Business Highlights: Fed minutes, electric trucks
Fed officials see earlier rate hikes as US hiring recovers
WASHINGTON (AP) — Federal Reserve policymakers at a meeting last month said the U.S. job market was nearly at levels healthy enough that the central bank’s low-interest rate policies were no longer needed. That’s according to minutes of the meeting released Wednesday. The minutes also said that Fed officials expressed concerns that surging inflation was spreading into more areas of the economy and would last longer than they previously expected. For both those reasons, Fed Chair Jerome Powell said after the Dec. 14-15 meeting that the central bank was accelerating the reduction of its ultra-low interest rate policies.
New GM electric truck faces competition and skeptical buyers
PITTSFIELD TOWNSHIP, Mich. (AP) — Even though the consumer appetite for electric pickup trucks is a bit murky, the competition for buyers just got a whole lot tougher. General Motors officially unveiled the Chevrolet Silverado EV Wednesday with a virtual press conference at the CES gadget show. Work truck versions go on sale in the spring of next year, and by then they’ll face competition from Ford’s electric F-150, startup Rivian’s R1T, and possibly Tesla’s Cybertruck. Stellantis, formerly Fiat Chrysler, has promised an all-electric Ram pickup. Industry analysts say the intense competition in the electric pickup market means that battery-powered vehicles are moving into the mainstream after years of confinement to luxury or smaller vehicles.
German watchdog puts Google under closer antitrust scrutiny
LONDON (AP) — Germany’s antitrust watchdog has paved the way for extra scrutiny of Google by designating it a company of “paramount significance.” It’s the first such decision since regulators got more power to curb abusive practices by big digital companies. The regulator’s decision Wednesday comes after rules were introduced last year that allow it “to intervene earlier and more effectively” to prohibit companies from using anti-competitive practices. It’s the latest example of how tech companies are facing more pressure over concerns their dominance stifles competition and hurts consumers. Google isn’t appealing the decision and says it’s confident it complies with the rules.
Unionized Starbucks workers walk out, citing health concerns
BUFFALO, N.Y. (AP) — Employees of a Starbucks store in upstate New York who voted to unionize last month have walked off the job. The employees in Buffalo say they don’t have the staff or resources to work safely amid surging COVID-19 cases. Six employees formed a picket line Wednesday outside the store and led Starbucks to close it for the day. The employees say they are being pressured to work despite health concerns. Starbucks says all of the Buffalo-area stores have been operating as “grab-and-go” locations since Monday. Starbucks spokesperson Reggie Borges says the company has met and exceeded CDC guidelines.
Anticipation that Fed will raise rates sends stocks lower
NEW YORK (AP) — Stocks closed lower on Wall Street Wednesday after minutes from the Federal Reserve’s last meeting raised expectations that the central bank will move faster to raise interest rates to fight inflation. The S&P 500 fell 1.9%. Drops in major technology stocks were the biggest weight on the market. The tech-heavy Nasdaq pulled 3.3%. The Dow Jones Industrial Average of 30 blue-chip companies slipped 1.1%, easing back from the record high it set a day earlier. Small-company stocks also posted sizable losses. Bond yields rose after the Fed minutes came out. The yield on the 10-year Treasury note rose to 1.70%.
Chinese developer asking bondholders to postpone repayment
BEIJING (AP) — A troubled Chinese real estate developer with $310 billion of debt is asking investors in one of its bonds to postpone when they will be repaid. Evergrande Group says it will conduct a three-day online vote starting Friday for holders of the 4.5 billion yuan ($700 million) bond. Evergrande is the global real estate industry’s most indebted company. It said the bond is due to mature in January 2023 but gave no indication how long investors would be asked to postpone repayment. Evergrande’s struggle to avoid defaults while it tries to comply with tighter official limits on borrowing by China’s real estate industry has prompted fears of a financial crisis.
Chrysler aims to be all electric by 2028
LONDON (AP) — Chrysler says it plans for its vehicle lineup to go all electric by 2028. It’s the latest brand to announce a major shift away from gas-powered cars amid pressure to act on climate change. The American automaker also said Wednesday that it will launch its first battery-electric vehicle by 2025. Chrysler announced its electric plans along with a new AI-enabled vehicle system powered by an electric battery it says can travel 350 to 400 miles per charge. It’s part of a broad transformation in the auto industry, as companies race toward more fully electric and hybrid propulsion systems, more autonomous driving features and increased connectivity in cars.
Boeing lands airplane order from US budget carrier Allegiant
LAS VEGAS (AP) — Allegiant Air is ordering new planes from Boeing. It’s a win for Boeing because Allegiant’s current fleet consists entirely of jets from European rival Airbus. Allegiant said Wednesday that it will buy 50 Boeing 737 Max jets and take options for 50 more. The terms of the deal weren’t released. The planes list for between $99 million and $122 million apiece, but airlines routinely receive deep discounts. Allegiant says it will take delivery of the planes from 2023 through 2025.
The S&P 500 dropped 92.96 points, or 1.9%, to 4,700.58. The Dow Jones Industrial Average fell 392.54 points, or 1.1%, to 36,407.11. The Nasdaq tumbled 522.54 points, or 3.3%, to 15,100.17. The Russell 2000 index of smaller companies shed 74.87 points, or 3.3%, to 2,194.