Business Highlights: Consumer prices, ransomware gang
US consumer prices surge in June by the most since 2008
WASHINGTON (AP) — Prices for U.S. consumers jumped in June by the most in 13 years, signaling that a swift rebound in spending has run up against widespread supply shortages that have escalated the costs of many goods and services. Tuesday’s report from the Labor Department showed that consumer prices in June rose 0.9% from May and 5.4% over the past year — the sharpest 12-month inflation spike since August 2008. Excluding volatile oil and gas prices, so-called core inflation rose 4.5% in the past year, the largest increase since November 1991.
Touting new trains, Amtrak CEO foresees riders heading back
DETROIT (AP) — Amtrak CEO William Flynn says that plans to spend $7.3 billion on 83 new trains to replace some that are 50 years old will speed up travel, make it more comfortable, and will help clean the environment. The passenger railroad last week announced plans to buy the new trains and is seeking funding from Congress and states. It also can finance the trains and repay the money with revenue from fares and states. Flynn says Amtrak is recovering well from the pandemic, with ridership at about 62% of pre-pandemic levels. He expects that to rise as more trains are added later this year.
Russia-based ransomware gang offline but cause not clear
WASHINGTON (AP) — The Russia-based criminal syndicate behind a devastating series of recent ransomware attacks is offline. But cybersecurity experts said Tuesday that it was premature to speculate why REvil’s dark web data-leak site and ransom-negotiating portals were unreachable and that there was no indication of a law enforcement takedown. The group was responsible for the Memorial Day ransomware attack on the meat processor JBS and the supply-chain attack this month targeting the software company Kaseya that crippled well over 1,000 businesses globally. President Joe Biden told Russian President Vladimir Putin on Friday that he needed to rein in attacks from Russia-based groups and warned that the U.S. had the right to defend itself from attacks.
EU nations approve a dozen pandemic recovery plans
BRUSSELS (AP) — European Union nations have approved the pandemic recovery plans of the bloc’s four biggest economies and eight other member countries. The approval given Tuesday is seen as a bellwether for an economic revival from the unprecedented recession caused by the coronavirus pandemic. It will allow a dozen of the EU’s 27 members to start unlocking funds for the pre-financing of projects that are intended to put Europe on more solid economic footing while also making it greener and more digitally advanced. The nations include the EU’s economic juggernauts, France, Germany, Italy and Spain, as well as Austria, Belgium, Denmark, Greece, Latvia, Luxembourg, Portugal and Slovakia.
JPMorgan’s 2Q profits more than double, beating expectations
NEW YORK (AP) — JPMorgan Chase says its second quarter profits more than doubled from a year ago — a reflection of the improving global economy and fewer bad loans on its balance sheet. But the bank’s revenues fell noticeably in the quarter, due a decline in interest rates during the last three months. The New York-based bank earned $11.95 billion in the quarter, up from $4.69 billion a year earlier. JPMorgan freed up $2.29 billion it had set aside in case of customer defaults, providing a boost to the bottom line.
Stocks ease below recent records as earnings reports roll in
NEW YORK (AP) — Stocks closed lower on Wall Street Tuesday, bringing major indexes slightly below the record highs they set a day earlier. The S&P 500 fell 0.4%. Investors were weighing the latest quarterly earnings reports from big U.S. companies and concerns about inflation. Inflation has been a lingering concern for the markets as investors try to gauge how the Federal Reserve will respond to it. The latest report from the Labor Department showed yet another increase in consumer prices in June that surprised economists. Banks, including Goldman Sachs and JPMorgan Chase helped kick off the latest round of corporate earnings reports, along with PepsiCo.
US deficit for current budget year climbs to $2.24 trillion
WASHINGTON (AP) — The U.S. government’s deficit for the first nine months of this budget year has hit $2.24 trillion. That means the country is still on track for its second biggest deficit in history. In its monthly budget report, the Treasury Department said Tuesday that the deficit for the budget year that ends in September is running 9.1% below last year’s pace. The deficit for all of 2020 totaled a record $3.1 trillion. The Congressional Budget Office is projecting that this year’s deficit will total a slightly smaller $3 trillion. The deficits in both years were bloated by the multitrillion-dollar spending packages the government has passed to combat the economic downturns caused by the coronavirus pandemic.
Boeing cuts production on the 787 to address flaw
CHICAGO (AP) — Boeing is temporarily lowering its delivery target for the 787 Dreamliner after discovering additional work that will need to be performed on the aircraft. The company said Tuesday that the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. Boeing now anticipates delivering less than half of the 787s currently in inventory this year. It’s another setback for the two-aisle 787, which is popular on longer routes. The slower rate of deliveries will hurt Boeing’s cash flow because the company gets a large portion of the price of a plane upon delivery.
The S&P 500 fell 15.42 points, or 0.4%, to 4,369.21. The Dow Jones Industrial Average dropped 107.39 points, or 0.3%, to 34,888.79. The Nasdaq shed 55.59 points, or 0.4%, to 14,677.65. The Russell 2000 index of smaller companies slipped 42.96 points, or 1.9%, to 2,238.86.