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A jumbled trading session on Wall Street; big tech firms report mixed earnings

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Amid the pandemic, Big Tech reports mixed earnings

The Google app. File/AP

Wall St. slips, but tech pares losses

NEW YORK  — Wall Street closed broadly lower Thursday, but another indefatigable rise for big technology stocks helped the market trim its losses from earlier in the day.

The S&P 500 lost 0.4 percent, and nearly three quarters of the stocks in the broad-based index fell. Among the hardest-hit were banks, oil producers and other companies that most need the economy to pull out of its recession. Stronger-than-expected profit reports from several companies helped the market regain some ground.

Treasury yields also fell  in a sign of increased caution.

The jumbled trading came after a report showed that layoffs are continuing at their stubborn pace. A separate report on Thursday showed that the U.S. economy contracted at a nearly 33 percent annual rate in the spring, the worst quarter on record.

Investors had already been expecting the reports on the economy to be weak, "so the real story today for traders is earnings," said Chris Larkin, managing director of trading and investment product at E-Trade Financial.

Google parent posts 1st-ever sales drop

SAN FRANCISCO — Big Tech companies reported mixed quarterly earnings on Thursday, a day after their top executives faced a tough congressional grilling over their market power and alleged monopolistic practices.

The staggering economic fallout caused by the coronavirus pandemic was reflected in reports from Amazon, Facebook, and Google parent, Alphabet, which reported its first-ever drop in quarterly revenue compared to the prior year. Although it was only a 2 percent slip, it was a telling sign of a downturn in the digital advertising market.

Facebook, which also makes most of its money from digital ads, recorded an 11 percent increase in revenue from the prior year, the social networking company’s slowest growth since going public eight years ago. Its profit nearly doubled to about $6 billion. Part of the big jump in earnings stemmed from charges Facebook booked last year.

Amazon stood as a notable exception. Stay-at-home orders and pandemic fears have help boost sales from its e-commerce sales, although the money that the company is pouring into its distribution system is at least temporarily depressing its profits. The company's earnings roughly doubled to $5.2 billion while revenue soared 40 percent to $88.9 billion.

Record surge in daily volumes at UPS

ATLANTA — A boom in online shopping during the pandemic pushed revenue higher at United Parcel Service, which reported a $1.77 billion profit for the second quarter.

Revenue rose more than 13 percent, to $20.46 billion.

UPS said Thursday that shipping volume jumped 23 percent to more than 21 million packages a day. Crucially, shipments from businesses to U.S. consumers soared 65 percent.

With thousands of retail stores ordered closed for safety reasons this spring, and some shoppers still wary of returning, consumers are going online to buy items they once carried out of a store, meaning more business for delivery companies.

UPS may also be benefiting after retailer, another company doing heavy volume in the pandemic, cut ties with rival FedEx Corp. last year.

Still, United Parcel's U.S. revenue per piece fell 5 percent in the quarter. Cowen analyst Helane Becker said this week that the growing number of quarantine measures in the U.S. could slow the recovery of shipments between businesses, which would be replaced by less-profitable residential deliveries.

Virus hits Comcast; Peacock has 10M users

NEW YORK — The coronavirus pandemic took a toll on Comcast in the second quarter as movie theaters closed, theme parks shut down and advertisers cut back.

Overall, the company said Thursday that net income fell 4.4 percent to $2.99 billion. Revenue slid 12 percent to $23.72 billion but slightly beat expectations.

Comcast said its NBCUniversal TV, film and theme park divisions, as well as its Sky unit in Europe, all suffered steep drops in revenue in the April-June quarter.

But period was not all grim news. The company added U.S. internet customers and 10 million users have signed up for its new Peacock streaming service since April. Peacock is free for Comcast customers and has been available to them since April, but opened to the general public, with a much-promoted free tier, on July 15. Comcast has said it hopes to have 30 million to 35 million users by 2024.

Airbus saw deliveries halved through June

PARIS — European plane maker and Boeing rival Airbus saw its deliveries halve during the first six months of the year as travel collapsed during the pandemic and airlines scrounged for cash.

The company said Thursday that its deliveries fell almost 50 percent to 196, with revenue sliding almost 40 percent. Airbus posted a loss of $2.2 billion for the first half of the year,

It said it was further scaling back production of its A350 long-haul jet, from six a month to five, after trimming from nine a month in April.

"The impact of the COVID-19 pandemic on our financials is now very visible," said CEO Guillaume Faury.

The company announced in June that it would cut 15,000 jobs, mostly in France and Germany. It expects air travel to recover to pre-pandemic levels sometime between 2023 and 2025. The airline industry association warned this week that that recovery is threatened by an increase in virus contagions in key markets like the United States.

Argo gain fuels Ford's surprise profit

DETROIT — Ford Motor Co. on Thursday surprised Wall Street by posting a $1.12 billion second-quarter net profit due to gains on its stake in the Argo AI autonomous vehicle operation.

Without the $3.5 billion gain, the company lost $1.9 billion, or a 35 cents per share. That beat Wall Street expectations of a $1.17 per-share loss.

A year ago, Ford posted a $148 million net profit.

Revenue was down by about half from a year ago to $19.37 billion, which narrowly beat estimates, according to FactSet.

Grubhub posts loss as orders jump a third

NEW YORK — Grubhub saw its average daily orders jump 32 percent in the second quarter but swung to a loss as it spent heavily to prop up restaurants and protect drivers as the pandemic shut in consumers.

The meal delivery company lost $45 million in the April-June period, down from a profit of $1.3 million in the same period a year ago. 

The earnings report is one of Grubhub's last as a standalone company. Grubhub announced a $7.3 billion merger with Just Eat last month. The deal is expected to close in the first quarter of 2021.

Grubhub Inc. said second-quarter revenue jumped 41 percent to $459 million as more diners opted for deliveries. But CEO Matt Maloney said the company spent $100 million on coronavirus-related costs, including cutting fees to restaurants and distributing protective equipment to its drivers.

Dunkin' to close 800 stores in US

CANTON, Mass. — Dunkin' Brands Inc. expects to close up to 800 underperforming U.S. stores this year as it tries to shore up its portfolio in the wake of the coronavirus pandemic.

The company had previously announced the closure of 450 stores within Speedway gas stations. But the company said Thursday it's targeting an additional 350 stores, most of which are unprofitable. Closing the restaurants would allow their franchisees to reinvest in newer stores in higher-traffic areas, finance chief Katherine Jaspon said during a call with investors.

Jaspon said the 800 stores represent 8 percent of Dunkin's U.S. footprint and 2 percent of its sales. International franchisees are also assessing their stores and could close 350 low-volume stores abroad by the end of this year, Jaspon added.

Dunkin' said Thursday its sales dropped 20 percent in the second quarter to $287 million.

Wire reports

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