing technology that has sent the vast majority of people online in search of news. While McClatchy and others have pushed digital operations aggressively, advertising dollars have continued to flow toward internet giants like Facebook and Google.
McClatchy Co.'s 30 newsrooms, including The Charlotte Observer, The News & Observer in Raleigh, and The Star-Telegram in Fort Worth, will continue to operate as usual as the publisher reorganizes under Chapter 11 bankruptcy protection.
The publisher's origins date to 1857 when it first began publishing a four-page paper in Sacramento, California, following the California Gold Rush. That paper became The Sacramento Bee.
NASCAR-WIRELESS
NASCAR signs Verizon to upgrade wireless, wifi at 12 tracks
DAYTONA BEACH, Fla. (AP) — NASCAR announced a deal with Verizon on Thursday intended to give fans at its 12 racetracks better access for their phones and solve a long-simmering headache over dead zones at the sprawling venues.
The deal will improve connectivity at the 12 tracks owned by NASCAR — a problem fans have complained about for years. Even when the top Cup Series was sponsored first by Nextel and then Sprint, cellular service was spotty and often only available to customers of those specific carriers.
Verizon will work with NASCAR to upgrade in-venue wireless communication service over the next three years. Verizon becomes the official wireless and 5G partner for the stock car racing series and the wi-fi partner at the 12 tracks, which host 19 of the 36 Cup Series races.
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