Business Highlights: Rising Powell criticism, Kellogg split
Fed’s Powell facing rising criticism for inflation missteps
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell won praise for his deft leadership during the maelstrom of the pandemic recession. As threats to the U.S. economy have mounted, though, Powell has increasingly struck Fed watchers as much less sure-footed. Inflation has proved higher and far more persistent than he or the Fed’s staff economists had foreseen. And at a policy meeting last week, Powell announced an unusual last-minute switch to a bigger interest rate hike than he had previously signaled — and then followed with a news conference that many economists described as muddled and inconsistent.
Facebook and US sign deal to end discriminatory housing ads
NEW YORK (AP) — The Justice Department says Facebook will change its algorithms to prevent discriminatory housing advertising as its parent company subjects itself to court oversight in a response to a U.S. lawsuit. The Justice Department announced Tuesday in a release that Meta Platforms Inc., formerly known as Facebook Inc., reached an agreement to settle the lawsuit filed the same day. The release said it was the Justice Department’s first case challenging algorithmic discrimination under the Fair Housing Act. U.S. Attorney Damian Williams called the lawsuit groundbreaking. A Facebook spokesperson said the company was excited to pioneer the effort to improve housing ads.
Snap, crackle, pop: Kellogg to split into 3 companies
BATTLE CREEK, Mich. (AP) — Kellogg Co., the maker of Frosted Flakes, Rice Krispies and Eggo, will split into three companies focused on cereals, snacks and plant-based foods. Kellogg’s, which also owns plant-based food maker MorningStar Farms, said Tuesday that the spinoff of the yet-to-be named cereal and plant-based foods companies should be completed by the end of next year. The cereal and plant-based food companies will remain headquartered in Battle Creek, Michigan, where Kellogg was founded in 1906. The snack company __ which accounts for 80% of Kellogg’s sales __ will have its corporate headquarters in Chicago. Shares of Kellogg rose almost 4% to $70.15 in morning trading Tuesday.
Wall Street ends broadly higher after sharp losses last week
NEW YORK (AP) — Stocks are ending higher on Wall Street Tuesday, clawing back some of the ground they lost last week in their worst weekly drop since the beginning of the pandemic. The S&P 500 rose 2.4%. It’s still 21.5% below the record high it set in January. The tech-heavy Nasdaq climbed 2.5% and the Dow Jones Industrial Average added 2.1%. Markets will be closely watching congressional testimony this week from Federal Reserve Chair Jerome Powell for more clues about the Fed’s thinking about inflation and future interest rate hikes. The yield on the 10-year Treasury note rose to 3.30%.
Home sales give way as prices enter unprecedented territory
WASHINGTON (AP) — Sales of previously occupied U.S. homes slowed for the fourth consecutive month in May as climbing mortgage rates and prices discouraged many would-be buyers. The National Association of Realtors said Tuesday that existing home sales fell 3.4% last month from April to a seasonally adjusted annual rate of 5.41 million. Sales fell 8.6% from May last year. The national median home price jumped 14.8% in May from a year earlier to $407,600, an all-time high. The housing market, a crucial part of the economy, is slowing as homebuyers facing sharply higher home financing costs than a year ago following a rapid rise in mortgage rates.
US charitable giving hit record in 2021 but inflation looms
NEW YORK (AP) — Charitable giving in the United States reached a record $485 billion in 2021, though the increase did not keep pace with inflation. That’s according to a report Tuesday that offers a comprehensive look at American philanthropy. The Giving USA report says donations in 2021 were 4% higher than the record-setting $466 billion contributed in 2020. But that it was down 0.7% when adjusted for inflation. Many nonprofits are now feeling the strain because giving is not growing as fast as price increases. Reacting to the intense needs of the early COVID-19 pandemic, as well as the calls for racial justice, giving increased in unusual ways in 2020, but has generally returned to previous patterns.
Amazon’s Jassy names new head for troubled retail business
SEATTLE (AP) — Amazon CEO Andy Jassy has named a new head for the company’s troubled retail business. It’s a unit that has been burdened with a glut of warehouse space after a massive expansion during the pandemic. Jassy said in a note sent to employees that Doug Herrington will become the new CEO of the consumer division. The division is also changing its name to “Worldwide Amazon Stores.” Herrington has been leading the company’s North American Consumer business since 2015. He replaces Dave Clark, who announced his resignation from the company earlier this month.
Supreme Court rejects Bayer’s bid to stop Roundup lawsuits
WASHINGTON (AP) — The Supreme Court has rejected Bayer’s appeal to shut down thousands of lawsuits claiming its Roundup weedkiller causes cancer. The justices on Tuesday left in place a $25 million judgment in favor of Edwin Hardeman, who says he developed cancer from using Roundup for decades to treat poison oak, overgrowth and weeds on his San Francisco Bay Area property. Hardeman’s lawsuit had served as a test case for thousands of similar lawsuits. The high court’s action comes amid a series of court fights over Roundup that have pointed in different directions. Bayer argued federal regulators have repeatedly determined its products are safe. The German pharmaceutical company inherited Roundup when it acquired Monsanto in 2018.
The S&P 500 jumped 89.95 points, or 2.4%, to 3,764.79. The Dow Jones Industrial Average gained 641.47 points, or 2.1%, to 30,530.25. The Nasdaq rose 270.95 points, or 2.5%, to 11,069.30. The Russell 2000 index of smaller companies added 28.34 points, or 1.7%, to 1,694.03.