Stocks turn lower…Consumer prices down for third month…Mall deal is off
NEW YORK (AP) – Stocks are lower on Wall Street as traders turn cautious ahead of a policy announcement on interest rates later Wednesday from the Federal Reserve. The S&P 500 was down in the early going. The index has staged a huge comeback since its late March low and is now within just 5% of the all-time high it reached in February, before the coronavirus lockdowns started happening. Global markets were mixed after the Organization for Economic Cooperation and Development said the coronavirus crisis has triggered the worst global recession in nearly a century. Bond yields fell.
WASHINGTON (AP) – U.S. consumer prices dropped in May for the third straight month as the coronavirus pandemic pushed the American economy into a recession. The Labor Department said Wednesday that its consumer price index fell 0.1% last month after tumbling 0.8% in April and 0.4% in March. Excluding food and energy prices, which bounce around from month to month, so-called core inflation fell 0.1%, falling for the third consecutive month for the first time ever. The pandemic and the quarantines meant to contain it pushed the U.S. economy into recession. Weaker demand from customers pushes prices down.
NEW YORK (AP) – The nation’s biggest mall owner is backing out of a $3.6 billion deal to buy a major rival as the coronavirus pandemic shakes the retail economy. It is the second major retail deal signed just before the pandemic began to spread in the U.S. that has crumbled. Last month, a deal to sell Victoria’s Secret to a private equity group fell apart. Simon Property Group said it would buy Taubman Centers in early February, just weeks before the CDC said a California patient was being treated for coronavirus, the first known case in the U.S.
UNDATED (AP) – Ford expects to have its U.S. factories humming at pre-coronavirus levels by July 6. Chief Operating Officer Jim Farley told a Deutsche Bank autos conference that the company hit 96% of its production targets in the first three weeks after it reopened factories on May 18. Many plants reopened working two shifts and have since added production with workers on overtime. He said the company plans to go to three shifts per day at some plants. Most of the U.S. auto industry reopened last month. Ford initially had trouble restarting in Chicago and Dearborn, Michigan due to employees testing positive for the virus or due to parts shortages.
UNDATED (AP) – Starbucks took a virus-related revenue hit potentially exceeding $3 billion in its third quarter. The brewer said in a regulatory filing Wednesday that the virus outbreak also slashed its operating income between $2 billion and $2.2. billion as the virus raged. Starbucks was forced to close its stores to customers, but continued to operate pick-up and other services in most locations.