Banks, tech stocks drag market to loss
NEW YORK — Stocks closed modestly lower on Wall Street Wednesday, handing the market its second straight loss.
Banks and technology companies accounted for much of the slide as investors shifted money into U.S. bonds, precious metals and other holdings considered safe havens after more than a week of aggressive buying.
Energy stocks took the heaviest losses following a 4% drop in the price of U.S. crude oil. That helped outweigh gains in health care, utilities and elsewhere in the market.
The latest decline followed a broad drop in stocks that ended a five-day winning streak for the market. The Federal Reserve set off last week's rally when it signaled that it is willing to cut interest rates to help stabilize the economy if the U.S. trade war with China starts to crimp growth.
Investors are worried that the dispute will drag on much longer than previously expected, weighing on economic growth and corporate profits. That has traders looking ahead to next week's Fed meeting.
"There are concerns about whether or not the Fed next week at its meeting is going to in fact continue to move its stance toward lowering rates," said Quincy Krosby, chief market strategist at Prudential Financial. "The increasing concern is that the global economy continues to slow and that the slowdown is affecting the United States as well."
Consumer prices edged up in May
WASHINGTON — U.S. consumer prices increased a slight 0.1% in May, as inflation was tempered by lower costs for gasoline, electricity and used cars.
The Labor Department said Wednesday that the consumer price index rose 1.8% during the past year. Excluding the volatile food and energy categories, core prices rose 0.1% in May and 2% from a year ago.
Inflation has been consistently muted, slightly below or near the Federal Reserve's target of 2% even though the economy is poised in July to set the record for the longest expansion in U.S. history.
Falling unemployment rates and a pick-up in wages have done little to push prices higher. Adjusted for inflation, average hourly earnings have climbed 1.3% in the past year. That same annual figure was up just 0.2% in May 2018.
The Fed faces pressure to cut a key short-term rate as there are signs of slowing economic growth. The benefits of the 2017 tax cuts have waned and President Donald Trump's tariff threats with China and Mexico have roiled financial markets. A majority of investors expect a rate cut at the Fed's July meeting, according to the CME Group.
Uber, Volvo launching self-driving vehicle
WASHINGTON — Uber is teaming with Volvo Cars to launch its newest self-driving vehicle.
The ride-hailing company said Wednesday that it can easily install its self-driving system in the Volvo XC90 SUV. The vehicle's steering and braking systems are designed for computer rather than human control, including several backup systems for both steering and braking functions and battery backup power. If the primary systems fail, the backup system will immediately act to bring the car to a stop.
Various sensors will allow Uber's self-driving system to safely operate and maneuver in urban areas.
Uber and Volvo Cars partnered in September 2016. This is the third car they've developed together and the first production car to be capable of fully driving itself.
Tesla CEO looks to lift investor spirits
SAN FRANCISCO — Tesla CEO Elon Musk assured shareholders the electric car maker has recovered from a disappointing start this year and promised to counter media coverage that he believes has distorted perceptions about the unprofitable company's long-term prospects.
"It has been a hell of a year, but a lot of good things are happening," Musk said Tuesday during Tesla's annual meeting in Mountain View, California.
Musk's 90-minute appearance came amid lingering questions about Tesla's finances and his own sometimes erratic behavior since the company held its last shareholder meeting a year ago.
Among other things, Musk has tangled with stock market regulators about a tweet dangling a buyout of Tesla that never materialized , and broken a pledge to make Tesla consistently profitable . He also has raised eyebrows, as well as public safety concerns, by setting out to launch a ride-hailing service consisting of self-driving cars next year.
But the shareholders who spoke Tuesday left little doubt that they believe Musk is a misunderstood visionary. Several urged him to pour more resources into countering news coverage about Tesla's financial condition, fatal accidents involving Tesla cars driving in semi-autonomous mode and his own histrionics .
"It's very distressing, makes me very sad," said Musk, who at another point described the media's coverage of the company as a "disinformation campaign." Without going into specifics, Musk promised to do more to "debunk the myths" about Tesla, perhaps by setting up a website devoted to correcting inaccuracies.
Before answering shareholder questions, Musk provided a reason for optimism by predicting Tesla would set manufacturing and sales records in the current quarter ending at the end of this month.
To set manufacturing and sales records, Tesla will need to top its performance during the final three months of last year. In that quarter, Tesla manufactured more than 85,500 vehicles and delivered 90,700.
If Tesla can exceed those numbers in the current quarter, it might help make up for the opening three months of the year when Tesla's production and sales fell well below expectations and contributed to a $702 million loss after the company had been profitable during the final half of last year.
The wild swings in fortune also have rocked Tesla's stock, which has gone from a high of $387.46 last August shortly after Musk said he had line up adequate financing for his illusory buyout, to a three-year low of $176.99 last week. The shares have rallied since then, and Musk's projection provided more momentum as the stock gained more than 3% to $224.68 in Tuesday's extended trading.
GM sinks $150M into Mich. truck plant
FLINT, Mich. — General Motors says it will spend $150 million so it can make more heavy-duty pickup trucks at its Flint, Mich., assembly plant. The money will improve the factory's conveyor system and for other equipment to boost output.
The factory builds heavy-duty Chevrolet Silverado and GMC Sierra pickups which are all-new for the 2019 model year.
No new jobs are tied to the Wednesday announcement, but GM announced earlier this year that it would add 1,000 workers at the plant. The factory now runs three shifts per day and employs about 5,000.
Sales of the Sierra were down 2.2 percent through March and the Silverado fellpoho nearly 16 percent as factories switch to the new models. GM expects increased sales and plans to increase factory capacity by 60,000 trucks per year.
French firm to buy Medidata for $5.8B
NEW YORK — French software company Dassault Systems says it will buy U.S.-based Medidata Solutions for $5.8 billion in cash. New York-based Medidata provides cloud-based services and software to help medical and pharmaceutical companies manage data and track clinical trials.
The companies said that 18 of the top 25 pharmaceutical companies are Medidata clients. Medidata, which has 16 offices across seven countries, had revenue of $636 million last year.
The deal is expected to close in the last quarter of 2019 pending approval by a majority of Medidata shareholders.