Stock Drop Could Pose Risk To U.S. Economy — If It Endures
WASHINGTON (AP) – The tumble in U.S. stock prices has inflicted psychological pain and financial losses — at least on paper — for people with a meaningful stake in the market. Their anxiety conjures another fear, too: That consumers and businesses might slash their spending in response.
Consumers are the engine of U.S. economic growth, so any sharp pullback in their spending would hurt. Could the result be a weaker economy and lost jobs?
So far at least, there’s little sign that the correction in the Dow Jones industrial average — it dropped 10 percent from its peak late last month — will squeeze the economy. Most economists see the current drop as an inevitable result of stocks’ rapid ascent since then. And few think most investors are about to curb their spending.
“The economy looks quite resilient to this type of relatively modest shock,” said Gregory Daco, chief U.S. economist at Oxford Economics.
Shipping Shake-up? Amazon May Deliver Its Own Packages
WASHINGTON (AP) – Retail giant Amazon may be about to flex its muscle in the package-delivery business. A report that Amazon is preparing to launch its own delivery service for businesses helps push shares of UPS and FedEx lower. Analysts caution, however, that it won’t be cheap or easy for Amazon to build a network like those of the traditional delivery companies.
Takata, Injured Drivers Reach Deal to End U.S. Bankruptcy
WILMINGTON, Del. (Reuters) – Takata Corp’s U.S. unit reached a settlement with its creditors, lawyers for those injured by its deadly air bags and automakers that smooths the way to end its Chapter 11 bankruptcy and sell its viable operations, according to court papers.
The Japanese company’s air bags can explode with too much force and have been linked to hundreds of injuries and at least 21 deaths, prompting the largest recall in automotive history and forcing Takata and its U.S. unit, TK Holdings Inc, into bankruptcy.
Under the agreement, a trust will be established to pay compensation for those injured or killed by the air bags, which will be funded in part by automakers surrendering some of their claims against Takata.
The 13 automakers which joined the agreement include General Motors Co, Ford Motor Co, Toyota Motor Corp, and the U.S. affiliates of Honda Motor Co Ltd and Volkswagen AG.
Wells Fargo Sends 38,000 Erroneous Letters in Auto Flub
NEW YORK (AP) – Wells Fargo has made missteps in its efforts to make amends to customers who were forced to buy unneeded auto insurance.
Bank spokeswoman Catherine Pulley says 38,000 customers received a letter they didn’t need and that contained no refund. She says the error was due to a coding mistake caught by the vendor responsible for the communications.
Pulley says the bank will work to make sure customers get the appropriate communication “including any refunds they’re eligible for.”