Business Highlights: High inflation, stock market slump
US inflation highest in 40 years, with no letup in sight
WASHINGTON (AP) — Inflation soared over the past year at its highest rate in four decades, hammering America’s consumers, wiping out pay raises and reinforcing the Federal Reserve’s decision to begin raising borrowing rates across the economy. The Labor Department said Thursday that consumer prices jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982. Shortages of supplies and workers, heavy doses of federal aid, ultra-low interest rates and robust consumer spending combined to send inflation accelerating in the past year.
Stocks slump, bond yields soar after a hot inflation reading
NEW YORK (AP) — Stocks slumped and bond yields moved sharply higher after a hot reading on inflation led to greater expectations that the Federal Reserve will have to move forcefully to cool down the economy by raising interest rates. The S&P 500 gave back 1.8% Thursday and the yield on the 10-year Treasury jumped above 2% for the first time since the summer of 2019. That came after the government reported that consumer prices rose at an annual rate of 7.5% last month, the fastest pace since 1982. The big swings marked a return of the volatility that has shaken markets in recent weeks.
California accuses Tesla of alleged discrimination at plant
SACRAMENTO, Calif. (AP) — California regulators have sued electric car maker Tesla Inc. They allege the company has been discriminating against Black employees at the San Francisco Bay Area factory where most of its vehicles are made. The lawsuit seems likely to widen a rift between Tesla CEO Elon Musk, the world’s wealthiest person, and the state where he launched the company. Tesla is now worth more than $900 billion, less than 20 years after Musk set out to transform the auto industry. Musk moved Tesla’s headquarters from Palo Alto, California, to Austin, Texas, last year after publicly feuding with California officials about keeping a factory open during the pandemic.
Twitter posts loss for 2021, but stock up on share buyback
SAN FRANCISCO (AP) — Twitter’s stock is rising after it posted strong revenue growth last year and announced a $4 billion share buyback program. That’s despite posting a loss in 2021 and missing analysts’ expectations on user growth in the fourth quarter. The San Francisco-based company said Thursday that revenue increased 37%, to $5.08 billion, compared with 2020. But it reported a net loss of $221 million for the year largely tied to a shareholder lawsuit it settled. In the last three months of the year, it reported earnings of $182 million, or 21 cents per share. Adjusted for one-time gains and costs, they were 33 cents per share, hitting Wall Street expectations.
Congress approves sex harassment bill in #MeToo milestone
NEW YORK (AP) — Congress has given final approval to legislation guaranteeing that people who experience sexual harassment at work can seek recourse in the courts. It’s a milestone for the #MeToo movement that prompted a national reckoning on the way sexual misconduct claims are handled in the U.S. The measure is expected to be signed by President Joe Biden. It bars employment contracts from forcing people to settle sexual assault or harassment cases through arbitration rather than in court. Democratic Sen. Kirsten Gillibrand of New York spearheaded the legislation. She calls it “one of the most significant workplace reforms in American history.
Coke sales rise 10% in Q4 as omicron fails to halt demand
Coca-Cola posted better-than-expected sales in the fourth quarter as venues like coffee shops and movie theaters continued to reopen. Coke Chairman and CEO James Quincey said the company saw some impact from the omicron variant in December and January, but the disruption was not as great as previous waves of the virus. Rival PepsiCo also reported better-than-expected fourth quarter results Thursday. Both companies say they plan to raise prices this year to account for higher costs of commodities and transportation. So far, price increases haven’t dented demand, but the companies say they’re watching consumers closely.
States get go-ahead to build electric car charging stations
WASHINGTON (AP) — States are getting the go-ahead to build a nationwide network of electric vehicle charging stations that would place new or upgraded stations every 50 miles along interstate highways. It’s part of the Biden administration’s plan to spur widespread adoption of the zero-emission cars. The administration on Thursday announced the availability of $5 billion in federal funds to states under President Joe Biden’s infrastructure law, sketching out a vision of seamless climate-friendly car travel from coast to coast. Under new requirements issued by the Transportation Department, states can begin construction by this fall if they focus first on highway routes rather than neighborhoods.
Mexico vows to press on with power changes amid US concerns
MEXICO CITY (AP) — Mexico’s president vowed Thursday to press ahead with changes to the electrical power industry despite U.S. concerns that they could close off markets, choke off competition and possibly violate the U.S.-Mexico-Canada free trade pact. After meeting with President Andrés Manuel López Obrador on Wednesday, U.S. climate envoy John Kerry expressed “significant concerns” over Mexico’s plan to favor its state-owned electricity company and limit private and foreign firms that have invested in renewable power in Mexico. López Obrador said Thursday the proposed changes “don’t affect the treaty at all,” despite provisions in the USMCA pact that prohibit countries from favoring domestic companies over foreign competitors.
The S&P 500 lost 83.10 points, or 1.8%, to 4,504.08. The Dow Jones Industrial Average fell 526.47 points, or 1.5%, to 35,241.59. The Nasdaq dropped 304.73 points, or 2.1%, to 14,185.64. The Russell 2000 index of smaller companies gave back 32.34 points, or 1.6%, to 2,051.16.