S&P has worst week in 2 years
NEW YORK — Stocks around the world plunged Friday as investors feared that a trade conflict between the U.S. and China, the biggest economies in the world, would escalate. A second day of big losses pushed U.S. stocks to their worst week in two years.
Investors fear that if China responds in kind to sanctions on $60 billion worth of Chinese imports the White House announced on Thursday, it will be a first step toward a full-blown trade war that could damage the global economy and slash profits at big U.S. exporters like Apple and Boeing.
“There could be a possibility of a bounce back if, as this progresses, both sides look like they’re negotiating,” said Lisa Erickson, chief investment officer at U.S. Bank Wealth Management. “There could be further decline if people get a sense there could be more trade restrictions in place.”
The market’s two biggest sectors slumped the most. Technology stocks have made enormous gains over the past year, but since they do so much business outside the U.S., investors see them as particularly vulnerable in a trade dispute. The sector dropped 7.9 percent this week.
Banks also fell sharply. Amid the trade-war rumblings, investors fled to the safety of bonds and drove down yields, a potential negative for bank profits.
It wound up being the worst week for U.S. indexes since January 2016. The S&P 500 index sank 6 percent.
Tesla among firms taking Facebook pause
NEW YORK — Some companies are distancing themselves from Facebook following revelations of a major leak of user data to political consultants associated with the 2016 Trump campaign.
Elon Musk’s companies — Tesla and SpaceX — along with Firefox creator Mozilla, speaker maker Sonos and German bank Commerzbank are among the brands that say they’re pulling advertising or deactivating their Facebook pages.
While the actions are not likely to be permanent and won’t have much of an effect on Facebook’s bottom line, they’re the latest fallout from the ever-spiraling scandal — along with a tumbling stock price and a #deletefacebook movement — that the social-media giant has to contend with.
But experts say Facebook’s ability to reach people globally is crucial for digital marketing and will likely bring the companies back.
New-home sales dip, but demand is solid
WASHINGTON — Sales of new U.S. homes slipped 0.6 percent in February, a third straight monthly decline. But year to date, sales are up 2.2 percent compared with 2017 in a sign that buyer demand remains solid.
The Commerce Department said Friday that last month’s sales came in at a seasonally adjusted annual rate of 618,000, down from 622,000 in January and 653,000 in December.
Homebuyers at the start of the spring purchase season are generally finding higher prices and fewer properties available. Those factors, along with rising mortgage rates, have suggested that home ownership is becoming less affordable. The shortage of existing homes on the market is intensifying competition among would-be buyers of newly built houses.
But buyers seem undeterred so far about the lack of available homes, given the low unemployment rate and wave of younger millennials who are entering the real estate market.
“The demand for new homes should continue to rise with a solid job market, modestly accelerating wages and positive demographics,” said David Berson, chief economist for Nationwide Insurance.
Plane sales drive durable goods orders
WASHINGTON — Led by a surge in demand for commercial aircraft, U.S. orders for long-lasting manufactured goods rebounded in February, reversing a drop in January, to rise at the fastest pace since June.
The Commerce Department said Friday that orders for durable goods, items meant to last at least three years, rose 3.1 percent last month, beating economists’ expectations handily. They had fallen 3.5 percent in January.
Orders have risen three of the past four months — a sign that American industry is humming thanks to a pickup in global economic growth.
February orders were lifted by a 25.5 percent jump in orders for aircraft and aviation parts, a category that swings wildly from month to month. Excluding the volatile transportation sector, orders rose 1.2 percent — the seventh gain in the last eight months.
Founder sheds all Wynn Resorts shares
LAS VEGAS — Once a Las Vegas titan, Steve Wynn no longer has any stock in Wynn Resorts after selling the remainder of his stake in the company he founded in 2002 and with which he built opulent casino-resorts in the nation’s gambling mecca and abroad.
Wynn Resorts on Thursday announced the billionaire, who resigned last month amid sexual misconduct allegations, sold 8 million shares to two long-term institutional investors. At a price of $175 a share, the value of the sale is $1.4 billion.
Wynn Resorts in a statement said the purchase by the two current investors, which were not identified, demonstrates “their confidence in the long-term strength of the company.” It added that the sale effectively ends Wynn’s ownership in the company.
Wynn had been the largest shareholder in the company. His resignation came after the Wall Street Journal two months reported that several women said the billionaire harassed or assaulted them and that one case led to a $7.5 million settlement with a manicurist formerly employed by the company. Other allegations and a settlement with a different employee have since surfaced.
Wynn, 76, has vehemently denied the allegations the newspaper reported and attributed them to his ex-wife, Elaine Wynn, who owns 9.5 million shares in the company and with whom he’s been battling in court for years. Her attorney has denied that she instigated the news report.
Weather Channel sold to independent shop
LOS ANGELES — The Weather Channel is under new ownership.
Entertainment Studios Inc., an independent movie and TV producer and distributor, said Thursday it’s acquired the channel’s parent company, Weather Group.
Byron Allen, founder and owner of Entertainment Studios, bought the Weather Group from the Blackstone Group, Bain Capital and Comcast-NBCUniversal, Entertainment Studios said.
“he purchase price for the channel and Local Now, a news streaming service, reportedly was $300 million. Entertainment Studios declined to confirm the figure.
Bain, Blackstone and Comcast-NBCUniversal bought the Weather Channel Cos. from Landmark Communications in 2008 for a reported $3.5 billion. The new owners sold digital assets including the Weather.com website for a reported $2 billion-plus to IBM in 2015.
Nike posts rare loss due to tax law
NEW YORK — Nike reported its first quarterly loss in 20 years, due to a $2 billion tax expense related to recent changes in U.S. tax law. But the sneaker company’s third-quarter results easily beat expectations.
It also addressed recently announced departures by high-level executives. CEO Mark Parker acknowledged that there were problems with the company’s culture, but didn’t provide any details.
Nike said last week that Trevor Edwards, its brand president who had been seen as a possible future CEO, was leaving the company in August. The Wall Street Journal reported that his resignation was announced to in an internal memo that said the company had received complaints about inappropriate workplace behavior. A day later, it said a vice president had left the company, but didn’t give a reason.
The leadership shakeup comes at a time Nike is trying to boost sales in North America, its biggest market. Nike is facing increasing competition in the region, especially from German sneaker company Adidas, whose sales have been rising in North America.