Business Highlights
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US retail sales plunged a record 16% in April as virus hit
BALTIMORE (AP) - U.S. retail sales tumbled by a record 16.4% from March to April as business shutdowns caused by the coronavirus kept shoppers away, threatened stores across the country and weighed down a sinking economy. The Commerce Department´s report on retail purchases showed a sector that has collapsed so quickly that sales over the past 12 months are down a crippling 21.6%. The sharpest drops from March to April were at clothiers, electronics stores, furniture stores and restaurants. A long-standing migration of consumers toward online purchases is accelerating, with that segment posting a 8.4% monthly gain. Measured year over year, online sales surged 21.6%.
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Economy in crisis: more virus aid or wait and see?
WASHINGTON (AP) - The U.S. economy appears to be at an inflection point - with many Republicans seeing reasons to believe the worst is over while Democrats call for more aid to stave off a possible depression. This debate stems from the unparalleled speed at which the U.S. economy collapsed as more than 36 million Americans have lost their jobs in the past two months. The political and policy gridlock baffles many economists who see the need for action on multiple fronts.
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Industrial production plunges unprecedented 11.2% in April
WASHINGTON (AP) - American industry suffered the most severe plunge on record last month with factories, mines and utilities battered by the coronavirus pandemic. The Federal Reserve said Friday that its industrial production index tumbled a record 11.2% in April. Manufacturing output also posted a record drop - 13.7% - as production of cars, trucks and auto parts plummeted more than 70%. Production of aerospace and other transportation products, metals and furniture fell around 20%. Output dropped 6.1% at mines and 0.9% at utilities. The implosion of the U.S. industrial sector was not unexpected, but the scale of the decline shocks the senses. Jennifer Lee, a senior economist at BMO Capital Markets, said "one can´t help but grimace."
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Fed sees Wall Street stress if virus takes `unexpected´ turn
WASHINGTON (AP) - The Federal Reserve says that Wall Street remains vulnerable to another shock if the global pandemic takes an "unexpected course" putting renewed strains on the economy and the country´s financial system. The central bank said the financial system came under severe pressure in March as the pandemic shut down much of the economy and sent the markets plummeting. The Fed said its quick action helped alleviate many of the stresses but it cautioned that prices for stocks, bonds and other assets could fall further, depending on the course of the virus.
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China uses trade as weapon to silence virus criticism
WELLINGTON, New Zealand (AP) - Trying to silence criticism over the coronavirus pandemic, China is deploying a well-used weapon - trade sanctions. Beijing has blocked some imports of Australian beef after Prime Minister Scott Morrison´s government, endorsed by Washington, called for a robust inquiry into the origins of the outbreak and rebuffed Chinese demands to back off. The move is the first time Beijing has used access to its huge markets as leverage in its campaign to deflect blame for the outbreak. But it has used the tactic regularly against governments from Norway to Canada in political disputes over the past decade.
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Tesla picks Austin, Tulsa as finalists for new US factory
DETROIT (AP) - A person briefed on the matter says Tesla has picked Austin, Texas, and Tulsa, Oklahoma, as finalists for its new U.S. assembly plant. The person says company officials visited Tulsa in the past week and were shown two sites. It wasn´t clear if there were any other finalists in the mix. The person didn´t want to be identified because the site selection process is secret. The electric car maker has said it wants the factory to be in the center of the country. The stakes are high. Tesla company has said the plant will be larger than its California factory that employs 10,000 workers.
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US adds new sanction on Chinese tech giant Huawei
BOSTON (AP) - The U.S. government is imposing new restrictions on Chinese tech giant Huawei by limiting its ability to use American technology to produce semiconductors abroad. The Commerce Department said Friday the move aims to prevent Huawei from making a run around existing U.S. sanctions. The U.S. government blacklisted the Chinese tech company a year ago, deeming it a national security risk. But numerous loopholes exist. China reacted angrily.
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NEW YORK (AP) - Stocks managed to close modestly higher on Wall Street Friday after a day of wobbling between gains and losses. The S&P 500 rose 0.4%. The index still wound up with its biggest weekly drop since late March. The market´s enthusiasm was checked by yet more grim data showing how badly the coronavirus pandemic is crippling the economy. Retail sales sank a record 16.4% in April and industrial production plunged a record 11.2%. At the same time, investors are cautiously optimistic that the fallout from the outbreak will begin easing as more U.S. states reopen their economies.
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The S&P 500 rose 11.20 points, 0.4%, to 2,863.70. The Dow Jones Industrial Average gained 60.08 points, or 0.3%, to 23,685.42. The Nasdaq composite added 70.84 points, or 0.8%, to 9,014.56. The Russell 2000 index climbed 19.44 points, or 1.6%, to 1,256.99.
