Stocks climb…Fed expects to slow aid for economy this year
NEW YORK (AP) – Stocks are climbing in morning trading on Wall Street. Stock indexes remain close to their record highs, after the S&P 500 and Nasdaq clinched their latest on Wednesday. Energy producers were making some of the market’s strongest gains in the early going. Occidental Petroleum and Marathon Oil rose along with oil prices, as benchmark U.S. crude gained 2.1%. Retailer Gap rose 2.8% after it reported stronger sales and profit for the latest quarter than Wall Street expected.
WASHINGTON (AP) – Federal Reserve Chair Jerome Powell says the Fed will start dialing back its ultra-low-interest rate policies this year as long as hiring continues to improve. Powell’s highly anticipated comments signal the beginning of the end of the Fed’s extraordinary response to the pandemic recession. Such a move could lead to higher borrowing costs for mortgages, credit cards and business loans. The Fed has been purchasing $120 billion a month in bonds to lower longer-term interest rates and support borrowing and spending. Powell’s comments today indicate the Fed will likely announce a reduction, or tapering, of those purchases sometime in the final three months of the year.
WASHINGTON (AP) – Growth in U.S. consumer spending slowed in July to a modest increase of 0.3% while inflation over the past 12 months rose to the fastest pace in three decades. The Commerce Department says July’s increase in spending was down sharply from a 1.1% rise in June, a sign that the surge in the delta variant of the coronavirus was having an impact on consumer spending. Today’s report showed that consumer prices over the past 12 months have risen 4.2%, the biggest 12-month gain since a 4.5% increase for the 12 months ending in January 1991. Incomes, which provide the fuel for future spending, rose a solid 1.1% in July reflecting in part the strong job gains seen that month.
DALLAS (AP) – Southwest Airlines is reducing the number of flights it will operate for the rest of this year. Southwest has struggled all summer with high numbers of delayed and canceled flights. CEO Gary Kelly says cutting the schedule should create a more reliable travel experience. Southwest says it will trim September flights by 27 a day, or less than 1%, and slash 162 flights a day in October, or 4.5% of the schedule. It says it will make similar cuts in November and December except around holidays.
UNDATED (AP) – Peloton says it has been subpoenaed by the Justice Department and the Department of Homeland Security for documents and other information related to its reporting of injuries associated with its products. The exercise equipment company also said in a regulatory filing today that the Securities and Exchange Commission is “investigating our public disclosures concerning these matters.” In May, Peloton recalled about 125,000 of its treadmills less than a month after denying they were dangerous despite the death of at least one child and injuries to 29 users. The U.S. Consumer Product Safety Commission warned in April that people with children and pets should immediately stop using the Tread+.