Update on the latest business
Technology stocks lead US rebound
NEW YORK (AP) — Stocks are rising in midday trading on Wall Street as technology companies resume their upward march.
Apple climbed 1.6 percent and software company CA soared 18 percent after agreeing to be acquired by Broadcom, a chipmaker, for $18.9 billion. Broadcom plunged 15 percent.
Health care and industrial companies are also higher. Johnson & Johnson rose 1.1 percent and Honeywell climbed 2.1 percent.
Bond prices rose. The yield on the 10-year Treasury slipped to 2.85 percent.
US inflation reaches 2.9 percent in June, highest in 6 years
WASHINGTON (AP) — Consumer prices rose in June from a year earlier at the fastest pace in more than six years, lifted by more expensive gas, car insurance, and higher rent.
The Labor Department said Thursday that the consumer price index ticked up just 0.1 percent in June. But inflation jumped 2.9 percent from a year earlier, the largest annual gain since February 2012. Core prices, which exclude the volatile food and energy categories, rose 0.2 percent in June and 2.3 percent from a year earlier.
Solid economic growth and supply bottlenecks have pushed inflation past the Federal Reserve’s 2 percent target, after price gains had languished below that level for six years. That is a key reason that Fed officials expect to raise short-term rates twice more this year.
Average US mortgage rates edge up; 30-year at 4.53 percent
WASHINGTON (AP) — Long-term U.S. mortgage rates edged higher this week, marking their first increase since early June.
Mortgage buyer Freddie Mac says the average rate on 30-year, fixed-rate mortgages ticked up to 4.53 percent from 4.52 percent a week earlier.
Despite the decline in recent weeks, long-term loan rates have been running at their highest levels in seven years. The average benchmark 30-year rate reached a high this year of 4.66 percent on May 24. The rate stood at 4.03 percent a year ago.
The average rate on 15-year, fixed-rate loans rose to 4.02 percent this week from 3.99 percent last week.
UNITED NATIONS-US-NORTH KOREA-OIL
US accuses North Korea of illegally smuggling oil products
UNITED NATIONS (AP) — The United States says North Korea is illegally smuggling refined petroleum products into the country beyond the quota of 500,000 barrels per year allowed under U.N. sanctions.
U.S. documents sent to the U.N. Security Council committee monitoring sanctions against North Korea and obtained by The Associated Press Thursday cite 89 instances in which North Korean tankers likely delivered refined products “illicitly procured” via ship-to-ship transfers.
The documents said even if each tanker delivered only one-third of its listed capacity the total volume would be above the 500,000 barrel annual quota.
The United States asked the committee to urgently inform all U.N. member states and the general public that North Korea has breached the quota — and to exercise “enhanced vigilance” against its attempts to obtain refined petroleum products.
Putin extends ban on Western food imports
MOSCOW (AP) — Russian President Vladimir Putin has extended a ban on Western food imports for another 18 months after the European Union’s decision to prolong its broader, punitive sanctions over Russia’s actions in Ukraine.
Putin’s Thursday decree keeps the food ban in place until Dec. 31, 2019. It follows the EU’s move to extend its restrictions until year’s end.
The U.S. and the EU introduced several rounds of sanctions to punish Russia for the annexation of Ukraine’s Crimea and support for separatist rebels in eastern Ukraine. They made lifting restrictions contingent on the progress of a 2015 peace deal for eastern Ukraine. Russia argues that the peace agreement has floundered at Ukraine’s fault.
The sanctions have hurt the Russian economy, restricting access to global financial markets and cutting imports of key technologies.
Kremlin says new gas pipeline to Germany will help stability
MOSCOW (AP) — The Kremlin says a new prospective natural gas pipeline to Germany will help increase regional stability and strengthen ties between Russia and the West.
U.S. President Donald Trump argued Wednesday that the new natural gas pipeline venture with Moscow has left German Chancellor Angela Merkel’s government “totally controlled” and “captive to Russia.”
Russian President Vladimir Putin’s spokesman, Dmitry Peskov, countered Thursday, saying “natural gas pipelines lead not to a dependence of one country from another, but to mutual interdependence.”
He added the U.S. criticism of the planned Nord Stream 2 pipeline was rooted in Washington’s desire to encourage European Union nations to buy more expensive liquefied gas from the U.S.
Asked if the issue could cloud Monday’s Putin-Trump summit in Helsinki, Peskov said its agenda would include many conflicting issues.
China seafood importers feel trade dispute pinch
BEIJING (AP) — Chinese seafood merchants say they have already begun buying lobster and fish from other countries as tariffs make American seafood too expensive.
Washington last week imposed 25 percent tariffs on $34 billion worth of Chinese products. Beijing responded by imposing similar duties on the same amount of US imports.
On a visit to Beijing’s largest wholesale seafood market, The Associated Press found scant American fish or crustaceans for sale.
Fish brought to Beijing’s Jingshen market are sold to distributors to source restaurants and grocers all across China.
The recent 25 percent tariff has made American lobster unaffordable, according to Beijing seafood distributor Ma Mengjie.
Zhang Song, general manager of a lobster and crab import shop, said he considers American lobsters inferior in quality to those from Canada. Now that they’re also more expensive, “we would be even less likely to import American ones, right?
European bank officials caution on trade war impact
BRUSSELS (AP) — Top officials at the European Central Bank expressed confidence at their last policy meeting that the eurozone economy remains “broadly on track” but expressed concern that rising trade protectionism could dampen business confidence and blunt the recovery.
The assessment was contained in the written account of the bank’s June 14 policy meeting where officials decided the economy was strong enough to phase out their 2.4 trillion-euro ($2.8 trillion) bond-purchase stimulus at year-end.
The direct impact of new tariffs was “ambiguous and uncertain.” But “such tensions could lead to a more general decline in confidence throughout the economy.”
U.S. President Donald Trump has imposed new tariffs on steel and aluminum imports as well as a range of Chinese goods
Earlier, the European Commission downgraded its growth forecasts amid trade war fears.
UK releases long-awaited and already derided Brexit plan
LONDON (AP) — The British government has released proposals for what it calls a “principled, pragmatic and ambitious” Brexit — plans that have already triggered the resignation of two top ministers and face likely resistance from the European Union.
The long-awaited document published Thursday aims to keep Britain and the bloc in a free market for goods, with a looser relationship for services.
But the plan has infuriated fervent Brexit supporters in Prime Minister Theresa May’s Conservative Party, who think it would limit Britain’s ability to strike new trade deals around the world. Foreign Secretary Boris Johnson and Brexit Secretary David Davis both quit the government this week in protest.
Newly appointed Brexit Secretary Dominic Raab said the plans called for an “innovative and unprecedented economic partnership” between Britain and the EU.
PAUL RYAN-GOP TAX CUTS
Speaker Ryan makes election year pitch for GOP tax law
WASHINGTON (AP) — House Speaker Paul Ryan is crediting the GOP’s tax plan with improving the U.S. economy, an argument that’s central to the Republican pitch to voters ahead of the midterm election.
In a speech Thursday to the Economic Club of Washington, D.C., Ryan says, “Tax reform is working. It is improving people’s lives.”
Voters though, aren’t so sure. Polls are showing mixed support for the corporate and household tax cuts President Donald Trump signed into law last year.
The plan is projected to add $1.5 trillion to the deficit, but Republicans say those costs will be covered by economic growth.
Ryan is retiring rather than seeking re-election, but Republicans are counting on the tax plan as part of the election-year message to keep GOP control of the House in fall.
$7,500 federal tax credit for Tesla buyers to end Dec. 31
DETROIT (AP) — Tesla Inc. says its customers won’t get the full $7,500 federal electric vehicle tax credit after Dec. 31.
The company says on its website that the credit on its vehicles will start to phase out next year.
Under federal law, buyers get the full credit until a manufacturer reaches 200,000 in sales since the start of 2010. Tesla buyers will get the $7,500 this year, then the credit is cut in half and phased out by the end of 2019.
The announcement on Tesla’s site means the company hit 200,000 in sales this month.
Losing the credit could hurt future sales. Tesla has over 400,000 people on a waiting list for its lower-priced Model 3 car. Some buyers may not be able to afford the cars without the tax credit.
EARNS-DELTA AIR LINES
Strong 2Q at Delta, but spiraling fuel costs ping outlook
ATLANTA (AP) — Delta topped most profit expectations for the second quarter, but slashed its outlook for the year, citing a $2 billion spike in fuel costs.
The Atlanta carrier on Thursday reported net income of $1.02 billion, or $1.47 per share. Adjusted per-share earnings were $1.77, which, according to a survey by Zacks Investment Research, is a nickel better than Wall Street expected.
That’s still down from last year and again, the company cited soaring fuel costs.
Delta and other airlines have been trying different strategies to try to offset rising fuel costs: charging extra for checking a bag or changing a flight, putting their names on credit cards, and hauling cargo.
Delta’s second-quarter revenue of $11.78 billion also beat projections, with double-digit growth in cargo revenue
Delta Air Lines Inc. expects full-year earnings of $5.35 to $5.70 per share, down from earlier per-share forecasts of $6.35 to $6.70.
The company also announced a 15 percent increase in its quarterly dividend, to 35 cents per share.
UK clears 21st Century Fox to buy satellite broadcaster Sky
LONDON (AP) — Britain’s culture secretary has cleared the way for 21st Century Fox’s bid for Sky following pledges that it will safeguard the independence of Sky News.
Britain’s government had been looking at the issue amid fears the takeover would give Rupert Murdoch too much power in the U.K. media market.
The decision by Jeremy Wright clears the final regulatory hurdle for Fox’s bid for the 61 percent of Sky that it does not already own.
Wright said Thursday that it’s “now a matter for the Sky shareholders to decide whether to accept 21 Century Fox’s bid.”
The battle for the European pay-TV service has been escalating this week as U.S. rivals Comcast and Fox have been raising their offers for Sky as they try to expand their media empires.
Sparse details on Iowa plans that bypass Obama’s health law
DES MOINES, Iowa (AP) — An Iowa law approved this spring in the Republican-controlled Legislature would allow the conservative and politically powerful Iowa Farm Bureau to offer health plans that skirt requirements of the Affordable Care Act.
But several months after a ceremonial bill signing, few details are available about how the plans will work for people with rising health insurance costs.
It represents another attempt by GOP-controlled states to chip away at some of the federal rules imposed under the 2010 law championed by former President Barack Obama.
National health care experts have reacted skeptically, arguing it could be a moneymaker for the Farm Bureau but won’t help people most in need.
An official for insurer Wellmark Blue Cross and Blue Shield, which is helping run the plans, denies that they’ll provide skimpy coverage.