Stocks slip after Fed talks interest rates
NEW YORK — U.S. stocks slipped Wednesday after the Federal Reserve raised interest rates and said it expects to increase rates two more times by the end of the year. Investors bet that several huge deals are more likely to happen after a federal court cleared AT&T's $85 billion purchase of Time Warner.
Wall Street was already certain the Fed would raise interest rates Wednesday. The central bank's decision makers also said they plan to raise rates two more times later this year for a total of four increases. Investors had debated all year if rates would rise three or four times, and some are concerned that if rates rise that quickly, it could stifle economic growth because consumers and businesses will have to pay more to borrow money.
The Fed's projections might have been unwelcome, but they weren't a shock: for months there have been signs the economy is getting stronger. Another came on Wednesday, when the Labor Department said wholesale prices climbed at a faster pace in May. The Fed says inflation is likely to increase and projects unemployment will hit a 50-year low in a few months, and it wants to keep inflation under control.
Shares of Twenty-First Century Fox jumped as investors anticipated Comcast's offer for Fox's entertainment businesses. It came just after trading ended, as Comcast announced a $65 billion bid.
VW fined $1.2B at home over scandal
BERLIN — Automaker Volkswagen says it's being fined $1.18 billion by German authorities in connection with the diesel emissions scandal.
Volkswagen said Wednesday it would accept the fine imposed by prosecutors.
Prosecutors concluded that Volkswagen failed to properly oversee the activity of its engine development department, resulting in some 10.7 million diesel vehicles with illegal emissions-controlling software being sold worldwide.
The scandal, which came to light in the United States in 2015, has already cost the German automaker billions in penalties imposed by U.S. authorities.
GM to have women in top two jobs
DETROIT — General Motors is about to have two of the auto industry's highest-ranking women in the upper echelons of its management team.
Dhivya Suryadevara, vice president of corporate finance for the last 11 months, will become chief financial officer on Sept. 1, replacing Chuck Stevens, the company said Wednesday. Suryadevara, 39, played a key role in GM divesting its German affiliate Opel, acquiring self-driving car unit Cruise Automation, investing in ride-hailing startup Lyft Inc. and arranging a recent investment by SoftBank Vision Fund.
GM will join a very short list of S&P 500 companies with women serving as CEO and CFO. Mary Barra is the automaker's chief executive.
Bitcoin at 4-month low after theft
LONDON — The price of bitcoin has fallen to a four-month low of $6,370, days after South Korean virtual currency exchange Coinrail said hackers had stolen over $37 million, or almost a third of the virtual currency it had stored.
After Coinrail announced the theft, the price of bitcoin dropped $500 in an hour and it has continued to slide.
The decline also follows a Wall Street Journal report that U.S. regulators have asked virtual currency exchanges to provide trading data to aid an investigation into virtual currency manipulation. The reports raised concerns about the future of virtual currency markets.
David Jones, Capital.com's chief market strategist, says Bitcoin is "a classic case of an economic bubble." Last year, the virtual currency increased sixfold and hit a record high of $19,783 in December.
Producer prices up 3.1% in year
WASHINGTON — U.S. wholesale prices last month posted the biggest 12-month gain since January 2012, a sign that the strong economy is beginning to rouse inflation.
The Labor Department said Wednesday that its producer price index— which measures inflation before it reaches consumers— rose 3.1 percent from May 2017. The index rose 0.5 percent from April, biggest one-month increase since January. In April, producer prices rose just 0.1 percent.
Energy prices, pulled higher by surging gasoline prices, rose 4.6 percent last month from April, the biggest jump in three years.
Food prices rose just 0.1 percent, and seafood prices fell a record 13.1 percent.
Core wholesale prices — which excludes the volatile food and energy sectors — rose 0.3 from April and 2.4 percent from May 2017.
Guess co-founder quits after sex probe
LOS ANGELES — Guess Inc. announced Tuesday that its co-founder Paul Marciano is stepping down after the completion of a company-commissioned investigation into allegations of sexual harassment and assault.
The fashion company disclosed in a filing with the Securities and Exchange Commission that Marciano is resigning immediately as executive chairman of the board.
"The investigation found that on certain occasions Marciano exercised poor judgment in his communications with models and photographers and in placing himself in situations in which plausible allegations of improper conduct could, and did, arise," the filing said.
Marciano, who owns a 17 percent stake in Guess, has denied the allegations. He will remain a board member and stay on as chief creative officer until his contract expires at the end of January. he allegations first became public when model Kate Upton said Marciano grabbed her breasts during a photo shoot nearly eight years ago. She also says that he harassed her.