Business Highlights: Wall Street sell-off, Target’s woes
Stocks fall sharply as Target’s woes renew inflation fears
NEW YORK (AP) — Stocks closed sharply lower on Wall Street Wednesday as dismal results from Target renewed fears that inflation is battering U.S. companies. The S&P 500, the benchmark for many index funds, fell 4%. Target lost a quarter of its value, dragging other retailers down with it, after saying its profit fell by half in the latest quarter as costs for freight and transportation spiked. That comes a day after Walmart cited inflation for its own weak results. The Dow Jones Industrial Average dropped 1,164 points, or 3.6% and the tech-heavy Nasdaq pulled back 4.7%. Treasury yields fell as investors sought safer ground.
Consumers shift again, flummoxing big retailers like Target
NEW YORK (AP) — The pandemic vastly changed the way Americans spend money and now as they return to pre-pandemic behavior, they’re tripping up retailers again. That dynamic has only been intensified in recent months as inflation jumps sharply, and the latest financial report from Target underscore the challenges. Target reported Wednesday that its profit tumbled 52% compared with the same period last year in an environment of rising costs for things like fuel, and also a lightening quick return by consumers to more normalized spending. Purchases of big TVs and appliances that Americans loaded up on during the pandemic have faded, leaving big retailers with bloated inventory that must be marked down to sell.
Biden’s burdens grow: Sagging global economy adds to US woes
WASHINGTON (AP) — President Joe Biden embarks for Asia on Thursday facing a new risk for the economy at home: a global economic slowdown caused by Russia’s invasion of Ukraine and the pandemic shutting down Chinese cities and factories. The world economy cannot any ballots in this year’s elections, but it’s a hidden force in the voting that will decide if Democrats retain control of the House and Senate. It’s one more challenge that highlights a steep climb for Biden, whose approval ratings have plunged as prices for everyday goods in the U.S. have soared.
EU rushes out $300 billion roadmap to ditch Russian energy
BRUSSELS (AP) — The European Union’s executive arm is moving to jump-start plans for the EU to abandon Russian energy amid the Kremlin’s war in Ukraine. The European Commission proposed Wednesday a nearly 300 billion-euro package that includes more efficient use of fuels and faster deployment of renewable power. Russia is the EU’s main supplier of oil, natural gas and coal, accounting for around a quarter of the bloc’s total energy. The investment initiative is meant to help EU countries start weaning themselves off Russian fossil fuels this year. The goal is to deprive Russia of tens of billions in revenue and strengthen EU climate policies.
Federal agency sends team to probe Tesla crash that killed 3
DETROIT (AP) — The U.S. government’s road safety agency has dispatched a team to investigate the possibility that a Tesla involved in a California crash that killed three people was operating on a partially automated driving system. The National Highway Traffic Safety Administration on Wednesday confirmed that it had sent a special crash investigation team to probe the May 12 crash on the Pacific Coast Highway in Newport Beach. The investigation is part of a larger inquiry by the agency into crashes involving advanced driver assistance systems such as Tesla’s Autopilot. Since 2016, the agency has sent teams to 34 crashes in which the systems were either in use or suspected of operating. According to a NHTSA document released Wednesday, of the 34, 28 involved Teslas.
Big dreams for new Warner Bros. Discovery in ad presentation
NEW YORK (AP) — In what was essentially the company’s public debut, executives at the new Warner Bros. Discovery media giant showed they have big dreams. Its leader, David Zaslav, portrayed the company as effectively a fifth broadcast television network in the United States, and said the goal was to build the most dynamic media and entertainment company in the world. The company was holding its first “upfront” presentation, where content companies present their wares to Madison Avenue executives in the hope that they invest in ads. The presentation featured Jennifer Hudson trying out her new role as a talk show host, and a colorful appearance by singer Lizzo.
Google’s Russian business plans to file for bankruptcy
LONDON (AP) — Google says its Russian subsidiary is planning to file for bankruptcy because it can’t pay staff and suppliers. Russian state media reported Wednesday that the U.S. tech company’s Russian subsidiary submitted notice of its intention to declare bankruptcy to a national registry. The company said in a press statement that the seizure of Google Russia’s bank account has made it untenable for its Russian office to function, including employing Russia-based employees and paying suppliers and vendors. Google said it would continue to provide its free services there, including Search, YouTube, Gmail, Maps, and Android. The company had previously suspended its business operations in Russia.
4 EU nations to harness North Sea wind for green transition
COPENHAGEN, Denmark (AP) — Four EU countries plan to speed up the continent’s green transition and help wean it off Russian energy imports through a large new project to build wind farms in the North Sea. Danish Prime Minister Mette Frederiksen said Wednesday her country, together with Belgium, the Netherlands and Germany, “want to increase our total offshore wind capacity fourfold by 2030 and tenfold by 2050” to provide energy to 230 million European households. The four countries would be able “to deliver more than half of all offshore wind needed to reach climate neutrality in the European Union.” All four countries have North Sea coast lines where new windmill farms would be raised.
The S&P 500 tumbled 165.17 points, or 4%, to 3,923.68. The Dow Jones Industrial Average plunged 1,164.52 points, or 3.6%, to 31,490.07. The Nasdaq shed 566.37 points, or 4.7%, to 11,418.15. The Russell 2000 index of smaller companies fell 65.45 points, or 3.6%, to 1,774.85.