Business Highlights: Europe’s energy woes, Dow bear market
Lights out, ovens off: Europe preps for winter energy crisis
FRANKFURT, Germany (AP) — Europe is staring down a winter energy crisis. Russia has reduced natural gas supplies as Europe supports Ukraine, and the continent’s ability to get through the winter may depend on how cold it is and competition from Asia. The lights of the Eiffel Tower are turning off earlier than normal and shop windows across Europe are going dark to save energy. High prices mean households and businesses are trying to use less heat and electricity, but they’re running into the hard truth that cutting back only shaves a little off their bills. Governments are rolling out relief and have been able to bolster natural gas storage. But analysts say Russia still has leverage with energy prices high and supplies tight. ___
Stocks fall on recession fears; Dow slips into bear market
NEW YORK (AP) — Stocks fell on Wall Street and put major indexes deeper into a slump as recession fears grow. The S&P 500 fell 1% Monday. The Dow Jones Industrial Average fell 1.1%, becoming the last of the major U.S. stock indexes to fall into what’s known as a bear market. The Nasdaq dropped 0.6%. The losses were broad and included banks, health care companies and energy stocks. The British pound slumped to an all-time low against the dollar and investors continued to dump British government bonds in displeasure over a sweeping tax cut plan announced in London last week. Treasury yields continued to rise as the Federal Reserve and other global central banks step up their fight against inflation.
US case against American Airlines and JetBlue heads to court
DALLAS (AP) — The government is getting its day in court to try to block a partnership between American Airlines and JetBlue. A trial is scheduled to start Tuesday in the Justice Department’s antitrust lawsuit against the airlines. The government says that letting American and JetBlue work together on flights in the Northeast will hurt competition and lead to higher fares. The airlines say it’s just the opposite — they say their partnership will make them stronger competitors against Delta and United, and that’s good for consumers. The trial is being held in federal court in Boston. It’s expected to last about three weeks.
White House: New rule will show ‘true cost’ of plane tickets
WASHINGTON (AP) — President Joe Biden plans to announce a new initiative that would eventually allow consumers to see a more complete price on airline tickets before they buy them. That would include baggage and change fees. The White House says the proposed rule from the Department of Transportation will prevent airlines from hiding the “true cost” of airline tickets, which would help consumers save money up front and encourage more competition among airlines to offer better fares. The requirement will apply not only to airlines directly but also on third-party search sites such as Kayak and Expedia. The rule would need to go through a 60-day comment period before final approval.
Boston Fed’s Collins says ‘modest slowdown’ is possible
WASHINGTON (AP) — Susan Collins, the new president of the Federal Reserve Bank of Boston, said says that a higher unemployment rate will be needed to bring down inflation from unusually high levels, but suggested any economic downturn would likely be modest. In her first speech as Boston Fed president, Collins said Monday that the economy is resilient enough to withstand the higher interest rates needed to combat inflation, which is near a four-decade high.
Bank of England fails to reassure markets after pound plunge
LONDON (AP) — The Bank of England has sought to reassure financial markets after the British pound touched an all-time low against the U.S. dollar, but its entreaty has fallen flat for investors concerned about the government’s sweeping package of tax cuts. The central bank said Monday that it’s “closely monitoring” the markets and wouldn’t hesitate to boost interest rates to curb inflation. The statement came after the pound plunged as low as $1.0373, its lowest since the decimalization of the currency in 1971. There are concerns that tax cuts announced Friday by Treasury chief Kwasi Kwarteng would swell government debt and fuel further inflation as the United Kingdom teeters toward recession.
OECD: War in Ukraine to drag on global economy into 2023
PARIS (AP) — The Organization for Economic Cooperation and Development says Russia’s war in Ukraine and the lingering effects of the COVID-19 pandemic are dragging down global economic growth more than expected and driving up inflation that will stay high into next year. The Paris-based organization projects worldwide growth to be a modest 3% this year before slowing further to just 2.2% next year, representing around $2.8 trillion in lost global output in 2023. The war in Ukraine has driven up food and energy prices worldwide, leading the OECD to project annual economic growth to slow to around 1.5% this year in the U.S., 1.25% in the 19 countries using the euro currency and 3.2% in China.
Starbucks says it wants union bargaining to begin
SEATTLE (AP) — Starbucks says it wants to start contract negotiations next month at 234 U.S. stores that have voted to unionize. The Seattle coffee giant said Monday it sent letters to stores in 36 states and the District of Columbia offering a three-week window to start negotiations. But Workers United, the union organizing Starbucks workers, is skeptical. It notes that Starbucks opposes unionization. Just three stores have begun bargaining contracts with Starbucks in the U.S. since the start of this year. Workers United says its national committee is focused on developing core proposals that workers will be able to use when they bargain at individual stores.
Amazon to hold holiday shopping event in October
SEATTLE (AP) — Amazon says it is holding a second Prime Day-like shopping event in October. The company is the latest major retailer to offer holiday deals earlier this year to entice cautious consumers dealing with tighter budgets. The event will be held October 11 and 12, offering early access to discounted items to Prime members. The event will mark the first time Amazon is holding a major sales event twice in a year and follows its annual Prime Day in July. It signals a recognition from Amazon that it needs to provide more deals to cash-strapped consumers in what’s expected to be a challenging holiday shopping season for retailers.
The S&P 500 dropped 38.19 points, or 1%, to 3,655.04. The Dow Jones Industrial Average fell 329.60 points, or 1.1%, to 29,260.81. The Nasdaq lost 65 points, or 0.6%, to 10,802.92. The Russell 2000 index of smaller companies tumbled 23.71 points, or 1.4%, to 1,655.88.