Update on the latest business
Stocks lower again on Wall Street
NEW YORK (AP) — Stocks are lower following a drop in early morning trading on Wall Street, putting the market on track for its fourth loss in a row and its first losing week since January.
Banks and technology companies had some of the biggest losses in early trading Thursday.
Kroger slumped 12 percent after the supermarket operator reported earnings that fell short of Wall Street’s forecasts.
European markets narrowed their losses after the European Central Bank pushed back the earliest date of interest rate increases and announced more cheap loans for banks.
US mortgage rates increased this week; 30-year at 4.41 pct.
WASHINGTON (AP) — U.S. long-term mortgage rates rose modestly this week, but they remain slightly lower than they were a year ago.
Mortgage buyer Freddie Mac says the average rate on the benchmark 30-year, fixed-rate mortgage increased to 4.41 percent from at 4.35 percent during the prior week. The average was 4.46 percent a year ago, but rates climbed for much of 2018 and peaked at nearly 5 percent in early November.
The average rate this week for 15-year, fixed-rate loans rose to 3.83 percent from 3.77 percent during the prior week
Mortgage rates often move in sync with the interest paid on 10-year U.S. Treasury notes. Rising rates in 2018 suppressed home sales, but the lower levels in recent months point to the possibility of sales gains this year.
US productivity up modest 1.9 percent in fourth quarter
WASHINGTON (AP) — U.S. productivity grew at a rate of 1.9 percent in the fourth quarter, a slight improvement over the third quarter. Labor costs rose 2 percent, the strongest gain since the beginning of 2018.
The Labor Department reported that the result from the October-December period was slightly better than a 1.8 percent rise in the third quarter. For the full year, productivity rose 1.3 percent, a small improvement from a 1.1 percent gain in 2017. It was the best showing since a 3.4 percent productivity surge in 2010.
Productivity is the amount of output per hour of work. The strong showing in 2010 had followed a 3.5 percent surge in 2009. Those two strong years were the exceptions in the current nearly 10-year long recovery. Productivity overall has been extremely weak, and economists consider boosting productivity growth as the key challenge facing the U.S. economy.
Without a significant improvement in productivity, analysts say that the Trump administration will not be able to achieve its goal of pushing overall economic growth to sustained annual gains of 3 percent in the gross domestic product.
In a separate report, the Labor Department said that the number of Americans filing for unemployment benefits fell to 223,000 last week, a drop of 3,000 from the previous week. When the government releases the February unemployment report. Many economists believe it will show unemployment edged back down to 3.9 percent, from 4 percent in January.
A hot US job market is coaxing people in from the sidelines
WASHINGTON (AP) — A surprisingly strong burst of job growth over the past year has led many economists to wonder: Where are all the workers coming from?
As recently as last spring, analysts had worried that hiring would slow as the pool of unemployed shrank. Many employers have complained for years that they could no longer find enough people to fill their open jobs.
Turns out they were both wrong.
The pace of hiring in 2018 was the most robust in three years, and for a surprising reason: Many more people have decided to look for work than experts had expected. The influx of those job seekers, if sustained, could help extend an economic expansion that is already the second-longest on record.
For five years after the Great Recession ended in 2009, many Americans gave up on their job hunts. Some suffered from disabilities. Others enrolled in school or stayed home to raise children. Still others were stymied by criminal pasts or failed drug tests. Some just felt discouraged by their job prospects. Because they weren’t actively seeking work, they weren’t even counted as unemployed.
Economists had speculated that millions of these people lacked necessary qualifications or were otherwise deemed undesirable by employers and might not work again. That meant stronger hiring wouldn’t necessarily help them.
Yet for the past few years it has. The proportion of Americans ages 25 to 54 who have a job has reached nearly 80 percent — the same as before the recession.
Can Zuckerberg really make a privacy-friendly Facebook?
SAN FRANCISCO (AP) — Facebook CEO Mark Zuckerberg wants to shift the company’s focus away from a service that connects everyone to one that favors encrypted conversations Facebook can’t read. It’s a major bet for a social network that turned into a surveillance system. One big question is whether the service can convince users burned by its privacy lapses that it really means it this time.
Facebook also plans to let messages automatically disappear, a feature pioneered by its rival Snapchat that could limit the risks posed by a trail of social media posts that follow people throughout their lives.
It’s a major bet by Zuckerberg, who sees it as a way to push Facebook more firmly into a messaging market that’s growing faster than its main social networking business. It might also help Facebook ward off government regulators, although the Facebook CEO made clear that he expects the company’s messaging business to complement, not replace, its core businesses.
China’s Huawei sues to challenge US security law
SHENZHEN, China (AP) — Chinese tech giant Huawei (WAH’-way) is challenging a U.S. law that would limit its American sales of telecom equipment on security grounds as the company steps up efforts to preserve its access to global markets for next-generation communications.
Huawei Technologies lawsuit asks a federal court to reject as unconstitutional a portion of this year’s U.S. military appropriations act that bars the government and its contractors from using Huawei equipment.
It comes as the biggest global maker of network equipment fights a U.S. campaign to persuade allies to shun Huawei. That threatens to block access to major markets as phone carriers prepare to invest billions of dollars in fifth-generation, or 5G, networks.
Huawei is at the center of U.S.-Chinese tensions over technology competition and cyberspying. The company has spent years trying to put to rest accusations it facilitates Chinese spying or is controlled by the ruling Communist Party.
Huawei has about 40 percent of the global market for network gear. Its U.S. sales evaporated after a congressional panel in 2012 cited the company and a Chinese competitor, ZTE Corp., as security risks and told phone carriers to avoid dealing with them.
Germany to require suppliers of 5G networks be ‘trustworthy’
BERLIN (AP) — German authorities have published a list of security requirements for telecoms networks amid concerns about the possible involvement of companies such as China’s Huawei (WAH’-way) in future 5G infrastructure.
Authorities published a list of requirements that says “systems may only be sourced from trustworthy suppliers whose compliance with national security regulations and provisions for the secrecy of telecommunications and for data protection is assured.”
Among the other “key elements” outlined by Germany’s Economic Ministry and the Federal Network Agency are that network traffic “must be regularly and constantly monitored for any abnormality” and security-related components have to be certified by the country’s IT security agency.
The guidelines, which come into effect immediately, also stipulate that networks should use components from several manufacturers and provide for redundancy of key equipment.
Xerox reorganizing under holding company
NORWALK, Conn. (AP) — Xerox is reorganizing under a new holding company, saying that it will have more strategic, operational and financial flexibility.
The maneuver is similar to one made by Google in 2015, when it reorganized under Alphabet.
Xerox Corp. said in a regulatory filing Thursday that the reorganization won’t change its business operations, directors or executive officers.
The new holding company’s shares will trade on the New York Stock Exchange under its current ticker symbol of “XRX.”
The reorganization of the Norwalk, Connecticut, company, which is expected to be implemented in the middle of the year, still needs shareholder and regulatory approval.
UNIVERSITY BRIDGE COLLAPSE
Collapsed bridge builder files for bankruptcy in Miami
MIAMI (AP) — A judge in Miami will allow a construction company being sued for wrongful death related to a bridge collapse to restructure its financial obligations under Chapter 11 bankruptcy rules.
Magnum Construction Management LLC — known as MCM — was the builder of the pedestrian bridge at Florida International University in Miami that collapsed in March 2018, killing six people.
The Miami Herald reports lawyers told the Judge that the company was more than $8 million in debt before the bridge collapse.
A company attorney said a series of events led the company to file for bankruptcy, including 18 lawsuits, the termination of a lucrative Texas project and limited access to new funding.
MCM is asking four insurance companies to cover up to $54 million in damages.
Consumer watchdog agency and its leadership under scrutiny
WASHINGTON (AP) — The government’s consumer watchdog agency is coming under new scrutiny from the House Financial Services Committee, now under the control of Democrats, who say appointees of President Donald Trump to lead the organization have undermined its mission to protect Americans.
The committee chair, Democrat Maxine Waters, made the remarks as the new head of the Consumer Financial Protection Bureau, Kathy Kraninger, appeard before the committee.
Kraninger succeeded Mick Mulvaney, now Trump’s acting chief of staff, who hired Republican political operatives to oversee nearly all of the agency’s operations.
Waters says she’s committed to reversing sustained efforts by Trump appointees to “destroy the agency.”
Kraninger told the lawmakers she’s pushing broader efforts at the CFPB to prevent harm to consumers.
European Central Bank acts to help weakening economy
FRANKFURT, Germany (AP) — The European Central Bank took unexpectedly quick action to support a slowing economy, joining the U.S Federal Reserve and Chinese leadership in their attempts to counter worries about global growth.
The central bank for the 19 countries that use the euro pushed back the date by which it might start raising interest rates. It said rates would not rise before next year — previously, it had said not before the fall.
It also said it would offer a new series of ultra-cheap loans to banks, supporting their ability to keep lending to businesses.
The moves appear to signal concern that the weakness in economic growth could be more than a blip and threatens to turn into a more lasting downturn. A trade war between the U.S. and China, the world’s largest economies, has hurt international commerce and manufacturing. And Britain’s exit from the European Union could further damage business activity.
The U.S. Federal Reserve has already adjusted the course of its monetary policy. It has signaled a pause in its rate increases and said it’s ready to slow the reduction of bond holdings purchased under earlier stimulus efforts.
UK insists Brexit talks will continue despite EU pessimism
LONDON (AP) — Brexit negotiations between Britain with the European Union will continue through the weekend, the country’s chief law officer said as the U.K. scrambled to secure changes to the divorce deal before a vote in Parliament next week.
With Britain’s scheduled departure from the bloc a little more than three weeks away, the EU says “difficult” talks have failed to produce a breakthrough because British proposals are unrealistic.
U.K. Attorney General Geoffrey Cox, however, insisted that said “focused, detailed and careful discussions” would resume “shortly.”
Britain is due to leave the EU on March 29, but in January the U.K. Parliament resoundingly rejected the divorce deal that lays out the terms of an orderly departure and a transition period for businesses to adjust to new trade rules.
British lawmakers are due to vote again Tuesday on the deal, including any changes the government manages to secure. If they throw it out again, lawmakers will vote on whether to leave the EU without an agreement — an idea likely to be rejected — or to ask the EU to delay Brexit.