Stocks dip as Wall St. rally pauses
NEW YORK — Banks and technology companies led a broad slide for stocks on Tuesday, snapping the market's four-day winning streak.
The S&P 500 lost 0.6 percent, giving back some of its gains from a day earlier. The pullback came as many forces are pushing and pulling on markets simultaneously. Coronavirus counts are rising at a worrying rate in many countries around the world, a trend that's increasing the urgency behind efforts to develop treatments.
On Tuesday, independent monitors paused enrollment in a study testing the COVID-19 antiviral drug remdesivir plus an experimental antibody therapy being developed by Eli Lilly. The company said the study was paused "out of an abundance of caution." The news followed a disclosure late Monday by Johnson & Johnson, which said it had to temporarily pause a late-stage study of a potential COVID-19 vaccine "due to an unexplained illness in a study participant."
Meanwhile, uncertainty about the prospects for more stimulus for the economy from Washington continues to hang over markets.
"Absent of getting any kind of fiscal stimulus, we've already seeing a leveling off in economic growth and some weakening under the surface, " Liz Ann Sonders, chief investment strategist at Charles Schwab. "There's concern that without that additional fiscal stimulus the economy could run into a little bit of trouble here."
Apple's new iPhones are wired for 5G
SAN FRANCISCO — Apple unveiled four new iPhones equipped with technology for use with faster new 5G wireless networks.
There's the iPhone 12, with a 6.1-inch display, the same as the iPhone 11 but lighter and thinner, starts at almost $800 and the iPhone 12 Mini with a 5.4-inch display at almost $700. A higher-end iPhone 12 Pro with more powerful cameras will begin at roughly $1,000; the 12 Pro Max, with a 6.7-inch display, will set buyers back at least $1,100. Apple said the phones should be more durable.
In a move that may annoy some consumers, Apple will no longer include charging adapters with new phones. It says that will mean smaller, lighter boxes that are more environmentally friendly to ship. Apple, however, separately sells power adapters that cost about $20 and $50, depending on how fast they charge phones.
Apple has one of the most loyal and affluent customer bases in the world, which has many analysts betting the next wave of phones will sell well. The iPhone remains the foundation of Apple's business.
The iPhone models unveiled Tuesday will launch at different times. The iPhone 12 and 12 Pro will be available starting Oct. 23; the Mini and the Pro Max will follow on Nov. 13.
Virus pushes Delta to $5.4B loss
DALLAS — The summer travel season was even worse than expected for Delta Air Lines, which lost nearly $5.4 billion in the third quarter as people hunkered down at home during the pandemic.
Most of the $5.38 billion loss stemmed from the cost of paying workers to quit and writing down the value of assets including planes destined for resale or the scrap yard. The rest was linked to a 76 percent plunge in revenue.
Still, CEO Ed Bastian offered a cautiously optimistic outlook, predicting that ever-increasing numbers of travelers will return the rest of this year and beyond.
"It's slow, but it's steady — week by week, they are coming back," Bastian said.
Atlanta-based Delta is the largest carrier serving Charleston International Airport based on passenger volume.
The number of people screened at U.S. airports is down more than 65 percent this month, compared with last October, but that's better than the 68 percent decline in September and the 71 percent drop in August.
Most of those are low-fare leisure travelers. Delta depends heavily on business travel, which is still down 85 percent from a year ago, Bastian said. Even there, however, the CEO was upbeat, saying that 90% of Delta's corporate customers have put some employees back in the air — just not many of them. He said a widely available vaccine and more rapid COVID testing are needed before corporate travel recovers.
JPMorgan reserves less for loan losses
CHARLOTTE — JPMorgan Chase & Co. saw its profits improve marginally in the third quarter, a notable change after the nation's largest bank had to set aside billions in the last two quarters to cover losses from the coronavirus pandemic.
The New York-based financial institution said Tuesday that it earned a profit of $9.44 billion, or $2.92 a share, in the July to September period. That's up from a profit of $9.08 billion, or $2.68 per share, in the same period a year earlier. The results beat analysts' expectations for earnings of $2.23 a share, according to FactSet.
The biggest surprise in JPMorgan's results was the bank's decision not to set aside any significant funds to cover potentially bad loans. JPMorgan had $611 million in loan loss provisions this quarter, a fraction of the $10.47 billion the bank set aside in the second quarter.
Since the pandemic spread across the U.S. in March, banks like JPMorgan had been setting aside billions to cover loans that once were fine but suddenly were in question due to the economic shutdowns. Banking executives argued that they were aggressively trying to mark down loans in the early months of the pandemic, in an effort to not surprise investors and regulators with chronic losses over several quarters.
Along with fewer loan losses, JPMorgan also had a solid quarter in its investment bank. The division reported profits 52 percent higher than a year earlier, helped by a surge of revenue from its trading desks.
JPMorgan is the first of the major banks to report its results this week. Its earnings report coincided with the opening of its first Chase retail bank branch in the Charleston area on Tuesday,
Citi profit falls 34%, beats predictions
CHARLOTTE — Citigroup says profit fell 34 percent to $3.23 billion in the third quarter due to weakness in its consumer banking division, as the pandemic continues to make it tough for millions of Americans and businesses to pay their bills. Per-share earnings for the latest quarter were $1.40, topping expectations of $1.01.
Citigroup posted revenue of $20.12 billion in the period. Its revenue net of interest expense was $17.3 billion, slightly better than Wall Street forecasts although down 7 percent from a year ago.
The bank set aside less money for potential bad loans in the latest quarter compared to earlier in the year, a sign that some of the economic strain from the coronavirus pandemic could be easing. Citigroup's provision for credit losses was $2.26 billion in the third quarter compared to $7.9 billion in the second quarter.
Used autos nudge consumer prices higher
SILVER SPRING, Md. — U.S. consumer prices rose slightly in September, led again by sharp increases in the index for used vehicles.
The consumer price index rose 0.2 percent last month, after gaining 0.4 percent in August, the Labor Department reported Tuesday.
Prices for used cars and trucks rose 6.7 percent in September after a 5.4 percent gain in August and are now up 10.3 percent in the past 12 months. The September increase is the largest monthly increase since February 1969.
Overall inflation for the last 12 months is up 1.4 percent while core inflation, which excludes energy and food, is up 1.7 percent.
UPS to add almost 600 NC jobs
GREENSBORO — UPS Inc. said Tuesday it will add more than 590 jobs in central North Carolina by expanding its Greensboro hub and building nearby a new center from which to distribute packages by vehicle to customers.
The package car center in Graham will generate about 450 jobs, while another approximately 140 positions will be created at the hub, according to Gov. Roy Cooper's office, which along with UPS announced the $316 million investment projects happening over four years.
Atlanta-based UPS already employs close to 2,500 workers in the state. Cooper's office said the upcoming jobs will pay average annual salaries of over $65,000.
"The new and expanded facilities will increase the speed and flexibility for connecting businesses and customers throughout the state, across the country and around the globe," Derrick Johnson, president of UPS's South Atlantic District, said in the release.
The announcement came shortly after an economic investment panel awarded UPS a financial incentives package that could provide the company $10.2 million in payments over 10 years if it meets investment and job creation thresholds. Memphis, Tenn., was also in the mix to land the project, according to a Department of Commerce official.
China's vehicle sales pick up in Sept.
BEIJING — China's vehicle sales including trucks and buses accelerated in September as the industry's biggest global market recovered from the coronavirus pandemic, an industry group reported Tuesday.
Sales rose 17.4 percent over a year earlier to 2.6 million vehicles, up from August's 11.6 percent growth, according to the China Association of Automobile Manufacturers.
It said SUV sales set a new monthly record and purchases of other passenger vehicles also rose but gave no details.
In the first nine months of the year, sales declined 6.9 percent from a year earlier to 17.1 million, CAAM said. That was an improvement over the 9.7 percent contraction for the first eight months.
Auto sales already were suffering before China closed factories and dealerships in February to fight the coronavirus. Consumers are uneasy about slowing economic growth and a trade war with Washington.
China is a major overseas sales market for vehicles made at BMW's South Carolina plant in Spartanburg County.
IMF sees 4.4% drop in global growth
WASHINGTON — The International Monetary Fund foresees a steep fall in international growth this year as the global economy struggles to recover from the pandemic-induced recession, its worst collapse in nearly a century.
The IMF estimated Tuesday that the global economy will shrink 4.4 percent for 2020. That would be the worst annual plunge since the Great Depression of the 1930s. By comparison, the international economy contracted by a far smaller 0.1 percent after the devastating 2008 financial crisis.
The fund's forecast for 2020 in its latest World Economic Outlook does represent an upgrade of 0.8 percentage point from its previous forecast in June. The IMF attributed the slightly less dire forecast to faster-than-expected rebounds in some countries, notably China, and to government rescue aid that was enacted by the U.S. and other major industrial countries.
For next year, the IMF envisions 3.1 percent growth in the United States, 1.4 percentage points less than in its June outlook and in line with the view of private forecasters. Last year, the U.S. economy grew 2.2 percent.
Ikea to buy back used furniture
STOCKHOLM — Flat-pack furnishings retailer Ikea said Tuesday that will offer to buy back thousands of pieces of used Ikea furniture in 27 countries, for resale, recycling or donation to community projects.
The Swedish giant said Tuesday that its Black Friday event will be "an opportunity to meet customers' needs in ways that contribute to a circular economy." It will run from Nov. 24 to Dec. 3.
"A circular economy can only be achieved through investment and collaboration with customers, other businesses, local communities and governments, so we can eradicate waste and create a cycle of repair, reuse, refurbishment and recycling", said Pia Heidenmark Cook, the group's chief sustainability officer.
Anyone selling used Ikea furniture will get a voucher that could be worth as much as 50 percent of the original price, to buy new items.
The company did not say in what condition the used furniture should be or whether it should be dismantled. The group said it was currently looking into how to best prolong the life of products for reuse, refurbishment, remanufacturing, and recycling.
It now has stores in 40 countries and 131,000 employees worldwide.