Inflation worries push stocks down
Stocks on Wall Street gave up more ground Tuesday amid mounting worries that persistently high inflation will dim corporate profits.
The S&P 500 fell 0.8%, while the Nasdaq dropped 2.3%. The Dow Jones Industrial Average eked out a 0.2% gain, thank's primarily to big gains for McDonald's and UnitedHealth.
Big technology and communications companies helped weigh down the broader market, though some of the selling eased by late afternoon.
A stark profit warning from Snapchat's parent company spooked investors into dumping the stocks of major social media companies. Snap plummeted 43.1%, its biggest single-day drop ever, while Facebook's parent, Meta, slumped 7.6%. Google's parent fell 5.1%.
Technology and communications stocks, with their lofty values, tend to have an outsize influence on the market. The sectors have been responsible for much of the volatility the market has seen recently as well as the broad decline the major indexes have seen since early April as investors worry about the impact of rising inflation on businesses and consumers.
Airbnb shuts down China operations
Airbnb, a home rental company, plans to shut down its domestic business in China in a further sign of the internet decoupling between China and much of the rest of the world.
Airbnb, which has operated in China since 2016, is retreating from the country after struggling to compete with local "superapps" that charge lower fees and less per night on average than in other regions, said a person with knowledge of the situation. The pandemic compounded Airbnb's business woes, the person said, as China's "zero-COVID" policy sent millions into strict lockdown.
Airbnb's move highlights a growing divide between China's internet and that of the rest of the world. Many U.S. internet companies have left China after Beijing emphasized domestic businesses, exercised censorship and made other demands of companies. LinkedIn, the only remaining U.S. social network to operate in China, pulled out of the country in October, citing a lack of success with its social media and information features. Airbnb is the last remaining big U.S. internet company in China.
Ford pays $19 million to settle complaints
Ford Motor Company has settled claims by 40 U.S. state attorneys general that the company made misleading claims about the fuel economy and payload capacity of some of its vehicles.
The company agreed Tuesday to pay $19.2 million to the states and refrain from making misleading advertising claims.
The attorneys general say Ford misled consumers about how far its 2013-2014 C-Max hybrid cars could travel on a tank of gas. They also said say Ford inflated the payload capacity of its 2011-2014 Super Duty pick-up trucks.
Ford said in a statement that it is pleased the investigation was settled with no judicial finding of improper conduct.
U.S. limits Russia foreign payments
The U.S. will close the last avenue for Russia to pay back its billions in debt to international investors on Wednesday, making a Russian default on its debts for the first time since the Bolshevik Revolution all but inevitable.
The Treasury Department said in a notification Tuesday that it does not plan to renew the license to allow Russia to keep paying its debtholders through American banks. That window closes at midnight Wednesday.
Without a legal avenue to pay its debtholders, Russia will certainly default on its bonds this summer.
— Compiled by Dave Flessner