Stocks pull back in start to trading-shortened week; Tesla's charging system gains another convert

Wall St, takes a step back after its big rally

NEW YORK — Stocks pulled back June 20 in their first trading after a five-week rally carried Wall Street to its highest level since the spring of last year.

The S&P 500 fell 0.5 percent, the Dow Jones Industrial Average dropped 0.7 percent and the Nasdaq composite lost 0.2 percent.

The stock market, which was closed Monday for Juneteenth, took a step back Tuesday following many steps forward on hopes the economy can avoid a recession and inflation is easing enough for the Federal Reserve to stop raising interest rates soon. A frenzy around artificial intelligence has also vaulted a select group of technology stocks to huge gains in recent weeks. 

Those hopes are battling against worries that stubborn inflation will force the Fed to keep interest rates higher for longer, which could grind down the economy. With some of the easiest improvements in year-over-year inflation soon to be lapped, a tougher road may be ahead for both the economy and financial markets.

“Leaning on the lessons of the 1970s, the Fed is right to be cautious, even if that represents an inconvenient truth for stock investors,” said Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management.

During the 70s, inflation remained high for much longer than hoped, forcing the central bank to drive the economy into a painful recession by sharply hiking rates.

Fed chief Jerome Powell will testify before Congress on Wednesday and Thursday.

Rivian to join Tesla charging network

DETROIT — Electric vehicle maker Rivian will follow General Motors and Ford and join Tesla’s charging network next year.

The startup truck, SUV and delivery van maker said June 20  that it will include ports with Tesla’s connector on its future vehicles starting in 2025. It also will offer an adapter for owners of current Rivian EVs.

It is another domino to fall as the auto industry considers switching to Tesla’s connector, which it calls the North American Charging Standard. At present, nearly all automakers other than Tesla use what is called a CCS connector developed with the Society of Automotive Engineers.

Tesla has more direct current fast-charging plugs in the U.S. than any other network, and its stations are in prime locations along freeway travel corridors.

Other automakers also are looking into the switch. Last week, Stellantis CEO Carlos Tavares said his company’s U.S. teams are studying the change and will make a decision in a few weeks.

Inflator maker unsure about air-bag risks

DETROIT — A company that makes air-bag inflators that have exploded in eight incidents involving two deaths and seven injuries argues that it can’t say for sure whether its inflators might cause further such incidents.

In a reply to the National Highway Traffic Safety Administration, the company, ARC Automotive, said that even adhering to industry quality standards cannot fully eliminate the risk of occasional failures in which the air-bag inflators might explode and spew shrapnel.

NHTSA has demanded that ARC recall 67 million inflators in air bags from at least a dozen automakers. Neither the company nor the automotive industry has published a full list of models with the kind of inflators that have exploded.

Gannett sues Google over ad dominance

NEW YORK — Gannett is suing Google and its parent company Alphabet, claiming that they unlawfully acquired and maintain monopolies on the advertising technology tools that publishers and advertisers use to buy and sell online ad space.

The publisher of USA Today alleges that Google controls how publishers sell their ad slots and forces them to sell an increasing amount of ad space to Google at lower prices. This in turn results in less revenue for publishers and Google’s ad-tech rivals and more money for Google.

Gannett CEO Mike Reed said in an opinion piece published Tuesday in USA Today that the company wants to “restore fair competition in a digital advertising marketplace that Google has demolished.”

Buffett’s firm ups stakes in trading houses

OMAHA, Neb. — Billionaire Warren Buffett’s company has increased its investments in five major Japanese trading houses to give Berkshire Hathaway control of 7.4 percent of each of those conglomerates.

Buffett disclosed the new investments June 20 in TV interviews while he was visiting Tokyo to meet with executives at the Japanese companies. Shares of Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. all surged.

The trading houses themselves are some of Japan’s oldest and biggest companies that each hold investments in a variety of industries and other companies. Buffett said he would consider investing in other Japanese companies or partnering with one of the trading companies on a deal if they ever needed an investor.

Europe, US urged to probe some AI tools

LONDON — European Union consumer protection groups are urging regulators to investigate the type of artificial intelligence underpinning systems like ChatGPT over risks that leave people vulnerable.

And they want action before the bloc’s groundbreaking AI regulations take effect.

In a coordinated effort June 20, 15 watchdog groups wrote to authorities warning them about a range of concerns around generative artificial intelligence.

A transatlantic coalition of consumer groups also wrote to U.S. President Joe Biden asking him to take action to protect consumers from possible harms caused by generative AI.

The EU is wrapping up the world’s first set of comprehensive AI rules, but they aren’t expected to take effect for two years.

Md. port director quits after crash in state Jeep

ANNAPOLIS, Md. — The executive director of the Maryland Port Administration resigned late last week after being involved in a four-vehicle crash in a state-issued vehicle that resulted in police citing him for failing to control speed, leaving the scene of a property damage crash and following too close.

William Doyle was cited by authorities after the crash June 13 on southbound Interstate 83 in Baltimore, State Police said in a statement.

“While we cannot discuss details of personnel matters, I can confirm that Bill Doyle did submit his resignation on Friday,” a port spokesman said in a statement.

Deputy executive director Brian Miller is serving as interim acting executive director.

Investigators believe three vehicles were stopped in the travel portion of the road at the time of the crash, state police said. Doyle was driving a state-issued 2017 Jeep and crashed into a pickup, causing a chain reaction with two other vehicles, police said. No one was hospitalized.

Doyle, 53, left the scene of the crash, though he later called police and told them about it, state police said. Troopers contacted Doyle and met him at the scene of the crash.

Doyle did not have a lawyer listed in court records. He had served as the executive director of the port administration for nearly three years.

The executive director of the port oversees and manages Baltimore’s six state-owned marine terminals. The job pays more than $300,000 a year, the Baltimore Sun reported.

Aircraft engine maker to expand in Ga.

COLUMBUS, Ga. — Airplane engine maker Pratt & Whitney will invest more than $200 million to expand its engine overhaul center in Georgia, hiring 400 new workers.

The unit of Virginia-based Raytheon Technologies made the announcement June 20 at the Paris Air Show.

Pratt & Whitney currently has about 2,000 employees at two locations in Columbus, which have operated since 1984. The expansion will take place at a plant that overhaul 400 engines a year.

Ex-auto chief Ghosn sues Nissan for $1B

BEIRUT — Former auto tycoon Carlos Ghosn has filed a $1 billion lawsuit against Nissan and about a dozen individuals in Beirut over his imprisonment in Japan and what he says is misinformation spread against him, Lebanese officials said June 20.

According to the officials, Ghosn’s lawsuit accuses Nissan and the individuals of defamation and of “fabricating charges” against him, which eventually put him behind bars in Japan.

The lawsuit was filed last month, the judicial officials said, speaking on condition of anonymity. They did not identify the individuals.

Ghosn, who was the top executive at Greenville-based tire giant Michelin North America in the mid-1990s, was arrested in Japan in November 2018 on charges of breach of trust, misusing company assets for personal gains and violating securities laws by not fully disclosing his compensation.

Chinese e-commerce giant has new CEO

HONG KONG — China’s Alibaba Group has announced a major management reshuffle as the e-commerce giant restructures into six different business divisions to adapt to fast-changing technologies.

The moves also are aimed at spurring growth at a time when the Chinese economy is slowing despite an end to COVID-19 pandemic restrictions a half-year ago.

Eddie Wu, chairman of its e-commerce group, will succeed Daniel Zhang as CEO, the company said in a statement Tuesday.

Zhang will be CEO and chairman of Alibaba’s cloud computing unit, which has been approved to be spun off and is expected to be listed for trading within a year.

Alibaba’s current executive vice chairman, Joseph Tsai, is to succeed Zhang as chairman of the Alibaba Group. Tsai, who owns the NBA basketball team Brooklyn Nets and is the chairman of Alibaba-owned Hong Kong newspaper South China Morning Post, is a Taiwan-born Canadian citizen. He helped to found Alibaba in the late 1990s.

Wu was the company’s technology director when the company was founded in 1999.