World could face months of Chinese market aftershocks
BEIJING (AP) — The latest trigger was currency jitters, but Thursday’s plunge in Chinese stocks was just one in a series of aftershocks from last year’s boom and bust that could shake markets for months to come.
Investor anxiety over economic weakness and a possible glut of unwanted shares flooding the market have complicated Beijing’s efforts to withdraw emergency controls imposed after Chinese stock prices collapsed in June.
On Thursday, trading halted for the day after a stock index fell 7 per cent a half-hour into the trading day. It was this week’s second daylong suspension after a plunge in prices Monday tripped the same “circuit breakers”.
Eurozone set for better economic growth — China permitting
LONDON (AP) — It’s not ideal timing. Just as the eurozone economy finally appears to be picking up speed, its future is clouded by concerns over China and the world economy.
China’s turmoil is a threat the 19-country eurozone could do without. The health of its trading partners is crucial for the region. Without China, the eurozone would have suffered even more than it did during its debt crisis of the past six years.
The eurozone is in a better place than it has been for years. Growth is solid, unemployment is falling and concern that Greece might fall out of the euro has dropped off the radar.
Stocks slump the most in 3 months on new China worries
NEW YORK (AP) — Stocks and oil prices plunged again Thursday on spreading fears that China’s economy, a major engine of global growth, is sputtering.
It was the worst one-day drop since late September, and the main U.S. benchmark, the Standard & Poor’s 500 index, has now had its worst four-day opening of a year in history.
The malaise spread across continents, sending indexes sharply lower in the U.S. and Europe. The price of U.S. crude oil plunged to its lowest level since 2004 as traders worried that weakness in China would translate into lower global demand for energy.
A stronger JC Penney emerges from the holiday season
NEW YORK (AP) — Talk about a comeback.
J.C. Penney reported a 3.9 per cent increase in comparable-store sales during the holiday.
It was a reversal of fortunes this crucial selling season, with the usually resilient Macy’s reporting that sales in stores open at least a year slumped 5.2 per cent between November and December. Macy’s is now cutting up to 4,800 jobs, reorganizing operations and closing 40 stores. It also slashed its profit outlook.
Macy’s estimated that 80 per cent of its decline was weather related. J.C. Penney said warm weather did cut into clothing sales but there were other strong sellers that offset that weakness.
US applications for jobless aid dropped last week
WASHINGTON (AP) — Fewer people sought U.S. unemployment benefits last week, suggesting that the job market remains healthy and insulated from the turmoil abroad in Europe and China.
Applications for jobless aid fell 10,000 to a seasonally adjusted 277,000, the Labor Department said Thursday. The less volatile 4-week average dipped 1,250 to 275,750. Over the past 12 months, the number of people receiving benefits has fallen 8.3 per cent to 2.2 million.
U.S. employers appear to be secure, even as the Chinese stock market is collapsing, oil prices are plunging and Europe continues to slowly nurse its way back to financial health
Average US rate on 30-year mortgage slips to 3.97 per cent
WASHINGTON (AP) — Average long-term U.S. mortgage rates were mixed this week, with the key 30-year rate slipping back under the 4 per cent mark.
Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage declined to 3.97 per cent from 4.01 per cent a week earlier. That rate has risen from its 3.73 per cent average a year ago. Still, borrowing costs are well below the historic average of 6 per cent for a 30-year loan.
The average rate on 15-year fixed-rate mortgages this week rose to 3.26 per cent from 3.24 per cent.
Workers are saving more for retirement, led by Millennials
NEW YORK (AP) — Workers are saving more for retirement, and the youngest are boosting their savings rates faster than any other age group.
Millennials between the ages of 25 and 34 are saving a median of 7.5 per cent of their pay for retirement, including whatever match they get from their jobs, according to a survey by Fidelity Investments. That’s up from 5.8 per cent two years ago, when the last survey was conducted, and it is the largest jump among all age groups.
That’s still not enough, but at least the trend is getting better. Financial advisers suggest socking away 15 per cent of pay.
Walgreens beats 1Q profit forecasts, narrows 2016 forecast
Walgreens trumped Wall Street earnings expectation for its fiscal first quarter, and the nation’s largest drugstore chain started 2016 cautiously by narrowing its forecast for the new year.
The company said Thursday that it hiked the bottom end of a forecast by 5 cents per share. It now expects to earn between $4.30 and $4.55 per share for the year.
Walgreens earned $1.11 billion in the quarter, with adjusted earnings of $1.03 per share. Analysts anticipated earnings of 97 cents per share, according to Zacks Investment Research. Its revenue of $29.03 billion missed analyst expectations for $29.56 billion.
KB Home misses Street 4Q forecasts
NEW YORK (AP) — KB Home on Thursday reported a worse-than-expected fiscal fourth-quarter profit, blaming harsh weather in some parts of the country and labour shortages for weaker deliveries of homes. But a jump in revenue and selling prices suggested the housing market continues to recover.
The company earned $44 million, or 43 cents per share, which missed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 51 cents per share.
Revenue jumped 24 per cent to $985.8 million, missing expectations of $1.07 billion.
Hudson Bay’s online push, snaps up luxury deal site Gilt
NEW YORK (AP) — Hudson Bay has purchased the luxury deal site Gilt Group Holdings Inc. for $250 million as traditional retailers follow shoppers, and their money, online.
The Toronto retailer, which owns stores under its own brand as well as Lord & Taylor, Saks Fifth Avenue, and Saks Off 5th, will at the same time integrate the online company into some of its physical store locations. Gilt concept shops will open at Saks Off 5th, Saks Fifth Avenue’s off-price division. And Gilt shoppers will be able to return merchandise bought online at Gilt at Saks Off 5th.
Gilt has cultivated a loyal base of affluent millennials, a demographic shared with Saks Off 5th. It has more than 9 million members and about 50 per cent of its orders come from mobile devices.
Doctors say United CEO doing well after heart transplant
Doctors who transplanted a heart into United Airlines CEO Oscar Munoz say the heart is functioning well and they are optimistic about a full recovery.
Munoz, who has been on medical leave for nearly three months, underwent a transplant Wednesday in Chicago. On Thursday, the airline disclosed that Munoz had a device implanted to help his heart after his heart attack on Oct. 15. The company said that a transplant was considered better than relying on the device for a long time.
United says Munoz is expected to return to work late in the first quarter or early in the second quarter.
The Dow Jones industrial average sank 392.41 points, or 2.3 per cent, to 16,514.10. The S&P 500 index gave up 47.17 points, or 2.4 per cent, to 1,943.09. The Nasdaq composite index dropped 146.34 points, or 3 per cent, to 4,689.43.
U.S. crude oil fell 70 cents, or 2.1 per cent, to $33.27. Brent crude, the benchmark for international oils, lost 48 cents to $33.75 a barrel in London. In other energy trading, wholesale gasoline declined 1.6 cents to $1.146 a gallon and heating oil lost 1.5 cents to $1.066 a gallon. Natural gas rose 11.5 cents, or 5.1 per cent, to $2.382 per 1,000 cubic feet.