Stocks rebound and end the worst week since February.
NEW YORK – Wall Street rebounded to open the last quarter of the year, led by the companies that would benefit most from a healthier economy, but that wasn’t enough to keep the stock market from its worst week since ‘winter.
The S&P 500 rose 1.1% after another choppy trading day. It fluctuated between a loss of 0.4% and a gain of 1.6% on October 1.
The Dow Jones Industrial Average climbed 1.4% and the Nasdaq composite rose 0.8%.
Merck helped pace the market and jumped 8.4% after saying its experimental pill to treat COVID-19 halved hospitalizations and deaths. The prospects of an additional tool to tame the pandemic have helped increase the shares of airlines, hotels and businesses affected by restrictions on travel and other activities.
United Airlines climbed 7.9%, casino owner Caesars Entertainment climbed 6.4% and Live Nation Entertainment jumped 8.3%.
Power producers, finance companies and other businesses whose profits are often closely tied to the strength of the economy have also helped lead the way.
Widespread market gains were not enough to make up for the dismal final days. The S&P 500 fell again to a weekly loss of 2.2%, its worst since February. A rapid rise in interest rates earlier this week rocked the market and forced a revaluation over whether stocks had gotten too expensive, especially the more popular ones.
Consumer spending increases for August.
WASHINGTON – US consumer spending accelerated in August due to an increase in COVID-19 cases, even as rising demand and booming supply chains kept inflation low raised.
Consumer spending rose 0.8% in August, compared with a decline of 0.1% in July. Income rose a smaller 0.2%, the US Department of Commerce reported on Oct. 1. This suggests that consumers have tapped into their savings to fuel more spending. Americans bought more furniture, clothing, and groceries, while the Delta variant forced them to forgo traveling and dining out.
The report showed that inflation remained high: consumer prices rose 0.4% in August compared to July, the same increase as the month before. Prices rose 4.3% last year, up slightly from the previous month and the highest in more than three decades. Excluding the volatile food and energy categories, core inflation rose 0.3 percent in August and 3.6 percent from a year earlier, the same figures as the last month. Unchanged readings are a sign that inflation may stabilize.
Overall, the data indicated that despite a drop in consumer confidence, Americans are still spending enough to drive the economy forward. Most economists expect growth to slow in the July-September quarter, but expect it to still hit a healthy 3.5% annual rate, down from 6.7% in the April-June quarter.
WH urges airlines to vaccinate workers
WASHINGTON – Two other airlines – Alaska and JetBlue – will require employees to be vaccinated against COVID-19. It comes as the Biden administration ramps up pressure on airlines to adopt vaccination mandates.
A key White House adviser has discussed the matter with the CEOs of American, Delta and Southwest, according to people familiar with the situation. United Airlines is already requiring employees to be vaccinated, and United says it could lay off more than 300 employees who have refused to be vaccinated. Delta says it will need a vaccination or weekly testing. American and Southwest have not said how they will comply with President Joe Biden’s vaccination mandate.
Plant growth up despite supply issues
WASHINGTON – US manufacturing growth accelerated last month to its highest level since May despite disruptions in the global supply chain.
The Institute for Supply Management, a professional group of purchasing managers, said on Friday its manufacturing activity index reached 61.1% in September, 1.2 percentage points above August’s level of 59.9%.
It was the best performance for manufacturing since a reading of 61.2 in May. Any reading above 50 indicates growth in the industry. September marked the 16th consecutive month of manufacturing growth following a contraction in April 2020 when the coronavirus triggered a nationwide shutdown.
In recent months, the biggest factor for manufacturers has been problems on the supply side, as growing cases of the delta variant reduce global supply, such as the slowdown in production of computer chips in Asia, which have hit automakers and others hard.
Daimler to separate trucks from luxury cars
FRANKFURT, Germany – The shareholders of Daimler AG, the luxury car maker Mercedes-Benz, approved on October 1 the split of the truck division as a separate company.
The move aims to give the division, including US-based Freightliner, the freedom to react quickly to changing markets and to focus on new technologies that are transforming the automotive industry.
Voting at an online shareholders’ meeting also means that Stuttgart-based Daimler will rename itself Mercedes-Benz Group AG as of February 1.
Daimler CEO Ola Kallenius said that “by unleashing the full potential of both companies, we are establishing two undisputed innovation leaders who will set the tone in transforming their industries.”
One of the reasons for this fallout is that luxury cars and trucks are pursuing different technological approaches to develop local zero-emission vehicles, with Mercedes-Benz focusing on battery-powered cars while the truck industry is developing high-powered vehicles. hydrogen for long distance transport. This move aims to enable different companies to make faster and more independent decisions in a rapidly changing environment and to serve distinct customer bases.
The company claims that luxury cars and big trucks are fundamentally different businesses. The Mercedes-Benz automotive division sells a luxury product to affluent consumers, while the truck division sells expensive products to companies focused on return on investment. The split of the two companies will, Daimler hopes, reduce what it calls a conglomerate rebate, meaning the two companies would be worth more separately than they are together.