Contrarian’s case: Why US could dip into recession
NEW YORK (AP) — Just as the U.S. economy is strengthening, other countries are threatening to drag it down.
Employers in the U.S. are creating jobs at the fastest pace since the late 1990s and the economy finally looks ready to expand at a healthy rate. But sluggish growth in France, Italy, Russia, Brazil and China suggests that the old truism, “When the U.S. sneezes, the rest of the world catches a cold,” may need to be flipped.
Maybe the rest of the world will sneeze this time, and the U.S. will get sick.
That’s the view of David A. Levy, who oversees the Levy Forecast newsletter. Nearly a decade ago, Levy warned that U.S. housing was a bubble set to burst. Now, he says the United States is likely to fall into a recession next year triggered by downturns in other countries, the first time in modern history.
Airlines scrap Israel flights over missile fear
In a sign of increased caution about flying near combat zones, U.S. and European airlines halted flights to Israel Tuesday after a rocket landed near Tel Aviv’s Ben Gurion Airport.
Delta Air Lines and United Airlines suspended service between the U.S. and Israel indefinitely. US Airways scrapped its one flight to Tel Aviv Tuesday. Germany’s Lufthansa and Air France also suspended flights. The actions come days after a Malaysia Airlines jet was shot down over eastern Ukraine with 298 people on board.
Following the action by the U.S. airlines, the Federal Aviation Administration prohibited U.S. airlines from flying to the Tel Aviv airport for 24 hours.
Apple’s fiscal 3Q earnings top analyst forecasts
SAN FRANCISCO (AP) — Apple’s growth prospects are looking brighter as anticipation builds for the upcoming release of the next iPhone, a model that is expected to cater to consumers yearning for a bigger screen.
The latest evidence of Apple’s mounting momentum emerged Tuesday with the release of the company’s fiscal third-quarter report.
Earnings topped analysts’ projections for the period as Apple Inc. sold 35.2 million iPhones. That was a 13 per cent increase from the same time last year, even though many people are believed to be holding off on new device purchases until the next version comes out this fall.
US consumer prices up 0.3 per cent in June
WASHINGTON (AP) — U.S. consumer prices rose in June at a slightly slower pace than in May with two-thirds of the June advance driven by the largest jump in gasoline prices in a year.
Prices rose 0.3 per cent in June following a 0.4 per cent rise in May, the Labor Department reported Tuesday. The May increase had been the biggest one-month gain in more than a year.
Energy prices were up 1.6 per cent, nearly double the May gain, reflecting a sharp 3.3 per cent rise in gasoline costs. But food costs edged up just 0.1 per cent, the smallest gain since January.
Core prices, which exclude volatile food and energy, were up just 0.1 per cent. Over the past 12 months, core prices are up 1.9 per cent, an indication of moderate inflation.
US home sales increase 2.6 per cent in June
WASHINGTON (AP) — Sales of previously owned homes rose for a third straight month in June, pushing activity to the highest level in eight months and providing evidence that housing is regaining lost momentum.
The National Association of Realtors said Tuesday that sales of existing homes increased 2.6 per cent to a seasonally adjusted annual rate of 5.04 million homes. It marked the first time that sales have been above the 5 million-mark since October.
Even with the three months of increases, however, sales were still 2.3 per cent below the sales rate in June of last year.
Sales peaked in July last year and then lost momentum as mortgage rates rose from extremely low levels. Sales were further hurt by an unusually severe winter.
Ukraine tensions see euro come off boil
LONDON (AP) — The euro fell Tuesday to its lowest level against the dollar this year amid concerns that the downing of Malaysia Airlines Flight 17 will prompt a bigger freeze in relations between the European Union and Russia.
The crash of the jetliner, which cost the lives of all 298 on board, has fueled concerns of a downward spiral in political and economic ties between the 28-country EU and Russia. EU foreign ministers at a meeting in Brussels agreed to extend the current list of sanctions on Russian individuals and said they may yet penalize economic ties.
Western powers have said there is evidence that the jet was hit with a missile fired from territory controlled by pro-Russia insurgents. Moscow has suggested the missile was fired by Ukrainian government forces.
Saudi stock market to allow foreign investment
RIYADH, Saudi Arabia (AP) — The Saudi government has approved a measure that will open the region’s largest stock market to direct foreign investment next year, news that sent the exchange surging Tuesday to its highest level in nearly seven years.
The Tadawul All Share Index closed up nearly 3 per cent.
The Cabinet’s decision Monday, reported by the official Saudi Press Agency, paves the way for foreign financial institutions to directly buy and sell stocks listed on Saudi Arabia’s $530 billion Tadawul All Share Index starting sometime in the first half of 2015.
Foreign investors outside the six-nation Gulf Cooperation Council currently can buy Saudi stocks through swaps and exchange-traded funds.
China meat scandal hits Starbucks, Burger King
BEIJING (AP) — A suspect meat scandal in China engulfed Starbucks and Burger King on Tuesday and spread to Japan where McDonald’s said the Chinese supplier accused of selling expired beef and chicken had provided 20 per cent of the meat for its chicken nuggets.
Chinese authorities expanded their investigation of the meat supplier, Shanghai company Husi Food Co. A day after Husi’s food processing plant in Shanghai was sealed by the China Food and Drug Administration, the agency said Tuesday that inspectors also will look at its facilities and meat sources in five provinces in central, eastern and southern China.
The scandal surrounding Husi Food, which is owned by OSI Group of Aurora, Illinois, has added to a string of safety scares in China over milk, medicines and other goods that have left the public wary of dairies, restaurants and other suppliers.
Dueling rulings: Courts split on health law clash
WASHINGTON (AP) — President Barack Obama’s health care law is snarled in another big legal battle, with two federal appeals courts issuing contradictory rulings on a key financing issue within hours of each other Tuesday.
But the split rulings don’t necessarily mean another trip to the Supreme Court for the Affordable Care Act.
And White House spokesman Josh Earnest immediately announced that millions of consumers will keep getting financial aid for their premiums — billions of dollars in all — as the administration appeals the one adverse decision.
In that first ruling, a divided three-judge panel in Washington called into question the subsidies that help millions of low- and middle-income people afford their premiums, saying financial aid can be provided only in states that have set up their own insurance markets, or exchanges.
By The Associated Press=
The Dow Jones Industrial average rose 61.81 points, or 0.4 per cent, to 17,113.54. The Standard & Poor’s 500 index added 9.90 points, or 0.5 per cent, to 1,983.53. The Nasdaq composite advanced 31.31 points, or 0.7 per cent, to 4,456.02.
U.S. benchmark crude for August delivery fell 17 cents to $104.42 a barrel on the New York Mercantile Exchange. Brent crude for September delivery, a benchmark for international oils, dropped 35 cents to $107.33 on the ICE Futures exchange in London. Wholesale gasoline fell 1 cent to $2.88 a gallon. Heating oil was flat at $2.85 a gallon. Natural gas dropped 1 cent to $3.77 per 1,000 cubic feet.