Stocks dip as steadying yields calm Wall St.
NEW YORK — Stocks drifted to modest losses in a quiet Aug. 23 trading session, as steadying Treasury yields helped calm the market following its worst tumble in months.
The S&P 500 dipped 0.2 percent after flipping between small gains and losses most of Tuesday. The edge lower follows up on Monday’s sharp 2.1 percent drop, which came on the heels of the first losing week for the index in the last five.
The Dow Jones Industrial Average fell 0.5 percent, and the Nasdaq composite slipped less than 0.1 percent.
Volatility has returned to Wall Street following what had been a strong summer as worries rise about how aggressively the Federal Reserve will raise interest rates to knock down high inflation. Recent comments from some Fed officials have cooled hopes the Fed may end up less forceful than feared.
The yield on the 10-year Treasury has climbed back above 3 percent, for example, after starting the month close to 2.60 percent.
Yields calmed on Tuesday, though, which helped give stocks something of a reprieve. The two-year yield fell in particular following some weaker-than-forecast readings on the economy, down to 3.28 percent from 3.33 percent late Monday.
Ex-Twitter security chief turns whistleblower
WASHINGTON — A former head of security at Twitter has filed whistleblower complaints with U.S. officials, alleging that the company misled regulators about its cybersecurity defenses and its problems with fake accounts, according to reports by the Washington Post and CNN.
Peiter Zatko, Twitter’s security chief until he was fired early this year, filed the complaints last month with the U.S. Securities and Exchange Commission, the Federal Trade Commission and the Department of Justice.
Zatko didn’t immediately respond to a request for comment Aug. 23 but told the Post he “felt ethically bound” to come forward.
A whistleblower group said Zatko exhausted all attempts to get his concerns resolved inside the company. Several members of Congress are calling for an investigation.
Macy’s lowers outlook despite solid 2Q
NEW YORK — Macy’s trimmed its expectations for the year Aug. 23 despite topping second-quarter expectations as it faces a glut of unsold inventory that has afflicted almost the entire retail sector.
The department store earned $275 million, or 99 cents per share, in the three-month period that ended July 30, or $1 if one-time charges are removed. That easily topped the per-share earnings of 86 cents that industry analysts had expected, according to a survey by FactSet. Sales slipped roughly 1% to $5.6 billion, but that was also stronger than anticipated.
Yet compared with the same period last year, sales and profit have cooled.
Sales at stores opened at least a year fell 1.5 percent, or 1.6% including licensed businesses like cosmetics. In contrast, its upscale Bloomingdale’s stores enjoyed an 8.8 percent increase in same-store sales. Online sales fell 5 percent during the second quarter, compared to the year-ago period, but was up 37 percent compared with the same period in 2019.
Americans are feeling four-decade high inflation and that has registered across the retail sector in the last few months with few exceptions. Shoppers are trading down to cheaper brands, looking for discounts, and making fewer visits to stores.
Fire risk prompts Hyundai, Kia recalls
DETROIT — Hyundai and Kia are telling owners of some large SUVs to park them outdoors and away from structures after a series of fires involving trailer hitch wiring.
The Korean automakers are recalling more than 281,000 vehicles in the U.S. because of the problem, but they haven’t figured out how to fix it yet.
The recalls cover more than 245,000 Hyundai Palisade and over 36,000 Kia Telluride SUVs from the 2020 through 2022 model years. The companies said debris and moisture can accumulate in a circuit board. That can cause an electrical short, which can lead to a fire. Hyundai said that dealers will inspect the wiring and remove a fuse as an interim repair.
The companies said a final repair is being developed.
Tesla hopes split was draw in new investors
NEW YORK — Unlike its electric cars, Tesla shares are about to get less expensive.
Tesla is splitting its stock 3 for 1, so after the close of trading Tuesday, investors will receive two additional Tesla shares for every one they owned as of Aug. 17.
In theory, that should drop Tesla’s share price by about two-thirds before trading starts on Wednesday to around $290. S
tock splits don’t make a company more valuable or more profitable, but the hope is the stock looks affordable to more investors. Tesla joins stock market heavyweights Amazon and Google parent Alphabet in splitting their high-priced shares this year.
GE workers in Alabama seek union
AUBURN, Ala. — Workers at a General Electric factory in Alabama launched an effort to form a union, joining a wave of labor organization efforts at large national companies.
Employees at the Auburn plant submitted union cards to the Birmingham office of the National Labor Relations Board in an organization effort with IUE-CWA. The 179-employee GE Aviation plant in makes aircraft engine parts.
The IUE-CWA indicated that a majority of workers submitted union cards, but did not provide an exact number.