America Airlines – Stocks recoup some of prior day’s losses; GM shifts its electric-vehicle push goes into overdrive |
Stocks claw back some ground they lost
NEW YORK — Stocks closed broadly higher Thursday, helping the market recoup some of its losses a day after its biggest pullback in nearly three months.
Investors continued to closely watch the wild swings in GameStop, AMC and several other stocks which have become targets for hordes of online investors who have sent them skyrocketing in recent days, taking on big hedge funds who have bet they will fall.
Several of those stocks fell sharply after Robinhood and other trading platforms restricted trading in them, causing an outcry among customers. The chaotic trading action is drawing calls in Washington and elsewhere for regulatory action to curb the speculative frenzy.
Mike Zigmont, director of trading and research at Harvest Volatility Management, said the cascade on Wednesday likely began when larger institutions started taking steps to reduce their exposure to risk at the same time, partly because of the sharp and questionable gains in several stocks. That prompted others in the market to follow suit, accelerating the decline. Similar sentiment may have driven shares higher Thursday.
“You listen to your models and suddenly everybody is de-risking together and everything cascades.” he said. “Then you sleep on it and things don’t look so bad.”
GM plan to go mostly electric by 2035
NEW YORK — General Motors has set a goal of making the vast majority of the vehicles it produces electric by 2035, and the entire company carbon neutral, including operations, five years after that.
The Detroit automaker’s push into electric vehicles has gone into overdrive this year.
GM has already announced that it will invest $27 billion in electric and autonomous vehicles in the next five years, a 35 percent increase over plans made before the pandemic. It will offer 30 all-electric models worldwide by the middle of the decade. By the end of 2025, 40 percent of its U.S. models will be battery electric vehicles. The company plans to include crossovers, SUVs, sedans and trucks in its electric vehicle lineup.
GM said Thursday that it will source 100 percent renewable energy to power its U.S. sites by 2030 and global sites by 2035. That’s five years faster than its previously announced global goal.
And it has a goal of making all new light-duty vehicles, the vast majority of its fleet, fully electric within 14 years. The company will concentrate on offering zero-emissions vehicles in different prices ranges. It’s also working with others, including the Environmental Defense Fund, to build out the necessary infrastructure to power its electric vehicles and to promote their use.
To account for carbon emissions that it cannot eliminate, GM expects to invest in carbon credits or offsets.
Airlines close out rotten ’20; so far ’21 is grim
DALLAS — Just how bad was 2020 for the airline industry? The six biggest U.S. airlines lost $34 billion, and Southwest suffered its first full-year loss since Richard Nixon was president and gasoline sold for 36 cents a gallon.
It was a disaster for airlines, worse than 9/11 or the global financial crisis — some very small carriers didn’t survive it — and the new year is off to a grim start.
On Thursday, Southwest, American and JetBlue reported that they lost a combined $3.5 billion in the final three months of the year. All issued dismal revenue outlooks for the current quarter that echoed similar pessimism from Delta, United and Alaska, which posted financial results earlier.
The airlines are looking past spring and hoping that as more people are vaccinated against COVID-19, carriers can salvage something from the peak summer vacation season.
But even that cautious optimism is threatened. Yes, the number of new reported cases of coronavirus in the U.S. have eased in the last few weeks, but they remain high. And now a halting rollout of vaccines threatens to further delay a recovery in travel and the travel industry.
McDonald’s US sales in 4Q strong
NEW YORK —McDonald’s is back on track in the U.S. and other key markets but still seeing a sales drag from coronavirus restrictions in other parts of the world.
U.S. same-store sales jumped 5.5 percent in the October-December period, pumped up by new menu items like spicy Chicken McNuggets and a meal deal collaboration with Colombian singer J Balvin. For the full year, McDonald’s said U.S. “same-store sales,” at locations open at least a year, were up less than 1 percent, their sixth consecutive year of growth.
But worldwide, same-store sales were down 1.3 percent for the quarter, reflecting store closures and limited operating hours in various markets across Europe, Latin America and Asia. For the full year, global same-store sales were down 7.7%, a bigger decline than the 7% drop Wall Street had forecast, according to analysts polled by FactSet.
CEO Chris Kempczinski said 2020 was the most difficult year in the company’s history.
The fast food giant fell short of Wall Street’s earnings and sales expectations for the fourth quarter. Revenue fell 2 percent to $5.3 billion, and net income fell 12 percent to $1.4 billion.
Home loan rates slip; 30-year at 2.73%
WASHINGTON — U.S. long-term mortgage rates slipped this week as the economy remains burdened by the coronavirus pandemic.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year fixed-rate home loan eased to 2.73 percent from 2.77 percent last week. By contrast, the rate was 3.51 percent a year ago.
The average rate on 15-year fixed-rate loans, popular among homeowners seeking to refinance their mortgages, ticked down to 2.20 percent from 2.21 percent.
The damage from the coronavirus pandemic on the U.S. and global economies suppressed home loan rates through most of 2020, and economists forecast modest increases this year. But they likely will remain relatively low, with the Federal Reserve keeping interest rates near zero as needed until the economy recovers.
Apple to crack down on iPhone tracking
SAN RAMON, Calif. — Apple plans to roll out a new privacy control in the early spring to prevent iPhone apps from secretly shadowing people. That puts the feature on course to come out after a more than six-month delay aimed at placating Facebook and other digital services that depend on such data surveillance to help sell ads.
Although Apple didn’t provide a specific date, the general timetable disclosed Thursday means the long-awaited safeguard known as App Tracking Transparency will be part of an iPhone software update likely to arrive in late March or some point in April.
After delaying the planned September introduction of the safeguard amid a Facebook-led outcry, Apple had previously said it would come out early this year. Apple released the latest schedule update as part of Data Privacy Day, which CEO Tim Cook will salute during a speech scheduled Thursday at a technology conference in Europe.
Apple has been holding off to give Facebook and other app makers more time to adjust to a feature that will require iPhone users to give their explicit consent to being tracked. Analysts expect a significant number of users to deny that permission once it requires their assent. Currently, iPhone users are frequently tracked by apps they install unless they take the extra step of going into iPhone settings to prevent it.
Facebook stepped up its attacks on Apple‘s new privacy control last month in a series of full-page ads in The New York Times, The Wall Street Journal and other national newspapers. That campaign suggested some free digital services will be hobbled if they can’t compile personal information to customize ads. On Wednesday, CEO Mark Zuckerberg questioned Apple‘s motives with the changes, saying the iPhone maker “has every incentive” to use its own mobile platform to interfere with rivals to its own messaging app.
“Apple may say that they are doing this to help people, but the moves clearly track their competitive interests,” Zuckerberg said.
American Air affiliate grounds jets for checks
FORT WORTH, Texas — An American Airlines subsidiary grounded most of its planes Thursday to conduct overdue inspections of bolts that secure doors on the nose gear.
The grounding affected two models of Bombardier regional jets operated by PSA Airlines, which operates flights under the American Eagle name. PSA has 130 of the planes, and all but a few were grounded, according to American.
American said it is working with PSA and the Federal Aviation Administration to fix the issue. It said a few of the planes have returned to service but gave no precise numbers and did not offer a timetable for finishing inspections on the remaining planes.
Tracking site FlightAware.com said 200 PSA flights were canceled by midafternoon Eastern time. American said it was trying to arrange new flights for displaced customers.
PSA is based in Dayton, Ohio, and operates many American Eagle flights in the eastern U.S., including at American’s hub airport in Charlotte.