Business Highlights: Stocks’ miserable month, EU inflation
Stocks end September down 9.3%, worst month since March 2020
NEW YORK (AP) — Wall Street closed out a miserable September with a loss of 9.3%, the worst monthly decline since March 2020. The S&P 500 fell 1.5% Friday and is at its lowest level in almost two years. The benchmark index has lost ground for six of the last seven weeks and posted its third straight losing quarter. The Dow Jones Industrial Average lost 1.7% and the Nasdaq fell 1.5%. Nike fell sharply after the company had to slash prices to clear inventories, while Carnival dropped following weaker-than-expected quarterly results. Bond markets were showing more calm as yields relaxed.
Inflation hits record 10% in 19 EU countries using euro
FRANKFURT, Germany (AP) — Inflation in the European countries using the euro currency has broken into double digits as prices for electricity and natural gas soar. EU statistics agency Eurostat reported Friday that consumer prices in the 19-country eurozone rose a record 10% in September from a year earlier, up from an annual 9.1% in August. Only a year ago, inflation was as low as 3.4%. Price increases are at their highest level since record-keeping for the euro started in 1997. The rise in inflation signals a looming winter recession for one of the globe’s major economies as higher prices undermine consumers’ spending power.
Resilient US consumers spend slightly more in August
WASHINGTON (AP) — Consumers spent a bit more in August than the previous month, a sign the economy is holding up even as inflation lifts prices for food, rent, and other essentials. Americans boosted their spending at stores and for services such as haircuts by 0.4% in August, after it fell 0.2% in July, the Commerce Department said Friday. The government’s report also showed that an inflation gauge closely monitored by the Federal Reserve rose 0.3% last month, faster than July.
Unpaid internships face new scrutiny as barriers to careers
NEW YORK (AP) — Unpaid internships are facing new scrutiny from colleges, state lawmakers and student activists. Nearly half of all internships are unpaid, putting them out of reach for students who need wages to keep up with their bills, even if the work has nothing to do with their intended careers. Many students say they can’t afford to meet internship requirements, and shouldn’t be expected to work unpaid to make it in a given field. The people who can take unpaid internships have financial safety nets, and that means they tend to benefit students who are wealthier and white, perpetuating wealth gaps.
‘Big impact’: UK economic chaos, pound plunge hit businesses
LONDON (AP) — The British government’s economic stimulus plan is designed to help people and businesses by cutting taxes and growing the economy. But it’s had the opposite effect as the promise of huge unfunded tax cuts sparked turmoil in financial markets and sent the British pound tumbling to a record low against the U.S. dollar this week. For many small businesses already battling soaring costs, things have gone from bad to worse. The pound’s slide hits many businesses hard because imported materials and commodities like natural gas that are priced in dollars will be more expensive. Businesses will likely be forced to pass the costs on to consumers, which would further push up inflation.
Brainard warns US rates to stay high, notes global impact
WASHINGTON (AP) — Federal Reserve Vice Chair Lael Brainard said Friday that U.S. interest rates will likely have to remain high for an extended period to combat inflation, capping a week of tough rhetoric by Fed officials. In remarks at a conference hosted by the Federal Reserve Bank of New York, Brainard said that international turmoil still threatens to disrupt global supplies of commodities and manufactured parts, a key factor pushing inflation higher. Brainard also said that one cannot rule out additional inflationary shocks from Russia’s invasion of Ukraine, China’s COVID lockdowns, or severe weather events globally.
EU adopts levy on excess energy profits, no gas price cap
BRUSSELS (AP) — European Union energy ministers have adopted a package of measures to ease an energy crisis, including a levy on windfall profits of fossil fuel companies. But an agreement on capping natural gas prices that is supported by a majority of countries remained off the table. The package approved Friday includes the windfall levy on oil, natural gas and coal companies, a temporary cap on the revenue of low-cost electricity generators, and an mandate for the 27 EU countries to reduce electricity consumption during peak price hours. With energy prices skyrocketing across Europe, the proposals from the European Commission are designed to help raise $140 billion in relief for people and businesses hit by the crunch.
Boeing behind schedule in gaining approval for new Max jets
ARLINGTON, Va. (AP) — Boeing is behind schedule in submitting documentation for new versions of its 737 Max jetliner, and it’s asking Congress for more time. Federal officials say Boeing has completed little of the work necessary to certify the new Max versions by a Dec. 31 deadline. If the company misses the deadline, it must add a new system to alert pilots when there is a potential safety problem with the flight. Boeing argues that its older 737s don’t have the alert system, and putting it on future Max jets would add complexity for airline pilots who fly both old and new 737s.
West rejects Putin’s claim it sabotaged Baltic gas pipelines
COPENHAGEN, Denmark (AP) — Russian President Vladimir Putin has accused the West of sabotaging the Russia-built gas pipelines under the Baltic Sea to Germany. Putin claimed that the West had turned from sanctions against Russia to “terror attacks,” sabotaging the Nord Stream 1 and 2 pipelines. The White House said Putin’s comments were outlandish and just an attempt to distract the world from his annexation on Friday of four parts of Ukraine. President Joe Biden said of Putin: “What he’s saying we know is not true.” The comments came ahead of an emergency meeting Friday at the U.N. Security Council in New York. Denmark and Sweden said the blasts, which set off huge methane leaks, probably were due to several hundred pounds of explosives.
The S&P 500 fell 54.85 points, or 1.5%, to 3,585.62. The Dow Jones Industrial Average lost 500.10 points, or 1.7%, to 28,725.51 The Nasdaq tumbled 161.89 points, or 1.5%, to 10,575.62. The Russell 2000 index of smaller companies shed 10.21 points, or 0.6%, to 1,664.72.