Friday, May 24, 2024

AP morning business brief for Nov. 17

by BIZ Magazine

Exec who cleaned up Enron calls FTX mess “unprecedented”

The new CEO of the collapsed cryptocurrency trading firm FTX, who oversaw Enron’s bankruptcy, said he has never seen such a “complete failure” of corporate control. John Ray III, in a filing with the U.S. bankruptcy court for the district of Delaware, said there was a “complete absence of trustworthy financial information.” Ray was named CEO of FTX less than a week ago when the company filed for bankruptcy protection and its CEO and founder Sam Bankman-Fried resigned.

Stocks fall as Fed signals rates need to go still higher

NEW YORK (AP) — Stocks fell broadly on Wall Street and Treasury yields rose after more indications from the Federal Reserve that it may need to raise interest rates much higher than many people expect to get inflation under control. The Fed has been raising rates aggressively in order to tame inflation by applying the brakes to the economy. The S&P 500 fell 1% Thursday and the tech-heavy Nasdaq fell also fell 1%. The Dow Jones Industrial Average also slipped. The yield on the two-year Treasury note rose to 4.45%. Oil prices climbed. Markets in Asia and Europe fell.

UK push to restore finances means higher taxes, energy bills

LONDON (AP) — Millions of British people face higher taxes and steeper energy bills after the government announced an emergency budget aimed at restoring the government’s economic credibility and shoring up the battered public finances. Treasury chief Jeremy Hunt on Thursday imposed 55 billion pounds in tax increases and spending cuts. He also promised to protect the most vulnerable, including pensioners and those on low incomes, and increase funding for core public services like health and education. Hunt pledged to spend billions of pounds to help consumers pay soaring energy bills, increase welfare benefits and pensions in line with inflation, and maintain investment in energy and infrastructure projects. He also announced a new windfall tax on the profits of energy companies.

UK budget takeaways: Higher taxes, more aid to needy

LONDON (AP) — The British government has unveiled an emergency budget featuring billions in tax increases in a bid to restore trust and stability in the U.K. economy and help millions struggling to cope with a deepening cost-of-living crisis. Treasury chief Jeremy Hunt said Thursday that state pensions and welfare will rise to match inflation and announced targeted measures to help the country’s poorest people. But personal finances for millions will worsen, with higher income taxes and fewer government subsidies next year to help with soaring energy bills.

Fed official suggests substantial rate hikes may be needed

The Federal Reserve may have to raise its benchmark interest rate much higher than many people expect to get inflation under control, said James Bullard, who leads the Federal Reserve Bank of St. Louis. Bullard’s comments raised the prospect that the Fed’s rate hikes will make borrowing by consumers and businesses even costlier and further heighten the risk of recession. Wall Street traders registered their concern by sending stock market futures further into the red early Thursday. Bullard’s remarks followed speeches by other Fed officials in recent days that suggested they see only limited progress, at most, in their use of steadily higher rates to fight inflation.

Sports construction rolls right through economic uncertainty

ARLINGTON HEIGHTS, Ill. (AP) — With the galloping horses long gone, the Chicago Bears see 326 acres of opportunity at the shuttered Arlington International Racecourse. The Buffalo Bills also are making plans for a new home. Same for the Tennessee Titans and baseball’s Kansas City Royals, and on and on it goes. When it comes to construction for sports, today’s economic uncertainty is nothing compared to the promise of tomorrow. Interest rates, inflation and supply chain issues factor into the plans, according to construction and financing experts, but they haven’t been standing in the way.

Starbucks workers plan strikes at more than 100 US stores

Starbucks workers at more than 100 U.S. stores say they’re going on strike Thursday. It’s largest labor action since a campaign to unionize Starbucks’ stores began late last year. The walkouts are scheduled to coincide with Starbucks’ annual Red Cup Day, when the company gives free reusable cups to customers who order a holiday drink. Workers say it’s often one of the busiest days of the year. They say they are seeking better pay, more consistent schedules and better staffing. Starbucks opposes the unionization effort. The Seattle coffee giant has more than 9,000 company-owned stores in the U.S.

Elizabeth Holmes faces judgment day for her Theranos crimes

A federal judge on Friday will decide whether disgraced Theranos CEO Elizabeth Holmes should serve a lengthy prison sentence for duping investors and endangering patients while peddling a bogus blood-testing technology. After being convicted of investor fraud and conspiracy earlier this year Holmes’ sentencing marks a climactic moment in a saga that has been dissected books and on TV. The federal government wants the 38-year-old Holmes to be sentenced to 15 years in prison. Holmes is arguing for an 18-month sentence, preferably in home confinement; her lawyers say she deserves more lenient treatment as a well-meaning entrepreneur who is now a devoted mother with another child on the way.

Macy’s boosts 2022 guidance while Kohl’s outlook withdrawn

NEW YORK (AP) — Macy’s profits and sales slid in the third quarter as the department store had to step up discounts amid a pullback from shoppers stung by inflation. Yet the New York-based company, which topped Wall Street expectations, raised its earnings outlook, in part due to better credit card revenue. Shares rose more than 11% on Thursday morning. Shares of rival Kohl’s, which caters to middle-income shoppers, rose 1% after it withdrew its annual earnings outlook amid volatile macroconditions and amid a CEO transition. The department store also reported a drop in sales and profits but results beat expectations.

3 get life sentences for 2014 downing of jet over Ukraine

SCHIPHOL, Netherlands (AP) — A Dutch court has convicted two Russians and a Ukrainian of the murders of 298 people who died in the 2014 downing of Malaysia Airlines flight MH17 over Ukraine. One Russian was acquitted for lack of evidence. Presiding Judge Hendrik Steenhuis said that evidence presented by prosecutors at a trial that lasted more than two years proved that the Boeing 777 flying from Amsterdam to Kuala Lumpur was brought down by a Buk missile fired by pro-Moscow Ukrainian rebels on July 17, 2014. None of the defendants appeared for the trial that began in March 2020 and if they are convicted, it’s unlikely they will serve any sentence anytime soon. Prosecutors had sought life sentences for all four.

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