Stocks rise as economy strengthens, central banks step back

The New York Stock Exchange. File/AP

Stocks rise as central banks retreat

NEW YORK — U.S. stocks mostly rose Thursday, as markets get accustomed to the idea of investing with less of a safety net from central banks around the world.

The European Central Bank laid out its plan to pull back from the stimulus it's pumped into markets, but it also said it plans to hold off on raising interest rates for longer than some investors expected.

More evidence arrived that the U.S. economy is improving, meanwhile, which helped send the S&P 500 to its fourth gain in the last five days. The Federal Reserve, has already halted bond purchases and has increased interest rates seven times since late 2015. Its latest move came Wednesday, when it raised its benchmark rate by another quarter of a percentage point and indicated two more increases may come this year thanks to the improving economy. Higher rates can stave off inflation, but they can also hinder economic growth.

"It is momentous because you're moving to something more normal," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. "At the same time, you're moving grudgingly toward that. Central banks around the world are going to err toward being more accommodative, and they don't want to cause a market shock."

IMF: Tax cuts a short-term panacea

WASHINGTON — The International Monetary Fund believes the U.S. economy will post solid growth this year and next, helped by a sizable boost from tax cuts. But then it says growth will slide as huge budget deficits drag growth far below the Trump administration's goals.

In its annual assessment of the U.S. economy, the IMF says growth will hit 2.9 percent this year and 2.7 percent next year. Both are significant increases from last year's 2.3 percent expansion. However, after an initial boost from the $1.5 trillion tax cut package, the IMF forecasts growth will slow steadily in future years, dropping to 1.4 percent in 2023.

This forecast is far below the Trump administration, which is predicting its economic program will deliver growth of 3 percent or better in coming years.

Citrus growers blame Irma for sour year

NAPLES, Fla. — Florida's citrus growers are blaming Hurricane Irma for one of their worst seasons in decades.

In a Naples Daily News report , U.S. agriculture officials said Florida's orange production dropped nearly 35 percent from the previous season. Grapefruit production was half of what it was last year.

The 49.5 million boxes of citrus fruits produced in Florida was the smallest number recorded since the 1941-1942 season.

Florida agriculture commissioner Adam Putnam said federal funding would help growers recover from Irma. Ron Hamel of the Gulf Citrus Growers Association said some growers are "cautiously optimistic" about next season.

Florida's Department of Agriculture and Consumer Services has said Irma caused over $1 billion in losses for the citrus industry. The hurricane uprooted trees and waterlogged groves for weeks, damaging root systems and stunting growth.

Kroger pulling back in part of NC

RALEIGH — National grocery chain Kroger will shutter all stores in North Carolina's Triangle region in a move that will affect around 1,500 workers.

News outlets reported that the Cincinnati-based company announced Wednesday that all 14 stores will be closed by Aug. 14.

The president of Kroger's mid-Atlantic division, Jerry Clontz, says the Raleigh-Durham market is oversaturated with stores, inhibiting the chain's growth. Kroger entered the market in 1989.

The future of at least 10 locations has already been determined: Kroger has entered into contracts to sell them to Food Lion, Crunch Fitness and Harris Teeter, the last of which the chain owns.

As for the affected employees, Clontz says they'll be offered job fairs and job placement services.

Musk firm to build Chicago airport transport

CHICAGO — A company founded by Tesla CEO Elon Musk has been selected to build a high-speed underground transportation system that will whisk passengers from downtown Chicago to O'Hare International Airport in minutes.

Adam Collins, a spokesman for Mayor Rahm Emanuel, confirmed in a tweet the selection of The Boring Co. Collins says the journey in electric vehicles will take roughly 12 minutes. The Boring Company will fund the project in its entirety. The company says on its website that each vehicle will carry eight to 16 people and travel at speeds of 125 to 150 mph.

Weekly long-term mortgage rates up

WASHINGTON — Long-term U.S. mortgage rates jumped this week after two straight weeks of declines, reaching their second-highest level this year.

Long-term loan rates have been running at their highest levels in seven years. And the Federal Reserve on Wednesday raised its benchmark interest rate for the second time this year and signaled that it may step up its pace of rate increases.

Mortgage buyer Freddie Mac says the average rate on 30-year, fixed-rate mortgages was 4.62 percent, up from 4.54 percent last week. By contrast, the 30-year rate averaged 3.91 percent a year ago.

The average rate on 15-year, fixed-rate loans increased to 4.07 percent from 4.01 percent last week.

Rolls-Royce to axe 4,600 jet jobs

LONDON — British plane engine manufacturer Rolls-Royce said Thursday that it plans to cut 4,600 jobs over the next 2 years as part of a major restructuring effort.

Around 3,000 of the cuts will affect U.K. employees. Rolls-Royce currently employs 26,000 people in the U.K., almost half of its total workforce worldwide.

Frank-Martin Hein, spokesperson for Rolls-Royce, said that up to 2,000 redundancies could be made this year and that mostly support and management roles will be cut.

The company said Thursday it wants to save $537 million over the next two years to sustain an increase in profits.

While Rolls-Royce saw a 25 percent rise in profits in 2017, it has issued a series of profit warnings in recent years, and Rolls-Royce is struggling to recoup the costs of long term investments.

Esty raises fees, revenue outlook

BROOKLYN, N.Y. — Etsy's stock jumped Thursday after the online crafts company announced an increase in fees and boosted its revenue outlook for the year.

The company said that the transaction fee charged when a person or business makes a sale will rise to 5 percent from 3.5 percent. It will also apply to the shipping cost. The fee will be increased starting on July 16.

Etsy Inc. has 2 million active sellers and nearly 35 million active buyers.

The company now sees 2018 revenue growth of between 32 percent and 34 percent. Its prior forecast was for 22 percent to 24 percent growth. Shares rose $8.66 to $41.65.

Wire reports