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Inflation worries weigh on Wall Street again; COVID-19 scuttles Davos economic gathering

US stocks fall further from records

NEW YORK — U.S. stocks closed modestly lower May 17, tacking more losses onto last week's stumble, as worries about inflation continue to dog Wall Street.

The S&P 500 lost 0.3 percent following its 1.4 percent drop last week from its record high.

Big Tech stocks weighed most heavily on the market. The sector has been responsible for big swings in either direction over the last few weeks as investors weigh the impact of rising inflation and a broad economic recovery.

Energy and materials companies did better than the rest of the market and helped to limit the losses. Small-company stocks closed higher.

The session marked the latest back-and-forth for a market swept up in worries about whether the rising inflation seen recently across the economy will prove to be only temporary or longer lasting.

"History says whenever we've had such a strong start to the year we tend to take a break and digest some of those gains," said Sam Stovall, chief investment strategist at CFRA. "In many ways this is fairly natural."

World Economic Forum cancels big event

GENEVA — World Economic Forum organizers say they have decided to cancel their annual gathering — usually held in Davos, Switzerland each year — this year amid concerns related to the COVID-19 pandemic.

After multiple attempts to find a proper date and venue, most recently settling on hopes to hold it in Singapore in August, the forum's organizers said in a statement May 17 that it won't go ahead with the meeting, largely citing the impact of the coronavirus.

"Regretfully, the tragic circumstances unfolding across geographies, an uncertain travel outlook, differing speeds of vaccination rollout and the uncertainty around new variants combine to make it impossible to realize a global meeting with business, government and civil society leaders from all over the world at the scale which was planned," the forum said.

Forum founder Klaus Schwab called it a "difficult decision" ... "but ultimately the health and safety of everyone concerned is our highest priority."

The forum's next annual gathering will be in the first half of next year, with the final date and location to be determined, organizers said. The elite gathering typically draws hundreds of well-known government leaders, business executives, civil society advocates and artists, actors and musicians.

Report: Gates probed before he left

NEW YORK — Board members at Microsoft Corp. made a decision in 2020 that it wasn't appropriate for its co-founder Bill Gates to continue sitting on its board as they investigated the billionaire's prior romantic relationship with a female Microsoft employee that was deemed inappropriate, according to a report in The Wall Street Journal.

Citing unidentified sources, The Journal reported online that board members looking into the matter hired a law firm in late 2019 to conduct an investigation after a Microsoft engineer alleged in a letter that she had a sexual relationship with Gates over several years. The Journal reported that Gates resigned before the board's investigation was finished, citing another person familiar with the matter.

An unnamed spokeswoman for Gates acknowledged to The Journal that there was an affair almost 20 years ago, and that it ended "amicably." The spokesperson told The Journal that "his decision to transition off the board was in no way related to this matter.""

When he left Microsoft's board last year, Gates said he was stepping down to focus on philanthropy.

In an email sent to the Associated Press, Microsoft said that it "received a concern in the latter half of 2019 that Bill Gates sought to initiate an intimate relationship with a company employee in the year 2000. A committee of the Board reviewed the concern, aided by an outside law firm, to conduct a thorough investigation. Throughout the investigation, Microsoft provided extensive support to the employee who raised the concern."

Earlier this month, Bill and Melinda Gates announced that they were divorcing after 27 years of marriage but would keep working together at the Bill and Melinda Gates Foundation, one of the largest charitable foundations in the world. Gates was formerly the world's richest person and his fortune is estimated at well over $100 billion.

Chip shortage leads to layoffs at Jeep

BELVIDERE, Ill. — About 1,600 jobs are being cut at a Jeep Cherokee factory in northern Illinois as automakers continue being plagued by the global shortage of semiconductors.

The U.S. arm of Stellantis, formerly known as Fiat Chrysler, said it was cutting one of the two work shifts at its Belvidere Assembly Plant as of July 26. That could result in the layoffs of 1,641 workers, company spokeswoman Jodi Tinson said.

The company is trying to "balance sales with production," although the factory's situation "has been further exacerbated by the unprecedented global microchip shortage," Tinson said.

The Belvidere plant has been idled since late March, with Stellantis repeatedly delaying the reopening that is now not expected until at least later this month.

Numerous other auto plants, including many owned by General Motors and Ford, have shut down in the past few months because of the chip shortage, which was caused by semiconductor makers switching their factories to more profitable consumer-electronics processors when automakers closed last year due to the pandemic.

Unruly air travelers face big FAA fines

WASHINGTON — Federal regulators are continuing to pursue large penalties against a few airline passengers accused of disrupting flights.

The Federal Aviation Administration said May 17 that it will seek fines totaling more than $100,000 against four passengers on recent flights, including a penalty of $52,500 against a man who was arrested after trying to open the cockpit door and striking a flight attendant in the face.

Airlines have reported a spate of troubling incidents in recent months, many of them involving passengers who appear intoxicated or refuse to wear face masks — that’s still a federal requirement even after health officials relaxed guidelines around mask wearing last week.

Associated Press

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