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Updated: January 8, 2022 @ 2:19 am
It was bumpy start to the new year for U.S. stock investors. File/AP
It was bumpy start to the new year for U.S. stock investors. File/AP
NEW YORK — Stocks closed lower and Treasury yields rose to close out the first week of 2022 with much of Wall Street anticipating that the Federal Reserve will raise interest rates as soon as March despite a mixed report on the U.S. jobs market.
The downbeat finish Jan. 7 capped the worst week for the S&P 500 technology sector since October 2020 and the biggest weekly drop for the tech-heavy Nasdaq in nearly a year.
The S&P 500 fell 0.4 percent, and the yield on the 10-year Treasury hit its highest level since COVID-19 began pummeling markets at the start of 2020. The benchmark index had been up 0.3 percent in the early going and then fell as much as 0.7 percent following the mixed reading from the U.S. Labor Department, which is usually the most anticipated piece of economic data every month.
“Does this bring the Fed to the table in March or in June?” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “It’s a moot point, in the long run. They’re going to raise rates in 2022.”
Higher rates could help corral the high inflation sweeping the world, but they would also mark an end to the conditions that have put financial markets in “easy mode” for many investors since early 2020. Higher rates also make shares in high-flying tech companies and other expensive growth stocks less attractive.
RALEIGH — The company that runs QVC is shutting down a North Carolina distribution center heavily damaged by a fire last month, putting nearly 2,000 employees out of work, according to a filing with state officials.
On Dec. 29, Qurate Retail Group filed a notice with the North Carolina Department of Commerce announcing its plans, news outlets reported. The company wrote that “it will be closing and ceasing all operations” at its distribution center near Rocky Mount, according to a copy obtained by WRAL-TV. The company said it will terminate all employees at the site, which employed 1,953 workers as of Dec. 29. The notice says that the company expects to complete the terminations by mid-2022.
In a statement to The News & Observer, the company said it would start giving “separation benefits” to affected workers Feb. 1. The company said it provided $500 in emergency funds to the workers, and QRG said workers will be provided with an opportunity to seek employment at other locations.
HONOLULU — Hawaii’s Council on Revenues on Thursday predicted that the Aloha State’s general fund tax receipts will surge 15 percent during the current fiscal year through June as tourism recovers from the COVID-19 downturn.
During the next fiscal year, which runs from July through June 2023, the council expects general fund tax revenues to climb 6.9 percent from this year as the rebound continues.
Hawaii law requires the governor and the Legislature to use the council’s forecasts when they draft their budgets.
Council members said the omicron coronavirus variant is causing COVID-19 case numbers to jump in many parts of the world but that wasn’t stopping tourists from coming to Hawaii.
“What we’re seeing right now is that U.S. visitors don’t seem to care. They’re traveling. And it doesn’t seem to matter what’s going on,” said Carl Bonham, an economics professor at the University of Hawaii at Manoa.
SEATTLE — Alaska Airlines said it will trim its schedule by about 10% for the rest of January as it deals with “unprecedented” numbers of employees calling in sick during the current COVID-19 surge.
The move by Alaska on Jan. 6 is similar to a decision last week by JetBlue Airways to cut about 1,300 flights through mid-January.
Alaska’s announcement came on a day in which more than 2,100 U.S. flights were canceled by early evening on the East Coast, according to FlightAware. The tracking service said that equaled about 8% of the day’s scheduled flights, and it was the 12th straight day of 1,000-plus cancellations, which airlines blamed on the virus surge and winter weather.
Worldwide, airlines had canceled about 4,700 flights.
Alaska had scrubbed about 125, or 17 percent of its flights.
The Seattle-based airline said in a statement that “the continued impacts of omicron have been disruptive in all our lives and unprecedented employee sick calls have impacted our ability to operate our airline reliably.” Alaska said reducing flights through the end of January “will give us the flexibility and capacity needed to reset.”
BERLIN — Budget airline Ryanair said Jan. 7 that it plans to stop serving Frankfurt Airport, Germany’s busiest, at the end of March. and close its base there.
Ryanair said it is closing its base in Frankfurt and reallocating its five planes there to other airports that “have responded with lower airport charges to stimulate traffic recovery.”
The airline complained that instead of providing incentives as the aviation industry struggles with the fallout from the coronavirus pandemic, Frankfurt Airport “has chosen to increase prices even further, making Frankfurt uncompetitive with European airports.”
The Ireland-based company said that all Frankfurt-based flight crew “can secure alternative positions within the Ryanair network” and that passengers affected by cancellations would receive notifications and refunds “over the coming days.”
Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott
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