Stocks mostly slip after virus cases jump
NEW YORK — Stocks closed lower Thursday as investors turned cautious following a surge in cases of a new virus in China that threatens to crimp economic growth and hurt businesses worldwide.
The modest losses snapped a three-day streak of record highs for the S&P 500 and Nasdaq composite. The selling marked only the second day this month that the market has declined.
Investors largely set aside worries about the economic impact of the virus outbreak the past two weeks. Markets rallied this week partly due to reports that the number of new cases of the new virus in China had declined.
Hopes that the spread of the virus had peaked were dashed Thursday, when China reported a sharp rise in cases and deaths after the hardest-hit province of Hubei took a new approach to classifying and diagnosing the virus.
"We're in a data-dearth period in the sense that we're not really going to know fully the effects of the impact of that on Asian and Chinese growth, as well as global growth, for at least several weeks," said Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. "You're just going to see some back-and-forth movement (in the market) until that time."
Owner of 5 SC papers is bankrupt
NEW YORK — The publisher of the Miami Herald and dozens of other newspapers, including The State in South Carolina, has filed for bankruptcy protection as it struggles to pay off debt while revenue shrinks because more readers and advertisers are going online.
McClatchy said Thursday that its 30 papers will continue to operate normally as it reorganizes with the help of $50 million in financing from Encina Business Credit.
The company hopes to emerge from the process in a few months as a private company, with majority ownership by a hedge fund that's currently McClatchy's largest shareholder and debtholder, Chatham Asset Management. It's also looking to unload its pension obligations to a federal corporation that guarantees them.
McClatchy didn't announce any layoffs, saying that while "we are always looking at opportunities to improve operational efficiencies," the bankruptcy process is "not geared around cost take-outs." In a statement, Chatham said it was "committed to preserving independent journalism and newsroom jobs."
The State is based in Columbia. McClatchy's other South Carolina papers are the Beaufort Gazette in Beaufort, the Sun News in Myrtle Beach, the Island Packet in Bluffton and the Herald in Rock Hill.
US files new charges against China's Huawei
WASHINGTON — The Justice Department has added new criminal charges against Chinese tech giant Huawei and two of its U.S. subsidiaries.
The U.S. is accusing the company in a plot to steal trade secrets. The company is also accused of installing surveillance equipment that enabled Iran to spy on protesters during 2009 anti-government demonstrations in Iran, and of doing business in North Korea despite U.S. sanctions there.
The case comes as the Trump administration is raising national security concerns about Huawei, the world's largest telecommunications equipment manufacturer, and is lobbying Western allies against including the company in wireless, high-speed networks.
In win for Amazon, DoD deal halted
NEW YORK — A federal court has ordered the Pentagon to temporarily halt work with Microsoft on a $10 billion military cloud contract that Amazon was initially favored to win.
Amazon sued last November, alleging that President Donald Trump's bias against the company hurt its chances to win the project. In July, before the contract was awarded, Trump publicly claimed that other companies told him the contract wasn’t competitively bid and said the administration would take a long look at it.
Amazon has asked to depose Trump, the former and current secretaries of defense and other officials as part of its case.
Weight-loss drug pulled over cancer risk
NEW YORK — The weight loss drug Belviq is being pulled from the market because of a slight increased risk of cancer.
The drug's maker, Japan's Eisai Inc., said Thursday that it has agreed to voluntarily withdraw Belviq at the request of the U.S. Food and Drug Administration. The company said in a statement that it disagrees with the FDA's interpretation of new data on the drug's safety and still believes the drug's benefit outweighs any cancer risk.
The FDA also is warning patients to stop taking Belviq immediately and contact their doctor for advice on alternatives. The agency also is telling doctors to stop prescribing the drug.
Tesla to raise money, discloses probe
DETROIT — Tesla said that is selling $2 billion worth of additional stock, that its U.S. revenue fell last year and that securities regulators are scrutinizing its finances.
All of the developments Thursday were disclosed in filings with U.S. Securities and Exchange Commission, which in December subpoenaed financial data and contracts, including the company's financing arrangements.
The company's shares jumped despite the disclosures and the additional 2.65 million shares that could dilute the value of the 180 million shares now on the market.
The surprise sale taps into Tesla's rocketing stock price. It comes just two weeks after CEO Elon Musk said the company didn't need to raise any more money.
Tesla said Musk will buy $10 million worth of the stock while billionaire board member and Oracle co-founder Larry Ellison will buy shares worth $1 million.
The electric car and solar panel maker will use the proceeds to strengthen its balance sheet and for general purposes.
Southwest pushes return of Boeing Max
DALLAS — Southwest Airlines said Thursday it has removed the grounded Boeing 737 Max from its schedule for another two months during the peak summer travel season and will drop about 9 percent of its planned flights as a result. The carrier said it took the plane out of the schedule through Aug. 10.
It was the latest move by airlines to acknowledge that the plane won't be ready to fly as soon as they — or Boeing — had expected. Southwest had previously removed the Max from its schedule through June 6.
Southwest was flying 34 Maxes and expected to receive more when the planes were grounded worldwide last March after crashes in Indonesia and Ethiopia killed 346 people. Without the planes, Southwest said it will remove about 371 weekday flights from its schedule of more than 4,000 flights per day.
Consumer prices in US edge up in Jan.
WASHINGTON — U.S. consumer prices rose modestly last month, weighed down by falling gasoline prices.
The Labor Department said Thursday that its consumer price index edged up 0.1 percent in January after rising 0.2 percent in December. Over the past year, consumer inflation is up 2.5 percent, the biggest gain since October 2018.
Excluding volatile food and energy prices, so-called core consumer inflation rose 0.2 percent in January and 2.3 percent over the past year. Gasoline prices dropped 1.6 percent in January after surging 3.1 percent in December abd are up 12.8 percent over the last 12 months.
Food prices posted an annual increase of 1.8 percent on a 3.1 percent jump in restaurant prices. New car prices were up 0.1 percent over the past year as used car prices dropped 2 pecent. Medical care prices rose 5.1 percent from January 2019.
Consumer inflation is running close to the Federal Reserve's 2 percent annual target.
China auto sales plunge, deepen slump
BEIJING — China's auto sales plunged in January, deepening a painful downturn in the industry's biggest global market and adding to economic pressures as the country fights a virus outbreak.
Sales of SUVs, sedans and minivans fell 20.2 percent from a year earlier to 1.6 million, an industry group, the China Association of Automobile Manufacturers, reported Thursday.
"Enterprises are under huge pressure," it said in a statement.
The industry was hurt by Beijing's decision to extend January's Lunar New Year holiday in order to keep families at home and reduce chances that infection might spread. That kept factories and dealerships closed.
Demand already was weak due to consumer jitters about a tariff war with Washington, slower economic growth and possible job losses. Sales fell 9.6% last year, their second annual decline.
CEO of casino giant says he'll step down
LAS VEGAS — Jim Murren, the head of casino giant MGM Resorts International, says he'll step down as chairman and chief executive as soon as the company finds a successor.
Murren has led the company since 2008. A corporate statement Wednesday said he intends to leave before his contract expires next year, but gave no reason.
Publicly traded MGM Resorts has some 80,000 employees at 29 casinos and hotels. The company is the largest employer in Nevada, with several Las Vegas Strip properties.
Mortgages flat to slightly higher for week
WASHINGTON — U.S. long-term mortgage rates were flat to slightly higher this week after three straight weeks of declines, as the historically low levels continue as an incentive for potential homebuyers.
Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year fixed-rate mortgage edged up to 3.47% from 3.45 percent last week. The key rate stood at 4.37 percent a year ago.
The average rate on a 15-year mortgage was unchanged at 2.97 percent.
Recent signs of strength in the U.S. economy have helped boost home sales, though a record-low inventory of houses on the market has caused prices to surge as affordability has worsened.