US stocks rally early, sputter later
NEW YORK — The major U.S. stock indexes closed unevenly Thursday after an early rally gave way to a mostly sideways day of trading on Wall Street.
Losses in health care stocks mostly offset gains in industrial companies, banks and elsewhere in the market. Insurers UnitedHealth Group and Anthem led the sector's slide. Technology stocks also fell.
The listless day of trading came as investors looked ahead to Friday, when major banks, including Wells Fargo and JPMorgan Chase, are due to report their first-quarter results. The banks will pave the way for a potentially market-moving wave of company earnings reports the next few weeks.
"For the better part here of five trading days we've been up and down just a little bit, and not really making any progress," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. "A lot of that is you're really waiting for earnings season."
Uber reveals strong growth, big losses
SAN FRANCISCO — Uber is providing a look under the hood of its business in the lead-up to its hotly anticipated debut on the stock market, revealing strong growth but an ongoing struggle to overcome huge losses and repair its reputation.
Documents released Thursday offered the most detailed view of the world's largest ride-hailing service since its inception a decade ago. The unveiling comes four months after Uber took its first step toward its initial public offering with a confidential filing.
The massive filing shows Uber has been generating the robust revenue growth that entices investors, but also racked up nearly $8 billion in losses over its 10 years in existence, which mirrors the same trend challenging Lyft, Uber's main rival in the U.S.
Uber's revenue totaled $11.3 billion in 2018, a 42% increase from $7.9 billion in 2017, and a giant leap from $495 million in 2014.
The company posted a profit of $997 million last year, but that doesn't mean its ride-hailing service suddenly started to make money — far from it. The positive result stemmed from a windfall that Uber generated from the sale of its operations in Russia and Southeast Asia. The company said it sustained an operating loss of $3 billion.
Nattional Enquirer may go on block
NEW YORK — The supermarket tabloid under fire for paying hush money to a former Playboy model to help Donald Trump in his 2016 presidential campaign is on the auction block.
The parent of the National Enquirer said Wednesday that it is exploring a possible sale as part of a "strategic review" of its tabloid business. The decision by American Media comes after the tabloid said it paid $150,000 to keep Karen McDougal quiet about an alleged affair with Trump and being accused by Amazon chief Jeff Bezos of blackmail.
American Media agreed in August to cooperate with federal prosecutors looking into campaign violations in exchange for immunity.
American Media recently refinanced hundreds of millions of dollars of debt after years of heavy borrowing and acquisitions.
Rite Aid cuts shares to stay on NYSE
NEW YORK —Rite Aid will chop its share count by about 95% in a bid to push the remaining shares above minimum trading requirements on the New York Stock Exchange.
The board of the struggling drugstore chain approved a 1-for-20 ratio for a reverse stock split after shareholders backed the plan last month. That will cut the total number of outstanding shares from nearly 1.1 billion, to about 54 million.
Rite Aid shares slid below $1 in December, prompting a removal warning from the NYSE. The drugstore chain said Wednesday after markets closed that on April 22, its shares will start trading on a split-adjusted basis.
Shares closed at 57 cents on Wednesday but slipped early Thursday after the company said it lost $273 million in its fiscal fourth quarter and $422 million in the full year.
Rite Aid runs 2,525 stores, mostly on the East and West coasts. It also operates a pharmacy benefit management business that runs prescription drug coverage for employers, insurers and other customers.
Gas lifts wholesale prices in March
WASHINGTON — U.S. wholesale prices increased in March by the most since last fall, driven largely by more expensive gas and electricity.
The Labor Department said Thursday that the producer price index , which measures price changes before they reach consumers, rose 0.6% in March after falling in three of the previous four months. Wholesale prices rose 2.2% from last year. Excluding the volatile food and energy categories, core wholesale prices rose 0.3% in March and 2.4% compared with a year ago.
The figures suggest that inflation is largely in check, a trend that has enabled the Federal Reserve to pull back from last year's steady rate hikes. Fed policymakers suggested at their most recent meeting in March that they did not expect to hike short-term rates for the rest of this year.
Other measures of inflation are also mostly tame. The consumer price index, released Wednesday, rose 0.4% in March, a healthy gain, but increased just 1.9% in the past year. Excluding food and energy, core consumer prices increased just 0.1% from the previous month and 2% from a year earlier. That's right at the Fed's inflation target.
Jobless aid requests at 50-year low
WASHINGTON — The number of people applying for unemployment aid fell last week to its lowest level in nearly five decades, solid evidence that the job market is healthy and layoffs scarce.
The Labor Department says weekly applications for jobless benefits dropped 8,000 to a seasonally adjusted 196,000. That is the lowest since October 1969. The four-week average, a less volatile measure, fell to 207,000, the lowest since December 1969.
Applications are a proxy for layoffs, so the ongoing decline — applications have tumbled for four straight weeks — signals that businesses are confident enough about future demand to hold onto their workers. That confidence is also spurring more hiring: Job gains rebounded last month after a sharp slowdown in February, suggesting the economy remains resilient in its 10th year of expansion.
Mortgage rates in US tick up slightly
WASHINGTON — U.S. long-term mortgage rates rose moderately this week, remaining at historically low levels that can lure potential purchasers in the spring home-buying season.
Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year, fixed-rate mortgage increased to 4.12% from 4.08% last week. Two weeks ago, the benchmark loan rate marked its steepest weekly drop in a decade, from 4.28%. The average rate on the 30-year loan stood at 4.42% a year ago.
The average rate this week for 15-year, fixed-rate home loans rose to 3.60% from 3.56%.
Despite the increase in rates this week, "We expect mortgage rates to remain low ..., boosting home buyer demand in the next few months," Freddie Mac chief economist Sam Khater said.
J. Crew considers IPO for sibling Madewell
NEW YORK — Clothing retailer J. Crew Group Inc. says it's considering a potential initial public offering for its successful Madewell brand.
The announcement Thursday comes after the struggling company completed a review of the options for its business.
It says a Madewell IPO, if pursued, could be completed as early as the second half of this year.
The news comes as some fashion companies are trying to capitalize on a burgeoning IPO market. Denim giant Levi Strauss & Co. returned to the public market in March as it stages a comeback even as it faces increasing competition and a changing retail landscape.
Some fashion companies are also looking to split up their businesses. Gap Inc. said in late February that it plans to split into two independent publicly traded companies — low-priced juggernaut Old Navy and a yet-to-be named company, which will consist of the iconic Gap brand, Banana Republic and the lesser known Athleta, Intermix and Hill City. Last year, VF Corp. said it will be splitting its denim business anchored by Lee and Wrangler jeans into an independently traded company.
J. Crew recently began to add a wider variety of styles as a way to turn around its business. Meanwhile, Madewell has done well with its classic, quality clothing. In its latest fiscal year ended Feb. 2, J. Crew sales fell 4% while Madewell's sales soared 26%.
Bezos dares rivals to boost wages
SEATTLE — Amazon challenged its retail rivals to raise their wages and improve benefits, saying the competition will help everyone.
CEO and founder Jeff Bezos said in a letter to shareholders Thursday that as Amazon grows, so does the size of its "failed experiments."
He said Amazon is willing to continue to take risks and learn from its failures, while simultaneously supporting successful areas of its business like its third-party sellers and retail locations.
Bezos named the Fire phone as a failure, but Echo and Alexa as successes.
He also touted third-party sales of $160 billion and Amazon Go stores, saying Amazon is "excited about the future."