Business Highlights: A summary of the top stories in the business world.
The AP Interview: GM’s Barra talks electric vehicles, future
NEW YORK (AP) — The economy is a bit wobbly, but General Motors CEO Mary Barra isn’t backing off of an audacious prediction: She pledges that by the middle of this decade, her company will sell more electric vehicles in the U.S. than Tesla, the global sales leader. She faces some long odds against immense economic forces that are working against auto sales. But in an interview with The Associated Press, Barra says GM can win by rolling out more affordable EVs, as well as pickup trucks and luxury vehicles. Her challenge is huge. Last year GM sold just 25,000 electric vehicles in the U.S., compared with an estimated 352,000 sold by Tesla.
Economics of war: Pain for Europe now, later for Russia
Europe is feeling the pain from Russia’s war in Ukraine. Mounting pressure from high energy prices is driving record inflation and raising the likelihood of a plunge back into recession. An energy crisis fueled by European reliance on Russian natural gas has spread through the economy. Food banks in Italy are feeding more people, dairies wonder how they will pasteurize milk and the euro has sagged to a 20-year low against the dollar. While Europe struggles, Russia has stabilized its currency and inflation through a fortress economy built to withstand international sanctions. But economists say that picture is misleading and Russia has bought itself long-term economic stagnation by launching the war.
European leaders ink energy deals in bid to sidestep Russia
ROME (AP) — European leaders have ramped up their push to secure alternative energy supplies as fears escalate of a complete natural gas cutoff by Russia. The leaders of Italy, France and the European Union are sealing deals with their counterparts in Algeria, Azerbaijan and the United Arab Emirates. Italian Premier Mario Draghi visited Algeria, whose president says a $4 billion deal would be signed Tuesday to supply “a significant quantity of gas.” EU Commission President Ursula von der Leyen visited Azerbaijan on Monday to clinch a deal on increased gas supplies from the former Soviet republic. France and the United Arab Emirates signed an agreement to ensure oil and natural gas supplies from the Gulf country.
Germany again rejects Russian explanation for gas supply cut
BERLIN (AP) — Germany says a turbine at the center of uncertainty about future gas deliveries through a major pipeline from Russia to Europe was only supposed to be installed in September, underlining its insistence there should be no technical obstacle to the gas flow. Meanwhile, Germany’s biggest importer of Russian gas said Monday that Russia’s Gazprom sent a letter claiming events beyond its control as the reason for shortfalls in gas deliveries. Gazprom reduced gas deliveries through the Nord Stream 1 pipeline to Germany by 60% last month. The Russian state-owned gas company cited alleged technical problems. German politicians say the decision was a political gambit by the Kremlin to sow uncertainty and push up energy prices.
Delta places order for 100 Boeing 737 aircraft
Delta is ordering 100 737 Max 10 airplanes, the largest of the line produced by Boeing, potentially giving the manufacturer additional momentum after a troubled rollout of its most advanced aircraft. Delta has an option to purchase 30 more of the aircraft as the airline looks to keep up with surging travel demand. Boeing has struggled to keep up with its European rival Airbus after a pair of 737 Max aircraft crashed in a short span of time, killing 346 passengers and crew members.
Millions swelter as UK endures its 1st extreme heat warning
LONDON (AP) — Britain’s first-ever extreme heat warning is in effect for large parts of England as hot, dry weather that has scorched mainland Europe moves north. The high heat is disrupting travel, health care and schools. Two airports were forced to close when their runways buckled. The temperature Monday reached 38.1 C (100.6 F) at Downham in eastern England, just shy of the highest-ever recorded in Britain. That record is 38.7 C (101.7 F), set in 2019. Wales did set a provisional national record of 37.1 C (95.5 F) at Hawarden. Britain’s red heat alert will last through Tuesday. The country is not remotely prepared to handle such heat since most homes, schools and small businesses don’t have air conditioning.
Yellen calls out China trade practices in South Korea visit
WASHINGTON (AP) — Treasury Secretary Janet Yellen says the U.S. and South Korea should deepen their trade ties to avoid working with countries that use their market positions to unfair advantage. And she called out China by name. In remarks prepared for delivery Monday, she said countries like China cannot be allowed to use their market position in key raw materials, technologies, or products “to disrupt our economy or exercise unwanted geopolitical leverage.” Yellen represented the U.S. at the Group of 20 finance minister meetings on Indonesia’s resort island of Bali and made stops in Tokyo, Japan and Seoul, South Korea. She avoided visiting China.
Wall Street rally fades as corporate profit reports ramp up
Stocks closed lower on Wall Street Monday after an early gain evaporated in the afternoon. The choppy trading came at the start of another busy week for profit reports from U.S. companies. The S&P 500 fell 0.8%. The Dow fell 0.7% and the Nasdaq lost 0.8%. Gains for energy producers, big retailers and other companies that rely on consumer spending were outweighed by a pullback in health care and technology stocks. Goldman Sachs rallied after reporting better profits than analysts expected. Dozens of big companies will give updates this week on how much profit they earned during the spring.
France, United Arab Emirates sign deal on energy cooperation
PARIS (AP) — France and the United Arab Emirates have signed an agreement on energy cooperation to ensure oil and gas supplies from the Gulf country. The deal announced by the French economy ministry Monday comes as Europe prepares for the possibility of a total cutoff of Russian natural gas in retaliation for sanctions over the war in Ukraine. French President Emmanuel Macron is hosting the UAE President Mohammed bin Zayed Al Nahyan in Paris. Oil and gas supplies to France and the European Union are top of the agenda as the 27-member bloc scrambles to prepare for winter. France has been in discussions with the UAE regarding supplies of oil and diesel as a Russian alternative.
EU promises more Ukraine war aid; calls for sanctions unity
BRUSSELS (AP) — European Union foreign ministers have promised another 500 millions euros in military aid to Ukraine’s war chest. The aid decision came after a video debriefing on the latest developments by Ukrainian Foreign Minister Dmytro Kuleba. He was “grateful” for the new funds but still urged the 27 nations to provide more. The bloc’s foreign policy chief also exhorted member states not to waver in their commitment to sanctions against Russia. Josep Borrell lashed out at critics claiming that measures were counterproductive and hurting the EU more than Russia itself.
The S&P 500 fell 32.31 points, or 0.8%, to 3,830.85. The Dow Jones Industrial Average fell 215.65 points, or 0.7%, to 31,072.61. The Nasdaq fell 92.37 points, or 0.8%, to 11,360.05. The Russell 2000 index of smaller companies fell 5.96 points, or 0.3%, to 1,738.42.