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U.S.-China competition to build drone swarms could fuel global arms race, analysts say | https://www.latimes.com/world-nation/story/2024-04-12/us-china-competition-to-field-military-drone-swarms-could-fuel-global-arms-race | 2024-04-12T09:45:25 | As their rivalry intensifies, U.S. and Chinese military planners are gearing up for a new kind of warfare in which squadrons of air and sea drones equipped with artificial intelligence work together like swarms of bees to overwhelm an enemy.
The planners envision a scenario in which hundreds, even thousands of the machines engage in coordinated battle. A single controller might oversee dozens of drones. Some would scout, others attack. Some would be able to pivot to new objectives in the middle of a mission based on prior programming rather than a direct order.
The world’s only AI superpowers are engaged in an arms race for swarming drones that is reminiscent of the Cold War, except drone technology will be far more difficult to contain than nuclear weapons. Because software drives the drones’ swarming abilities, it could be relatively easy and cheap for rogue nations and militants to acquire their own fleets of killer robots.
The Pentagon is pushing urgent development of inexpensive, expendable drones as a deterrent against China acting on its territorial claim on Taiwan. Washington says it has no choice but to keep pace with Beijing. Chinese officials say AI-enabled weapons are inevitable, so they, too, must have them.
The unchecked spread of swarm technology “could lead to more instability and conflict around the world,” said Margarita Konaev, an analyst with Georgetown University’s Center for Security and Emerging Technology.
World & Nation
Growing concerns over war with China have Japan’s southwestern islands scrambling to bolster defenses.
Feb. 28, 2024
As the undisputed leaders in the field, Washington and Beijing are best equipped to set an example by putting limits on military uses of drone swarms. But their intense competition, China’s military aggression in the South China Sea and persistent tensions over Taiwan make the prospect of cooperation look dim.
The idea is not new. The United Nations has tried for more than a decade to advance drone nonproliferation efforts that could include limits such as forbidding the targeting of civilians or banning the use of swarms for ethnic cleansing.
Drones have been a priority for both powers for years, and each side has kept its advances secret, so it’s unclear which country might have an edge.
It’s not clear how many drones a single person would control. A spokesman for the Defense secretary declined to say, but a recently published Pentagon-backed study offers a clue: A single operator supervised a swarm of more than 100 cheap air and land drones in late 2021 in an urban warfare exercise at an Army training site at Ft, Campbell, Tenn.
Not to be outdone, China’s military claimed last year that dozens of aerial drones “self-healed” after jamming cut their communications. An official documentary said they regrouped, switched to self-guidance and completed a search-and-destroy mission unaided, detonating explosive-laden drones on a target.
World & Nation
Incoming Taiwanese President Lai Ching-te must grapple with an increasingly fraught relationship with China that has edged closer to armed conflict.
Jan. 13, 2024
A year ago, CIA Director William Burns said Chinese Communist Party leader Xi Jinping had instructed his military to “be ready by 2027” to invade Taiwan. But that doesn’t mean an invasion is likely.
Just before he died last year, former U.S. Secretary of State Henry Kissinger urged Beijing and Washington to work together to discourage AI arms proliferation. They have “a narrow window of opportunity,” he said.
Xi and President Biden made a verbal agreement in November to set up working groups on AI safety, but that effort has so far taken a backseat to the arms race for autonomous drones.
The competition is not apt to build trust or reduce the risk of conflict, said William Hartung, a senior research fellow at the Quincy Institute for Responsible Statecraft.
If the U.S. is “going full speed ahead, it’s most likely China will accelerate whatever it’s doing,” Hartung said.
World & Nation
Biden sought to smooth over tensions with China’s Xi, who said conflict with the U.S. has ‘unbearable consequences’ for both countries.
Nov. 15, 2023
There’s a risk China could offer swarm technology to U.S. foes or repressive countries, analysts say. Or it could be stolen. Other countries developing the tech, such as Russia, Israel, Iran and Turkey, could also spread the know-how.
U.S. national security advisor Jake Sullivan said in January that U.S.-China talks set to begin sometime this spring will address AI safety. Neither the Defense secretary’s office nor the National Security Council would comment on whether the military use of drone swarms might be on the agenda.
The Chinese Foreign Ministry did not respond to a request for comment.
Military analysts, drone makers and AI researchers don’t expect fully capable, combat-ready swarms to be fielded for five years or so, though big breakthroughs could happen sooner.
“The Chinese have an edge in hardware right now. I think we have an edge in software,” said Chief Executive Adam Bry of U.S. drone maker Skydio, which supplies the Army, the Drug Enforcement Agency and the State Department, among other agencies.
Chinese military analyst Song Zhongping said the U.S. has “stronger basic scientific and technological capabilities” but added that the American advantage is not “impossible to surpass.”
Paul Scharre, an AI expert at the Center for a New American Security think tank, believes the rivals are at rough parity.
“The bigger question for each country is about how do you use a drone swarm effectively?” he said.
That’s one reason attention is fixed on the war in Ukraine, where drones work as eyes in the sky to make undetected frontline maneuvers all but impossible. They also dispatch death from the sky and serve as sea-skimming ship killers.
Drones in Ukraine are often lost to jamming. Electronic interference is just one of multiple challenges for drone swarm development.
Researchers are also focused on the difficult logistics of marshaling hundreds of air and sea drones over vast expanses of the western Pacific for a potential war over Taiwan.
Julie Adams, an Oregon State University robotics professor, has collaborated with the U.S. military on drone-swarm research including the 2021 exercise at Ft. Campbell.
She said she was particularly impressed with a swarm commander in an exercise last year at Fort Moore, Ga., who single-handedly managed a 45-drone swarm over 2½ hours with just 20 minutes of training.
“It was a pleasant surprise,” she said.
Was he a video game player, she was asked.
Yes, she said. “And he had a VR headset at home.”
Bajak writes for the Associated Press. AP writer Zen Soo in Hong Kong contributed to this report.
April 2, 2024
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Todd Chrisley is ordered to pay Georgia investigator $755,000 in defamation lawsuit loss | https://www.latimes.com/entertainment-arts/tv/story/2024-04-09/todd-chrisley-amy-doherty-heinze-defamation-lawsuit-75500-damages | 2024-04-10T20:54:18 | Imprisoned reality TV star Todd Chrisley is facing even more legal and financial woes.
Last week, a federal jury found that the real estate tycoon, known for the USA Network series “Chrisley Knows Best,” defamed an investigator from the Georgia Department of Revenue. A Georgia judge decided Thursday that Chrisley, who is currently serving a years-long sentence in federal prison for bank fraud and tax evasion, must pay Amy Doherty-Heinze $755,000 in compensatory and punitive damages and legal fees, according to legal documents reviewed by The Times.
Doherty-Heinze sued Chrisley on July 9, 2021, alleging he accused her of “a multitude of crimes and wrongdoing” starting in 2020, legal documents say. The defamation suit also alleged Chrisley, 55, “repeated false accusations that, among other things, [Doherty-Heinze] engaged in various criminal misconduct in her post as an investigator for the Georgia Department of Revenue’s Office of Special Investigations.” Two months after the lawsuit came down, Chrisley tried to get the case thrown out, but Doherty-Heinze alleged that the TV star continued to “defame” her in a September 2021 episode of his and wife Julie’s “Chrisley Confessions” podcast.
Television
Reality TV star and podcast host Savannah Chrisley has been vocal about her parents’ federal fraud case. Julie and Todd Chrisley were convicted two years ago.
March 14, 2024
According to the investigator’s suit, Chrisley names Doherty-Heinze in his podcast and accuses her of corruption and of “illegally accessing” a government program to pull information on the reality TV family, including his wife and their children, Chase and Savannah.
Doherty-Heinze filed her lawsuit four years after the Georgia Department of Revenue began investigating Todd and Julie Chrisley in 2017, the lawsuit said.
Her suit alleged that Chrisley started a “social media campaign against the GDOR and certain of its employees, contending that the investigation was illegal and improperly motivated.” Amid the lawsuit, Doherty-Heinze’s attorneys demanded in September 2022 that Chrisley retract the alleged defamatory statements from the September 2021 podcast episode.
Television
‘Chrisley Knows Best’ stars Julie and Todd Chrisley are serving a combined 19 years in prison for bank fraud and tax evasion. Here’s how they got there.
Aug. 3, 2023
In response to Thursday’s ruling, Chrisley’s attorney Leesa Guarnotta said in a statement to The Times the star’s team was “pleased the jury recognized that some of Mr. Chrisley’s statements were not defamatory and awarded the plaintiff a fourth of the damages she requested.”
“We are concerned about the state of the First Amendment where such a case could make it to trial in the first place,” the statement added. “We are optimistic about our appeal.”
The Georgia investigator is “thrilled” with last week’s decision and thankful for the jury who ruled in her favor, Nicole Jennings Wade, an attorney for Doherty-Heinze, told The Times on Wednesday.
“[Doherty-Heinze] has had these lies hanging over her head for four years, and it is a huge relief to her that a federal jury has finally held Todd Chrisley accountable,” the attorney added. “She is particularly appreciative that the jury found that not only were Mr. Chrisley’s statements false and defamatory, but also that he acted with actual malice and a specific intent to cause her harm. She hopes this verdict will help deter Mr. Chrisley from defaming other innocent people in the future.”
The “Chrisley Knows Best” patriarch and Julie Chrisley were convicted in June 2022 of federal charges including tax evasion and bank fraud, disrupting their reality TV empire and family dynamics. The spouses began their prison sentences in January 2023.
Todd Chrisley was sentenced to 12 years in Florida’s Federal Prison Camp Pensacola and Julie seven years at Kentucky’s Federal Medical Center in Lexington. Last year, both received minor reductions in their sentences: Todd is set to be released two years earlier than originally scheduled, and Julie 14 months.
Times researcher Scott Wilson contributed to this report.
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Wall Street holds at a virtual standstill after last week's sharp swerves | https://www.latimes.com/world-nation/story/2024-04-08/stock-market-today-wall-street-holds-at-a-virtual-standstill-following-last-weeks-sharp-swerves | 2024-04-09T04:54:58 | U.S. stock indexes held at a virtual standstill Monday as trading calmed after a whirlwind couple of days left them a bit shy of their records.
The Standard & Poor’s 500 edged down by 1.95 points, or less than 0.1%, to 5,202.39. The benchmark index was coming off a shaky stretch where a 1.2% drop immediately flipped to a 1.1% gain.
The Dow Jones industrial average tiptoed 11.24 points lower, or less than 0.1%, to 38,892.80, while the Nasdaq composite inched 5.44 points higher, or less than 0.1%, to 16,253.96.
Much of the focus has been on interest rates and when the Federal Reserve will lower them to ease pressure on the economy and financial system. A string of reports showing inflation and the economy have remained hotter than expected has forced Wall Street to delay forecasts for when relief on rates could arrive.
This week has several flashpoints that could further swing expectations. On Wednesday will come the latest monthly update on the inflation that U.S. consumers are feeling. Later in the week will be reports on inflation at the wholesale level and expectations for upcoming inflation among U.S. households.
Fed Chair Jerome H. Powell said recently he still expects interest rate cuts this year, but the central bank needs additional confirmation inflation is heading toward its target of 2%. The Fed has been holding its main interest rate at the highest level since 2001, hoping to grind down enough on the economy and prices for investments to get inflation under control. The risk of holding rates too high for too long is that it could cause a recession.
Some Fed officials have raised the possibility of rates staying high for longer, if inflation remains stubborn. That has pushed many traders on Wall Street to cut back expectations for how many rate cuts may arrive this year to two from three. They had already drastically pulled back their forecasts from the start of this year, when many were expecting six cuts or more.
Traders now see roughly a coin flip’s chance of the Fed cutting interest rates at its meeting in June, down from a better than 70% probability a month ago, according to data from CME Group.
Cuts to interest rates not only make borrowing easier for U.S. households and companies, but they also encourage investors to pay higher prices for stocks and other investments. Stock prices have already leaped in part on such expectations.
U.S. stocks have remained near records despite diminishing expectations for rate cuts this year because of the hope that the strong economy will drive profits for companies. Profits and interest rates are the two main levers that set stock prices.
Such hopes have helped the stock market’s gains broaden out beyond the handful of Big Tech stocks responsible for the majority of last year’s gain. Energy producers in the S&P 500 have jumped 16% this year, after dropping nearly 5% last year, on expectations that a recent rebound in energy prices will mean fatter profits .
It’s also possible that the U.S. economy can post strong growth while simultaneously seeing inflation cool. That’s what Goldman Sachs economist David Mericle is forecasting, in part because of elevated immigration of younger people who are working in construction and other industries that generally earn lower wages.
Friday’s surprisingly strong jobs report showed that workers’ average hourly wages were behaving as expected, even though employers hired far more workers than expected last month.
But critics say stock prices already look expensive given their huge run of more than 20% from November into March. That means “achieving ambitious earnings forecasts has become paramount,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.
“Economic growth is good, but complacency around its implications is not,” she said.
To that end, this week will bring the start of the latest earnings reporting season. Delta Air Lines, JPMorgan Chase and other banks will headline the earliest days of the reporting period. Analysts are expecting companies across the S&P 500 to deliver a third straight quarter of growth.
Real-estate investment trusts helped lead the market after Apartment Income REIT said Blackstone agreed to buy it for about $10 billion in cash, including assumed debt. Apartment Income REIT, which also goes by AIR Communities, jumped 22.4%.
On the losing end of Wall Street was Trump Media & Technology Group. The company behind the Truth Social platform has seen its stock price swing sharply by the day, as experts say it’s moving more on the hopes of Trump fans than on the profit prospects of the company. It sank 8.4%.
In the bond market, Treasury yields rose to add to their gains for the year so far on diminished expectations for cuts to rates. The yield on the 10-year Treasury ticked up to 4.42% from 4.40% late Friday and from less than 3.90% at the start of the year.
In stock markets abroad, indexes mostly rose across Europe and Asia, though stocks fell 0.7% in Shanghai.
Choe writes for the Associated Press. AP writers Matt Ott, Yuri Kageyama and Alex Veiga contributed to this report.
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U.S.-China military talks on air and maritime safety resume after a nearly 2-year break | https://www.latimes.com/world-nation/story/2024-04-05/us-chinese-military-talks-resume-on-safety-in-the-air-and-at-sea-after-a-nearly-2-year-break | 2024-04-05T15:21:11 | For the first time in nearly two years, U.S. and Chinese defense officials met this week to discuss unsafe and aggressive ship and aircraft incidents between their militaries in the Pacific region, restarting a dialogue that Beijing abruptly ended in a dispute involving Taiwan.
The meeting, held Wednesday and Thursday in Hawaii, came as Washington and Beijing work to expand communications and ease escalating tensions between the two world powers. Military-to-military contact had stalled in August 2022, when Beijing suspended all such communication after a visit by then-House Speaker Nancy Pelosi to Taiwan, the self-governing island China claims as its own.
The thaw in relations between the two countries got a kickstart last November when President Biden and China’s President Xi Jinping met on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco. About a month later, Gen. Charles Q. Brown Jr., chairman of the U.S. Joint Chiefs of Staff, spoke with his Chinese counterpart in a video call — the first senior military-to-military contact since the Pelosi visit.
Other top-level talks have continued, including a call this week between Biden and Xi, and a visit to China by Treasury Secretary Janet Yellen that began Thursday.
The resurgence of senior military leader discussions includes the relaunch of routine engagements, including the China-U.S. Military Maritime Consultative Agreement meeting, which was this week in Hawaii, and the bilateral Defense Policy Coordination Talks, which were held earlier this year.
The maritime meeting is focused on unsafe and unprofessional incidents involving the U.S. and Chinese militaries, while the coordination talks focus on broader policy issues. This week’s meeting included representatives from the U.S. Indo-Pacific Command, the U.S. Pacific Fleet, the U.S. Pacific Air Forces and the People’s Liberation Army (PLA). This is the first time since 2019 that the meeting was held in person; there was a virtual meeting in 2021, during the COVID-19 pandemic.
World & Nation
The call, described by the White House as ‘candid and constructive,’ was the leaders’ first conversation since their November summit in California.
April 2, 2024
According to officials, this week’s meeting included about 18 senior military and civilian officials from each side. Both delegations noted specific incidents over the past several years that they believe raised operational safety concerns, and the group discussed them.
“Open, direct, and clear communications with the PLA — and with all other military forces in the region — is of utmost importance to avoid accidents and miscommunication,” said the head of the U.S. delegation, Army Col. Ian Francis, in a statement.
Francis, who is the director for Northeast Asia policy at U.S. Indo-Pacific Command, said the U.S. is encouraged that the People’s Liberation Army is honoring its commitments to the maritime agreement.
Two U.S. officials said that they’ve seen fewer unsafe incidents involving Chinese military aircraft and ships in recent months. They said the meeting was a way to make sure that the trend continues and that overall safety is increased in the region for troops who operate there. The officials spoke on condition of anonymity because the meetings are private.
The U.S. has consistently viewed military communications with China as critical to avoiding any missteps between their armed forces and to maintaining a peaceful Indo-Pacific.
Pelosi became the highest ranking American lawmaker to visit Taiwan since 1997, when then-Speaker Newt Gingrich traveled there. Her visit sparked a surge in military maneuvers by China. Beijing dispatched warships and aircraft across the median line in the Taiwan Strait, claiming the de facto boundary did not exist, fired missiles over Taiwan itself, and challenged established norms by firing missiles into Japan’s exclusive economic zone.
During the following two years, U.S. military officials repeatedly objected to a range of unsafe intercepts by Chinese aircraft in the Pacific and other dangerous incidents.
Last October, the Pentagon released footage of some of the more than 180 intercepts of U.S. warplanes by Chinese aircraft in the previous two years. And military officials said the number was more than the total amount over the previous decade — a trend they called concerning. In one instance last year, a Chinese pilot flew within 10 feet of a U.S. Air Force B-52, which was conducting routine operations over the South China Sea in international airspace.
China’s defense ministry, meanwhile, has criticized the U.S. for what it calls interference in both Taiwan and the South China Sea, charging that American arms sales to Taiwan are making the situation more dangerous.
Baldor writes for the Associated Press.
April 23, 2024
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Wall Street sees its worst day in weeks on rate concerns as jobs report looms | https://www.latimes.com/business/story/2024-04-04/stock-market-today-wall-street-edges-toward-record-high-ahead-of-fridays-jobs-report | 2024-04-05T04:07:28 | U.S. stocks tumbled Thursday after a Federal Reserve official raised the possibility of delivering none of the cuts to interest rates this year that Wall Street has been banking on, if inflation worsens.
The S&P 500 dropped 1.2% for its worst day in seven weeks. Earlier in the day, a gain of nearly 1% had brought it to the cusp of its record set last week.
The Dow Jones industrial average swung 530 points lower, or 1.4%, after reversing a rise of nearly 300 points. The Nasdaq composite fell 1.4%.
Financial markets were already on edge as traders made their final moves ahead of a jobs report on Friday that could itself shake the market.
A late-day spurt for oil prices amid continued tensions in the Middle East unsettled things, threatening to add more pressure on inflation after oil’s strong gains so far this year.
Around the same time, Treasury yields dropped in the bond market, which can be a signal of investors looking for safer harbors, and a measure of fear among U.S. stock investors leaped.
Stocks slumped after Minneapolis Fed President Neel Kashkari said he’s questioning the need to cut rates if so many areas of the economy look to be solid despite high interest rates.
He had earlier penciled in two cuts to interest rates this year, “but if we continue to see inflation moving sideways, then that would make me question about whether we need to do those rate cuts at all.”
“There’s a lot of momentum in the economy right now,” Kashkari said in an interview with Pensions & Investments.
Kashkari’s hypothetical case, which he said depends on “a lot of ‘ifs,’” cuts at one of the main propellants that drove the U.S. stock market up more than 20% from November into March: the expectation for several cuts to interest rates.
Lower rates boost prices for investments, while easing the pressure on the economy, and stock prices had already jumped in part on expectations for them.
Earlier in the morning, yields had been holding steadier after a report showed more U.S. workers applied for unemployment benefits last week, though the number remains low compared with historical data.
Wall Street is looking for the job market to cool enough to remove upward pressure on inflation, but not so much that it throws too many people out of work and causes a recession.
That has raised the anticipation for a report coming Friday, in which the U.S. government will show how much hiring happened across the country last month. Economists expect it to show a cool-down in March from February.
“As always, the monthly jobs report will have the final say,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
In the stock market, Nvidia went from a gain of nearly 2% early in the day to a drop of 3.4%. It was the single heaviest weight on the S&P 500.
Lamb Weston dropped 19.4% after the frozen French fry maker said a transition to a new planning system hurt its ability to fill customer orders. It said the impact from the transition has probably passed, but it lowered its sales and profit forecast for the year. It also cited softer trends for restaurant traffic in the near term.
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Paris Hilton testifying today in Sacramento for bill aimed at ‘troubled teen industry’ | https://www.latimes.com/california/story/2024-04-04/paris-hilton-sacramento-california-bill-troubled-teen-industry-residential-treatment | 2024-04-04T10:00:55 | The celebrity hotel heiress once known for her high-profile nightclub appearances has turned her attention to a much more staid venue: the California state Capitol.
Paris Hilton is supporting Senate Bill 1043, authored by Sen. Shannon Grove (R-Bakersfield) and joint-authored by two Democratic lawmakers, which would require residential treatment facilities to report to parents and the state government when they use restraints or seclusion rooms in disciplining minors.
It’s the latest move in what’s become Hilton’s political focal point in recent years as she’s positioned herself as a voice for youths who have endured abuse at the hands of teen treatment centers. Hilton has traveled to Washington, D.C., and Utah to push for tougher regulations on residential treatment programs. Today she is scheduled to testify in support of the new legislation in Sacramento.
“As a survivor of the ‘Troubled Teen Industry,’ I am proud to partner with Sen. Shannon Grove ... to bring much-needed transparency to California youth facilities,” Hilton said in a statement.
Movies
In a new documentary, Paris Hilton opens up about the physical and emotional abuse she suffered at a disciplinary high school.
Sept. 15, 2020
The bill aims to protect children and young adults housed in facilities licensed by the California Department of Social Services by mandating that the agency publish data on a public dashboard on its website reporting the use of restraint and seclusion rooms, including instances of serious injuries or death. It would also require notification of parents or guardians when restraints and seclusion rooms are used on minors.
The Department of Social Services said it does not comment on legislation.
California used to send foster youths with serious behavior problems to out-of-state treatment programs, but after numerous reports of abuse, a 2021 law barred these placements. The state has since created an alternative known as Short Term Residential Therapeutic Programs, but the use of seclusion rooms and restraints on minors still occurs, according to Grove’s office.
Hilton, 43, has been outspoken about the mental and physical abuse she said she endured as a teenage resident for 11 months at Utah’s Provo Canyon School, a boarding school and psychiatric youth treatment center. Provo Canyon was sold over two decades ago and, after Hilton went public with her story, declined to comment on any allegations about events that took place before new ownership.
Some youths are sent to these treatment programs by their parents; others are foster kids ordered to attend by the courts.
The so-called troubled teen industry dates back at least 50 years and refers to a network of programs that target teenagers struggling with issues including substance abuse, mental illness and problematic behavior. The programs typically cost in the same ballpark as college tuition, and despite having been at the center of many abuse and corruption scandals, the industry remains largely unregulated, according to the American Bar Assn.
Prompted by her experiences in residential treatment in the 1990s, Hilton has formed a nonprofit organization, released a documentary and written a memoir recounting her personal story of abuse. And she is advocating for the protection of minors in residential programs and facilities.
California
Republican Sen. Shannon Grove has introduced legislation to lengthen prison terms for those who purchase or engage in child prostitution.
March 1, 2024
In 2021, Hilton testified at the Utah state Capitol for a bill that required more government oversight of youth residential treatment centers and documentation when they use restraints on minors. The bill also prohibits using sedation or mechanical restraints without prior authorization in treatment centers. The bill was signed into law, affecting the state’s 100 youth treatment centers, and has paved the path for more legislation.
The National Assn. of Therapeutic Schools and Programs, the country’s largest member organization, supported the Utah bill.
“We strongly support the creation of laws that help protect the rights and safety of students who attend our programs,” the group wrote in a letter that was read by Utah state Sen. Todd Weiler.
Last year, Hilton was at the U.S. Capitol to advocate for the Stop Institutional Child Abuse Act, a federal bill to establish best practices and transparency in youth residential care programs.
“This issue is deeply personal for me,” Hilton said at a Washington news conference introducing the bill. “From the ages of 16 to 18, I was sent to four troubled teen industry facilities. Each one was more horrific than the last. I witnessed and experienced sexual abuse from adult staff, as well as endured verbal and emotional abuse daily. ... What I went through will haunt me for the rest of my life.”
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Wall Street rises to more records to close out its latest winning month | https://www.latimes.com/world-nation/story/2024-03-28/stock-market-today-wall-street-rises-to-more-records-to-close-out-its-latest-winning-month | 2024-03-29T05:37:56 | Wall Street set more records Thursday as U.S. stocks coasted to the close of their latest winning month and quarter.
The S&P 500 added 5.86 points, or 0.1%, to its all-time high set a day before and closed at 5,254.35. That sent its gain for the year’s first three months to a fat 10.2%. The only quarter that’s been better in the last two years was the one that came just before.
The Dow Jones industrial average ticked up 47.29 points, or 0.1%, to 39,807.37 and likewise set a record. The Nasdaq composite dipped 20.06 points, or 0.1%, to 16,379.46. It’s just shy of its own all-time high.
The stock market has been on a nearly unstoppable run since late October, and the S&P 500 just capped its fifth straight winning month. It has leaped as the U.S. economy has remained remarkably solid despite high interest rates meant to get inflation under control. And with inflation hopefully still cooling from its peak, the Federal Reserve has indicated it will probably cut interest rates multiple times later this year.
Thursday was the last day of trading for both the U.S. stock and bond markets this month and quarter. Financial markets will be closed on Friday for Good Friday.
Most stocks scrambled higher during the quarter, led by a pocket of companies riding Wall Street’s continued frenzy around artificial intelligence technology. Nvidia, whose chips are powering much of the AI rush, have surged 82.5%.
The only stock in the S&P 500 to do better was Super Micro Computer, which just joined the index recently because it’s also been caught up in AI mania. The company, which sells server and storage systems used in AI and other computing, saw its stock soar a staggering 255.3% during the quarter.
They more than made up for stumbles during the quarter by companies such as Tesla and Boeing. Tesla fell 29.3% to continue its volatile run, having more than doubled last year. Boeing, meanwhile, sank 26% as worries mounted about its safety and manufacturing quality.
In the bond market, Treasury yields inched higher Thursday after some mixed reports on the economy.
One said the U.S. economy’s growth in the final three months of last year was stronger than earlier estimated. Another said fewer U.S. workers applied for unemployment benefits last week, the latest indication of a solid job market.
Other reports showed that sentiment among U.S. consumers is stronger than economists expected, but manufacturing in the Chicago region is contracting by more than forecast.
The yield on the 10-year Treasury rose to 4.20% from 4.19% late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for the Fed, rose to 4.62% from 4.57%.
The hope on Wall Street is still that the Federal Reserve will begin cutting its main interest rate in June. Lower interest rates ease the pressure on the economy, while boosting prices for investments. But progress on bringing inflation down has become bumpier recently, with reports this year coming in hotter than expected.
A top official at the Federal Reserve, Gov. Christopher Waller, said in a speech late Wednesday that “there is no rush to cut the policy rate,” given such data.
“Indeed, it tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory toward 2%,” Waller said.
Besides interest rates staying higher for longer, critics say other threats could also derail the stock market’s dash higher. Chief among them is that stock prices have climbed faster than corporate profits, leaving them looking expensive by some measures. Companies will need to deliver solid growth in profits to justify the moves.
On Wall Street, RH jumped 17.3% even though the retailer of home furnishings reported weaker profit and revenue for the latest quarter than analysts expected. It also indicated demand is trending upward, and it gave a revenue forecast for the upcoming year that was slightly above analysts’ expectations.
Analysts said investors are ready to pounce on signs of a recovery in the housing market, with interest and mortgage rates expected to come down later this year.
Chemours fell 9.1% despite reporting better results for the latest quarter than analysts expected. It gave a forecast for earnings before taxes and other items in the current quarter that was below analysts’ expectations. The company also said its board has completed its internal reviews of accounting issues and found some weaknesses in its internal controls over financial reporting.
Also on the losing end was Trump Media & Technology Group. The company behind former President Trump’s Truth Social fell 6.4% after soaring more than 14% in each of the last two days. Its stock has shot well beyond what critics say is reasonable for the money-losing company, driven by fans of Trump and by investors hoping to cash in on the mania.
In stock markets abroad, Tokyo’s Nikkei 225 slumped 1.5% amid speculation about whether Japanese officials will make moves to support the value of the Japanese yen.
Movements were more modest across much of the rest of Asia and Europe.
Choe writes for the Associated Press. AP writer Elaine Kurtenbach contributed to this report.
March 27, 2024
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California proposal would change how power bills are calculated, aiming to relieve summer spikes | https://www.latimes.com/world-nation/story/2024-03-28/california-proposal-would-change-how-power-bills-are-calculated-aiming-to-relieve-summer-spikes | 2024-03-28T20:48:59 | It’s become a rite of summer in sunny California: When the temperature spikes, so do electricity bills, leaving some customers with monthly payments over $500.
A big reason for that is the way California’s largest power companies calculate rates. The more power you use, the more money you pay — not just for electricity, but also for things like maintaining the grid and reducing wildfire risk.
A proposal unveiled Wednesday by state regulators aims to change that. Instead of calculating bills based mostly on how much power people use, a portion would be a fixed charge. For most people, that charge would be $24.15 per month. People who are enrolled in low-income assistance programs or who live in deed-restricted affordable housing would pay less — either $6 or $12, depending on their situation.
To offset this new charge, the rate people pay for using power would go down. During peak hours when electricity is in the most demand — and the most expensive — rates for customers of the state’s big three utilities would fall between 8% and 9.8%. That means the average customer in Fresno, where temperatures were at or above 100 Fahrenheit (37.8 Celsius) for 17 days last July, would save about $33 during the summer months, according to the California Public Utilities Commission.
People who own electric cars and charge them at home would save about $25 per month on average, while people who have fully electrified their homes — including replacing gas-powered stoves — would save about $19 per month. Other customers whose bills are not affected as much by the weather would likely see an increase.
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“I think it’s a wise idea to put us in a position where we’re incentivizing electrification and clean vehicles and then also providing some relief to those customers who really can’t help using a lot of electricity in the summertime,” said Alice Reynolds, president of the California Public Utilities Commission. “This is part of a reaction to a changing climate where we have these extreme weather events.”
California is one of the only states that doesn’t already have a fixed charge for its largest utilities, and the state Legislature ordered regulators in 2022 to implement one by July 1 of this year. Since then, power bills have only gotten more expensive. Regulators approved an average increase of $32 per month for Pacific Gas & Electric Company customers just last year. The average price per kilowatt hour of electricity for California’s big three utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — is about 36 cents, compared with the national average of 17 cents.
The prospect of a new charge that could raise some people’s rates has prompted backlash from some state and federal lawmakers. In the state Legislature, a group of Democrats led by Assemblymember Jacqui Irwin of Thousand Oaks has introduced legislation that would cap the fixed charge at $10 for most people and $5 for people with low incomes. Irwin said the California Public Utilities Commission “is out of touch with consumers.”
“We need to prioritize driving down consumer’s overall bills, not redistributing the ever-increasing (investor-owned utilities) electric rates,” Irwin said.
On Wednesday, a group of 18 members of Congress from California sent a letter to Reynolds urging state regulators to keep the new fixed rate low. Their letter said the average monthly fixed charge in the United States is $11.
“There is little to stop utilities from continuing to increase electric rates once they secure the highest fixed charges in the country,” the letter said.
The Predictable Power Coalition, which includes the big three utilities, called the fixed rate “vital” and said the proposal “is a step in the right direction.” Some of the state’s most well-known consumer advocates, including the Utility Reform Network and the California Public Advocates Office, support the proposal because they say it would make utility bills more affordable.
Others, including the solar industry, worry that if electricity rates are cheaper during peak hours people won’t conserve as much energy. California has struggled at times to have enough electricity during these periods, especially during extreme heat waves, which caused some rolling blackouts in 2020.
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“In this time when it’s all hands on deck about climate change, why would we have people say, ‘You know what? I’m not going to hang out my laundry today because I’m just paying a fixed charge anyway,’” said Bill Allayaud, California director of governmental affairs for the Environmental Working Group.
Reynolds noted that California’s big three utilities will still charge more for power during peak hours but that the fixed charge would make sure the increase is more evenly distributed among customers. She also noted the big three had proposed fixed rate charges of $51 and $73. The commission rejected those amounts.
Most of California’s publicly owned utilities already have a fixed charge as part of their billing structure. Regulators’ proposal mirrors the fixed rate charged by the Sacramento Municipal Utilities District.
“Millions of people already have a flat rate component of their bills. They may not know it,” Reynolds said.
If it’s approved by regulators, the rule would take effect in 2025, and customers would not see the charge until later that year or in early 2026.
April 2, 2024
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Richard Serra, American artist and sculptor known as the 'poet of iron,' dies at 85 | https://www.latimes.com/world-nation/story/2024-03-27/famed-american-sculptor-richard-serra-the-poet-of-iron-has-died-at-85 | 2024-03-27T02:53:42 | Famed American artist and sculptor Richard Serra, known for turning curving walls of rusting steel and other malleable materials into large-scale pieces of outdoor artwork that are now dotted across the world, died Tuesday at his home in Long Island, N.Y. He was 85.
Considered one of his generation’s most preeminent sculptors, the San Francisco native originally studied painting at Yale University but turned to sculpting in the 1960s, inspired by trips to Europe.
His death was confirmed Tuesday night by his lawyer, John Silberman, whose firm is based in New York. He said the cause of death was pneumonia.
Known by his colleagues as the “poet of iron,” Serra became world-renowned for his large-scale steel structures, such as monumental arcs, spirals and ellipses. He was closely identified with the minimalist movement of the 1970s.
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Serra’s work started to gain public attention in 1981, when he installed a 120-foot-long and 12-foot-high curving wall of raw steel that splits the Federal Plaza in New York City. The sculpture, called “Tilted Arc,” generated swift backlash from people who work there and a fierce demand that it should be removed. The sculpture was later taken down, but Serra’s popularity in the New York art scene had been cemented.
Most of Serra’s large-scale works are welded in Cor-Ten steel, but he also worked with other nontraditional materials such as rubber, latex, neon — as well as molten lead, which Serra threw against a wall or floor to create his “Splash” series in his early career.
His works have been installed in landscapes and included in the collections of museums across the world, from the Museum of Modern Art in New York to the deserts of Qatar.
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Richard Serra in drawing mode
May 1, 2011
In 2005, eight major works by Serra were installed permanently at the Guggenheim Museum in Spain. Carmen Jimenez, the exhibition organizer, said Serra was “beyond doubt the most important living sculptor.”
Born to a Russian-Jewish mother and a Spanish father in San Francisco, Serra was the second of three sons in the family. He started drawing at a young age and was inspired by the time he spent at a shipyard where his father worked as a pipefitter. Before his turn to sculpting, Serra worked in steel foundries to help finance his education at the Berkeley and Santa Barbara campuses of the University of California. He then went on to Yale, where he graduated in 1964.
Haigh and Nguyễn write for the Associated Press.
March 27, 2024
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Wall Street slips further away from records amid inflation worries | https://www.latimes.com/world-nation/story/2024-03-15/stock-market-today-wall-street-slips-further-away-from-records-amid-inflation-worries | 2024-03-15T22:00:19 | Wall Street closed out its second straight losing week Friday, giving back some of the gains that helped push the stock market to an all-time high earlier in the week.
The Standard & Poor’s 500 fell 0.6%, its third straight loss. The benchmark index hit a record high on Tuesday but mostly wavered in the days that followed.
The Dow Jones industrial average fell 0.5%, while the Nasdaq composite ended 1% lower.
Technology stocks were the biggest weights on the market. Software maker Adobe slumped 13.7% after giving investors a weak revenue forecast. Microsoft fell 2.1% and Broadcom lost 2.1%.
Communication services stocks also helped pull the market lower. Meta Platforms fell 1.6% and Google parent Alphabet fell 1.3%.
All told, the S&P 500 fell 33.39 points to 5,117.09. The Dow dropped 190.89 points to 38,714.77, and the Nasdaq gave up 155.36 points to close at 15,973.17.
The latest pullback for stocks came as traders reviewed several reports showing that inflation, though broadly cooling, remains stubborn.
A closely watched report from the University of Michigan showed that consumer sentiment unexpectedly fell in March. Consumers became slightly less optimistic about the economy but continue to expect inflation to come down further, a potential sign that consumer prices will come under control.
Inflation remains the big concern for Wall Street amid hopes for the Federal Reserve to start cutting interest rates. The Fed sharply raised interest rates starting in 2022 in an effort to tame inflation back to its 2% target. Inflation at the consumer level was as high as 9.1% in 2022.
A report on consumer prices this week showed inflation remains stubborn, ticking up to 3.2% in February from 3.1% in January. Another report on prices at the wholesale level also showed inflation remains hotter than Wall Street expected.
Other reports this week showed some softening in the economy, which bolstered hopes for a continued long-term easing of inflation.
A rally for stocks that started in October has essentially stalled in March as investors try to determine the path ahead for inflation, the Fed and the economy.
“You can kind of look in either direction and find a reason to be concerned about equities,” said Brian Nick, senior investment strategist at the Macro Institute.
Investors still have to worry about the lagging impact on the economy from the Fed’s historic rate hikes, he said. The broader economy remains strong, but it is showing signs of slowing and that could mean a recession is still possible.
“Things happen more slowly than investors have come to process,” he said. “Policy lag exerting a downward pull is a lot longer than what investors have priced in.”
Fed officials will give their latest forecasts for where they see interest rates heading this year on Wednesday, after their latest policy meeting. Traders are still leaning toward a rate cut in June, according to data from CME Group. The Fed’s main rate remains at its highest level since 2001.
The central bank has held the benchmark rate steady since July 2023 and has previously signaled that it expects three rate cuts in 2024. Lower rates would relieve pressure on the economy and financial system.
Bond yields edged higher. The yield on the 10-year Treasury rose to 4.31% from 4.29% late Thursday. The yield on the two-year Treasury rose to 4.73% from 4.69%.
Weak financial forecasts weighed down several companies. Beauty products retailer Ulta Beauty fell 5.2% after giving investors a disappointing earnings forecast for the year. Electronics maker Jabil slumped 16.5% after trimming its revenue forecast for the year.
Markets in Europe ended mixed, while markets in Asia slipped.
Damian J. Troise is an Associated Press writer. AP writers Elaine Kurtenbach, Matt Ott, Alex Veiga and Christopher Rugaber contributed to this report.
April 10, 2024
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Stocks slip on Wall Street after another report on inflation that was worse than expected | https://www.latimes.com/world-nation/story/2024-03-14/stock-market-today-wall-street-slips-after-another-report-on-inflation-that-was-worse-than-expected | 2024-03-15T04:18:58 | U.S. stocks slipped Thursday after a mixed batch of economic data seemed to drive the final nail into hopes that easier interest rates may arrive very soon.
The Standard & Poor’s 500 fell 14.83 points, or 0.3%, to 5,150.48, though it’s still close to its all-time high set Tuesday. The Dow Jones industrial average sank 137.66 points, or 0.4%, to 38,905.66, and the Nasdaq composite lost 49.24 points, or 0.3%, to close at 16,128.53.
The moves were more decisive in the bond market, where Treasury yields rose after a report showed inflation was a touch hotter at the wholesale level last month than economists expected. It’s the latest in a string of data on inflation that’s been worse than forecast, which has kept the door closed on hopes that the Federal Reserve could start cutting interest rates at its meeting next week.
But other reports released Thursday also showed some softening in the economy, which kept alive hopes that the long-term trend for inflation remains downward.
Traders still largely expect the Fed to begin cutting rates in June, according to data from CME Group. The Fed’s main rate is at its highest level since 2001 in an effort to down inflation, and cuts would relieve pressure on the economy and financial system.
The question hanging over Wall Street is how much the latest signals of potentially stubborn inflation will ultimately delay rate cuts. That in turn could damage the huge run U.S. stocks have been on since late October, rising in 16 of the last 19 weeks.
Traders on Thursday pushed some bets for the first rate cut into July from June.
The day’s mix of data could push the Federal Reserve to signal it foresees only two cuts to rates this year, down from three, according to Brian Jacobsen, chief economist at Annex Wealth Management.
Fed officials will give their latest forecasts for where they see interest rates heading this year on Wednesday, after their latest policy meeting.
Among the data they’ll mull over is a report from Thursday that said shoppers spent less at U.S. retailers last month than economists expected. Such data drag on the overall economy but could also remove upward pressure on inflation.
The government also said retail sales were weaker in January than earlier thought. Strong spending by U.S. households has been one of the linchpins keeping the economy out of a recession despite high interest rates.
A separate report said fewer U.S. workers applied for unemployment benefits last week than expected. That’s good news for workers generally. But too much strength in the job market, which has remained remarkably resilient, could add upward pressure on inflation.
The mix of data sent the yield on the 10-year Treasury up to 4.28% from 4.19% late Wednesday. The two-year yield, which more closely tracks expectations for the Fed, rose to 4.69% from 4.63%.
On Wall Street, Dollar General swung sharply despite reporting stronger profit and revenue for the latest quarter than expected. Its stock fell 5.1% after being up more than 6% earlier.
Dollar General executives said inflation is pushing customers to make trade-offs in the aisles, away from nonessentials and name brands. It’s also removing self-checkout from more than 300 of its stores that are experiencing high losses of inventories.
A day earlier, rival Dollar Tree tumbled after reporting weaker-than-expected results and saying it would close hundreds of its Family Dollar stores.
Dick’s Sporting Goods jumped 15.5% after it reported stronger profit for the latest quarter than expected and increased its dividend.
Robinhood Markets gained 5.2% as near-record stock and crypto prices drove strong growth in trading activity among its customers last month.
U.S. Steel sank 6.4% after President Biden came out in opposition of the planned sale of the company to Nippon Steel of Japan.
Nippon Steel announced in December that it planned to buy the Pittsburgh-based steel producer for $14.1 billion in cash, raising concerns about what the transaction could mean for unionized workers, supply chains and U.S. national security.
Shares of Anheuser-Busch InBev trading in the United States slumped 5.5% after Altria said it was selling a portion of its stake in the maker of Budweiser.
Home builder Lennar sank 7.6% despite reporting stronger growth in profit than expected, as its revenue fell short of analysts’ forecasts.
In stock markets abroad, indexes were mixed across Europe and Asia.
Japan’s Nikkei 225 rose 0.3% amid speculation that the Bank of Japan may soon end its policy to keep interest rates below zero.
Stan Choe writes for the Associated Press. AP writers Yuri Kageyama and Matt Ott contributed to this report.
April 10, 2024
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Wall Street rallies to a record as Big Tech stocks renew their run | https://www.latimes.com/business/story/2024-03-12/stock-market-today-wall-street-rallies-to-a-record-as-big-tech-stocks-renew-their-run | 2024-03-13T01:53:19 | U.S. stocks rallied to records Tuesday, led again by technology companies, as some of Wall Street’s most influential got back in their groove.
The Standard & Poor’s 500 jumped 1.1% to top its all-time high set last week. The Dow Jones industrial average climbed 0.6%, and the Nasdaq composite jumped 1.5%.
All three indexes began the day with losses after a highly anticipated report on inflation said U.S. consumers paid prices that were a bit higher last month than economists expected. The worse-than-expected data kept the door closed on hopes that the Federal Reserve could deliver long-sought cuts to interest rates at its meeting next week.
But the inflation figures were still close to expectations, and traders held on to hopes that the longer-term trend downward means the Fed will begin the hoped-for cuts in June. That helped stock indexes to reverse their losses as the day progressed.
Plus, inflation may not be as hot in reality as the morning’s report suggested.
“January and February are notoriously noisy months for a lot of economic data,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“The Fed wasn’t planning on cutting rates next week, and this report doesn’t change that. The discussion around the table will be more about the longer-term trend.”
The fear is that “sticky” inflation that refuses to go down will force the Fed to keep interest rates high, which grinds down on the economy and investment prices. The Fed’s main interest rate is already at its highest level since 2001.
“Another hotter-than-expected CPI reading may breathe new life into the sticky inflation narrative, but whether it actually delays rate cuts is a different story,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
For months, traders on Wall Street have been trying to get ahead of the Federal Reserve and guess when rate cuts will arrive. They have already sent stock prices higher and bond yields lower in anticipation of it.
Through it all, the Fed has remained “nothing if not consistent in doing what it said it would do,” Larkin said. “Until they say otherwise, their plan is to cut rates in the second half of the year.”
The immediate reaction across financial markets to the inflation data was nevertheless halting and uncertain.
In the bond market, Treasury yields initially dropped and then swung higher. The yield on the 10-year Treasury eventually rose to 4.15% from 4.10% late Monday.
The price of gold, which has shot to records on expectations for coming rate cuts, also swung. An ounce for delivery in April ended up falling $22.50 to settle at $2,166.10. A measure of nervousness among U.S. stock investors, meanwhile, eased more than 8% after squiggling up and down a few times.
On Wall Street, big technology stocks did much of the market’s heaviest lifting. Oracle jumped 11.7% after reporting stronger profit for the latest quarter than analysts expected.
Nvidia also rallied 7.2% to bounce back from a rare two-day stumble. A frenzy on Wall Street around artificial intelligence technology has caused its stock to swell, making it one of the most influential on the market. It was the single strongest force pushing the S&P 500 upward on Tuesday.
New York Community Bancorp rose 5.8% after it said it had closed its previously announced deal to raise roughly $1.05 billion in cash from the sale of stock. The bank has been struggling under the weight of falling prices for commercial real estate and the growing pains associated with prior acquisitions it made. Its troubles have also led to worries about the broader regional banking industry.
3M climbed 5% after it said Bill Brown, the former chairman and chief executive of L3Harris Technologies, will take over as its CEO at the start of May.
On the losing end of Wall Street was Southwest Airlines. It dropped 14.9% after cutting its forecast for an important measure of revenue in the first three months of this year, partially because of lower-than-expected demand by some leisure travelers.
It also said Boeing had told the company that it would deliver fewer airplanes than expected this year. Shares of Boeing, which is facing criticism over safety and manufacturing quality, sank 4.3%.
All told, the S&P 500 rose 57.33 points to 5,175.27. The Dow climbed 235.83 points to 39,005.49, and the Nasdaq advanced 246.36 points to 16,256.64.
In stock markets abroad, Japan’s Nikkei 225 slipped 0.1%, retreating further from its recent records. Expectations are building that its central bank will raise interest rates, which are below zero.
Indexes jumped 3.1% in Hong Kong, 1.2% in Frankfurt and 1% in London but moved more modestly elsewhere across Asia and Europe.
Stan Choe writes for the Associated Press. AP business writers Elaine Kurtenbach and Matt Ott contributed to this report.
March 28, 2024
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U.S. employers add a surprisingly strong 275,000 jobs in sign of continued strength | https://www.latimes.com/world-nation/story/2024-03-08/us-employers-add-a-surprisingly-strong-275-000-jobs-in-sign-of-continued-economic-strength | 2024-03-08T13:40:56 | America’s employers delivered another healthy month of hiring in February, adding a surprising 275,000 jobs and again showcasing the U.S. economy’s resilience in the face of high interest rates.
Last month’s job growth was up from a revised gain of 229,000 jobs in January. The unemployment rate ticked up two-tenths of a point to 3.9% but was still the 25th straight month in which it has remained below 4%.
Friday’s government report reflected the job market’s sustained ability to withstand the 11 rate hikes the Federal Reserve imposed to fight inflation, which made borrowing much costlier for households and businesses. Employers have continued to hire briskly to meet steady demand from consumers across the economy.
Yet despite sharply lower inflation, a healthy job market and a record-high stock market, many Americans say they are unhappy with the state of the economy — a sentiment that is sure to weigh on President Biden’s bid for reelection. Many voters blame Biden for the surge in consumer prices that began in 2021. Though inflationary pressures have significantly eased, average prices remain about 17% above where they stood three years ago.
When the Fed began aggressively raising rates in March 2022 to fight the worst bout of inflation in four decades, a painful recession was widely predicted, with waves of layoffs and high unemployment. The Fed boosted its benchmark rate to the highest level in more than two decades.
Inflation has eased, more or less steadily, in response: Consumer prices in January were up just 3.1% from a year earlier — way down from a year-over-year peak of 9.1% in 2022 and edging closer to the Fed’s 2% target.
Many Americans are exhibiting confidence in the economy through their actions: Consumers, whose average wages have outpaced inflation over the past year and who socked away money during the pandemic, have continued to spend and drive economic growth. The economy’s gross domestic product — the total output of goods and services — grew by a solid 2.5% last year, up from 1.9% in 2022. And employers keep hiring.
Immigration has helped invigorate the job market since the end of pandemic-related travel bans. Last year, foreign-born individuals accounted for 62%, or 1.5 million, of the 2.4 million people who either obtained a job or began looking for one. The economy’s growth depends on a steady influx of job seekers.
In the meantime, the job market’s modest slowdown is happening so far in perhaps the most painless way possible: Companies are posting slightly fewer job openings rather than laying people off. The number of Americans filing for weekly unemployment benefits — a rough proxy for the number of layoffs — has remained low, suggesting that most workers enjoy solid job security.
Wage growth still remains slightly high from the Fed’s perspective because it can contribute to inflation pressures. Some economists argue, though, that pay increases don’t need to drop so much: A surge in productivity that started last year — as companies invested in machines and used their workers more efficiently — means that employers can pay more and still reap profits without raising prices.
Paul Wiseman writes for the Associated Press.
April 10, 2024
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Wall Street sets another record as traders look ahead to easier rates | https://www.latimes.com/world-nation/story/2024-03-07/stock-market-today-wall-street-sets-another-record-as-traders-look-ahead-to-easier-rates | 2024-03-08T02:43:40 | U.S. stocks climbed to records Thursday, with easier interest rates beckoning on the horizon.
The Standard & Poor’s 500 rallied 1% to set its 16th all-time high so far this year. It’s been on a terrific run and is on track for its 17th winning week in the last 19 after erasing the last of its losses from Monday and Tuesday.
The Dow Jones industrial average added 130 points, or 0.3%, and the Nasdaq composite jumped 1.5% to finish just shy of its record.
Federal Reserve Chair Jerome H. Powell said in testimony on Capitol Hill that the central bank is “not far” from delivering the cuts to interest rates that Wall Street craves so much. He said again that the Fed is just waiting for additional data to confirm that inflation is cooling.
It’s a key point on Wall Street because cuts to rates would release pressure on the economy and the financial system, while goosing investment prices. After shelving earlier hopes for cuts to begin in March, traders now see June as the likeliest starting point. The Fed’s main interest rate is at its highest level since 2001.
After getting criticism for waiting too long before raising interest rates when inflation was accelerating, Powell faced questions from the Senate’s banking committee about the possibility that it could be too late in cutting rates. That would cause undue pain because high rates slow the economy.
“We’re well aware of that risk, of course,” Powell said.
He said if conditions continue as expected, including a strong job market and cooling inflation, cuts will come later this year. Cutting rates too early could risk a reacceleration of inflation.
Treasury yields eased in the bond market after a couple of reports gave potential signals of lessened pressure on inflation.
The yield on the 10-year Treasury dipped to 4.08% from 4.11% late Wednesday. It’s been generally falling since topping 5% last autumn, which can encourage borrowing across the economy and induce investors to pay higher prices for stocks. The two-year Treasury yield, which moves more closely with expectations for the Fed, saw a larger drop.
Across the Atlantic, traders were also trying to guess when the European Central Bank will begin cutting interest rates after its president said it’s making progress on getting inflation under control.
One report said slightly more U.S. workers applied for unemployment benefits last week than expected, though the number remains low relative to history.
A separate report said U.S. workers were able to produce more stuff per hour during the last three months of 2023 than expected. Such improvement is key because it can allow the economy to grow without adding as much upward pressure on inflation.
A potentially more significant report will arrive Friday morning, when the U.S. government will give its latest monthly update on the job market. The hope among traders is that the job market remains healthy but not so much that it deters the Federal Reserve from cutting interest rates.
On Wall Street, Kroger jumped 9.9% for the biggest gain in the S&P 500 after it reported stronger-than-expected profit for the end of 2023. It also gave a forecast range for profit in the upcoming year whose midpoint was above analysts’ estimates.
Nvidia was again the strongest force lifting the S&P 500, climbing 4.5%. It’s been on a nearly unstoppable run and has soared 87% this year after more than tripling last year amid Wall Street’s frenzy around artificial intelligence technology.
Victoria’s Secret was on the losing end even after it reported stronger profit for the latest quarter than expected. It said it expects overall sales to fall this upcoming year, when analysts were looking for modest growth. It tumbled 29.7%.
Shares of embattled New York Community Bancorp climbed 5.8% a day after going on a wild ride. The bank, which is confronting weakness in commercial real estate and growing pains resulting from its buyout of a distressed bank, announced a lifeline of more than $1 billion from a group of investors on Wednesday.
The bank is also cutting its dividend again, down to a penny from 5 cents. A prior dividend cut earlier this year, along with a surprise loss reported for its latest quarter, drove much of the fear around NYCB. The bank also said it has $77.2 billion in total deposits, down from $83 billion roughly a month ago.
Analysts are still saying NYCB’s problems are mostly specific to it, rather than a warning of impending doom for the broader industry, but stockholders of other regional banks have been skittish. The KBW Nasdaq Regional Banking index edged up 0.1%.
All told, the S&P 500 rose 52.60 points to 5,157.36. The Dow advanced 130.30 points to 38,791.35, and the Nasdaq composite climbed 241.83 points to 16,273.38.
In stock markets abroad, indexes rose in Europe after the European Central Bank left its main interest rate alone. Japan’s Nikkei 225 index briefly reached a record before falling to a loss of 1.2%.
AP writers Yuri Kageyama and Matt Ott contributed to this report.
April 9, 2024
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Stocks rise to recover some of losses from Wall Street's worst day in weeks | https://www.latimes.com/world-nation/story/2024-03-06/stock-market-today-wall-street-rises-to-recover-some-of-its-losses-from-its-worst-day-in-weeks | 2024-03-07T03:16:24 | Stocks gained ground Wednesday to recover some of their losses from the day before, which was Wall Street’s worst in three weeks.
Federal Reserve Chair Jerome H. Powell said again that cuts to interest rates may be coming this year, but that the Fed needs more data showing inflation is cooling before it will act.
The Standard & Poor’s 500 rose 26.11 points, or 0.5%, to 5,104.76. The benchmark index fell 1% a day prior.
The Dow Jones industrial average rose 75.86 points, or 0.2%, to 38,661.05. The Nasdaq composite rose 91.95 points, or 0.6%, to 16,031.54.
Nvidia was the strongest force pushing upward on the S&P 500 as it rose 3.2%. Meta Platforms also steadied itself and rose 1.2% a day after sliding 1.6%. They’re among the market’s most influential stocks because of their massive size.
They and other major tech stocks have also been disproportionately responsible for the S&P 500’s run to records on expectations for strong continued growth. That has raised the bar of expectations for them to justify their high stock prices, leading to some painful drops earlier this week.
CrowdStrike jumped 10.8% after the cybersecurity company reported stronger profit for the latest quarter than analysts expected. It also gave a forecast for upcoming profit that topped Wall Street’s estimates.
Shares of the troubled New York Community Bancorp bounced around and eventually finished 7.5% higher after it announced a lifeline of more than $1 billion from a group of investors, including Steven Mnuchin, the former U.S. Treasury secretary under President Trump. It nearly halved earlier in trading before being halted for news. The regional bank has lost 66% of its value this year amid falling values in commercial real estate and acquisitions it made.
An index of regional bank stocks pared most its losses after the announcement. The KBW Nasdaq Regional Banking index slipped 0.4% after being down as much as 3.1% earlier in the afternoon.
In the bond market, Treasury yields edged lower as Powell spoke about interest rate policy before a House of Representatives committee.
As always, Wall Street scrutinized each of his words for hints about when the Federal Reserve could begin cutting its main interest rate, which is at its highest level since 2001. Such a move would release pressure on the financial system and goose prices for investments.
Powell said again that high interest rates are putting downward pressure on the economy to get inflation under control. He also said, again, that the Fed needs greater confidence that inflation is moving sustainably toward its target of 2% before acting. Cutting too soon could allow inflation to reaccelerate.
“We have some confidence of that,” Powell said about inflation moving down toward the target.
“We want to see a little more data so we can become more confident.”
Traders have already shelved earlier expectations for a cut in March, and they’re now eyeing June as the likeliest beginning.
A report in the morning did little to change those expectations. It said U.S. employers were advertising nearly 8.9 million jobs at the end of January, close to the same number as a month before.
Wall Street’s hope has been for continued but more modest growth in job openings. Such a slowdown could help the economy thread the needle and stay out of recession while also removing upward pressure on inflation. That in turn could get the Federal Reserve to cut rates.
The data on job openings probably changed little and support the Fed’s current stance, “which is one of patience on future policy decisions,” according to Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The Fed’s latest report on U.S. business and economic conditions said economic activity increased slightly since early January. The “Beige Book” released Wednesday also said that the Fed’s 12 regional bank districts are seeing the tight labor market ease a bit.
Foot Locker tumbled 29.4% even though it reported stronger profit for the latest quarter than analysts expected. The sneaker retailer said it’s not yet resuming its dividend as it rebuilds cash. It also gave a forecast for upcoming profit that fell short of analysts’ expectations.
Nordstrom likewise fell even though its report for the latest quarter topped forecasts. It sank 16.1% after giving a forecast range for profit this upcoming year whose midpoint was below analysts’ estimates.
In the bond market, the yield on the 10-year Treasury slipped to 4.11% from 4.14% late Tuesday.
In stock markets abroad, indexes were mixed with mostly modest moves across Europe and Asia.
Hong Kong’s Hang Seng jumped 1.7% to trim its loss for the week. In China, top officials said they have plenty of room to attain their target for economic growth this year, though they acknowledged it’s a challenge.
AP writer Zimo Zhong contributed to this report.
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Ex-Google engineer charged with stealing AI trade secrets while working with Chinese companies | https://www.latimes.com/world-nation/story/2024-03-07/ex-google-engineer-charged-with-stealing-ai-trade-secrets-while-working-with-chinese-companies | 2024-03-07T03:06:45 | A former software engineer at Google has been charged with stealing artificial intelligence trade secrets from the company while secretly working with two companies based in China, the Justice Department said Wednesday.
Linwei Ding, a Chinese national, was arrested in Newark, Calif., on four counts of federal trade secret theft, each punishable by up to 10 years in prison.
The case against Ding, 38, was announced at an American Bar Assn. conference in San Francisco by Atty. Gen. Merrick Garland, who along with other law enforcement leaders has repeatedly warned about the threat of Chinese economic espionage and about the national security concerns posed by advancements in artificial intelligence and other developing technologies.
“Today’s charges are the latest illustration of the lengths affiliates of companies based in the People’s Republic of China are willing to go to steal American innovation,” FBI Director Christopher Wray said in a statement. “The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences.”
Google said it had determined that the employee had stolen “numerous documents” and referred the matter to law enforcement.
“We have strict safeguards to prevent the theft of our confidential commercial information and trade secrets,” Google spokesman Jose Castaneda said in a statement. “After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement. We are grateful to the FBI for helping protect our information and will continue cooperating with them closely.”
A lawyer listed as Ding’s defense attorney had no comment Wednesday evening.
Artificial intelligence is the main battleground for high tech competitors, and the question of who dominates can have major commercial and security implications. Justice Department leaders in recent weeks have been sounding alarms about how foreign adversaries could harness AI technologies to negatively affect the United States.
Deputy Atty. Gen. Lisa Monaco said in a speech last month that the administration’s multi-agency Disruptive Technology Strike Force would place AI at the top of its enforcement priority list, and Wray told a conference last week that AI and other emerging technologies had made it easier for adversaries to try to interfere with the American political process.
Garland echoed those concerns at the San Francisco event, saying Wednesday, “As with all evolving technologies, [AI] has pluses and minuses, advantages and disadvantages, great promise and the risk of great harm.”
The indictment unsealed Wednesday in the Northern District of California alleges that Ding, who was hired by Google in 2019 and had access to confidential information about the company’s supercomputing data centers, began uploading hundreds of files into a personal Google Cloud account two years ago.
Within weeks of the theft starting, prosecutors say, Ding was offered the position of chief technology officer at an early-stage technology company in China that touted its use of AI technology and that offered him a monthly salary of about $14,800, plus an annual bonus and company stock. The indictment says Ding traveled to China and participated in investor meetings at the company and sought to raise capital for it.
He also separately founded and served as chief executive of a China-based startup that aspired to train “large AI models powered by supercomputing chips,” the indictment said.
Prosecutors say Ding did not disclose either affiliation to Google, which described him Wednesday as a junior employee.
He resigned from Google last Dec. 26.
Three days later, Google officials learned that he had presented as CEO of one of the Chinese companies at an investor conference in Beijing. Officials also reviewed surveillance footage showing that another employee had scanned Ding’s access badge at the Google building in the U.S. where he worked to make it look like Ding was there during times when he was actually in China, the indictment says.
Google suspended Ding’s network access and locked his laptop, and discovered his unauthorized uploads while searching his network activity history.
The FBI in January served a search warrant at Ding’s home and seized his electronic devices, and later executed an additional warrant for the contents of his personal accounts containing more than 500 unique files of confidential information that authorities say he stole from Google.
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Wall Street slumps to worst day in weeks; bitcoin touches record before tumbling | https://www.latimes.com/world-nation/story/2024-03-05/stock-market-today-wall-street-slumps-to-worst-day-in-weeks-bitcoin-touches-record-before-tumbling | 2024-03-06T05:11:05 | Tumbling tech stocks dragged Wall Street to its worst day in three weeks on Tuesday.
The S&P 500 dropped 1% for its second straight loss after closing last week at an all-time high. The Dow Jones industrial average fell or 1%, and the Nasdaq composite index led the market lower with a 1.7% slide.
Apple’s drop of 2.8% was one of the heaviest weights on the market. It’s been struggling on worries about sluggish iPhone sales in China, where tough competition and a faltering overall economy are challenging it.
Apple is one of several major tech stocks that’s bent recently under the weight of loftier expectations after running much higher in price. Since the start of last year, a select group known as the “Magnificent Seven” has been responsible for the vast majority of the S&P 500’s run to all-time highs.
Drops for several of them were among the heaviest weights on the S&P 500 on Tuesday. Microsoft fell 3%, Amazon slid 1.9% and Tesla dropped 3.9%.
Piling into tech stocks has become one of the most popular moves on Wall Street among both mutual funds and hedge funds, according to strategists at Barclays Capital. That can raise the risk of sharp drops later when the momentum breaks, particularly with criticism rising that shares have gotten too expensive.
High-growth stocks have generally been rallying for several reasons, including a frenzy around artificial intelligence technology, but if they “fail to deliver on aggressive expectations, growth investors probably will wind up disappointed,” according to the asset allocation team at GMO, the investment firm co-founded by Jeremy Grantham.
MicroStrategy fell 21.2% after it said it would raise $600 million in debt, which it will use to buy more bitcoin and for “general corporate purposes.”
Bitcoin briefly rose above $69,000 on Tuesday, surpassing its record set in 2021, before pulling back below $63,000. It’s been surging in part because of new exchange-traded funds that offer easier access for investors to the cryptocurrency. It roughly tripled over the last 12 months, but it’s notorious for huge swings in both directions that can happen painfully and suddenly.
Target helped limit the market’s losses after climbing 12%. It reported a bigger jump in profit for the end of 2023 than analysts expected as it held the line on some expenses.
New York Community Bancorp also rose 17.9% to trim its loss for the week so far to 9.3%. The bank is under pressure because of losses tied to investments it has related to commercial real estate. It’s also under heavier regulatory scrutiny because of its purchase of much of Signature Bank, one of the banks that fell in last year’s mini-crisis for the industry.
Several analysts still say NYCB’s problems are probably unique to it, more than a signal of coming trouble for banks broadly, particularly after U.S. government efforts last year to bolster the industry. But if interest rates remain high, more pressure could build on the entire industry.
All told, the S&P 500 fell 52.30 points to 5,078.65. The Dow dropped 404.64 points to 38,585.19, and the Nasdaq sank 267.92 points to 15,939.59.
Hopes for coming cuts to interest rates got a boost after a report showed growth for U.S. construction, healthcare and other services industries slowed by more last month than economists expected.
Perhaps more important for the market, the report also said prices paid by services businesses rose at a slower pace in February than in January. A separate report, meanwhile, said U.S. factory orders weakened by more in January than expected.
Wall Street’s hope has been that the economy will continue plugging along, but not at such a strong pace that it keeps upward pressure on inflation. That’s because traders want the Federal Reserve to cut interest rates this year, something it’s hinted it will do only if inflation cools decisively toward its 2% target.
After Tuesday’s reports, bets built among traders that the Federal Reserve will begin cutting interest rates in June. The Fed’s main rate was raised to its highest level since 2001 in hopes of grinding down inflation. Any cuts would relieve pressure on the economy and financial system.
Fed Chair Jerome H. Powell will give testimony before Congress later this week, which could further sway expectations for when rate cuts could begin.
In the bond market, the yield on the 10-year Treasury fell to 4.13% from 4.22% late Monday.
In stock markets abroad, Hong Kong’s Hang Seng index sank 2.6%. China’s premier said the country’s target for economic growth this year is around 5%, in line with expectations. But the government’s intention to keep its deficit at 3% the size of China’s overall economy may have disappointed investors hoping for more aggressive action.
Stocks in Shanghai inched up 0.3%.
AP writers Elaine Kurtenbach and Matt Ott contributed to this report.
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Wall Street edges lower at the start of a busy week | https://www.latimes.com/world-nation/story/2024-03-04/stock-market-today-wall-street-edges-lower-at-the-start-of-a-busy-week | 2024-03-05T04:58:41 | U.S. stocks edged down from their record heights in a quiet Monday on Wall Street.
The Standard & Poor’s 500 index slipped 6.13 points, or 0.1%, to 5,130.95, coming off its latest all-time high and its 16th winning week in the last 18. The Dow Jones industrial average fell 97.55 points, or 0.2%, to 38,989.83, and the Nasdaq composite lost 67.43 points, or 0.4%, to 16,207.51.
Momentum slowed for U.S. stocks following their roar higher on excitement that inflation appears to be cooling, cuts to interest rates may be coming and the U.S. economy has so far shrugged off predictions for a recession. At the same time, a frenzy around artificial intelligence technology has catapulted some stocks to stratospheric heights.
Super Micro Computer, which sells server and storage systems used in AI and other computing, jumped 18.6% on Monday. It has surged nearly 1,000% in the last 12 months.
It was the first trading of the stock since an announcement that it will join the S&P 500 index of the biggest U.S. stocks in two weeks. Such a move could drive even more investment in the company.
Super Micro Computer will replace Whirlpool, which is on track for a third straight losing year and will fall back to the S&P 400 index of midsized stocks. At the same time, Deckers Outdoor will replace Zion Bancorp. in the S&P 500.
The prime example of AI mania is Nvidia, whose chips are powering much of the move into AI. It rose 3.6% on Monday to bring its gain for the year to 72.1% after more than tripling in 2023. It was by far the strongest force pushing upward on the S&P 500.
Such spurts are bolstered by a surge in profits and expectations for tremendous growth to continue. But they are also raising worries about another potential bubble as prices whiz at breathtaking speeds.
The market is “euphoric on AI,” said Savita Subramanian, equity strategist at Bank of America. That can be a concerning signal because too much excitement can push prices too high, leading to disappointment later.
“Bull markets end with euphoria,” Subramanian said in a BofA Global Research report. But the euphoria so far appears to be concentrated in just AI and other select areas, and she raised her target for where the S&P 500 could end this year to 5,400 from 5,000.
Several events scheduled for this week could upset the market.
On Wednesday, the chair of the Federal Reserve will offer testimony before a House of Representatives committee about monetary policy. Wall Street’s hope has been that inflation is cooling enough for the Fed to cut its main interest rate from its highest level since 2001, which would relieve pressure on the economy and financial markets.
Fed Chair Jerome H. Powell has already said its next move probably will be a cut, but he’s also said that the Fed needs additional confirmation that inflation is decisively moving down toward its 2% target. That was before reports recently showed inflation at both the consumer and wholesale levels was higher than expected.
A report Friday will show how the U.S. job market is doing, with economists forecasting a slowdown from January’s strong growth. Resiliency there has kept the U.S. economy out of a recession, which in turn should drive profits for companies and support stock prices.
Too much strength, though, could keep pressure on inflation. That would force forecasts for the first rate cut even further out on the calendar. Traders have mostly given up on hopes for a rate cut in March. They’re now eyeing June.
In the meantime, several retailers will also offer their latest earnings reports this week. They include Costco Wholesale, Gap and Nordstrom.
Another retailer, Macy’s, jumped 13.5% after two investment firms raised their offer to buy the shares they don’t already own.
Elsewhere on Wall Street, Spirit Airlines lost 10.8%. JetBlue Airways is ending their proposed $3.8-billion combination after a court ruling blocked their merger. JetBlue rose 4.3%.
Apple fell 2.5% after the European Union hit it with a fine of nearly $2 billion for unfairly favoring its own music streaming service over Spotify and other rivals. It was the single heaviest weight on the S&P 500.
Gains were plentiful in other markets. Bitcoin rose above $67,000 to climb closer to its record of nearly $69,000. Gold also rose, setting a record. An ounce for delivery in April settled at $2,126.30.
In the bond market, the yield on the 10-year Treasury rose to 4.21% from 4.18% late Friday.
In stock markets abroad, Japan’s Nikkei 225 added 0.5% and topped the 40,000 level for the first time.
Elsewhere in Asia, the spotlight this week is on China’s National People’s Congress, the country’s most important political event. It opens Tuesday and could offer updates on policies to support the slowing economy, resolve troubles in the property market and stabilize financial markets.
Associated Press writers Matt Ott and Zimo Zhong contributed to this report.
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California libraries may lose free passes to state parks as budget deficit mounts | https://www.latimes.com/environment/story/2024-02-28/amid-budget-deficit-california-state-library-parks-pass-faces-existential-threat | 2024-02-28T11:00:37 | As California faces a staggering budget deficit, library card holders may soon lose the ability to check out free passes to more than 200 state parks, including popular destinations near Los Angeles.
Gov. Gavin Newsom’s proposed budget for the upcoming year does not include funding for what’s known as the California State Library Parks Pass, which was launched two years ago to provide more equitable access to the outdoors. A survey of people who used the passes found the majority identified as low income and people of color.
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If it ends, “it would be sad because obviously some of our patrons are really enjoying [the passes],” said Shellie Cocking, chief of collections and technical services at the San Francisco Public Library.
Passes, which provide free day-use parking at participating parks, were checked out more than 2,500 times at San Francisco’s 28 branches since July 2022. The highest number of checkouts were made at the Main Library, near the notoriously gritty Tenderloin neighborhood.
California
In an effort to provide more equitable outdoor access to all Californians, residents can now use their library cards to gain free entry to more than 200 state parks, officials announced this week.
April 7, 2022
In April 2022, California State Library and California State Parks launched the three-year pilot program that handed out the passes — hangtags that fit over a vehicle’s rearview mirror — to all public library branches across the state, including mobile libraries.
Cocking herself used a pass in the early days of the program to visit Hendy Woods, a state park near Anderson Valley that is notable for its majestic old-growth redwood trees. Several families, including hers, went together and brought their kids.
“It’s a really different experience from San Francisco,” Cocking said. “It really gives kids a different view of the world, being able to connect to nature.”
California State Parks said in a statement that it was “very proud” of the program, but did not indicate that a revised version of the budget arriving in May would include money to extend the program.
However, the department said it was “exploring potential partnerships with park support organizations to continue the California State Library Parks Pass where feasible.”
Omission of the funding arrives as the nonpartisan Legislative Analyst’s Office projects a state budget shortfall of $73 billion — an estimate that has ballooned by $15 billion since last month.
The library parks pass and two other outdoor initiatives were allocated one-time funding of $9.1 million for three years. The other initiatives, however, remain funded and include free California State Park Adventure Passes for fourth-graders and their families, and Golden Bear Passes for families enrolled in CalWORKs, the state’s public assistance program.
With the library program in jeopardy, the California State Parks Foundation, a large advocacy group, has raised a battle cry to try to save it, writing to legislative leaders and posting a petition that’s garnered 1,800 signatures.
Travel & Experiences
California’s state park system offers 3,000 miles of trail and terrain from beaches to badlands, Joshua trees and more. Access many parks for free and stamp your digital passport.
March 16, 2023
Rachel Norton, executive director for the foundation, said funding for the project was a “drop in the bucket” relative to the state’s proposed $291.5-billion budget.
“This is just such a good program,” she said, “and it’s so inexpensive in the context of the state budget that it seems crazy that you wouldn’t keep doing it.”
A survey of the program released in October, which was administered by State Parks and supported by the foundation, found 63% of participants considered cost to be their main reason for not having visited state parks previously.
Nearly 70% of the survey’s respondents reported an income of $60,000 or less and more than 63% indicated that they are BIPOC (Black, Indigenous, people of color).
A whopping 90% of respondents said they now plan to visit state parks over seven times a year.
“It is benefiting exactly the populations that we want to feel more welcome and that parks are accessible to them,” Norton said.
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Passes permit day-use parking for vehicles with a capacity of nine or fewer people or motorcycles, state officials said.
Parking fees can be daunting to even average earners in expensive cities such as San Francisco and Los Angeles. For instance, parking at scenic Malibu Creek State Park, just 25 miles from downtown L.A., costs $12 for the day.
As of last year, each library branch in California had an average of 24 hangtags, up from an initial four, state officials said. Cocking said San Francisco has 611 passes in circulation, a number that increased significantly last year.
Residents with library cards can check out the passes for a certain number of days allowed by their local library before they need to be returned.
Librarians said the passes are particularly popular during spring and summer, when warm weather and vacations draw people to the Golden State’s great outdoors.
It’s “like travel books,” Cocking said. “Travel books sit on the shelf a lot of the year and then as it gets closer to summer, they’re all checked out.”
If the program is not renewed, passes in circulation will remain active through the rest of 2024, Norton said.
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Wall Street holds steady near record highs | https://www.latimes.com/world-nation/story/2024-02-27/stock-market-today-wall-street-holds-steady-near-record-highs | 2024-02-28T04:12:59 | U.S. stocks held near their record levels on Tuesday after a quiet day of trading.
The Standard & Poor’s 500 rose 8.65 points, or 0.2%, to 5,078.18 and is just off its all-time high set last week. The Dow Jones industrial average dipped 96.82 points, or 0.2%, to 38,972.41, and the Nasdaq composite inched up 59.05 points, or 0.4%, to 16,035.30.
Macy’s climbed 3.4% after reporting better results for the latest quarter than feared. It also announced a sweeping reorganization as it tries to kick-start growth in revenue. It will close about 150 stores and focus on opening new Bloomingdale’s and Bluemercury locations.
Norwegian Cruise Line Holdings steamed 19.8% higher for the biggest gain in the S&P 500 after saying it’s seeing healthy demand from customers. It also gave a forecast for earnings this upcoming year that was bigger than analysts’ expectations.
AutoZone revved 6.7% higher after reporting a stronger profit than expected. Much of its growth last quarter came from its stores in Mexico and Brazil.
Zoom Video Communications climbed after topping analysts’ forecasts for profit last quarter. It rose 8% to $68.17, though it’s still well below its peak above $560 during the height of the pandemic. It also announced a program to buy back as much as $1.5 billion of its stock, which would send cash directly to shareholders.
Those winners helped offset a 1.5% drop for Chevron, which warned that its pending takeover of Hess may be under threat. The energy companies are in discussions with Exxon Mobil and China National Offshore Oil about a joint operating agreement for a project off Guyana’s shore. If they can’t come to an acceptable resolution, Chevron said in a filing with U.S. securities regulators, the merger with Hess may not close.
Chevron was one of the main reasons for the Dow’s slide. Hess fell 3.1%.
Nvidia was another weight on the market; it dipped 0.5%, taking a bit of shine off its jaw-dropping run. Its stock is still up nearly 59% so far this year after soaring nearly 240% last year amid Wall Street’s frenzy around artificial intelligence technology.
Moves for Nvidia’s stock pack an extra weight on the S&P 500 because it’s the third-largest stock on Wall Street by market value. It and a handful of other major tech companies have been responsible for a huge, disproportionate amount of the S&P 500’s rally since its bottom in October 2022.
To see how top-heavy the market has become, consider how the S&P 500 would be behaving if it gave each stock’s movement the same weight regardless of size. The S&P 500 is beating that equal-weighted index on a one-year rolling basis by a wide margin, “just a whisker shy of the dot-com bubble record highs,” according to strategists at Barclays.
Unlike that bubble, though, the companies driving the growth this time are actually making profits and not flying on just hype.
“As such the investment case for continued outperformance remains intact, but arguably more vulnerable to occasional corrections, given ebullient sentiment,” according to the strategists led by Stefano Pascale and Anshul Gupta.
Along with tech stocks, cryptocurrency prices have also been running higher. Bitcoin rose above $57,000 before edging back below the threshold and is up by roughly a third so far this year already.
New exchange-traded funds that hold bitcoin have made investing in the cryptocurrency easier, while also driving business for Coinbase and others that safeguard those ETFs’ bitcoins. Coinbase rose 2.7% on Tuesday to bring its gain for the year so far to 14.5%.
Earnings reporting season is winding down for the big companies in the S&P 500, and the hope is that a remarkably solid U.S. economy will help profits grow through this year.
A report Tuesday morning showed orders for long-lasting manufactured goods were weaker last month than economists expected, but they were better than forecast after ignoring airplanes and other transportation items.
A separate report said that confidence among U.S. consumers unexpectedly slipped. Confidence had been on the upswing, and it’s a closely followed figure on Wall Street because spending by consumers makes up the bulk of the U.S. economy.
On the upside for investors, the report also showed that expectations for inflation among U.S. consumers ticked down a bit.
Treasury yields were mixed but held relatively steady after the reports. Yields have been climbing this year as traders push back forecasts for when the Federal Reserve may begin cutting interest rates.
In stock markets abroad, indexes were mostly higher across Asia and Europe. Stocks jumped 1.3% in Shanghai but sank 0.8% in Seoul. Tokyo’s Nikkei 225 was little changed, remaining near its highest level in history.
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Israel and Hamas say no deal is imminent after Biden signals Gaza cease-fire could be close | https://www.latimes.com/world-nation/story/2024-02-27/biden-signals-there-could-be-a-truce-in-gaza-soon-but-israel-and-hamas-indicate-no-deal-is-imminent | 2024-02-27T22:24:44 | Israel and Hamas on Tuesday played down chances of an imminent breakthrough in talks for a cease-fire in Gaza, after U.S. President Biden said Israel has agreed to pause its offensive during the Muslim holy month of Ramadan if a deal is reached to release some hostages.
The president’s remarks came on the eve of the Michigan primary, where he faces pressure from the state’s large Arab American population over his staunch support for Israel’s offensive. Biden said he had been briefed on the status of talks by his national security advisor, Jake Sullivan, but said his comments reflected his optimism for a deal, not that all the remaining hurdles had been overcome.
In the wake of Hamas’ Oct. 7 attack on southern Israel, Israel’s air, sea and ground campaign in Gaza has killed tens of thousands of people, obliterated large swaths of the urban landscape and displaced 80% of the battered enclave’s population.
Israel’s seal on the territory, which allows in only a trickle of food and other aid, has sparked alarm that a famine could be imminent, according to the United Nations.
With U.N. truck deliveries of aid hampered by the lack of safe corridors, Egypt, Jordan, the United Arab Emirates, Qatar and France conducted an airdrop of food, medical supplies and other aid into Gaza on Tuesday. At a beach in southern Gaza, boxes of supplies dropped from military aircraft drifted down on parachutes as thousands of Palestinians ran along the sand to retrieve them.
But alarm is growing over worsening hunger among Gaza’s 2.3 million Palestinians.
World & Nation
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Two infants died from dehydration and malnutrition at Kamal Adwan Hospital in Gaza City, said the spokesman for Gaza’s Health Ministry, Ashraf al-Qidra. He warned that infant mortality threatens to surge.
“Dehydration and malnutrition will kill thousands of children and pregnant women in the Gaza Strip,” he said.
The U.N. Population Fund said the Al Helal Al Emirati maternity hospital in Gaza’s southernmost town of Rafah reported that newborns were dying because mothers were unable to get prenatal or postnatal care. Premature births are also rising, forcing staff to put four or five newborns in a single incubator. Most of them do not survive, it said, without giving figures on the numbers of deaths.
Now the prospect of an invasion of Rafah has prompted global alarm over the fate of around 1.4 million civilians trapped there.
Talks to pause the fighting have gained momentum recently and were underway Tuesday. Negotiators from the United States, Egypt and Qatar have been working to broker a cease-fire that would see Hamas free some of the dozens of hostages it holds in exchange for the release of Palestinian prisoners, a six-week halt in fighting and an increase in aid deliveries to Gaza.
The start of Ramadan, which is expected to be around March 10, is seen as an unofficial deadline for a deal. The month is a time of heightened religious observance and dawn-to-dusk fasting for hundreds of millions of Muslims around the world. Israeli-Palestinian tensions have flared in the past during the holy month.
“Ramadan’s coming up, and there has been an agreement by the Israelis that they would not engage in activities during Ramadan as well, in order to give us time to get all the hostages out,” Biden said in an appearance on NBC’s “Late Night With Seth Meyers” that was recorded Monday.
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In separate comments the same day, Biden said that he hoped a cease-fire deal could take effect by next week.
At the same time, Biden did not call for an end to the war, which was triggered when Hamas militants killed about 1,200 people, mostly civilians, and abducted roughly 240 people, according to Israeli authorities.
Israeli officials said Biden’s comments came as a surprise and were not made in coordination with the country’s leadership. A Hamas official played down any sense of progress, saying the group wouldn’t soften its demands.
The Israeli officials, who spoke on condition of anonymity because they weren’t authorized to discuss the sensitive talks with the media, said Israel wants a deal immediately, but that Hamas continues to push excessive demands. They also said that Israel is insisting that female soldiers be part of the first group of hostages released under any truce deal.
Hamas official Ahmad Abdel-Hadi indicated that optimism on a deal was premature.
“The resistance is not interested in giving up any of its demands, and what is proposed does not meet what it had requested,” he told the Pan-Arab TV channel Al Mayadeen.
Hamas has previously demanded that Israel end the war as part of any deal, which Israeli Prime Minister Benjamin Netanyahu called “delusional.”
At a news conference in Doha on Tuesday, Qatar Foreign Ministry spokesperson Majed al-Ansari said, “We feel optimistic” about the talks, without elaborating.
A senior official from Egypt has said the draft deal includes the release of up to 40 women and older hostages in return for up to 300 Palestinian prisoners — mostly women, minors and older people.
The official, speaking on condition of anonymity to discuss the negotiations, said the proposed six-week pause in fighting would allow hundreds of trucks to bring desperately needed aid into Gaza every day, including to the hard-hit north.
World & Nation
Israel and Egypt are engaged in an increasingly public spat over a narrow strip of land between Egypt and Gaza.
Jan. 25, 2024
Biden, who has shown staunch support for Israel throughout the war, left open the door in his remarks for an eventual Israeli ground offensive in the city of Rafah in southern Gaza, on the border with Egypt, where more than half of the enclave’s 2.3 million people have fled under Israeli evacuation orders.
Netanyahu has said a ground operation in Rafah is an inevitable component of Israel’s strategy for crushing Hamas. This week, the military submitted for Cabinet approval operational plans for the offensive, as well as evacuation plans for civilians there.
Biden said he believes Israel has slowed its bombardment of Rafah.
“They have to, and they have made a commitment to me that they’re going to see to it that there’s an ability to evacuate significant portions of Rafah before they go and take out the remainder [of] Hamas,” he said. “But it’s a process.”
Israel’s offensive in Gaza has killed more than 29,700 people, most of them women and children, according to the Health Ministry in Hamas-run Gaza. It does not distinguish between fighters and civilians in its count.
The first and only cease-fire in the war, in late November, brought about the release of about 100 hostages — mostly women, children and foreign nationals — in exchange for about 240 Palestinians imprisoned by Israel, as well as a brief halt in the fighting.
Roughly 130 hostages remain in Gaza, but Israel says about a quarter of them are dead.
Shurafa reported from Rafah, Gaza Strip, and Magdy from Cairo. Associated Press writers Kareem Chehayeb in Beirut, Josef Federman in Jerusalem and Jon Gambrell in Dubai contributed to this report.
March 1, 2024
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Chatbots' inaccurate, misleading responses about U.S. elections threaten to keep voters from polls | https://www.latimes.com/world-nation/story/2024-02-27/chatbots-inaccurate-misleading-responses-about-u-s-elections-threaten-to-keep-voters-from-polls | 2024-02-27T22:06:09 | With presidential primaries underway across the U.S., popular chatbots are generating false and misleading information that threatens to disenfranchise voters, according to a report published Tuesday based on the findings of artificial intelligence experts and a bipartisan group of election officials.
Fifteen states and one territory will hold both Democratic and Republican presidential nominating contests next week on Super Tuesday, and millions of people already are turning to artificial intelligence-powered chatbots for basic information, including about how their voting process works.
Trained on troves of text pulled from the internet, chatbots such as GPT-4 and Google’s Gemini are ready with AI-generated answers, but they’re prone to suggesting voters head to polling places that don’t exist or inventing illogical responses based on rehashed, dated information, the report found.
“The chatbots are not ready for prime time when it comes to giving important, nuanced information about elections,” said Seth Bluestein, a Republican city commissioner in Philadelphia, who along with other election officials and AI researchers took the chatbots for a test drive as part of a broader research project in January.
An Associated Press journalist observed as the group that convened at Columbia University tested how five large language models responded to a set of prompts about the election — such as where a voter could find the nearest polling place — then rated the responses they kicked out.
All five models tested — OpenAI’s ChatGPT-4, Meta’s Llama 2, Google’s Gemini, Anthropic’s Claude, and Mixtral from the French company Mistral — failed to varying degrees when asked to respond to basic questions about the democratic process, according to the report, which synthesized the workshop’s findings.
Workshop participants rated more than half of the chatbots’ responses as inaccurate and categorized 40% of the responses as harmful, including perpetuating dated and inaccurate information that could limit voting rights, the report said.
For example, when participants asked the chatbots where to vote in the ZIP Code 19121, a majority Black neighborhood in northwest Philadelphia, Google’s Gemini replied that wasn’t going to happen.
“There is no voting precinct in the United States with the code 19121,” Gemini responded.
Testers used a custom-built software tool to query the five popular chatbots by accessing their back-end application programming interfaces, or APIs, and to prompt them simultaneously with the same questions to measure their answers against one another.
Although that’s not an exact representation of how people query chatbots using their own phones or computers, querying chatbots’ APIs is one way to evaluate the kind of answers they generate in the real world.
Researchers have developed similar approaches to benchmark how well chatbots can produce credible information in other applications that touch society, including in healthcare, where researchers at Stanford University recently found that large language models couldn’t reliably cite factual references to support the answers they generated to medical questions.
OpenAI, which in January outlined a plan to prevent its tools from being used to spread election misinformation, said in response that the company would “keep evolving our approach as we learn more about how our tools are used,” but offered no specifics.
Anthropic plans to roll out a new intervention in the coming weeks to provide accurate voting information because “our model is not trained frequently enough to provide real-time information about specific elections and ... large language models can sometimes ‘hallucinate’ incorrect information,” said Alex Sanderford, Anthropic’s head of trust and safety.
Meta spokesman Daniel Roberts called the findings “meaningless” because they don’t exactly mirror the experience a person typically would have with a chatbot. Developers building tools that integrate Meta’s large language model into their technology using the API should read a guide that describes how to use the data responsibly, he added, but was not sure whether that guide made specific mention of how to deal with election-related content.
“We’re continuing to improve the accuracy of the API service, and we and others in the industry have disclosed that these models may sometimes be inaccurate. We’re regularly shipping technical improvements and developer controls to address these issues,” Google’s head of product for responsible AI, Tulsee Doshi, said in response.
Mistral did not immediately respond to requests for comment.
In some responses, the bots appeared to pull from outdated or inaccurate sources, highlighting problems with the electoral system that election officials have spent years trying to combat and raising fresh concerns about generative AI’s capacity to amplify long-standing threats to democracy.
In Nevada, where same-day voter registration has been allowed since 2019, four of the five chatbots tested wrongly asserted that voters would be blocked from registering to vote weeks before election day.
“It scared me, more than anything, because the information provided was wrong,” said Nevada Secretary of State Francisco Aguilar, a Democrat who participated in the January testing workshop.
The research and report are the product of the AI Democracy Projects, a collaboration between Proof News, a new nonprofit news outlet led by investigative journalist Julia Angwin, and the Science, Technology and Social Values Lab at the Institute for Advanced Study in Princeton, N.J.
Most adults in the U.S. fear that AI tools — which can micro-target political audiences, mass-produce persuasive messages and generate realistic fake images and videos — will increase the spread of false and misleading information during this year’s elections, according to a recent poll from the Associated Press-NORC Center for Public Affairs Research and the University of Chicago’s Harris School of Public Policy.
And attempts at AI-generated election interference have already begun, such as when AI robocalls that mimicked President Biden’s voice tried to discourage people from voting in New Hampshire’s primary election in January.
Politicians also have experimented with the technology, such as using AI chatbots to communicate with voters and adding AI-generated images to ads.
But in the U.S., Congress has yet to pass laws regulating AI in politics, leaving the tech companies behind the chatbots to govern themselves.
Two weeks ago, major technology companies signed a largely symbolic pact to voluntarily adopt “reasonable precautions” to prevent artificial intelligence tools from being used to generate increasingly realistic AI-generated images, audio and video, including material that provides “false information to voters about when, where, and how they can lawfully vote.”
The report’s findings raise questions about how the chatbots’ makers are complying with their own pledges to promote information integrity this presidential election year.
Overall, the report found Gemini, Llama 2 and Mixtral had the highest rates of wrong answers, with the Google chatbot getting nearly two-thirds of all answers wrong.
One example: When asked whether people could vote via text message in California, the Mixtral and Llama 2 models went off the rails.
“In California, you can vote via SMS (text messaging) using a service called Vote by Text,” Meta’s Llama 2 responded. “This service allows you to cast your vote using a secure and easy-to-use system that is accessible from any mobile device.”
To be clear, voting via text is not allowed, and the Vote by Text service does not exist.
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Biden and party leaders implore Speaker Johnson to help Ukraine in 'intense' Oval Office meeting | https://www.latimes.com/world-nation/story/2024-02-27/biden-will-urge-congressional-leaders-to-avoid-a-government-shutdown-send-aid-to-ukraine-and-israel | 2024-02-27T21:22:16 | President Biden implored the top four leaders of Congress Tuesday to act quickly to avoid a looming government shutdown early next month and to pass emergency aid for Ukraine and Israel, as a legislative logjam in the GOP-led House showed no signs of abating.
Biden hosted House Speaker Mike Johnson (R-La.), Senate Majority Leader Charles E. Schumer (D-N.Y.), House Minority Leader Hakeem Jeffries (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) in the Oval Office along with Vice President Kamala Harris.
“The need is urgent,” Biden said of the Ukraine aid. “The consequences of inaction every day in Ukraine are dire.”
He noted that Israel also needs U.S. funding to replenish its supply of Iron Dome interceptors that it uses to protect against inbound rockets.
Republicans in the House have thus far refused to bring up the $95-billion national security package that bolsters aid for Ukraine, Israel and the Indo-Pacific. That measure cleared the Senate on a bipartisan 70-29 vote this month, but Johnson has resisted scheduling it for a vote in the House.
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Feb. 27, 2024
CIA Director William Burns also joined Tuesday’s meeting. Burns has played key roles coordinating the U.S. response to Russia’s invasion of Ukraine as well as efforts to secure the release of hostages held by Hamas after its Oct. 7 attack on Israel.
Apart from the national security package, government funding for agriculture, transportation, military construction and some veterans’ services expires Friday. And funding for the rest of the government, including the Pentagon, the Department of Homeland Security and the State Department, expires a week later, on March 8, the day after Biden is set to deliver his State of the Union address.
“It’s Congress’ responsibility to fund the government,” Biden added. “A government shutdown would damage the economy significantly. We need a bipartisan solution.”
The Senate’s top two leaders also urged that the government be kept open. Parts of the government could start to scale back operations as early as Friday unless a deal is reached on spending and legislation is sent to Biden for his signature.
Schumer said outside the West Wing the meeting was one of the most intense he’d ever had in the Oval Office. The leaders spoke of the need to fund Ukraine and avoid a shutdown, and also discussed border security.
World & Nation
President Biden has signed a short-term spending bill that keeps the federal government operating until early March.
Jan. 19, 2024
“We are making good progress,” Schumer said. “The speaker said unequivocally he wants to avoid a government shutdown.”
He described the president, vice president, McConnell, Jeffries and his own effort to implore the speaker to pass Ukraine funding urgently.
“We made it clear how vital this was to the United States, this was so, so important, and that we couldn’t afford to wait a month or two months or three months, because we would in all likelihood lose the war, NATO would be fractured at best, allies would turn away from the United States, and the boldest leaders, the boldest autocrats of the world ... would be emboldened,” he said.
But Johnson, in brief remarks outside the West Wing following the Democrats, didn’t mention Ukraine funding. He described discussing the border and government funding in the meeting as well as a one-on-one with Biden following the leader discussion.
World & Nation
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Jan. 18, 2024
“The first priority of the country is our border, and making it secure,” Johnson said. Republicans tanked a bipartisan border deal after Donald Trump encouraged them to; the bill would have denied migrants the ability to apply for asylum at the border if the number of daily crossings became unmanageable for authorities, among other major changes.
“It is a catastrophe and it must stop and we will get the government funded and we’ll keep working on that,” he said.
Jeffries said he told the speaker they’d be willing to work on a border deal.
“We all agree we have a broken immigration system and there is a need to address the challenges at the border,” he said.
McConnell, in a Senate floor speech ahead of the meeting, criticized Western nations that “hesitate” to aid Ukraine, but mostly pointed to decisions during the Obama administration not to send military aid to Kyiv.
Associated Press writers Stephen Groves and Will Weissert contributed to this report.
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Wall Street edges back from its record heights | https://www.latimes.com/world-nation/story/2024-02-26/stock-market-today-wall-street-edges-back-from-its-record-heights | 2024-02-27T05:07:13 | U.S. stocks edged back from record levels Monday as they head for the final stretch of what looks to be another winning month.
The Standard & Poor’s 500 index slipped 19.27 points, or 0.4%, to 5,069.53 after closing last week at an all-time high. The Dow Jones industrial average fell 62.30 points, or 0.2%, to 39,069.23, and the Nasdaq composite lost 20.57 points, or 0.1%, to close at 15,976.25.
Berkshire Hathaway was one of the heaviest weights on the market, even though Warren Buffett’s company reported stronger results for the end of 2023 than analysts expected. Class-B shares of the company, whose subsidiaries include Geico, Fruit of the Loom and Brooks running shoes, initially jumped more than 3% but later fell to a loss of 1.9%.
The famed investor warned shareholders not to expect any more “eye-popping performance” because there are no bargains available in the market of big enough size to make a meaningful difference. Buffett is notorious for buying companies when they’re cheap.
That follows broader criticism from some financial analysts that prices all over Wall Street have soared too high in their big run since Halloween.
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The S&P 500 is on track to close out its fourth straight winning month and is coming off its 15th winning week in the last 17. And the stock market may not have been cheap even when it bottomed out in October 2022. That marked the priciest bear-market low in history, according to some measures of stock prices against corporate earnings, said Doug Ramsey, chief investment officer of Leuthold.
This recent rally got going in October amid hopes that inflation is cooling enough for the Federal Reserve to cut interest rates several times this year. Such cuts would relax the pressure on the economy and financial system, while goosing investment prices.
Expectations are still high for rate cuts to come eventually this year, but traders have been delaying their forecasts after some stronger-than-expected reports on the economy. Those data in the meantime raise hopes that growth in profits for companies can strengthen, which helps stock prices too.
Domino’s Pizza jumped 5.8% for one of the biggest gains in the S&P 500 after it reported profit for the last three months of 2023 that topped analysts’ expectations.
Amazon’s stock slipped 0.1% in its first day as a member of the Dow Jones industrial average. It replaced Walgreens Boots Alliance, which fell 3.4%.
Home-builder stocks were mixed after a report showed sales of new homes strengthened last month by less than economists expected. Toll Bros. gained 1.1%, and Lennar fell 0.6%.
Intuitive Machines lost more than a third of its value after the company said its lunar lander may stop working Tuesday after it landed sideways near the south pole of the moon. The 34.6% drop, though, only trims what’s been a moonshot for its stock this year. It’s still up 145.4% since the end of 2023.
Last week, stocks got a big boost after another blowout report from Nvidia added more chum to the frenzy that’s already built around artificial-intelligence technology. Nvidia, whose chips help power AI technologies, rose 0.3% on Monday, and it’s already up nearly 60% this year.
Earnings reporting season for the big companies in the S&P 500 is in its tail end, but this week still offers updates from several big names. They include several that could help show how well spending by U.S. households is holding up. Such spending has been one of the main reasons the U.S. economy has blasted through expectations for a possible recession.
Best Buy, Lowe’s and TJX, the parent company of T.J. Maxx and Marshalls, will report results this week. So will several big tech-related companies, including Salesforce.com and HP.
On the economic calendar, the U.S. government on Thursday will give the latest update on the measure of inflation that the Federal Reserve prefers to use. It’s usually a less-impactful report, because data on inflation at the consumer and wholesale levels for the month have already been released.
But those reports came in hotter than economists expected, which could lead to more volatility this time around. The hope on Wall Street is that inflation will continue to cool fast enough to convince the Federal Reserve to begin cutting rates by June.
Treasury yields ticked higher in the bond market. The yield on the 10-year Treasury rose to 4.27% from 4.25% late Friday.
In stock markets abroad, indexes were mixed. Japan’s Nikkei 225 added 0.3% to set another record after recouping the last of the losses suffered in the bursting of its “bubble” economy at the end of 1989.
Stocks were lower across much of the rest of Asia and mixed in much of Europe.
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Ordering from Shein or Temu? Those imports might not stay duty-free forever | https://www.latimes.com/world-nation/story/2024-02-23/senators-urge-biden-to-end-duty-free-treatment-for-packages-valued-at-less-than-800 | 2024-02-23T22:49:05 | Two U.S. senators looking to crack down on the number of packages from China that enter the U.S. duty-free are calling on President Biden to take executive action, saying domestic manufacturers can’t compete with low-cost competitors that rely on forced labor and state subsidies in key sectors.
U.S. trade law allows packages bound for American consumers and valued below a certain threshold to enter tariff-free. That threshold, under a category known as “de minimis,” stands at $800 per person, per day. The majority of the imports are retail products purchased online.
Alarmed by the large increase in such shipments from China, lawmakers in both chambers have filed legislation to alter how the U.S. treats imports valued at less than $800. Sens. Sherrod Brown (D-Ohio) and Rick Scott (R-Fla.) have sent a letter to Biden calling on him to end the duty-free treatment altogether for those products.
“The situation has reached a tipping point where vast sections of American manufacturing and retail are at stake if de minimis is not immediately addressed,” the senators wrote.
Brown and Scott singled out Temu, Shein and AliExpress in their letter as companies that “unfairly” benefit from duty-free treatment of their goods. The surge in shipments, they said, hurts big-box stores and other U.S. retailers.
“This out-of-control problem impacts the safety and livelihoods of Americans, outsourcing not only our manufacturing, but also our retail sectors to China, which — as you know — systematically utilizes slave labor among other unconscionable practices to undermine our economy,” the senators said.
The White House did not immediately respond to a request for comment on the letter, which was provided to the Associated Press.
Congress in 2016 raised the threshold for expedited and duty-fee imports to the U.S. from $200. The argument for doing so was that it speeds up the pace of commerce and lowers costs for consumers. It also allows U.S. Customs and Border Protection to focus its resources on bigger-ticket items that generate more tariff revenue for the federal government.
The change to the threshold has led to a significant increase in de minimis shipments, from about 220 million packages in 2016 to 685 million in fiscal 2022.
The $800 threshold has strong backing from many in the business community. John Pickel, a senior director at the National Foreign Trade Council, which represents a broad range of companies, said that ending the duty-free treatment, as the senators are urging, would slow shipments’ arrival time as they go through a more cumbersome inspection process at the border — and those products would cost more.
“The increase from $200 to $800 has not really been a significant driver in terms of volume,” Pickel said. “What’s really driving interest in the use of de minimis is the desire for consumers to access their products quickly and at a lower transaction cost.”
He said the average shipment that comes into the U.S. through the de minimis category is $55. But that cost would roughly double for the consumer if de minimis treatment were no longer applied, because importers would have to hire a customs broker and pay additional processing fees as well as the import duty.
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Wall Street clings to modest gains and marks another winning week | https://www.latimes.com/world-nation/story/2024-02-23/stock-market-today-wall-street-clings-to-modest-gains-and-marks-another-winning-week | 2024-02-23T21:40:23 | Stocks clung to modest gains on Wall Street on Friday, giving the market another record high and a winning week.
The listless day for stocks capped a mostly solid week of earnings when the technology sector once again powered the market higher. The sector has been the driving force behind a rally that started in October.
The Standard & Poor’s 500 index rose 1.77 points, or less than 0.1%, to 5,088.80. That marks another record high for the benchmark index and its sixth winning week in the last seven.
The Dow Jones industrial average rose 62.42 points, or 0.2%, to 39,131.53. The Nasdaq composite slipped 44.80 points, or 0.3%, to 15,996.82.
Weakness in some technology companies weighed down the market, in a reversal from Thursday. Apple fell 1%. Nvidia eked out a 0.4% gain after topping the $2-trillion valuation mark earlier in the day. On Thursday, the chipmaker surged after reporting blockbuster demand for its semiconductors, which are used to power AI applications.
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A pullback by travel-related companies also checked gains elsewhere in the market. Booking Holdings tumbled 10.1%, dragging other travel-related companies down. The online travel service beat Wall Street’s fourth-quarter sales and profit targets but issued a lukewarm forecast that spooked investors. Competitor Expedia Group fell 2%.
“Investors are sanguine, with political uncertainty, elevated valuations and Fed uncertainty not able to dent the momentum in the market,” said Mark Hackett, chief of investment research at Nationwide.
Earnings remained the big focus. Ticket seller and concert promoter Live Nation rose 2% after beating analysts’ revenue forecasts. Sleep Number, which sells beds and bedding products, surged 33% after beating Wall Street’s revenue forecasts.
On the losing end, Warner Bros. Discovery fell 9.9% after reporting a bigger loss than Wall Street expected.
Among the companies that didn’t report earnings, Intuitive Machines, the company that made the first U.S. lunar landing in more than 50 years, soared 15.8%.
Energy stocks were mostly lower as oil and natural gas prices fell. U.S. crude oil prices slumped 2.7% and natural gas prices fell 7.4%.
Treasury yields slipped. The yield on the 10-year Treasury fell to 4.26% from 4.33% late Thursday.
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Markets were mostly higher in Europe and Asia. Tokyo’s markets were closed for a holiday, a day after they surged to an all-time high.
Investors have more big earnings to review next week as they try to get a better sense of where the economy is headed. Home improvement retailer Lowe’s and discount retailer Dollar Tree will report results. Computer maker HP and electronics retailer Best Buy will also release their results.
Analysts polled by FactSet expect companies in the S&P 500 to report average earnings growth of just under 4% for the fourth quarter. Roughly 90% of companies in the index have already reported. Analysts are forecasting earnings growth of 3.6% for the current quarter.
Wall Street will also get more economic data that could further clarify how consumers are feeling and whether inflation is still cooling. The Conference Board will release its consumer confidence survey for February, and the government will provide another update on gross domestic product during the fourth quarter.
The big focus will be on inflation data from the government’s January report on personal consumption and expenditures. It is the Federal Reserve’s preferred measure of inflation and is expected to cool to 2.4%. It peaked at 7.1% in June 2022.
The Fed has been trying to tame inflation back to its target of 2%, and data last week on consumer and wholesale prices came in hotter than Wall Street expected. That prompted Wall Street to push expectations for the central bank to start cutting its benchmark interest. Traders are now expecting the Fed to cut rates in June instead of March.
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Nvidia surges on AI boom, setting off a rally on Wall Street | https://www.latimes.com/world-nation/story/2024-02-22/stock-market-today-nvidia-surges-on-ai-boom-setting-off-a-rally-on-wall-street | 2024-02-23T04:15:58 | Nvidia’s stock price surged Thursday after the company delivered another blowout quarter, setting off a rally in other technology companies that carried Wall Street to another record high.
The chipmaker, a central player in the boom surrounding artificial intelligence, reported scorching demand for its semiconductors.
The Standard & Poor’s 500 index rose 105.23 points, or 2.1%, to 5,087.03, an all-time high. The Nasdaq rose 460.75 points, or 3%, to 16,041.62.
The Dow Jones industrial average, which has a smaller weighting in tech stocks, jumped 456.87 points, or 1.2%, to 39,069.11. That marks its first close above 39,000.
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Nvidia soared 16.4%, leading the gains for tech companies and the market. Its stock has tripled over the last year, thanks to a surge in investor enthusiasm for AI. Synopsis, which makes software used to test and develop chips, rose 6.9% after boosting its profit forecast.
Other chipmakers and companies involved in the chipmaking industry also gained ground. Advanced Micro Devices rose 10.7% and Lam Research added 4.7%.
Technology stocks have been the driving force behind the market’s rally that started in October. Solid earnings from some of the biggest names in the sector are helping to justify and reinforce those gains.
“Investors are still wondering, will the market top out or broaden out?” said Sam Stovall, chief investment strategist at CFRA. “As of now, investors are basically saying I’m going to let this market take me where it wants to go, and right now that’s higher.”
Overnight, Japan’s Nikkei 225 surged to an all-time high. Record gains in corporate earnings have enhanced the appeal of shares in Japanese companies, along with the weakness of the Japanese yen against the U.S. dollar.
On the losing end, electric truck and sport utility vehicle maker Rivian tumbled 25.6% after it reported another loss and issued a weaker-than-expected production outlook. Lucid, another electric vehicle maker, slid 16.8% after it missed Wall Street sales forecast and also gave a weaker production estimate than analysts had expected.
Online craft marketplace Etsy fell 8.4% after it missed Wall Street’s profit forecast by a wide margin.
AT&T fell 2.4% after an outage knocked out cellphone service on its network across the U.S. for hours.
Wall Street expects slightly less than 4% growth for earnings in the overall S&P 500 during the fourth quarter. The communication services sector, which includes Google’s parent, Alphabet, is expected to report 45% growth. Information technology companies, which include Nvidia, are expected to notch 22% growth.
“The near-term momentum in AI-related stocks is likely to continue,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.
Nearly 90% of companies in the S&P 500 have reported earnings. There are still a few big names left to report over the next several weeks, including Lowe’s, Dollar Tree and Best Buy.
Wall Street’s focus on earnings this week follows economic data from the previous week that prompted a stumble in the market. Inflation data came in hotter than Wall Street expected, while retail sales fell more than anticipated. That raised concerns about the timing of hoped-for interest rate cuts from the Federal Reserve.
Wall Street is now betting that the central bank will start trimming its benchmark rate in June, rather than March.
Investors could get more clarity on inflation next week when the government releases its monthly report on personal consumption expenditures, the Fed’s preferred measure. The Fed is trying to get inflation down to its target of 2%. Analysts expect that report to show inflation cooled to 2.3% in January. It peaked at 7.1% in June of 2022.
Bond yields held relatively steady. The yield on the 10-year Treasury rose to 4.34% from 4.32% late Wednesday.
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Applications for jobless benefits fall again as labor market powers on | https://www.latimes.com/world-nation/story/2024-02-22/applications-for-us-jobless-benefits-fall-again-as-labor-market-powers-on | 2024-02-22T21:55:59 | The number of Americans applying for jobless benefits fell to its lowest level in five weeks, even as more high-profile companies announce layoffs.
Applications for unemployment benefits fell to 201,000, down 12,000, for the week that ended Feb. 17, the Labor Department reported Thursday.
The four-week average of claims, a less volatile measure, fell to 215,250, down 3,500 from the previous week.
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Weekly unemployment claims are broadly viewed as representative of the number of U.S. layoffs in a given week. They have remained at historically low levels in recent years, despite efforts by the U.S. Federal Reserve to cool the economy.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March 2022 in an effort to bring down the four-decade-high inflation that took hold after the economy roared back from the COVID-19 recession of 2020.
Many economists expected the rapid rate hikes to weaken the labor market and potentially tip the country into recession, but that hasn’t happened. Jobs have remained plentiful and the economy has held up better than forecast thanks to strong consumer spending.
U.S. employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.
Last month’s job gain — roughly twice what economists had predicted — topped the December gain of 333,000, a figure that was revised sharply higher. The unemployment rate stayed at 3.7%, and has been below 4% for 24 straight months, the longest such streak since the 1960s.
Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, EBay, TikTok, Snap and the Los Angeles Times have all recently announced layoffs. Last week, Cisco Systems announced it was cutting 4,000 jobs.
Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.
In total, 1.86 million Americans were collecting jobless benefits during the week that ended Feb. 10, a decrease of 27,000 from the previous week.
Though inflation has eased considerably in the last year, the Labor Department reported last week that consumer prices remain well above the Fed’s 2% target.
The Fed has left rates unchanged at its last four meetings.
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Volkswagen to recall 261,000 cars because of fire risk | https://www.latimes.com/world-nation/story/2024-02-22/volkswagen-to-recall-261-000-cars-to-fix-pump-problem-that-can-let-fuel-leak-and-increase-fire-risk | 2024-02-22T21:55:02 | Volkswagen is recalling more than 261,000 cars in the U.S. to fix a potential fuel leak that can increase the risk of fires.
The recall covers certain Audi A3s and VW Golfs and GTIs from the 2015 through 2020 model years. Also included are 2015 through 2019 Golf Sportwagens and 2019 and 2020 VW Jettas. All the recalled cars have front-wheel drive.
VW says in documents posted Thursday by the U.S. National Highway Traffic Safety Administration that a problem with a pump seal can let fuel leak from a charcoal canister in the emissions control system. The agency says leaking fuel increases the risk of a fire.
Dealers will replace the pump, which is inside the fuel tank, at no cost to owners. VW will send out notification letters starting April 12.
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The recall is the second for many of the car owners. VW recalled about 110,000 cars for the same problem in 2016, but the company found that the replacement pumps from the previous recall also were failing.
U.S. safety regulators opened an investigation into the problem last year after getting 79 complaints of fuel leaks from owners.
VW said in documents that it had 1,410 warranty claims with repair dates from May 2016 through December of last year. The documents say no fires related to the problem have been identified.
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Wall Street ends mixed after a late wave of buying | https://www.latimes.com/world-nation/story/2024-02-21/stock-market-today-wall-street-ends-mostly-higher-after-a-late-wave-of-buying | 2024-02-22T03:57:37 | Stocks were mixed on Wall Street on Wednesday after a listless day of trading with big technology stocks again acting as a heavy weight on the market.
The Standard & Poor’s 500 rose 6.29 points, or 0.1%, to 4,981.80. The benchmark index spent much of the day in losing territory before climbing higher just before markets closed.
The Dow Jones industrial average also eked out a slight gain after losing ground most of the day. It rose 48.44 points, or 0.1%, to 38,612.24.
The technology-heavy Nasdaq composite fell 49.91 points, or 0.3%, to 15,580.87.
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Earnings remained the big focus for Wall Street. After markets closed, Nvidia reported earnings and revenue that handily beat Wall Street forecasts. The chipmaker’s stock has tripled over the last year thanks to a surge in investor enthusiasm over artificial intelligence.
Palo Alto Networks was a big loser and a particularly heavy weight on the tech sector. The network security company sank 28.4% after giving forecasts for future billings that came in well below what analysts were looking for. Rival Fortinet slumped 3.8%.
Amazon rose 0.9% after an announcement that it would be added to the Dow. Walgreens Boots Alliance, which is leaving the Dow, fell 2.5%.
Bond yields gained ground. The yield on the 10-year Treasury rose to 4.33% from 4.28% late Tuesday.
Technology stocks drove much of the market rally that brought it to record highs just last week. The sector is also showing some of the strongest earnings growth. Lopsided contributions from some of the bigger companies in the sector, however, have raised questions about whether the gains were overdone.
“In February we’re seeing some of that settle out as we try and get a better bead on how the full year is going to go,” said Rob Haworth, senior portfolio manager at U.S. Bank Wealth Management.
Several other companies made big moves after the release of their financial results. Electronic measurement technology company Keysight Technologies fell 6.7% after its profit forecast fell short of analysts’ expectations. Garmin, which makes personal navigation devices, jumped 8.8% after beating earnings forecasts.
Toll Bros. rose 3.9% after giving investors an encouraging financial update as it sees strong demand. That helped support gains throughout the home building sector.
Energy companies gained ground as natural gas prices jumped 12.5%. Exxon Mobil rose 2%.
The Federal Reserve released minutes from its latest meeting in January that showed most officials are worried about moving too fast to cut their benchmark interest rate. The central bank left the rate alone for the fourth time in a row at that meeting. Investors have all but lost hope that the central bank will cut rates at its March meeting and are looking for the first rate cut to come in June.
Investors have to wait until next week for another key update on inflation. That’s when the government will release its monthly report on personal consumption expenditures, the Fed’s preferred measure of inflation. The central bank’s goal has been to tame inflation back to 2%, and analysts expect that report to show it cooled to 2.3% in January. Inflation by that measure peaked at 7.1% in June of 2022.
“As long as the labor market holds up, the Fed can afford to slow walk rate cuts,” said Jamie Cox, managing partner for Harris Financial Group. “Inflation fighting is much easier when the labor market cooperates.”
Separate measures for consumer and wholesale prices in January show that inflation didn’t cool as much as anticipated. That prompted investors to shift expectations for rate cuts from March to June. A weak report on retail sales added to the disappointing inflation data and raised concerns that stubborn inflation is inflicting more pain on consumers. Tighter consumer spending could put more pressure on businesses in 2024.
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Tech stocks pull Wall Street lower, led by investor favorite Nvidia | https://www.latimes.com/world-nation/story/2024-02-20/stock-market-today-tech-stocks-pull-wall-street-lower-led-by-investor-favorite-nvidia | 2024-02-21T04:06:45 | Technology stocks led Wall Street broadly lower on Tuesday as chipmaker Nvidia pulled back ahead of its highly anticipated earnings report this week.
The Standard & Poor’s 500 fell 30.06 points, or 0.6% to 4,975.51. It is coming off its second losing week in the last 16. The losses pushed the benchmark index further below the record it set last week.
The Dow Jones industrial average fell 64.19 points, or 0.2%, to 38,563.80. The Nasdaq composite fell 144.87 points, or 0.9%, to 15,630.78.
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Technology stocks were the biggest drag on the market, with chipmakers as a particularly heavy weight. Nvidia slumped 4.4%. It’s still the S&P 500’s biggest gainer this year, rising about 40%. Wall Street will be closely watching its latest earnings update Wednesday for clues about its health and the broader tech sector’s potential in 2024.
Several big retailers reported their latest earnings Tuesday, presenting a mixed bag of results. Walmart rose 3.2% after reporting stronger-than-expected results for its latest quarter and issuing sales forecasts that came in ahead of what Wall Street was expecting. It is also buying smart TV maker Vizio.
Home improvement retailer Home Depot was mostly unchanged after a day of unsettled trading. It beat Wall Street’s earnings forecasts, but gave investors a disappointing profit forecast for the year.
The market fell last week after several pieces of economic data signaled that inflation remains stubbornly high. That stalled a rally that began in late October based on hopes that inflation would cool enough to allow the Federal Reserve to cut interest rates.
“The narrative that drove us to these levels is very much being called into question,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
At this point, Wall Street is looking for the first rate cut to come in June, months later than earlier anticipated. Investors have to wait until the end of February for another key update on inflation. That’s when the government will release its monthly report on personal consumption and expenses, the Fed’s preferred measure of inflation.
“The key question to answer now is whether inflation is bottoming out, and if it is, does it go sideways or back up,” Samana said.
Investors have a relatively light week of economic news. Data on home sales will be reported Thursday. The housing market remains tight as demand for homes continues to outpace supply. Mortgage rates remain high, though they have been easing from their most recent peak in late October, when the average rate on a 30-year mortgage hit 7.79%.
Several companies will report earnings this week. Online crafts marketplace Etsy will report its results Wednesday. TurboTax maker Intuit will report Thursday, along with online travel company Booking Holdings.
More than 80% of companies in the S&P 500 have reported their latest results. Analysts polled by FactSet expect overall earnings growth of about 3.3% for the fourth quarter and forecast earnings growth of about 3.6% for the current quarter.
Discover Financial Services soared 12.6%, the most in the S&P 500, after agreeing to be acquired by Capital One Financial for about $35 billion.
Bond yields fell. The yield on the 10-year Treasury slipped to 4.27% from 4.28% late Friday. The yield on the two-year Treasury fell to 4.61% from 4.65%.
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Wall Street rises to another record as Treasury yields ease | https://www.latimes.com/world-nation/story/2024-02-15/stock-market-today-wall-street-rises-to-another-record-as-treasury-yields-ease | 2024-02-16T05:23:01 | U.S. stocks set another record Thursday after some mixed reports on the economy.
The Standard & Poor’s 500 index rose 29.11 points, or 0.6%, to 5,029.73 and squeaked by its prior all-time high set last week. The Dow Jones industrial average gained 348.85 points, or 0.9%, to 38,773.12, and the Nasdaq composite climbed 47.03 points, or 0.3%, to 15,906.17.
TripAdvisor gained 9.2% after reporting stronger results for the latest quarter than analysts expected. Tech giant Cisco Systems also reported better-than-anticipated results, but its stock sank 2.4% after it cut its profit forecast for its full fiscal year.
The mixed set of data on the economy included a report showing sales at U.S. retailers weakened by more in January from December than expected. It was a striking drop in spending by U.S. households, whose strength has helped keep the economy out of a recession, even with high interest rates. The upside for financial markets is that it could also remove some upward pressure on inflation.
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A separate report said fewer U.S. workers applied for unemployment benefits last week than expected, the latest signal of a solid job market despite high-profile announcements of layoffs. Other reports Thursday morning painted a mixed but better-than-feared picture of the manufacturing industry.
Altogether, the economic reports helped send Treasury yields lower in the bond market. The yield on the 10-year Treasury fell to 4.24% from 4.27% late Wednesday.
Treasury yields have been swiveling recently. Stronger-than-expected reports on inflation, the job market and the overall economy have forced traders on Wall Street to delay their forecasts for when the Federal Reserve will begin cutting interest rates.
The Fed has already hiked its main interest rate to the highest level since 2001. The hope is that high rates will squeeze the economy just enough to get inflation down to a comfortable level without causing a recession.
After earlier hoping that the Fed would offer some relief and begin cutting rates in March, the thinking on Wall Street now is that won’t happen until May or maybe June. That delay in turn knocked stocks down from their record highs.
Still, the widespread expectation remains for cuts to rates to come this year. It’s just the timing that is changing. In the meantime, the economy continues to look solid, which should help drive growth in profits for companies. That’s helping to keep stocks from falling very much.
CBRE Group jumped 8.5% for one of the largest gains in the S&P 500 after it joined the parade of companies beating analysts’ expectations for profit in the last three months of 2023. Despite difficult conditions for commercial real estate, the company also reported stronger revenue than expected.
Shake Shack was another winner, rising 26% after the burger chain reported better profit and revenue than expected. Its total revenue jumped 20% from a year earlier, more than forecast.
Wells Fargo climbed 7.2% and was one of the stronger forces pushing the S&P 500 upward. Regulators at the Office of the Comptroller of the Currency removed a consent order issued in 2016, which required the bank to revamp how it sells products to customers after it was caught opening unauthorized accounts.
On the losing end of Wall Street was Deere, which fell 5.2% even though the maker of agricultural equipment’s profit for the latest quarter topped expectations. Deere gave a profit forecast for this fiscal year that fell short of analysts’ estimates, saying conditions in the industry are getting back to normal following a couple of record years.
One risk that could upset things is the upcoming U.S. election. The Fed does not like to shift from holding rates steady to cutting too close to an election, said Bank of America strategists led by Mark Cabana. So if the Fed doesn’t move by June, the possibility rises that it may end up holding rates steady until late 2024 or early 2025.
Still, Cabana said where yields ultimately go will depend more on how far the Fed ends up cutting rates than on when it begins.
In stock markets abroad, the Nikkei 225 rose 1.2% after Japan said its economy shrank for a second consecutive quarter. It dropped behind Germany to become the world’s fourth-largest economy, and the weakness raised expectations that Japan’s central bank may keep interest rates very easy.
The United Kingdom also reported its economy shrank for a second straight quarter. The FTSE 100 index in London rose 0.4%, while stocks were up a bit more across Europe.
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Wall Street recovers much of its big loss from a day before | https://www.latimes.com/world-nation/story/2024-02-14/stock-market-today-wall-street-recovers-much-of-its-big-loss-from-a-day-before | 2024-02-15T03:45:19 | U.S. stocks rose Wednesday to recover much of their sharp losses from a day before, triggered by worries that high interest rates may stick around for months longer than hoped.
The Standard & Poor’s 500 index climbed 47.45 points, or 1%, to 5,000.62 and clawed back more than two-thirds of its loss from Tuesday. A hotter-than-expected report on inflation forced investors to delay forecasts for when the Federal Reserve may begin cutting interest rates, potentially into the summer. Expectations for such cuts are a big reason stocks rallied to records recently.
The Dow Jones industrial average gained 151.52 points, or 0.4%, to 38,424.27 a day after after dropping 524 points for its worst loss in nearly 11 months. The Nasdaq composite jumped 203.55 points, or 1.3%, to 15,859.15.
The smallest stocks, which took the hardest hit Tuesday from worries about higher interest rates , bounced back more than the rest of the market. The Russell 2000 index leaped 2.4%.
Helping to keep things steadier on Wall Street was a calmer bond market. Treasury yields eased after shooting upward a day earlier on expectations that the Fed would keep rates high for longer. The central bank has already jacked up its main interest rate to the highest level since 2001 in hopes of slowing the overall economy just enough to grind high inflation down to its target.
The yield on the 10-year Treasury fell to 4.25% from 4.32% late Tuesday. It’s still well above its 3.85% level at the start of this month.
Critics have been saying that stock prices may have run too far, too fast in their rally since October. A pullback could be healthy if it takes some of the “froth” out of the market, said JJ Kinahan, chief executive of IG North America.
Kinahan said he found it interesting that big recent winners such as Nvidia and other chip makers finished Tuesday well off their lows for the day. That makes him think that the day’s drop “was more about taking some profits than it was panic selling” by investors.
Nvidia, which has been riding a mania around artificial intelligence technology, rose 2.5% on Wednesday and was the single strongest force pushing up the S&P 500 index.
DaVita jumped 8.6% for one of the S&P 500’s larger gains after the healthcare company reported stronger profit and revenue for the latest quarter than analysts expected.
Most companies in the S&P 500 have been topping analysts’ forecasts for the last three months of 2023. Hopes for stronger growth in 2024 from a solid economy have been another reason the S&P 500 has set 10 records this year.
Lyft shares leaped 35.1% after a wild ride in off-hours trading that was driven in part by a typo in its latest earnings report. The ride-hailing company reported stronger results than analysts expected, but its news release also said it expects a key measure of profitability to improve by 500 basis points, or 5 percentage points. Later, it said that should have been 50 basis points, or 0.5 percentage points.
Lyft’s stock rocketed by more than 60% in after-hours trading Tuesday after the typo.
Rival Uber Technologies rose 14.7% after its board authorized a program to buy back as much as $7 billion of its stock. Investors tend to like such programs because they send cash directly to shareholders and can boost per-share profits.
Robinhood Markets gained 13% after it reported a profit for the latest quarter when analysts were expecting a loss. The stock- and crypto-trading platform also said its total net revenue rose 24%, more than analysts expected.
On the losing end, Akamai Technologies dropped 8.2% after it reported mixed results. Its profit for the latest quarter topped analysts’ forecasts, but its revenue fell short.
Online vacation rental booker Airbnb slipped 1.7% after it reported losing $349 million in the fourth quarter due to an income tax settlement with Italy. Analysts had been expecting a profit.
The company forecast first-quarter revenue that would meet or beat Wall Street expectations, however, Airbnb said the pace of bookings growth is likely to “moderate” from the fourth quarter into the first.
In stock markets abroad, London’s FTSE 100 rose 0.7% after a better-than-expected report on inflation in the United Kingdom.
Hong Kong’s Hang Seng index gained 0.8% after trading reopened there, but markets remained closed in mainland China for the Lunar New Year holiday. Stocks fell elsewhere in Asia, with Japan’s Nikkei 225 down 0.7% and South Korea’s Kospi down 1.1%.
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Wall Street hangs near records ahead of inflation report | https://www.latimes.com/world-nation/story/2024-02-12/stock-market-today-wall-street-hangs-near-records-ahead-of-inflation-report | 2024-02-13T03:06:05 | Wall Street held relatively steady Monday after its latest record-setting week.
The Standard & Poor’s 500 slipped 4.77 points, or 0.1%, to 5,021.84 after closing Friday above the 5,000 level for the first time. Most of the stocks in the index rose, but losses for Microsoft and other tech companies weighed on the index.
The weakness for tech also pulled the Nasdaq composite down by 48.12 points, or 0.3%, to 15,942.55. Earlier in the day, it had been hovering just above its all-time closing high set in 2021. The Dow Jones industrial average, meanwhile, rose 125.69 points, or 0.3%, to 38.797.38 to set a record.
Conditions were calm across markets, and yields were also stable in the bond market. The next big event for the market could be Tuesday’s update on inflation across the United States, which economists expect to show a drop below the 3% level.
In the meantime, Diamondback Energy climbed 9.4% after it said it would buy Endeavor Energy Resources in a deal valued at about $26 billion, including Endeavor’s debt. Diamondback is using both cash and stock to pay for the purchase of the privately held exploration and production company.
Trimble rose 4.2% after the technology provider reported stronger profit and revenue for the latest quarter than analysts expected. The company, whose products are used in construction, mapping and other industries, shook off an earlier loss after it also gave a forecast for revenue in 2024 that fell short of Wall Street’s estimates.
Big companies in the S&P 500 mostly have been reporting better results than expected for the final three months of 2023. More than two-thirds of the companies in the index have already reported their results, but several big names are still to come this week. They include Coca-Cola on Tuesday, Kraft Heinz on Wednesday and Southern Co. on Thursday.
The smallest companies in the market, meanwhile, are still in the relatively early days of their profit reporting season. But they’ve been beating analysts’ expectations by even more than their big rivals, according to Bank of America strategists.
Worries have grown about how top-heavy the stock market has become, where the seven biggest companies have accounted for a disproportionate amount of the S&P 500’s rally to a record. If more companies aside from the group known as the “Magnificent Seven” can deliver strong profit growth, it could soften the criticism that the market has become too expensive.
Another worry for the market has been uncertainty about just how much danger lurks for the economy in the loans and other holdings banks have on their balance sheets that are tied to commercial real estate.
The widespread expectation, even among top U.S. government officials, is that weakness for office buildings and other commercial projects will mean at least some pain for banks. But no one can say how much for sure.
That’s why so much focus has been on New York Community Bancorp recently. It shocked investors two weeks ago when it announced a surprise loss for its latest quarter. Some of the pain was due to its acquisition of Signature Bank during the industry’s mini-crisis last year. But worries about commercial real estate also played a role.
New York Community Bancorp’s stock has roughly halved since that surprise report, but it held a bit steadier Monday, edging down 0.2%.
An index measuring stock prices across the regional banking industry rose 1.8%.
In the bond market, yields were moving very little. The yield on the 10-year Treasury slipped to 4.16% from 4.18%, late Friday.
The two-year Treasury yield, which more closely tracks expectations for the Federal Reserve, held at 4.48%, where it was late Friday.
Inflation has been cooling enough that the Fed has hinted it may cut its main interest rate several times this year. Such cuts typically energize financial markets and the economy, and they would release pressure that’s built up since the Fed has taken its main interest rate to the highest level since 2001.
After earlier hoping cuts to rates could begin as soon as March, traders have since pushed their forecasts out to May or June. Reports showing that the U.S. economy and job market remain remarkably solid, along with some comments from Fed officials, have been forcing the delays.
If the Fed ends up making traders wait even longer than expected for rate cuts, it could upset stock prices that have already shot upward on the assumption of lots of good news, said Marc Dizard, chief investment strategist at PNC Asset Management Group. Besides lower interest rates, that also includes stronger convictions for no recession for the U.S. economy, inflation continuing to come down and corporate profits growing more strongly.
In stock markets abroad, indexes were modestly higher in much of Europe. In Asia, several markets were closed for holidays.
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Recession risk is fading, but political tensions remain a worry | https://www.latimes.com/world-nation/story/2024-02-12/recession-risks-are-fading-business-economists-say-but-political-tensions-pose-threat-to-economy | 2024-02-12T11:09:21 | Just a quarter of business economists and analysts expect the United States to fall into recession this year. And any downturn probably would result from an external shock — such as a conflict involving China — rather than from domestic economic factors such as higher interest rates.
But respondents to a National Assn. of Business Economics survey released Monday still expect year-over-year inflation to exceed 2.5% — above the Federal Reserve’s 2% target — through 2024.
A year ago, most forecasters expected the U.S. economy — the world’s largest — to slide into a recession as the Fed raised interest rates to fight a burst of inflation that began in 2021. The Fed hiked its benchmark rate 11 times from March 2022 to July 2023, taking it to the highest level in more than two decades.
Inflation has fallen from a peak of 9.1% in June 2022 to 3.4% in December. But the economy unexpectedly kept growing and employers kept hiring and resisting layoffs despite higher borrowing costs.
The combination of tumbling inflation and resilient growth has raised hopes — reflected in the survey — that the Fed can achieve a so-called soft landing: vanquishing inflation without the pain of a recession.
“Panelists are more optimistic about the outlook for the domestic economy,’’ said Sam Khater, chief economist at mortgage giant Freddie Mac and chair of the association’s economic policy survey committee.
The Fed has stopped raising interest rates and has signaled that it expects to reduce rates three times this year.
But a growing share of business forecasters worry that the Fed is keeping rates unnecessarily high: 21% in the NABE survey called the Fed’s policy “too restrictive,’’ up from the 14% who expressed that view in August. Still, 70% say the Fed has it “about right.’’
What worries respondents are the chances of a conflict between China and Taiwan even if it isn’t an outright war: 63% consider such an outcome at least a “moderate probability.’’ Likewise, 97% see at least a moderate chance that conflict in the Middle East will drive oil prices above $90 a barrel (from around $77 now) and disrupt global shipping.
In addition, 85% are worried about political instability in the U.S. before or after the Nov. 5 presidential election.
The respondents are also increasingly concerned about U.S. government finances: 57% say budget policies — which have created a huge gap between what the government spends and what it collects in taxes — need to be more disciplined, up from 54% in August.
They say the most important objectives of government budget policy should be promoting medium- to long-term growth (cited by 45% of respondents) and reducing the federal deficit and debts (42%). Coming in a distant third — and cited by 7% — is the goal of reducing income inequality.
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Wall Street waltzes past its latest milestone as S&P 500 closes above 5,000 | https://www.latimes.com/world-nation/story/2024-02-09/stock-market-today-wall-street-waltzes-past-its-latest-milestone-as-s-p-500-closes-above-5-000 | 2024-02-09T22:28:57 | More gains for U.S. stocks on Friday sent Wall Street to its latest record, milestone and winning week.
The Standard & Poor’s 500 rose 0.6% and finished above 5,000 for the first time. It’s the 10th record in less than a month for the index, which closed its 14th winning week in the last 15 to continue a romp that began around Halloween.
The Nasdaq composite jumped 1.2% to pull within 0.4% of its own all-time high, which was set in 2021. The Dow Jones industrial average was a laggard a day after setting its own latest record. It slipped 0.1%.
Milestones such as the S&P 500 at 5,000 don’t carry much weight for a market that’s supposed to move on hard numbers including interest rates, profits and revenue. But they can juice up the animal spirits of a market that can also be prone to emotional moves.
Wall Street’s rally got going with hopes that cooling inflation would get the Federal Reserve to dial down the pressure by cutting interest rates. Lately, such cuts look to be coming later than hoped because reports keep showing a remarkably solid economy. But that strength has in turn raised expectations for profits from companies, supporting stocks.
Cloudflare was the latest company to soar after reporting stronger profit than analysts expected for its latest quarter. The cloud-services company jumped 19.5% after it said it signed both its largest new customer and its largest renewal ever, despite an overall economic environment that “remains challenging to predict.”
Big Tech stocks did most of the market’s heavy lifting, as they’ve been doing for more than a year, in part on mania around artificial-intelligence technology. Nvidia, Amazon and Microsoft were the three strongest forces lifting the S&P 500 after they rose 3.6%, 2.7% and 1.6%, respectively.
They helped offset a 3.6% drop for PepsiCo, which reported weaker revenue for the latest quarter than analysts expected. It said growth is slowing because customers are getting back to their snacking and other behaviors from before the pandemic.
Expedia tumbled 17.8% despite also reporting stronger profit than expected. The company gave forecasts for the first three months of 2024 that analysts said pointed to slower growth in bookings. The company also announced a new chief executive, Ariane Gorin, will take over in May.
Take-Two Interactive, the publisher of “Grand Theft Auto” and other video games, sank 8.7% after it reported weaker profit than expected. It also cut its forecast for results for its fiscal year, which ends March 31.
All told, the S&P 500 rose 28.70 points to 5,026.61. The Dow slipped 54.64 points to 38,671.69, and the Nasdaq gained 196.95 points to close at 15,990.66.
Profits have largely been coming in better than expected for the big companies in the S&P 500 this reporting season, which is roughly two-thirds finished. That’s usually the case, but even more companies than usual are doing so this time around, according to FactSet.
That has boosted optimism on Wall Street, but contrarians say it may have gone too far and carried stocks to too-expensive heights.
Traders are flowing into some riskier investments at a quick enough pace that a contrarian measure kept by Bank of America is leaning more toward “sell” now than “buy,” though it’s not at convincing levels. The measure tracks how much fear and greed are in the market, and it suggested buying in October when fear was at a convincing high.
In the bond market, Treasury yields inched higher. The yield on the 10-year Treasury rose to 4.16% from 4.15% late Thursday.
But the movements were much calmer than earlier in the month, when the 10-year yield leaped from 3.85% as traders forcefully pushed out their forecasts for rate cuts.
It’s an encouraging signal that the stock market can keep hitting highs when expectations are dimming for an imminent cut to interest rates, particularly after the market earlier seemed to be moving solely on such forecasts.
“A less emotional market is a positive sign, though investors must fight against the complacency that is a natural reaction to such a strong and steady bull run,” said Mark Hackett, Nationwide’s chief of investment research.
In stock markets abroad, indexes were mostly modestly lower. In Asia, several markets were closed for the Lunar New Year holiday.
Tokyo’s Nikkei 225 edged up by 0.1% after touching a 34-year high earlier in the day.
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Beginning in 2026, the Oscars will include an award for casting | https://www.latimes.com/entertainment-arts/movies/story/2024-02-08/film-academy-announces-new-oscar-for-casting-ampas | 2024-02-08T18:30:37 | There will soon be one more category to fill out on your Oscar ballots.
On Thursday, the motion picture academy’s board of governors announced the creation of a new competitive Oscar for achievement in casting. The award will be given out annually beginning in 2026 with the 98th Academy Awards for films released in 2025.
Though casting has been an integral part of the filmmaking process since the advent of the studio system, the academy only established a branch for casting directors in 2013. With nearly 160 current members, the branch is one of the smallest in the organization, which has a total membership of more than 10,800.
The announcement follows the British film and TV academy’s decision to add a casting award in 2020.
“Casting directors play an essential role in filmmaking and as the Academy evolves, we are proud to add casting to the disciplines that we recognize and celebrate,” academy Chief Executive Bill Kramer and President Janet Yang said in a joint statement announcing the award. “We congratulate our Casting Directors Branch members on this exciting milestone and for their commitment and diligence throughout this process.”
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The casting award is the first new Oscars category introduced since the best animated feature film category was established in 2001 and, barring any other changes, will bring the number of competitive Oscar categories to 24.
Oscar categories have evolved and fluctuated significantly over the years. The first Academy Awards ceremony included only 12 awards, and over the ensuing decades categories have at times been added, subtracted, split and combined. In 2018, the academy announced the creation of a new best popular film award only to scrap the idea following a blowback. Meanwhile, the stunt community has long lobbied for its own Oscar but has so far been unsuccessful in its campaign.
Casting director David Rubin served as the organization’s president from 2019 to 2022. Speaking to The Times shortly after being elected, Rubin said he was not focused on trying to create an Oscar for casting but was thrilled that the BAFTAs were adding such an award. “It will likely serve to increase awareness of our involvement in the collaborative art of filmmaking,” he said. “But other than that, I would say let’s just see what the future brings.”
In a joint statement Thursday, current academy casting directors branch governors Richard Hicks, Kim Taylor-Coleman and Debra Zane called the award “a deserved acknowledgment of our casting directors’ exceptional talents and a testament to the dedicated efforts of our branch.”
Category rules for eligibility and voting for the new award will be announced in 2025.
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