Tech rally leads Nasdaq to new high
NEW YORK — Technology companies soared Thursday as major U.S. stock indexes recovered the ground they lost a day earlier. The Nasdaq composite closed at another all-time high.
Big names like Apple and Microsoft and chipmakers including Intel all made big gains as investors remain optimistic about the technology sector even though much of the market has been shaken by escalating tensions between the U.S. and its trading partners, especially China.
Industrial companies also regained much of the ground they lost Wednesday, but energy companies and basic materials makers failed to rally. Defense contractors climbed after President Donald Trump advocated for more defense spending in the U.S. and Europe.
Software maker CA made the biggest gain in the technology sector soared after it accepted an offer from Broadcom worth $18.9 billion, or $44.50 per share. Its stock rocketed 18.7 percent to $44.15.
Inflation hits highest level in 6 years
WASHINGTON — Consumer prices rose in June from a year earlier at the fastest pace in more than six years, lifted by more expensive gas, car insurance, and higher rent.
The Labor Department said Thursday that the consumer price index ticked up just 0.1 percent in June. But inflation jumped 2.9 percent from a year earlier, the largest annual gain since February 2012. Core prices, which exclude the volatile food and energy categories, rose 0.2 percent in June and 2.3 percent from a year earlier.
Solid economic growth and supply bottlenecks have pushed inflation past the Federal Reserve's 2 percent target, after price gains had languished below that level for six years. That is a key reason that Fed officials expect to raise short-term rates twice more this year.
Price gains may intensify if President Donald Trump makes good on his threat Tuesday to slap tariffs on $200 billion of Chinese goods, including furniture, hats, and handbags. If implemented, those duties, combined with tariffs put in place last week, would mean about half of China's imports would be subject to extra duties, likely boosting costs for consumers.
Papa John's founder out after slur report
NEW YORK — Papa John's founder John Schnatter has resigned as chairman of the pizza chain's board after reportedly using a racial slur, though his image remains on the company's logo.
The company made the announcement late Wednesday, hours after Schnatter apologized for using a racial slur during a conference call in May. Schnatter, who has appeared in TV ads for the pizza chain, still owns about 30 percent of the company's shares.
Forbes reported that Schnatter used the N-word during a media training exercise. When asked how he would distance himself from racist groups, Schnatter reportedly complained that Colonel Sanders never faced a backlash for using the word. The incident prompted Papa John's marketing firm to break ties with the company, Forbes said.
Fed chair: Economy in 'good place'
WASHINGTON — Federal Reserve chairman Jerome Powell says the economy is in a "good place" at the moment with low unemployment and inflation rising toward the Fed's optimal range. But he says rising trade tensions and higher tariffs could end up being a drag on growth.
In an interview for American Public Media's "Marketplace" radio program, Powell gave an upbeat assessment of the economy, in remarks signaling that the central bank's current pace of gradual interest rate increases should continue. The Fed has raised rates twice this year and is projecting two more rate hikes this this year.
Powell, who was tapped by President Donald Trump to succeed Janet Yellen as Fed chairman, says he is not concerned about possible political pressure trying to influence the Fed's rate decisions.
Fast-food chains to end 'no-poaching'
SEATTLE — Seven national fast-food chains have agreed to end policies that block workers from changing branches — limiting their wages and job opportunities — under the threat of legal action from the state of Washington.
Washington Attorney General Bob Ferguson on Thursday announced binding agreements with the companies — McDonald's, Auntie Anne's, Arby's, Carl's Jr., Jimmy John's, Cinnabon and Buffalo Wild Wings. McDonald's had previously announced plans to end the practice.
The no-poach policies prevent franchises from hiring workers away from other franchises of the same chain. That's been considered convenient for owners, but has blocked experienced workers at one franchise from getting better-paying jobs at others, potentially keeping tens of thousands of employees around the country stuck in low-wage positions.
Watchdog blasts FAA oversight of airline
DALLAS — A government watchdog says a federal inspector overseeing American Airlines was too cozy with the carrier and did not respond to safety complaints raised by the pilots' union.
The inspector general of the Transportation Department says the Federal Aviation Administration inspector failed to respond to questions about unqualified pilots and whether planes were safe after maintenance work.
The watchdog says the FAA inspector had been assigned to American for 28 years and grew close to a key airline management employee.
A new FAA supervisor saw potential problems with the inspector's objectivity and recommended last year he be reassigned. But the FAA didn't consider it a priority and took four months to act, according to the report, which was made public Thursday. The inspector, who is not named in the report, later retired.
Build-a-Bear end too-popular deal
NEW YORK — Build-A-Bear Workshop's "Pay Your Age" promotion proved too popular.
The chain known for its customizable teddy bears and other stuffed toys couldn't handle the crowds Thursday and had to turn shoppers away. It wrote in a Facebook post it closed lines at its stores in Canada and the U.S. due to overwhelming crowds and safety concerns.
The offer, which let customers buy a bear and pay their current age with a cap at $29, was also available at its United Kingdom stores.
Customers took to social media to complain afterward. The company said it knew people were disappointed and it would reach out soon. Analyst Neil Saunders of GlobalData said many parents are upset and Build-a-Bear will likely have to make some special offer.
US mortgage rates edge up
WASHINGTON — Long-term U.S. mortgage rates edged higher this week, marking their first increase since early June.
Mortgage buyer Freddie Mac says the average rate on 30-year, fixed-rate mortgages ticked up to 4.53 percent from 4.52 percent a week earlier.
Despite the decline in recent weeks, long-term loan rates have been running at their highest levels in seven years. The average benchmark 30-year rate reached a high this year of 4.66 percent on May 24. The rate stood at 4.03 percent a year ago.
The average rate on 15-year, fixed-rate loans rose to 4.02 percent this week from 3.99 percent last week.
Strong 2Q at Delta, but fuel dings outlook
ATLANTA — Delta Air Lines topped most profit expectations for the second quarter, but slashed its outlook for the year, citing a $2 billion spike in fuel costs.
The Atlanta carrier on Thursday reported net income of $1.02 billion, or $1.47 per share. Adjusted per-share earnings were $1.77, which, according to a survey by Zacks Investment Research, is a nickel better than Wall Street expected.
That's still down from last year and again, the company cited soaring fuel costs.
Delta and other airlines have been trying different strategies to try to offset rising fuel costs: charging extra for checking a bag or changing a flight, putting their names on credit cards, and hauling cargo.
Delta's second-quarter revenue of $11.78 billion also beat projections, with double-digit growth in cargo revenue Delta Air Lines Inc. expects full-year earnings of $5.35 to $5.70 per share, down from earlier forecasts of $6.35 to $6.70.