Business Highlights: Stagflation worries, CEO pay
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Worry about stagflation, a flashback to ’70s, begins to grow
WASHINGTON (AP) — Stagflation. It was the dreaded “S word” of the 1970s. For Americans of a certain age, it conjures memories of painfully long lines at gas stations and shuttered factories. Stagflation is the bitterest of pills: High inflation mixes with a weak job market to cause a toxic brew that punishes consumers and befuddles economists. For decades, most economists didn’t think such a nasty concoction was even possible. But a confluence of events has economists reaching back to the days of disco and the bleak high-inflation, high-unemployment economy of nearly a half century ago. Few think stagflation is in sight. But as a longer-term threat, it can no longer be dismissed.
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More Memorial Day travel expected, despite high gas prices
LOS ANGELES (AP) — Pandemic-weary U.S. residents are confronting high gas prices as they decide whether to travel this Memorial Day weekend. AAA says the average gas price in the U.S. on Thursday was $4.60 per gallon. In California, it topped $6. But for some, more than two years of pandemic life has them hitting the road or taking to the skies despite a recent surge in cases. AAA estimates that more than 39 million people in the U.S. will travel 50 miles or more from home during the holiday weekend. A record number of almost 90% of those travelers are expected to go by car over the long weekend.
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CEO pay rose 17% in 2021 as profits soared; workers trailed
NEW YORK (AP) — Pay for CEOs who run the biggest U.S. companies soared 17.1% last year, up to a median of $14.5 million. That’s according to the AP’s annual pay survey conducted with Equilar. Such raises tower over the 4.4% gain in wages and benefits netted by private-sector workers. The raises for many rank-and-file workers also failed to keep up with inflation, which reached 7% last year. CEO pay took off as stock prices and profits rebounded sharply and the economy roared out of its brief 2020 recession. Because much of a CEO’s compensation is tied to such performance, their pay gains zoomed higher after years of mostly moderating growth.
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Better results from retailers help send stock market higher
NEW YORK (AP) — Stocks are ending higher on Wall Street Thursday as investors cheered a strong set of quarterly results from Macy’s and other retailers. The S&P 500 rose 2% and is solidly in the green for the week following a choppy few days of trading. The gains have positioned the benchmark index for its first weekly gain after seven straight weekly losses. The Dow Jones Industrial Average rose 1.6% and the Nasdaq rose 2.7%. The better-than-expected reports from retailers helped allay investors’ worries about the sector, which took big losses last week after Target and Walmart reported dismal results. Bond yields rose.
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Big tech deals keep coming: Broadcom buys VMware for $61B
NEW YORK (AP) — Computer chip and software maker Broadcom will spend about $61 billion to acquire the cloud technology company VMware, one of the biggest deals of the year despite rising inflation and some economic uncertainty. As part of the transaction, VMware shareholders can choose to receive either $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share.
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Twitter shareholders sue Musk, say he ‘deflated’ stock price
SAN FRANCISCO (AP) — Twitter shareholders have filed a lawsuit against billionaire Elon Musk, accusing him of unlawfully sowing doubt about his bid to buy Twitter. They say the Tesla CEO’s aim has been to drive down Twitter’s stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price. Twitter is also named as a defendant in the lawsuit, which was filed late Wednesday in the U.S. District Court for the Northern District of California. A representative for Musk did not immediately respond to a message for comment on Thursday. Twitter declined to comment.
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West mulls having Russian oligarchs buy way out of sanctions
BERLIN (AP) — Government officials say Western allies are considering whether to allow Russian oligarchs buy their way out of Western sanctions and use the money to rebuild Ukraine. Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland proposed the idea at a G-7 finance ministers’ meeting in Germany last week. One official said Freeland raised the issue after oligarchs spoke to her about it. The Canadian minister knows some Russian oligarchs from her time as a journalist in Moscow. One official says the Ukrainian leadership is aware of the discussions and have “some comfort” with the idea since Ukraine badly needs the additional liquidity.
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Germany: G-7 nations can lead the way on ending coal use
BERLIN (AP) — Germany’s energy and climate minister says the Group of Seven wealthy nations can lead the way on ending the use of coal. Coal is a heavily polluting fossil fuel that’s responsible for a large chunk of global greenhouse gas emissions. Senior officials from the G-7 countries are holding a three-day meeting in Berlin. They will seek to agree common targets for the shift from fossil fuels to renewable energy that scientists say is urgently needed to curb climate change. Getting the broader Group of 20 leading and emerging economies to sign on to ambitious targets set by some of the most advanced economies will be key, as countries such as China, India and Indonesia remain heavily reliant on coal.
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The S&P 500 rose 79.11 points, or 2%, to 4,057.84. The Dow Jones Industrial Average added 516.91 points, or 1.6%, to 32,637.19. The Nasdaq jumped 305.91 points, or 2.7%, to 11,740.65. The Russell 2000 index of smaller companies gained 39.07 points, or 2.2%, to 1,838.24.