Stocks rebound on Wall Street, S&P 500 trades above record
NEW YORK (AP) — The S&P 500 briefly traded above its record closing high Wednesday, nearly erasing the last of the historic losses it took due to the coronavirus pandemic. The index ended up with a gain of 1.4%, just shy of its all-time high. Big technology stocks once again led way. At its depths, the S&P 500 had been down nearly 34% when worries about the recession were at their height. But massive aid from the Federal Reserve and Congress helped prop up the market. That’s allowed investors to look ahead a to a future when a vaccine will hopefully help the economy get back to normal.
How can Wall Street be so healthy when Main Street isn’t?
NEW YORK (AP) — Wall Street is flying, with the S&P 500 now within a few points of its pre-pandemic record, while Main Street is teetering. Stocks have soared even as the economy has struggled in large part because investors are looking ahead to a brighter future. Huge efforts by the Federal Reserve and Congress to prop up the economy have helped put a floor under markets. Profits have also remained incredibly resilient for the stock market’s most influential companies. Rising hopes for a potential COVID-19 vaccine are also encouraging investors to focus on an expected rebound in corporate profits as life returns to normal.
Boston Fed chief: States’ rush to reopen slowed US recovery
WASHINGTON (AP) — A top official at the Federal Reserve criticized the decision by many states to reopen businesses this spring before getting the virus fully under control, and said those choices have hindered an economic recovery in the U.S. Eric Rosengren, president of the Federal Reserve Bank of Boston, says that states in the South and West that allowed businesses to reopen after shutting down for a brief period did register an initial burst of economic activity. But spikes in infection rates soon followed and economies in those states are now lagging those in the Northeast as consumers have become more cautious. Rosengren’s comments, delivered online Wednesday, are among the most specific yet by a Fed official tying the health of the economy to the nation’s ability to control the virus.
US budget deficit climbs to record $2.81 trillion
SILVER SPRING, Md. (AP) — The Treasury Department says the U.S. budget deficit climbed to $2.81 trillion in the first 10 months of the budget year. That exceeds any on record, and it’s expected to eventually reach levels more than double the nation’s largest recorded annual deficit. The department said Wednesday that the federal government rang up a $63 billion deficit in July. That’s a relatively modest amount compared to red ink that spilled in the spring months when the government tried to revive an economy that all but ground to a halt due to the coronavirus outbreak. The July figure follows a record monthly deficit of $864 billion in June.
Sumner Redstone, who built media empire including CBS, dies
NEW YORK (AP) — Sumner Redstone, who built a media empire from his family’s drive-in movie chain, has died. He was 97. Redstone built his operations through aggressive acquisitions, but many headlines with his name focused on his severing ties with wives, actors and executives. In multiple interviews, he said he’d never die. His tight-fisted grip on the National Amusements theater chain, which controls both CBS Corp. and Viacom Inc. through voting stock, has been passed down to his daughter, Shari Redstone, who battled top executives to re-merge the two entities that split in 2006.
US consumer prices rose 0.6% in July, matching June uptick
WASHINGTON (AP) — U.S. consumer prices jumped 0.6% in July as gasoline prices continued to rise. The Labor Department reported Wednesday that the increase in its consumer price index matched a 0.6% rise in June. The uptick was about twice what economists expected. But inflation remains in check: Consumer prices are up just 1% over the past year. Gasoline prices rose 5.3% from June to July but are down 20.3% in the past 12 months as the coronavirus recession has kept Americans from driving. Excluding volatile food and energy prices, so-called core inflation was up 0.6% last month from June and 1.6% from a year ago.
In a first, Airbnb takes action against guest for party
SAN FRANCISCO (AP) — For the first time, Airbnb is taking legal action against a guest for violating its ban on unauthorized parties. The San Francisco-based home-sharing company is initiating legal proceedings against a guest who held an unauthorized party at a home in Sacramento County, California, last weekend. Three people were shot and injured at the party. Airbnb wouldn’t release the guest’s name but says it has removed the guest from its platform. Airbnb has been trying to clean up its image as it prepares for an initial public offering of its stock. The IPO, which was delayed by the coronavirus pandemic, could still take place later this year.
The S&P 500 rose 46.66 points, or 1.4%, to 3,380.35. The Dow Jones Industrial Average gained 289.93 points, or 1%, to 27,976.84. The Nasdaq composite climbed 229.42 points, or 2.1%, to 11,012.24. The Russell 2000 index of small company stocks picked up 8.15 points, or 0.5%, to 1,583.25.