Wall St. rebounds in erratic session
NEW YORK - Wall Street rebounded on Tuesday, and the S&P 500 more than made up all its losses from the day before, after stocks pinballed through another day of erratic trading.
The S&P 500 climbed 1.3 percent, led by energy producers and other companies whose profits would benefit greatly from a strengthening economy. It was a sharp turnaround from the morning, when the index was down 0.9 percent, and from Monday's last-hour slide after California shut bars and reinstated other restrictions amid a jump in coronavirus counts.
After the market closed, shares of Moderna jumped in after-hours trading after a COVID-19 vaccine it's developing with the National Institutes of Health revved up people's immune systems just the way scientists had hoped. The experimental vaccine will start its most important step around July 27: a 30,000-person study to prove if the shots really are strong enough to protect against the coronavirus.
Tuesday's unsettled market moves came as earnings reporting season kicked off. Three of the nation's biggest banks painted a mixed picture of how badly the pandemic is ripping through their businesses.
"The earnings season is off to a very guarded start," said J.J. Kinahan, chief market strategist at TD Ameritrade.
He pointed to cautious forecasts from companies that see the economy possibly taking a step back because of worsening COVID-19 trends, or at least taking longer to recover than expected.
"The fact that they are prepared for bad scenarios is helping to give the market a little confidence," he said.
Gas pushes June consumer prices up
WASHINGTON - U.S. consumer prices increased 0.6 percent in June, after three months of declines, with a big jump in gasoline prices accounting for over half of the gain.
The Labor Department reported Tuesday that the increase in its consumer price index followed declines of 0.4 percent in March, 0.8 percent in April and 0.1 percent in May as the hit to demand caused by the widespread shutdowns of the economy kept a lid on prices.
The June report showed that energy prices jumped 5.1 percent with gasoline costs surging 12.3 percent. However, even with that gain gasoline pump prices are 23.4 percent below where they were a year ago.
Core inflation, which excludes food and energy, rose a more modest 0.2 percent in June the first monthly increase since February.
Fed leader warns economy may slow
WASHINGTON - Federal Reserve Governor Lael Brainard warned Tuesday that the U.S. economy appears to be slowing after an initial burst of recovery and called for the Fed to take aggressive steps to spur growth.
Brainard said that hiring and consumer spending bounced back more strongly than expected in May and June. But ongoing spikes in viral infections across most of the United States could lead reverse much of that progress. Brainard is an influential "dove" on the Fed's board, which means she typically prioritizes keeping interest rates low to support jobs and worries less about inflation.
"Rolling flare-ups or a broad second wave of the virus may lead to widespread social distancing-whether mandatory or voluntary-which could weigh on the pace of the recovery and could even presage a second dip in activity," Brainard said in prepared remarks. "Some high-frequency indicators tracked by Federal Reserve Board staff ... suggest that the strong pace of improvement in May and the first half of June may not be sustained."
Brainard's warning comes as California's governor has reimposed business shutdowns in that state in response to a jump in new cases of the coronavirus. Several other states, including Florida and Texas, are also reversing their efforts to reopen their economies. Confirmed case counts are rising in at least 38 states.
UK backtracks on Huawei's 5G role
LONDON - Britain on Tuesday backtracked on plans to give Chinese telecommunications company Huawei a role in the U.K.'s new high-speed mobile phone network amid security concerns fueled by rising tensions between Beijing and Western powers.
Britain said it decided to prohibit Huawei from working on the so-called 5G system after U.S. sanctions made it impossible to ensure the security of equipment made by the Chinese company.
The U.S. had also threatened to sever an intelligence-sharing arrangement with Britain because of concerns that Huawei's involvement could allow the Chinese government to infiltrate U.K. networks.
Culture Secretary Oliver Dowden said the decision would delay the rollout of 5G technology and increase costs by up to $2.5 billion, but that it had to be done.
The move forces telecoms operators to stop buying 5G equipment from Huawei by the end of this year but gives them until 2027 to remove Huawei gear that has already been used in the network, which is currently under construction.
Nucor Ky. mill lands steel processor
FRANKFORT, Ky. - A steel processing company plans to open a facility in Kentucky that will level and cut steel for customers in the Ohio Valley region, officials said.
Chicago-based Feralloy Corp. will lease a 60,000-square-foot facility on Nucor Steel Gallatin's campus and employ 30 workers, according to Gov. Andy Beshear, who said he was thankful for the investment during an uncertain time.
Feralloy will receive steel coils directly from Nucor's mill, then cut and level them into sheets. Operations are scheduled to begin in October with one shift of 15 employees and expand soon after.
Zappos tweaks shoe sales formula
NEW YORK - Zappos is trying out new ways to sell shoes: allow shoppers to buy a single shoe at a time or purchase a pair in two different sizes.
The tests, which started Tuesday, are aimed at amputees, those with differing foot sizes and others who have been left out by the footwear industry, which has sold shoes in pairs and in the same size for decades.
Zappos said shoppers have been asking for the new options for years, but the requests grew stronger in 2017 when it launched its Zappos Adaptive site, where it sells clothing and shoes designed for people with disabilities.
The company, which is owned by online shopping giant Amazon.com Inc., said it's working with six brands on the test, including Converse, New Balance and Nike.
It'll be small at first: there are about 80 styles and colors available in adult and kids sizes. But Zappos hopes to expand into more styles in the future, said Dana Zumbo, the business development manager at Zappos Adaptive, where the shoes will be sold.
Single shoes will cost less that a pair. Prices range from $18.50 to $85, the company said.