Wall St. has largest pullback of 2023
NEW YORK — Wall Street had its biggest pullback of the year as an early 2023 market rally sputtered Jan. 18.
Technology stocks led the way lower, including a 1.9 percent drop in Microsoft after the tech titan joined others in its industry in announcing layoffs.
Weak readings on retail sales and industrial production also helped keep investors in a selling mood.
The S&P 500 fell 1.6 percent Wednesday, while the Nasdaq slid 1.2 percent and the Dow lost 1.8 percent. Treasury yields fell broadly.
Tech job cuts spread with Microsoft layoffs
NEW YORK — Microsoft Corp. is cutting 10,000 workers, almost 5 percent of its workforce, joining other technology companies that have scaled back their pandemic-era expansions.
The company said Jan. 18 that the layoffs were a response to “macroeconomic conditions and changing customer priorities.”
The software giant said it will also be making changes to its hardware portfolio and consolidating its leased office locations.
Microsoft is cutting far fewer jobs than it had added during the COVID-19 pandemic as it responded to a boom in demand for its workplace software and cloud computing services with so many people working and studying from home.
“A big part of this is just overexuberance in hiring,” said Joshua White, a finance professor at Vanderbilt University.
Microsoft’s workforce expanded by about 36 percent in the two fiscal years following the emergence of the pandemic, growing from 163,000 workers at the end of June 2020, to 221,000 in June 2022.
Dec. retail sales slip from Now. amid inflation
NEW YORK — Americans cut back on spending in December, the second consecutive month they’ve done so, underscoring how inflation and the rising cost of using credit cards slowed consumer activity over the crucial holiday shopping season.
Retail sales fell a worse-than-expected 1.1 percent in December, following a revised 1 percent drop in November, the Commerce Department reported Jan. 18. In October, retail sales ticked up 1.3 percent, helped by early holiday shopping
Auto sales declined as rising interest rates for auto loans crimped demand. That, and falling gas prices, helped to pull overall retail sales lower. The December figure marked the biggest monthly decline in 2022.
Excluding sales from auto and gasoline, retail sales slipped 0.7 percent. Retail sales are not adjusted for inflation, unlike many other government reports. Higher prices inflate sales, while lower prices push sales down. December spending may also have been trimmed by an early start to the shopping season.
Also on Wednesday, the National Retail Federation, the industry’s largest U.S. trade group, said holiday sales in November and December rose a weaker-than-expected 5.3 percent, based on its calculations of the government figures. It was a dramatic slowdown from the 2021 holiday season, when sales spiked 13.5 percent.
Campbell’s retools snacks units, moving jobs to NJ
CAMDEN, N.J. — Campbell’s Soup Co. plans to spend about $50 million to upgrade of its headquarters in New Jersey as it consolidates the central offices of snacks businesses from North Carolina and Connecticut.
The company announced Jan. 18 it will add about 330 positions at the site in Camden, bringing the total jobs there to about 1,600. It said the move will drive greater creativity, collaboration and career development at the company.
The jobs are moving from a Snyder’s-Lance plant in Charlotte and the Pepperidge Farm headquarters in Norwalk, Connecticut.
The headquarters upgrade and expansion, aided by unspecified tax incentives from New Jersey, will start in March and should take about three years to complete. Campbell’s plans to upgrade existing space and construct new buildings, including a campus center and a snacks research and development center and pilot plant.
Having one snacks headquarters is expected to save Campbell $10 million within a few years, the company said..
US charges Russian crypto firm founder
WASHINGTON — A Russian national who founded a cryptocurrency exchange the Justice Department says evaded U.S. regulations and became a haven for proceeds of criminal activity has been arrested.
Federal officials say Anatoly Legkodymov was arrested Jan. 17 in Miami and was due in court Wednesday on a charge of conducting an unlicensed money transmitting business.
Prosecutors allege his China-based cryptocurrency exchange, Bizlato, did not implement required anti-money-laundering safeguards and required only minimal identification from its users. The charge he faces carries a maximum penalty of five years in prison.