Business Highlights: Inflation fight faces toughest test; Fans of Rao’s sauce worried by Campbells
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US inflation has steadily cooled. Getting it down to the Fed’s target rate will be the toughest mile
WASHINGTON (AP) — Over the past year, inflation in the United States has tumbled from 9% all the way to 3%, softening most of the price pressures that have gripped the nation for more than two years. Now comes the hard part. Squeezing out the last bit of excess inflation and reducing it to the Federal Reserve’s 2% target rate is expected to be a much harder and slower grind. The stickiness of inflation could endanger the possibility that the Fed will achieve a rare “soft landing” — a scenario in which it manages to slow inflation down to its target level through higher interest rates without derailing the economy.
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Stock market today: Wall Street dips as markets fall worldwide on worries about banks, economy
NEW YORK (AP) — Wall Street slipped as worries about the banking system and the global economy forced more caution into financial markets worldwide. The S&P 500 fell 0.4% Tuesday and at one point was down nearly triple that. The Dow lost 158 points after paring an earlier loss of 465 points. The Nasdaq fell 0.8%. Bank stocks dropped after Moody’s cut the credit ratings for 10 smaller and midsized ones. Across the Pacific, stocks sank after exports for China’s troubled economy shrank by the most since the start of the pandemic. And in Europe, bank stocks tumbled after Italy’s Cabinet approved a proposed tax on their profits.
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Campbell is buying Rao’s. Fans are worried, but the soup maker says it won’t touch the sauce
NEW YORK (AP) — Campbell Soup is set to buy Sovos Brands, the maker of Rao’s pasta sauces. In a Monday announcement, the two companies said they had entered an agreement for Campbell’s to acquire Sovos for $23 per share in cash — reflecting a total value of about $2.7 billion. The transaction will help diversify and strengthen Campbell’s Meals & Beverages division, Campbell’s President and CEO Mark Clouse said in a statement. Campbell intends to finance the Sovos acquisition with the issuance of new debt. The transaction’s closing is expected for December, subject to Sovos stockholder and regulatory approval, as well as other closing conditions.
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Zoom, which thrived on the remote work revolution, wants workers back in the office part-time
NEW YORK (AP) — Zoom became a symbol of remote work during the pandemic but the company is now joining a growing return-to-office trend. Zoom is asking employees who live within a 50-mile radius of its offices to work onsite two days a week. The company said it’s decided that “a structured hybrid approach – meaning employees that live near an office need to be onsite two days a week to interact with their teams – is most effective for Zoom.”
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Soaring sales of diabetes drug Mounjaro, widely used for weight loss, sends Eli Lilly to new heights
INDIANAPOLIS (AP) — Eli Lilly’s diabetes treatment Mounjaro, which is widely used for weight loss, raked in nearly $1 billion in second-quarter sales, or more than $200 million above what Wall Street had expected. Shares of the drugmaker soared to a new all-time-high price early Tuesday after Lilly said Mounjaro sales swelled more than 70% since the first quarter to $980 million. Almost all of that came from the U.S., and the company said significant demand was leading to delays in filling orders for some doses. FactSet says analysts expected the drug to bring in about $740 million during the quarter.
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China’s July exports tumble by double digits, adding to pressure to shore up flagging economy
BEIJING (AP) — China’s exports tumbled by double digits in July, adding to pressure on the ruling Communist Party to reverse an economic slump. Customs data shows exports plunged 14.5% from a year earlier to $281.8 billion. Imports fell 12.4% to $201.2 billion in a sign of weak domestic demand. Chinese leaders are trying to shore up business and consumer activity after the world’s second-largest economy grew by only 0.8% in the second quarter of 2023 from the previous three-month period. The ruling party has promised measures to support entrepreneurs and to encourage home purchases and consumer spending but hasn’t announced large-scale stimulus spending or tax cuts.
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Italy proposed a bank tax to help people with interest rate hikes. The move sent stocks plunging
ROME (AP) — The Italian finance ministry is defending a proposed 40% tax on some bank profits as being in line with “already existing rules in Europe on extra bank margins.” The ministry said in a statement Tuesday that regardless the contribution from the new tax can’t exceed 0.1% of total bank assets. The statement was issued after Italian bank stocks plunged following the announcement that the Cabinet had approved a proposal to apply a temporary tax on some 2023 bank profits. Transport Minister Matteo Salvini announced the tax at a Monday evening news conference. He said that it was a measure of “social equity” to make up for a series of interest rate hikes from the European Central Bank.
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UPS lowers 2023 revenue outlook citing labor deal with 340,000 unionized workers, falling volume
Revenue declined at UPS in the second quarter and the package delivery company lowered its full-year revenue expectations by $4 billion, primarily due to a tentative labor contract reached late last month with its 340,000 unionized workers. Shares for the Atlanta company fell slightly in Tuesday afternoon trading. UPS reached a tentative deal with the International Brotherhood of Teamsters, potentially averting a strike that threatened to disrupt package deliveries for millions of businesses and households nationwide. UPS earned $2.08 billion and posted revenue of $22.06 billion.
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Japan’s tech investor SoftBank trims losses and promises offensive turnaround
TOKYO (AP) — Japanese technology company SoftBank Group continued to rack up losses for the fiscal first quarter as technology investments soured amid a market downturn. But the April-June red ink, at 477.6 billion yen, or $3.4 billion, was smaller than a year ago. Losses came from what SoftBank calls its Vision Funds. Chief Financial Officer Yoshimitsu Goto struck an upbeat tone on Tuesday, stressing that the environment for technology issues was improving. SoftBank Vision Fund 1 marked a $12.4 billion gain since its inception, while SoftBank Vision Fund 2, set up after the first fund, was still performing at a loss of $18.6 billion.
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FAA warns of safety hazard from overheating engine housing on Boeing Max jets during anti-icing
U.S. regulators are warning airlines about a new risk on Boeing 737 Max jets. The Federal Aviation Administration will tell airlines to limit the use of an anti-icing system on Max jets in dry air to avoid overheating engine-housing parts, which could cause them to break away and possibly strike the plane. The FAA plans to issue its order Thursday. Boeing says it is working to correct the problem. The finding affects the type of engines used on all versions of the Boeing 737 Max. The FAA says there have been no reports of the overheating problem occurring on flights, and that the issue was discovered during testing in June.
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The S&P 500 fell 19.06 points, or 0.4%, to 4,499.38. The Dow Jones Industrial Average fell 158.64 points, or 0.4%, to 35,314.49. The Nasdaq composite fell 110.07 points, or 0.8%, to 13,884.32. The Russell 2000 index of smaller companies fell 11.52 points, or 0.6%, to 1,947.42.