Stocks end day up after a shaky start
NEW YORK — U.S. stocks overcame a wobbly start to finish higher Thursday, as traders welcomed more corporate quarterly results for the summer that weren’t as bad as Wall Street feared.
The S&P 500 rose 0.5 percent after shifting between small gains and losses throughout the morning. The broad-based index recouped all of its losses from a day earlier, but remains on track for its first weekly loss after notching a gain in each of the previous three weeks.
Health care companies, banks, and communication services stocks accounted for most of the gains. Energy stocks also rose as the price of U.S. crude oil pushed 1.6 percent higher. Those gains outweighed losses by technology companies and elsewhere in the market. Treasury yields rose, a sign that investors are feeling better about the economy.
After a downbeat start, stocks wobbled for a bit as traders weighed encouraging new data on weekly U.S. unemployment aid claims and September home sales. The indexes flipped into the green by midafternoon after House Speaker Nancy Pelosi said that negotiations for another round of economic stimulus were progressing.
Time is running out to get something done before the election, which has dimmed some of the optimism that Democrats and Republicans will soon strike a bargain on an aid package.
“I have very low expectations for a stimulus deal, but the economic news and corporate earnings news is pretty good, and that’s encouraging,” said Phil Orlando, chief equity strategist at Federated Hermes.
Delta gets 1st Ala.-made Airbus jet
MOBILE, Ala. — The European aircraft manufacturer Airbus says it has delivered its first Alabama-made A220 passenger aircraft to Delta Air Lines.
The A220-300 plane was manufactured in the company’s factory near downtown Mobile.
Atlanta-based Delta is currently the largest A220 customer, with a total of 95 of the planes on order, according to Airbus.
Airbus broke ground on the A-200 assembly line on the Alabama coast in January 2019. It is the planemaker’s first manufacturing plant in the U.S., the longtime home turf of rival Boeing Co.
Sales of existing homes rise 9.5%
CHARLOTTE — Sales of existing homes climbed 9.4 percent in September, the National Association of Realtors said Thursday, the latest sign that the housing market remains red hot despite the coronavirus pandemic.
On a seasonally adjusted rate, the selling pace of existing homes climbed to 6.54 million annualized units. That is the highest level for that metric since February 2006, at the peak of the previous housing bubble.
The median selling price of a home also climbed to $311,800, up 15 percent from a year earlier, according to NAR. Housing inventory remains low as well, with only 2.7 months of home inventory on the market. That’s a record low for that metric.
September is typically when home buying slows as the market enters into the fall and winter. But because of the pandemic, spring sales were delayed a few months.
Goldman Sachs unit pleads in 1MDB probe
WASHINGTON — A subsidiary of Goldman Sachs pleaded guilty on Thursday and agreed to pay more than $2.9 billion in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal.
In addition, several current and former top executives at Goldman will have to return millions of dollars in pay and bonuses to the company, a financial penalty for those in charge when the scandal unfolded.
Goldman Sachs Malaysia entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it “knowingly and willfully” conspired to violate U.S. anti-bribery laws.
The $2.9 billion includes payments to U.S. and overseas regulators. The penalties also include roughly $600 million in profits Goldman made off the 1MDB scandal that it will have to disgorge. Goldman had previously reached a $3.9 billion settlement with the government of Malaysia.
Goldman Sachs’ board of directors decided to claw back pay and bonuses from top executives, including current CEO David Solomon and former CEO Lloyd Blankfein.
Leaner Coke shows recovery signs
ATLANTA — Coca-Cola Co. measured gradual improvement in the third quarter as it focused on emerging leaner from the global pandemic.
Revenue fell 9 percent to $8.7 billion, edging out Wall Street expectations of $8.4 billion. It was far better than the 28 percent drop in revenue in the second quarter.
Net income was $1.7 billion. Earnings, adjusted for one-time items, fell 2 percent to 55 cents per share. That also outpaced analyst forecasts of 46 cents.
Atlanta-based Coke has been decimated with the closure of arenas, restaurants, theaters and other public places where it books about half of its revenue. It has been making up for some of that as shoppers buy more beverages to consume at home.
Sales of sparkling soft drinks fell 1 percent in the July-September period; sales of trademark Coca-Cola grew 1 percent for the quarter. But other beverages struggled. Sales of enhanced water and sports drinks dropped 11 percent and tea and coffee sales were down 15 percent, hurt by closures of Costa retail stores.
CEO James Quincey said the company has accelerated a reorganization that will put more emphasis on fast-growing brands. Coke plans to cut its brands by half, to 200.
Short-lived video app Quibi shuts down
NEW YORK — Short-video app Quibi said it is shutting down just six months after its early April launch, having struggled to find customers.
The company said it would wind down its operations and plans to sell its assets. “Quibi is not succeeding,” its top executives bluntly declared in a letter posted online.
The video platform — designed for people who were out and about to watch on their phones — was one of a slew of new streaming services started to challenge Netflix.
Quibi, short for “quick bites,” raised $1.75 billion from investors including Disney, NBCUniversal and Viacom and its leadership were big names: entertainment industry heavyweight Jeffrey Katzenberg and former Hewlett-Packard CEO Meg Whitman. But the service struggled to reach viewers, despite a 90-day free trial, as short videos abound on the internet and the pandemic kept many people at home.
Home loan rates mark another low
WASHINGTON — U.S. long-term mortgage rates slipped this week as the key 30-year loan marked a new all-time low for the 11th time this year.
Home loan rates have notched a year-long decline amid economic anxiety in the recession set off by the coronavirus pandemic. Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year benchmark loan edged down to 2.80 percent from 2.81 percent last week. By contrast, the rate averaged 3.75 percent a year ago.
The average rate on the 15-year fixed-rate mortgage declined to 2.33 percent from 2.35 percent.
The low borrowing rates have bolstered demand from prospective homebuyers. Real estate database Zillow noted that home sales have continued an impressive run into September, as buyers have “stayed their course” despite the ongoing pandemic and the persistent shortage of available homes for sale.
BA’s parent cuts passenger forecast
LONDON — The parent company of British Airways has cut its fourth-quarter passenger forecast to just 30 percent of last year’s level as government restrictions imposed to control a new wave of coronavirus infections reduces demand for flights.
International Airlines Group made the announcement Thursday as it swung to a third-quarter operating loss of $1.7 billion.
The company said it reduced the fourth-quarter passenger forecast because of additional restrictions, including “an increase in local lockdowns and extension of quarantine requirements to travelers from an increasing number of countries.”
The company said that measures meant to mitigate the disruption, such as pre-departure testing and air corridor arrangements, “have not been adopted by governments as quickly as anticipated.”