Business Highlights: Bill’s inflation impact, stock rally
Inflation Reduction Act may have little impact on inflation
WASHINGTON (AP) — With inflation raging near its highest level in four decades, the House gave final approval to President Joe Biden’s landmark Inflation Reduction Act. Its title raises a tantalizing question: Will the measure actually do what it says? Economic analyses suggest that the answer is likely no — not anytime soon, anyway. The legislation, which now heads to the White House for Biden’s signature, won’t directly address some of the main drivers of surging prices — from gas and food to rents and restaurant meals. Still, over time, the bill could save money for some Americans by lessening the cost of certain prescription drugs for the elderly, extending health insurance subsidies and reducing energy prices.
Wall Street extends winning streak to 4th week
NEW YORK (AP) — Stocks are closing higher on Wall Street, giving the S&P 500 its first 4-week winning streak since November. The benchmark index gained 1.7% Friday, and other indexes also rose. Technology stocks drove much the broad rally. Inflation cooled more than expected last month, sending stocks higher. Investors see a greater chance inflation may have peaked, allowing the Federal Reserve to be less aggressive with its rate hikes than it has been this year. Crude oil prices fell, while bond yields were mixed.
Amazon’s Ring, MGM to launch show from viral doorbell videos
NEW YORK (AP) — Amazon-owned companies Ring and Hollywood studio MGM are partnering to create a TV show in the mold of “America’s Funniest Home Videos.” MGM says the half-hour “Ring Nation” program will showcase viral footage from Ring’s doorbell and smart-home cameras. The series is the latest example of Amazon’s fusion of its various business arms. It also presents a branding and marketing opportunity for Amazon, which bought Ring in 2018. Since then, the company has dealt with rounds of privacy concerns around Ring and its relationship with police departments across the country. The show will be hosted by comedian Wanda Sykes and premier in syndication on September 26.
Best Buy trims jobs after it cuts sales and profit outlook
NEW YORK (AP) — Best Buy, the nation’s largest consumer electronics chain, is trimming jobs in an effort to adjust to new changes in consumer behavior as the virus wanes. Best Buy declined to say how many jobs it was cutting but The Wall Street Journal, which was first to report the news, estimated it involved hundreds of jobs at the store level. The job cuts come after Best Buy reduced its annual sales and profit forecast late last month, citing surging inflation that has dampened consumer spending on gadgets. The Minneapolis-based company echoed Walmart, which a few days before said higher prices on basic necessities are forcing shoppers to cut back on discretionary items.
Russian GDP drops 4% in Q2 -- 1st full quarter of fighting
MOSCOW (AP) — Russia’s gross domestic product contracted 4% in the second quarter of this year, the first full quarter since Russia sent troops into Ukraine. The state statistical service reported the drop on Friday. Russia was hit with a wide array of sanctions following its move into Ukraine in late February, including ones that cut off some Russian banks from the SWIFT international transfer system, and a significant exodus of foreign companies. The report by the Rosstat service did not analyze why GDP was lower this year than in the same quarter of 2021. But it said there was a 15.3% drop in wholesale trade and a 9.8% contraction in retail trade. Russia had reported sizable GDP increases for the last four quarters.
Publisher of USA Today, other papers axes staff to cut costs
NEW YORK (AP) — Newspaper publisher Gannett Co. confirmed Friday that it’s laying off some of its newsroom staff as part of a cost-cutting effort to lower its expenses as its revenue crumbles amid a downturn in ad sales and customer subscriptions. The McLean, Virginia-based company declined to provide details about the number of people who were losing their jobs. Gannett, which owns USA Today and more than 200 other daily U.S. newspapers with print editions, ended last year with more than 16,000 employees worldwide, according to the company’s annual report. The payroll included including more than 4,200 reporters, editors and photographers.
Peloton cuts jobs, raises prices in bid for profitability
NEW YORK (AP) — Peloton is laying off almost 800 employees and raising prices for some of its equipment as part of its latest bid to make the business profitable and free up cash. The moves were disclosed Friday in a memo to employees of the maker of high-end exercise bikes and treadmills from the company’s new CEO Barry McCarthy. The actions also include closing Peloton’s North America distribution network and shifting its delivery work to third-party providers. Peloton also plans to slash reduce its North American store base, which currently numbers 86. But the company didn’t say how many locations will close. The moves mark the latest changes since McCarthy took over in February. He replaced John Foley, who co-founded the business 10 years ago.
South Korea to pardon Samsung’s Lee, other corporate giants
SEOUL, South Korea (AP) — Samsung’s de-facto leader has secured a pardon of his conviction for bribing a former president in a corruption scandal that toppled a previous South Korean government. The act of leniency underscored the tech company’s huge influence in the nation. Lee Jae-yong’s pardon is partially symbolic since he was released on parole a year ago after serving 18 months of a prison term that would have ended in July. Critics say the billionaire has remained in control of Samsung even while behind bars. Still, the pardon will allow the heir to the electronics juggernaut to fully resume his management duties and could make it easier for the company to pursue investments and mergers. The Justice Ministry said Friday that Lee and other top business leaders will be pardoned Monday.
The S&P 500 jumped 72.88 points, or 1.7%, to 4,280.15. The Dow Jones Industrial Average gained 424.38 points, or 1.3%, to 33,761.05. The Nasdaq rose 267.27 points, or 2.1%, to 13,047.19. The Russell 2000 index of smaller companies added 41.36 points, or 2.1%, to 2,016.62.