Business Highlights
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Fed wrestles with its next moves as virus stalls US economy
WASHINGTON (AP) — Federal Reserve officials are grappling this week with the timing and scope of their next policy moves at a time when the raging viral pandemic has weakened the U.S. economy. No major changes are likely when the Fed releases a statement Wednesday after its two-day policy meeting ends and just before Chair Jerome Powell holds a news conference. But the central bank is working toward providing more specific guidance on the conditions it would need to see before raising the short-term interest rate it controls, which is now pegged near zero. ___
US consumer confidence tumbles in July as COVID-19 spreads
WASHINGTON (AP) — U.S. consumer confidence tumbled in July to a reading of 92.6 as coronavirus infections spread in many parts of the country. The Conference Board, a New York research organization, reported Tuesday that its Consumer Confidence Index fell from a June reading of 98.3. The consumer confidence index is closely watched for signals it can send about future consumer spending, which accounts for 70% of economic activity. The Conference Board said that the large decline in the expectations index reflected big drops in sentiment in Michigan, Forida, Texas and California, all states that have seen a resurgence in coronavirus cases. ___
Spotlight on 4 Big Tech CEOs testifying in competition probe
WASHINGTON (AP) — They command corporations with gold-plated brands and millions or even billions of customers. One of them is the world’s richest individual; another is the fourth-ranked billionaire. Their industry has transformed society, linked people around the globe, mined and commercialized users’ personal data, Now Amazon CEO Jeff Bezos, Facebook’s Mark Zuckerberg, Google’s Sundar Pichai and Tim Cook of Apple will answer for their companies’ practices before Congress for the first time as a group. The House Judiciary subcommittee on antitrust is capping its yearlong investigation of Big Tech’s market dominance with a hearing spotlighting the four CEOs.
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Starbucks seeing recovery as global stores reopen
SEATTLE (AP) — Starbucks says it’s seeing a steady recovery as its stores reopen, but it expects the impact of the new coronavirus to last well into the fall. The coffee giant said Tuesday that revenue in its fiscal third quarter plummeted 38% to $4.2 billion. That was ahead of Wall Street’s forecast of $4 billion. The Seattle-based company said 97% of its company-operated stores around the world are now open, including 99% of stores in China and 96% in the U.S. But some franchised locations remain closed, especially at airports and on college campuses.
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Visa’s profits shrink as virus stops consumers from spending
NEW YORK (AP) — Credit card processing giant Visa says its fiscal third quarter profit fell by 23% from a year ago, undercut by the world’s consumers and businesses dramatically slowing their spending as the coronavirus pandemic took hold. Visa’s business model — taking a small percentage of every transaction that runs on the Visa network — is highly susceptible to fluctuations in how consumers and businesses spend money. As economies shut down in March, April and May due to the pandemic, consumers spent less money on gas, eating out for lunch and dinner, movies or any other activities that required being outside. That was a direct hit to Visa’s bottom line.
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Twitter gives Trump Jr. a tweet timeout for pandemic misinfo
CHICAGO (AP) — Twitter has temporarily halted President Donald Trump’s son from tweeting after he shared a video riddled with unsupported claims about the coronavirus Monday. The video features pro-Trump doctors telling Americans they do not need to wear masks to prevent coronavirus and saying hydroxychloroquine, an anti-malaria drug, is a sure-fire way to treat coronavirus. The video directly refutes advice from Trump’s own medical experts, who have urged people to slow the virus’ spread by wearing masks and cautioned against using hydroxychloroquine to treat coronavirus. Twitter required Trump Jr. take down the video and put his account on a 12-hour timeout, a Twitter spokesman confirmed Tuesday.
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Late slump pulls Wall Street lower; gold sets another record
NEW YORK (AP) — A late slump left stocks broadly lower on Wall Street Tuesday, while cautious investors continued to push money into gold and Treasurys, leaving gold at another record high. Weak earnings from several big U.S. companies also dampened the mood. The S&P 500 gave up 0.6% after falling steadily in the last hour of trading. Weakness in technology stocks pulled the Nasdaq down 1.3%. A sizable loss in 3M pulled the Dow Jones Industrial Average lower. The maker of N95 masks reported earnings that fell shy of analysts’ expectations. McDonald’s also dropped after reporting earnings for the spring that were weaker than analysts had forecast.
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The S&P 500 fell 20.97 points, or 0.6%, to 3,218.44. The Dow Jones Industrial Average dropped 205.49 points, or 0.8%, to 26,379.28, and the Nasdaq composite lost 134.18, or 1.3%, to 10,402.09. The Russell 2000 of smaller-company stocks ended down 14.90 points, or 1%, at 1,469.76.