Stocks drop again ahead of earnings season; Frontier Air asks Spirit to delay takeover vote |

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Stocks tumble amid recession, rates worry

NEW YORK — Wall Street is back down on July 11, ahead of a busy week with expected updates on the severity of inflation and how corporate earnings are handling it.

The S&P 500 closed down 1.2% on Monday, while declines in tech stocks sent the Nasdaq down 2.3%. The Dow lost 0.5%.

Wynn Resorts and Las Vegas Sands collapsed after COVID infections forced the closure of casinos in Macau. Twitter plummeted further after billionaire Elon Musk said he wanted to cancel his deal to buy the social media platform.

On the bond market, a recession alarm signal continued to sound.

Later this week, the big companies will start releasing their latest quarterly results, starting with banking titan JPMorgan Chase.

Frontier says it’s running out of votes for the Spirit deal

DALLAS — Frontier Airlines admits it’s still a long way from the shareholder votes it needs to merge with Spirit Airlines, and it’s asking for another potential delay in the vote.

Frontier CEO Barry Biffle said in a letter made public on July 11 that if the merger still lacks sufficient support from Spirit shareholders in a vote scheduled for this Friday, the vote would be postponed until July 27. .

Frontier is struggling to win support from Spirit shareholders, who are considering a more expensive takeover bid from JetBlue Airways.

The Spirit shareholder vote has already been postponed three times.

Fed official: economy can handle rates

WASHINGTON — The chairman of the St. Louis Federal Reserve said last week’s jobs report pointed to a strong U.S. economy with few signs of a recession on the horizon and an economy capable of withstanding rising rates. higher interest.

Financial markets are showing signs that an economic slowdown could come next year as Americans grapple with the highest inflation in four decades and the Fed pushes up borrowing costs.

But James Bullard said in an Associated Press interview on July 11 that the central bank would not have to plunge the economy into a recession or dramatically increase unemployment to bring inflation back to its 2% target.

Chinese auto sales rebound in June

BEIJING — China’s auto sales rose 3.4% from a year earlier in the first half of 2022 as virus checks kept buyers away from dealerships but demand in the industry’s biggest global market rebounded in June, an industry group reported on July 11. .

Sales in January-June reached 10.4 million, according to the China Association of Automobile Manufacturers. June sales jumped 41.2% from a year earlier to 2.2 million after the easing of controls that shuttered Shanghai and other industrial hubs.

Total vehicle sales, including trucks and buses, fell 6.6% from a year earlier in the first half to 12.1 million, CAAM reported. Total sales in June rose 23.8% to 2.5 million.

The decline in total sales was less severe than an estimate of a 7.1% contraction released Friday by CAAM based on data from major brands. Sales growth in June was stronger than the previous estimate of 20.9%.

Auto sales in China have been hurt by consumer jitters about the economic slowdown and anti-virus controls imposed from late March.

Production was hampered by shortages of processor chips and disruption of global supply chains.

The slowdown is squeezing cash flow from global automakers that are looking to China to drive sales growth and spending billions of dollars to meet government sales quotas for electric vehicles.

Sales of electric and gasoline-electric SUVs and sedans rose 130% year on year in June to 596,000, according to CAAM. Sales for the first half of 2020 increased by 115% to reach 2.6 million, which represents half of the global market.

UK air hub sorry for travel grunts

LONDON — London’s Heathrow Airport has apologized to passengers whose journeys have been disrupted by staff shortages.

The airport has warned it may ask airlines to cut more flights from their summer schedules to ease pressure if the chaos continues.

Heathrow, Britain’s busiest airport, said service levels had at times been unacceptable in recent weeks. He cited long queues for security, delays helping passengers with reduced mobility, and luggage missing or arriving late.

The explosion in summer travel demand after two years of COVID-19 travel restrictions has overwhelmed airlines and airports in Europe.

German union calls for 8% pay rise

BERLIN — Germany’s biggest industrial union has said it will demand an 8% pay rise for millions of industrial workers in upcoming wage talks, a demand that is just above the rate of current inflation in the country.

The demand from the IG Metall union comes as Chancellor Olaf Scholz seeks to find ways with unions and employers to deal with the impact of rising prices while preventing an inflationary spiral. Germany has the largest economy in Europe. In Germany, wage agreements are usually reached in negotiations between employers’ organizations and trade unions which cover an entire sector.

IG Metall bargains for workers in the automotive and machinery industries, among others, with over 3.8 million workers. Negotiations are due to begin in mid-September.

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