Business Highlights: Rail deal, retail sales
Tentative labor deal averts threat of nationwide rail strike
WASHINGTON (AP) — Rail companies and their workers reached a tentative agreement Thursday to avert a nationwide strike that could have shut down the nation’s freight trains and devastated the economy less than two months before the midterm elections. President Joe Biden announced the deal, which emerged from a marathon 20-hour negotiating session at the Labor Department and came just one day before the threatened walkout. “This agreement is validation of what I’ve always believed — unions and management can work together ... for the benefit of everyone,” Biden said at the White House. The deal, which includes a 24% pay raise, will go to union members for a vote after a cooling-off period of several weeks.
Retail sales up 0.3% in Aug. from July amid inflation
NEW YORK (AP) — Americans picked up their spending a bit in August from July even as surging inflation on household necessities like rent and food took a toll on family budgets. U.S. retail sales rose an unexpected 0.3% last month after falling 0.4% in July, the Commerce Department said Thursday. Excluding business at gas stations, sales rose 0.8%. The sales figures for August were largely boosted by higher spending on vehicles. Sales of purchases at motor vehicles and parts dealers rose 2.8% last month. Excluding vehicle sales, spending slipped 0.3%. Excluding both vehicle and gas spending, retail sales rose 0.3%.
Amtrak works to restore routes after rail labor accord
NEW YORK (AP) — Amtrak on Thursday worked to accommodate travelers whose plans were disrupted this week ahead of a tentative railway labor agreement. Crowds were noticeably smaller at New Jersey stop on Amtrak’s Northeast Corridor line between Philadelphia and New York hours after the agreement was announced, customers said. Amtrak cancelled several of its long-distance routes this week because there would not have been enough time for them to reach their destinations before the strike deadline of 12:01 a.m. Friday. That strike would have disrupted commuter traffic as well as freight rail lines because Amtrak and other commuter train lines use tracks owned by major freight railroads.
DOJ unveils more ‘carrots’ to ramp up corporate crime probes
WASHINGTON (AP) — Faced with a decline in the number of corporate criminal prosecutions over the last decade, a top Justice Department official on Thursday unveiled new sweeteners for companies that cooperate with the government and a $250 million Congressional budget request to expand its work. Every division that prosecutes corporate crime must now develop programs to incentivize companies to report misconduct, Deputy Attorney General Lisa Monaco said in a speech at New York University Law School. In some cases, no one will have to plead guilty to criminal charges if the violation was self-reported and the company fixed it.
Stocks fall, indexes slip deeper into the red for the week
NEW YORK (AP) — Stocks gave up more ground Thursday, leaving major indexes on Wall Street deeper in the red for the week. The S&P 500 fell 1.1% after another wobbly day of trading. The benchmark index is now down 4.1% for the week following the biggest pullback for the market in more than two years on Tuesday. The Dow Jones Industrial Average fell 0.6% and the Nasdaq composite slid 1.4%. The Russell 2000 index of smaller companies closed 0.7% lower. New retail sales data gave a mixed view of how consumers are coping with the hottest inflation in four decades. The government report showed that retail sales rose an unexpected 0.3% in August after falling 0.4% in July.
Mortgage rates hit 6%, first time since 2008 housing crash
WASHINGTON (AP) — Average long-term U.S. mortgage rates climbed over 6% this week for the first time since the housing crash of 2008, threatening to sideline even more homebuyers from a rapidly cooling housing market. Mortgage buyer Freddie Mac reported Thursday that the 30-year rate rose to 6.02% from 5.89% last week. The long-term average rate has more than doubled since a year ago and is the highest it’s been since November of 2008, just after the housing market collapse triggered the Great Recession. One year ago, the rate stood at 2.86%. Rising interest rates — in part a result of the Federal Reserve’s aggressive push to tamp down inflation — have cooled off a housing market that has been hot for years.
FedEx warns on profit, slashes outlook as demand slumps
MEMPHIS, Tenn. (AP) — FedEx Corp. warned Thursday it will likely miss Wall Street’s first-quarter profit target and said it expects business conditions to further weaken in its fiscal second quarter amid weaker global volume. The Memphis, Tennessee-based package delivery company also scrapped its forecast for fiscal 2023 earnings, which it issued less than three months ago.
Boeing to resell some Max jets ordered by Chinese airlines
ARLINGTON, Va. (AP) — Boeing is stuck with more than 100 planes that it can’t deliver to Chinese airlines, so it’s going to resell some of those planes to other customers. Company officials said Thursday they have waited long enough for permission to deliver new Boeing 737 Max jets to China, and they can’t wait any longer. Max jets were grounded around the world after two deadly crashes, and China is the last big market that hasn’t let airlines resume using the planes. Boeing’s chief financial officer says China is an important market, but he thinks Boeing can find new buyers. Max jets start around $100 million, although airlines usually get deep discounts from list prices.
The S&P 500 dropped 44.66 points, or 1.1%, to 3,901.35. The Dow Jones Industrial Average shed 173.27 points, or 0.6%, to 30,961.82. The Nasdaq lost 167.32 points, or 1.4%, to 11,552.36. The Russell 2000 index of smaller companies fell 13.23 points, or 0.7%, to 1,825.23.