Business Highlights: Powell testimony; Stocks tumble


Powell signals increased rate hikes if economy stays strong

WASHINGTON (AP) — The Federal Reserve could increase the size of its interest rate hikes and raise borrowing costs to higher levels than previously projected if evidence continues to point to a robust economy, Chair Jerome Powell says in prepared testimony to a Senate panel. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” he says. The Fed raised its benchmark rate by a quarter-point in early February, after imposing a half-point increase in December and four three-quarter-point hikes before that. Over the past year, the central bank has raised its key rate, which affects many consumer and business loans, eight times.


Stocks tumble on fears about faster rate hikes, Dow down 570

NEW YORK (AP) — Stocks sank on Wall Street after the head of the Federal Reserve warned it could speed up its economy-rattling hikes to interest rates if pressure stays high on inflation. The S&P 500 dropped 1.5% Tuesday, and the Dow Jones Industrial Average gave back 574 points. Both had been nearly flat just before Fed Chair Jerome Powell said the central bank is ready to get more aggressive on rate hikes if warranted. Treasury yields also shot higher following Powell’s testimony before a Senate committee. The yield on the two-year Treasury is at its highest level since 2007.


US sues to block JetBlue from buying Spirit Airlines

The Biden administration is suing to block JetBlue Airways from buying Spirit Airlines, saying the deal would reduce competition and drive up air fares for consumers. The Justice Department said Tuesday that the tie-up would especially hurt cost-conscious travelers who depend on Spirit, a budget carrier, to find cheaper options than they can find on JetBlue and other airlines. Attorney General Merrick Garland held a news conference to announce the lawsuit — a sign of the importance that the administration places on stopping further consolidation in the airline industry.


Coming soon: Reese’s Cups, chocolate bars made from plants

Reese’s Peanut Butter Cups are getting the vegan treatment. Hershey says its Reese’s Plant Based Peanut Butter Cups, which go on sale this month, will be its first vegan chocolates sold nationally. A second plant-based offering, Hershey’s Plant Based Extra Creamy with Almonds and Sea Salt, will follow in April. The chocolates are made with oats instead of milk. Hershey says consumers want choice and are looking for products they consider healthier or with fewer ingredients, including reduced sugar and plant-based options.


France on strike: Unions say ‘non’ to higher pension age

PARIS (AP) — More than a million demonstrators have marched in cities and towns across France in a new round of protests and strikes against the government’s plan to raise the retirement age to 64. Unions called for more protests on Saturday while warning that the situation could become “explosive.” The government “must withdraw its project now,” unions demanded after an evening meeting Tuesday to decide their course of action. Garbage collectors, utility workers, train drivers and others walked off the job across the country to show anger at the reform. Unions asked for an urgent meeting with authorities, saying government silence is growing dangerous.


China’s trade contracts as Western demand weakens

BEIJING (AP) — China’s trade contracted again in January and February as U.S. and European demand weakened in the face of interest rate hikes, adding to pressure on official efforts to revive economic growth following the end of anti-virus controls. Customs data show exports sank 6.8% from a year earlier. Imports fell 10.2%, deepening December’s 7.3% contraction. Forecasters expected trade to weaken as the likelihood of a recession in Western economies increased following rate hikes to cool economic activity and inflation. That adds to complications for President Xi Jinping’s government, which is trying to revive economic growth that sank last year to 3%, the second-weakest rate since the 1970s.


WeightWatchers gets into prescription weight loss business

WeightWatchers’ stock is soaring after the company said it is getting into the prescription drug weight loss business with the acquisition of Sequence. The telehealth operator can prescribe medications under brand names including Ozempic, Wegovy and Trulicity. WeightWatchers offers subscribers meal plans with the goal of losing excess weight. With the acquisition of Sequence, the company is tapping into a red-hot market for prescription drugs that address obesity, and broadening what it offers to customers. Shares of WW International Inc. almost 70%.


Joe Biden plans new taxes on the rich to help save Medicare

WASHINGTON (AP) — President Joe Biden has started to unveil parts of his budget proposal being released later this week. The Democratic president is beginning with his plan for Medicare, including higher taxes on wealthy people to increase funding for the program’s trust fund. Biden also wants to expand Medicare’s ability to negotiate prescription drug prices. Biden wants to increase the Medicare tax rate from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains. That would likely increase tax revenues by more than $117 billion over 10 years, according to prior estimates by the Tax Policy Center. Biden writes Tuesday in The New York Times that Medicare is “the rock-solid guarantee that Americans have counted on to be there for them when they retire.”


FDA: Two more eyedrop brands recalled due to risks

WASHINGTON (AP) — U.S. health officials are alerting consumers about two more recalls of eyedrops due to contamination risks that could lead to vision problems and serious injury. The announcements follow a recall last month of eyedrops made in India that were linked to an outbreak of drug-resistant infections. There’s no indication the latest recalls are related to those products. The Food and Drug Administration posted separate recall notices for certain eyedrops distributed by Pharmedica and Apotex after the companies announced they are voluntarily pulling several lots from the market.


The S&P 500 fell 62.05 points, or 1.5%, to 3,986.37. The Dow Jones Industrial Average fell 574.98 points, or 1.7%, to 32,856.46. The Nasdaq composite fell 145.40 points, or 1.2%, to 11,530.33. The Russell 2000 index of smaller companies fell 21.03 points, or 1.1%, to 1,878.72.

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