Tag Archives: DISC1

Wall Street ends mixed; Salesforce selloff pressures Dow

  • Salesforce drops on co-CEO exit plan
  • Dollar General falls on slashing annual profit view
  • U.S. manufacturing shrinks for first time in 2-1/2 years in Nov

Dec 1 (Reuters) – Wall Street ended mixed on Thursday as a selloff in Salesforce weighed on the Dow, while traders digested U.S. data that suggested the Federal Reserve’s interest rate hikes are working.

On Wednesday, the S&P 500 surged over 3% on optimism the Fed might moderate its campaign of interest rate hikes.

U.S. manufacturing activity shrank in November for the first time in 2-1/2 years as higher borrowing costs weighed on demand for goods, data showed, evidence the Fed’s rate hikes have cooled the economy.

The personal consumption expenditures (PCE) price index rose 0.3%, the same as in September, and over the 12 months through October the index increased 6.0% after advancing 6.3% the prior month.

Excluding the volatile food and energy components, the PCE price index rose 0.2%, one-tenth less than expected, after gaining 0.5% in September.

“On a normal day, the package of data this morning would be pretty risk-on, but after the rally yesterday, I think it’s not quite good enough to push another leg higher,” said Ross Mayfield, an investment strategy analyst at Baird.
Wednesday’s rally drove the S&P 500 index (.SPX) above its 200-day moving average for the first time since April after Fed Chair Jerome Powell said it was time to slow the pace of interest rate hikes.

Traders now see a 79% chance the Fed will increase its key benchmark rate by 50 basis points in December and a 21% chance it will hike rates by 75 basis points.

Salesforce Inc (CRM.N) tumbled after the software maker said Bret Taylor would step down as co-chief executive officer in January.

Dollar General Corp (DG.N) fell after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp (COST.O) dropped after the membership-only retail chain reported slower sales growth in November.

According to preliminary data, the S&P 500 (.SPX) lost 2.31 points, or 0.06%, to end at 4,077.80 points, while the Nasdaq Composite (.IXIC) gained 15.22 points, or 0.13%, to 11,483.21. The Dow Jones Industrial Average (.DJI) fell 193.24 points, or 0.56%, to 34,397.42.

A report from the Labor Department on Thursday showed initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 225,000 for the week ended Nov. 26.

Investors now await nonfarm payrolls data on Friday for clues about how rate hikes have affected the labor market.

With a month left in 2022, the S&P 500 is down about 14% year to date, and the Nasdaq has lost about 27%.

Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta and David Gregorio

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Stocks struggle as China rate cut sends oil tumbling

FILE PHOTO – People pass by an electronic screen showing Japan’s Nikkei share price index inside a conference hall in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato

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  • Nikkei edges up, S&P 500 futures dip
  • PBOC cuts key rates, China data badly miss forecasts
  • Eyes on Fed minutes, earnings

LONDON, Aug 15 (Reuters) – Global shares struggled to advance on Monday while investors digested news of an unexpected cut in Chinese interest rates as data pointed to faltering growth in the world’s second largest economy, sending oil prices nearly 2% lower.

Weaker U.S. stock index futures also weighed on sentiment, while a steadier dollar knocked gold.

The MSCI all country index (.MIWD00000PUS) was barely firmer, a month-long advance having whittled away the benchmark’s decline for the year to about 13%.

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China’s central bank cut key lending rates to revive demand as data showed the economy unexpectedly slowing in July, with factory and retail activity squeezed by Beijing’s zero-COVID policy and a property crisis. read more

Until now, investors have been grappling with how much further central banks in the United States and Europe would hike rates when they meet next month.

Hopes of smaller rate hikes on signs that U.S. inflation may be peaking helped Wall Street clock up its fourth straight week of gains by Friday.

The gains on Wall Street and steady growth figures for Japan helped the Nikkei (.N225) share average in Tokyo jump to its highest in more than seven months.

“China, I think, is a different situation than the rest of the world. They’ve got a self imposed recession that they’ve created from the zero COVID policy,” said Patrick Armstrong, chief investment officer at investment house Plurimi Group.

“I do think it’s going to be Fed driven if there is another leg down in markets. Quantitative tightening, I think, will begin in earnest in September and that’s going to withdraw liquidity from the market,” Armstrong said.

Markets are still implying around a 50% chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75% by the end of the year.

The Fed will publish minutes on Wednesday from its last rate-setting meeting, but investor hopes of them showing the central bank beginning to pivot on rate hikes could be dashed.

“I don’t think (Fed Chair) Powell is going to say that, I don’t think the minutes are going to indicate that,” Armstrong said.

In Europe, the STOXX share index of 600 leading companies was up 0.13% at 441.43 points, still down around 10% for the year.

Fed Rate Futures and Stocks

U.S. FUTURES EASE

S&P 500 futures and Nasdaq futures were both down around 0.5% after last week’s gains.

Earnings from major retailers, including Walmart (WMT.N) and Target (TGT.N), will be scrutinised for signs of flagging consumer demand.

The cut in Chinese interest rates failed to stop Chinese blue chips (.CSI300) easing 0.13%, while the yuan and bond yields also slipped. read more

Geopolitical risks remain high with a delegation of U.S. lawmakers in Taiwan for a two-day trip. read more

The bond market still seems to doubt the Fed can manufacture a soft landing, with the yield curve remaining deeply inverted. Two-year yields at 3.27% are well above those for 10-year notes which were trading at 2.86%.

Those yields have underpinned the U.S. dollar, though it did slip 0.8% against a basket of currencies last week as risk sentiment improved.

But on Monday the dollar regained some poise, with the euro down 0.2% against the greenback at $1.02345 after bouncing 0.8% last week. Against the yen, the dollar steadied at 133.51 after losing 1% last week.

“Our sense remains that the dollar rally will resume before too long,” argued Jonas Goltermann, a senior economist at Capital Economics.

Gold was down 0.8% at $1,786, losing nearly all of its 1% gains last week.

Oil prices eased as China’s disappointing data added to worries about global demand for fuel.

The head of the world’s top exporter, Saudi Aramco, said it was ready to ramp up output while production at several offshore U.S. Gulf of Mexico platforms is resuming after a brief outage last week.

Brent slipped 1.8% to $96.35, while U.S. crude fell 1.9% to $90.34 per barrel.

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Reporting by Wayne Cole; Editing by Sam Holmes, Raju Gopalakrishnan and Ed Osmond

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Indexes drop after Walmart profit warning; Nasdaq down 2%

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid

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  • Walmart cuts profit forecast; news hits retailers
  • McDonald’s up as sales, profit top estimates
  • Coca-Cola up on forecast raise
  • Indexes down: Dow 0.8%, S&P 500 1.3%, Nasdaq 2%

NEW YORK, July 26 (Reuters) – U.S. stocks were sharply lower on Tuesday afternoon, with Nasdaq down more than 2%, as a profit warning by Walmart dragged down retail shares and fueled fears about consumer spending.

Walmart (WMT.N) shares fell 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories. read more

Shares of Target Corp (TGT.N) declined 3.8% and Amazon.com Inc (AMZN.O) dropped 5.1%. read more

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Also, Amazon said it would raise fees for delivery and streaming service Prime in Europe by up to 43% a year. read more

Amazon was among the biggest drags on the Nasdaq and S&P 500, while consumer discretionary (.SPLRCD) fell more than 3% and led declines among S&P 500 sectors.

“The majority of companies that reported today beat earnings, and that’s been the case. But of course there have been some warnings, and that’s what the market is focusing on,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Walmart basically pulled the plug, and most retailers are lower across the board.”

Meanwhile, Coca-Cola Co (KO.N) gained 1.9% after the company raised its full-year revenue forecast. McDonald’s Corp (MCD.N) rose 3% after beating quarterly expectations. read more

A busy week for earnings includes reports from Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) after the bell. Microsoft was down 3.4% and Alphabet was down 2.9%.

The Dow Jones Industrial Average (.DJI) fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 (.SPX) lost 52.28 points, or 1.32%, to 3,914.56 and the Nasdaq Composite (.IXIC) dropped 239.38 points, or 2.03%, to 11,543.29.

The Federal Reserve started a two-day meeting and on Wednesday, it is expected to announce a 0.75 percentage point interest rate hike to fight inflation. read more Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.

Earnings from S&P 500 companies are expected to have risen 6.2% for the second quarter from the year-ago period, according to Refinitiv data.

Among the week’s heavy slate of economic news, data Tuesday showed U.S. consumer confidence dropped to nearly a 1-1/2-year low in July, pointing to slower economic growth at the start of the third quarter. read more

Advance second-quarter GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.

Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 32 new highs and 123 new lows.

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Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Anil D’Silva and David Gregorio

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Wall St jumps with tech, energy; Target news weighs on retailers

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 1, 2022. REUTERS/Brendan McDermid

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  • Target’s margin cut hits some retail stocks
  • Kohl’s climbs on sale talks with Franchise Group
  • Indexes: Dow up 0.8%, S&P 500 up 1%, Nasdaq up 0.9%

NEW YORK, June 7 (Reuters) – U.S. stocks rallied late on Tuesday to end higher for a second straight day as technology and energy shares gained, while Target Corp’s warning about excess inventory weighed on retail stocks for much of the session.

Apple Inc (AAPL.O) shares climbed 1.8% despite news earlier in the day that the company must change the connector on iPhones sold in Europe by 2024 after EU countries and lawmakers agreed to a single charging port for mobile phones, tablets and cameras.

The S&P 500 technology index (.SPLRCT) rose 1% and gave the benchmark index its biggest boost. Microsoft Corp (MSFT.O) shares added 1.4%.

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The S&P 500 energy sector index (.SPNY) jumped 3.1% to end at its highest level since 2014, with oil prices sharply higher.

At the same time, shares of Target Corp (TGT.N) fell 2.3% after the retailer said it would have to offer deeper discounts and cut back on stocking discretionary items. read more

Equity trading was choppy, with indexes down early in the day, but the market has been recovering from recent steep losses.

Recently, “we’ve had a nice bounce … and in general investors are feeling better right now. But we are very much in a seesaw market as we’ve seen all year,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

“At some point, we will put in a bottom, and the market will move higher. We have a hard time believing that’s any time soon, given a number of fundamental issues overhanging the market,” he said. “Certainly what we’ve seen today from Target isn’t good news in terms of the consumer.”

Long-dated U.S. Treasury yields tumbled after the Target news, however, as it fueled some speculation that the worst of inflation may be in the past.

The Dow Jones Industrial Average (.DJI) rose 264.36 points, or 0.8%, to 33,180.14, the S&P 500 (.SPX) gained 39.25 points, or 0.95%, to 4,160.68 and the Nasdaq Composite (.IXIC) added 113.86 points, or 0.94%, to 12,175.23.

Shares of Walmart (WMT.N) fell 1.2%, and the S&P retail index (.SPXRT) was down 1%.

Consumer price data on Friday is expected to show that inflation remained elevated in May, though core consumer prices, which exclude the volatile food and energy sectors, likely ticked down on an annual basis.

Not all retailers were in the red. Kohl’s Corp (KSS.N) shares jumped 9.5% after news the department store chain entered exclusive talks with retail store operator Franchise Group Inc (FRG.O) over a potential sale that would value it at nearly $8 billion. read more

Advancing issues outnumbered declining ones on the NYSE by a 2.36-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers.

The S&P 500 posted 3 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 35 new highs and 121 new lows.

Volume on U.S. exchanges was 10.38 billion shares, compared with the 12.50 billion average for the full session over the last 20 trading days.

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Reporting by Caroline Valetkevitch in New York
Additional reporting by Devik Jain, Susan Mathew, Mehnaz Yasmin in Bengaluru
Editing by Maju Samuel and Matthew Lewis

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Target warns of more margin squeeze as excess inventory weighs

June 7 (Reuters) – Target Corp (TGT.N) on Tuesday cut its quarterly profit margin forecast issued just weeks earlier, and said it would have to offer deeper discounts to clear inventory as decades-high inflation takes a toll on demand.

The surprise outlook revision sent shares of Target down nearly 7% in early trading and weighed on the retail sector and broader markets.

The retailer said it would mark down prices in the second quarter, cancel orders with suppliers, strengthen parts of its supply chain and prioritize categories such as food and household essentials.

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Soaring inflation is forcing consumers to change their shopping habits, catching many retailers off guard and forcing them to offer more discounts.

Target, along with Walmart (WMT.N), had reported a much steeper-than-expected drop in quarterly profit in May, sending shockwaves through the retail industry. read more

At the time, Target said its inventory rose 43%, compared with a year earlier, as demand for high-margin discretionary items such as kitchen appliances and televisions waned.

A shopping cart is seen in a Target store in the Brooklyn borough of New York, U.S., November 14, 2017. REUTERS/Brendan McDermid

“Target was a retailer that had done exceptionally well at managing inventory challenges, but now when consumers … are pausing to see where they’re spending, what was once an advantage may come back to bite,” Jane Hali & Associates analyst Jessica Ramirez said.

Target’s strategy to keep most of its products affordable compared with its rivals is proving to be costly, with the company now saying it would raise prices on some items to offset the unusually high transportation and fuel costs.

Reuters Graphics

The company now expects second-quarter operating margin to be about 2%, compared with its prior estimate of 5.3%. It also expects margins to be around 6% for the second half of the year.

Still, Target maintained its sales goals for the year, prompting some Wall Street analysts to say the company’s aggressive measures could help it come out on top later in the year.

“While this is a painful period for Target, taking their medicine (again) in Q1 and Q2 does set up for a better second half with cleaner inventories … (and) set up for a better second half for the stock as well,” D.A. Davidson analyst Michael Baker said.

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Reporting by Aishwarya Venugopal, Susan Mathew and Uday Sampath in Bengaluru; Editing by Anil D’Silva

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Wall Street ends mixed after punishing week

  • Ross Stores plunges after cutting 2022 forecast
  • S&P 500 +0.01%, Nasdaq -0.30%, Dow +0.03%

May 20 (Reuters) – Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground.

The S&P 500 and the Nasdaq logged their seventh straight week of losses, their longest losing streak since the end of the dotcom bubble in 2001.

The Dow (.DJI) suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

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Worries about surging inflation and rising interest rates have pummeled the U.S. stock market this year, with danger signals from Walmart Inc (WMT.N) and other retailers this week adding to fears about the economy.

The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day.

Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition.

The tech-heavy Nasdaq (.IXIC) was last down about 27% from its record close in November 2021.

S&P 500 bear markets

Weighing heavily on the S&P 500, Tesla (TSLA.O) tumbled 6.4% after Chief Executive Elon Musk denounced as “utterly untrue” claims in a news report that he sexually harassed a flight attendant on a private jet in 2016. read more

Other megacap stocks also fell, with Apple Google-owner Alphabet Inc (GOOGL.O) down 1.3% and Nvidia (NVDA.O) losing 2.5%.

Shares of Deere & Co (DE.N) dropped 14% after the heavy equipment maker posted downbeat quarterly revenue. read more

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. REUTERS/Andrew Kelly

Pfizer (PFE.N) rose 3.6%, helping the S&P 500 avoid a loss for the day.

Recent disappointing forecasts from big retailers Walmart, Kohl’s Corp (KSS.N) and Target Inc (TGT.N) have rattled market sentiment, adding to evidence that rising prices have started to hurt the purchasing power of U.S. consumers.

On Friday, Ross Stores (ROST.O) plunged 22.5% after the discount apparel retailer cut its 2022 forecasts for sales and profit, while Vans brand owner VF Corp (VFC.N) gained 6.1% on strong 2023 revenue outlook.

Traders are pricing in 50-basis point rate hikes by the U.S. central bank in June and July.

The S&P 500 edged up 0.01% to end the session at 3,901.36 points.

The Nasdaq declined 0.30% to 11,354.62 points, while the Dow Jones Industrial Average rose 0.03% to 31,261.90 points.

S&P 500’s busiest trades

For the week, the S&P 500 fell 3.0%, the Dow lost 2.9% and the Nasdaq declined 3.8%.

About two thirds of S&P 500 stocks are down 20% or more from their 52-week highs.

Volume on U.S. exchanges was 13.0 billion shares, compared with a 13.5 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 48 new lows; the Nasdaq Composite recorded 11 new highs and 353 new lows.

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Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta, Arun Koyyur and Grant McCool

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Shares slide as global growth fears mount

FILE PHOTO – An investor sits in front of a board showing stock information at a brokerage office in Beijing, China, December 7, 2018. REUTERS/Thomas Peter

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BEIJING/HONG KONG, May 19 (Reuters) – Asian stocks slid on Thursday, tracking a steep Wall Street selloff, as investors worried about global inflation, China’s zero-COVID policy and the Ukraine war, while the safe-haven dollar eased.

European equity markets also looked set for another rough day.The pan-region Euro Stoxx 50 futures fell 0.52%, German DAX futures were down 0.63% while FTSE futures were 0.51% lower.

Nasdaq futures eased 0.15%, although S&P500 futures reversed earlier losses to be 0.05% higher.

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Overnight on Wall Street, retail giant Target Corp (TGT.N) warned of a bigger margin hit due to rising costs as it reported its quarterly profit had halved. Its shares plunged 24.88%. The Nasdaq fell almost 5% while the S&P 500 lost 4%.

“The bounce on Tuesday was proven to have been ‘too optimistic’, thus the self-doubt stemming from the misjudgement only makes traders click the sell button even harder,” said Hebe Chen, market analyst at IG.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) snapped four days of gains and slumped 1.8%, dragged down by a 1.5% loss for Australia’s resource-heavy index (.AXJO), a 2.1% drop in Hong Kong stocks (.HSI) and a 0.3% retreat in mainland China’s bluechips (.CSI300).

Japan’s Nikkei (.N225) shed 1.7%.

Tech giants listed in Hong Kong (.HSTECH) were hit particularly hard, with the index falling more than 3%. Tencent (0700.HK) sank more than 6% after it reported no revenue growth in the first quarter, its worst performance since going public in 2004. read more

China’s technology sector is still reeling from a year-long government crackdown and slowing economic prospects stemming from Beijing’s strict zero-COVID policy, even though soothing comments from Vice Premier Liu He to tech executives had buoyed sentiment on Wednesday. read more

Two U.S. central bankers say they expect the Federal Reserve to downshift to a more measured pace of policy tightening after July as it seeks to quell inflation without lifting borrowing costs so high that they send the economy into recession. read more

“It must be said that the concern for inflation has never gone away since we stepped into 2022. However, while things haven’t reached the point of no return, they are seemingly heading in the direction of ‘out of control’. That is probably the most worrying part for the market,” IG’s Chen said.

The U.S. dollar , which had rallied on falling risk appetite, eased 0.15% against a basket of major currencies, after a 0.55% jump overnight that ended a three-day losing streak.

The Aussie gained 0.8%,while New Zealand’s kiwi bounced 0.6% to, as an easing in Shanghai’s COVID lockdown helped sentiment.

Data on Wednesday showed that British inflation surged to its highest annual rate since 1982 as energy bills soared, while Canadian inflation rose to 6.8% last month, largely driven by rising food and shelter prices.

Bilal Hafeez, CEO of London-based research firm MacroHive, said there was a strong bias toward safe-haven assets right now, particularly cash.

“There may be short-term bounces in equities like the last few days, but the big picture is that the era of low yields is over, and we are transitioning to a higher rates environment,” Hafeez told the Reuters Global Markets Forum.

“This will pressure all the markets that benefited from low yields – especially equities.”

U.S. Treasuries rallied overnight and were largely steady in Asia, leaving the yield on benchmark 10-year Treasury notes at 2.9076%.

The two-year yield , which rises with traders’ expectations of higher Fed fund rates, touched 2.6800% compared with a U.S. close of 2.667%.

Oil prices recovered from early losses, as lingering fears over tight global supplies outweighed fears over slower economic growth.

Brent crude rose 1.2% to $110.41 per barrel, while U.S. crude was up 0.8% to $110.48 a barrel.

Gold was slightly lower. Spot gold was traded at $1814.88 per ounce.

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Additional reporting by Divya Chowdhury; Editing by Sam Holmes, Kenneth Maxwell and Kim Coghill

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EXCLUSIVE Maker of Walmart, Amazon store-brand infant formulas expects shortages through rest of 2022

Empty shelves show a shortage of baby formula at a Target store in San Antonio, Texas, U.S. May 10, 2022. REUTERS/Kaylee Greenlee Beal

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NEW YORK, May 13 (Reuters) – Perrigo Company PLC (PRGO.N), which makes store-brand baby formulas for retailers including Walmart Inc (WMT.N) and Amazon.com Inc (AMZN.O) expects shortages and heightened demand to last for the “balance of the year,” said CEO Murray Kessler in an interview with Reuters.

Perrigo’s formula manufacturing facilities in Ohio and Vermont are now running at 115% of capacity, Kessler said. At the request of the U.S. Food and Drug Administration, the company is making only four items, the store-brand versions of Similac Pro Sensitive and Pro Advance and Enfamil Gentle Ease and Infant, Kessler said. Perrigo also has a smaller business making some national formula brands including Bobbie.

The closure of Abbott Laboratories’ (ABT.N)infant-formula plant in Sturgis, Michigan, exacerbated national pandemic-related shortages, leading to empty shelves in big box stores and supermarkets and panicked parents. Abbott’s brands include Similac formulas.

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Perrigo is working with retailers including Walmart and Target Corp (TGT.N) so they “get something each week,” Kessler said. Retailers’ allocations are based on an average of what the retailers received prior to “this crisis,” he said.

“We have stepped up and are killing ourselves to do everything we can,” Kessler said.

Some retailers including CVS Health Corp (CVS.N) and Target are rationing baby formula.

The White House on Thursday announced steps taking to alleviate the shortage, including permitting more imports.

French food and beverage company Danone SA(DANO.PA), which also makes infant formulas,said the “unexpected Abbott Nutrition recall in February has led to a surge in demand in the U.S. market.

“We are in discussions with the U.S. authorities to see how we can support them in addressing their shortages.”

Of the total U.S. baby formula market, Perrigo makes up roughly 8%, Kessler said, adding that it has gained share as it has worked to satisfy the soaring demand.

Due to “massive inflation,” Perrigo raised prices by about 3% in the first quarter, Kessler said.

The company has ordered materials to meet the heightened level of demand throughout the year, he said.

Bobbie, a European-style infant formula new to the market, saw its customer count double the first week after the recall of Abbott formulas, and it has continued to climb, CEO Laura Modi told Reuters. Perrigo manufacturers Bobbie’s formula, but can only meet about 50% of the company’s demand, Modi said, leading it to stop taking new customers. Perrigo can meet 100% of Bobbie’s current customer needs, she said.

Bobbie has about 70,000 customers.

Abbott closed its manufacturing facility in Michigan after complaints of bacterial contamination.

The FDA later cited five bacterial infections reported in babies given the company’s formula, including two deaths. Abbott has said its plants are “not likely the source of infection” and is planning on re-opening the facility in the next two weeks.

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Reporting by Jessica DiNapoli in New York and Richa Naidu in London
Editing by Nick Zieminski

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Bird flu puts organic chickens into lockdown from Pennsylvania to France

CHICAGO/PARIS, May 2 (Reuters) – Organic and free-range chickens have been thrown into lockdown.

Egg-laying hens that normally have access to the outdoors can no longer roam as freely or feel the sun on their beaks as some U.S. and European farmers temporarily keep flocks inside during lethal outbreaks of bird flu, according to egg producers and industry representatives.

The switch comes as a surprise to shoppers already shelling out more money for eggs due to cullings of infected flocks. read more Consumers pay extra for specialty eggs, thinking they come from hens that can venture out of barns.

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U.S. watchdogs say retailers and egg companies must do a better job informing customers that hens are kept inside, as shoppers track their spending amid record global food inflation. Keeping birds inside is safest for now, according to government officials, because a single case of bird flu results in entire flocks being culled. The virus can also infect humans, though experts say the risk is low. read more

In France, where the government has temporarily required farmers to keep chickens indoors since November, some retailers are defying obligations to post clear information for consumers about the mandate, according to checks of grocery stores by Reuters.

“I didn’t know that they had to stay inside,” said Josephine Barit, 34, a shopper at a small Paris store that had no indications hens may have been confined.

“So it’s not really ‘free range’ anymore?” she said. “I suppose there is no other choice because of bird flu, but they could say so.”

Allowing chickens time outside is thought to be more humane, giving consumers some peace of mind about buying animal farm products.

Veterinarians say poultry with outdoor access are particularly vulnerable to becoming infected with bird flu, officially known as highly pathogenic avian influenza or HPAI, because migratory birds spread the disease. Poultry can fall ill from contact with infected wild birds, their feathers or feces.

The U.S. Department of Agriculture recommends farmers keep poultry indoors “as long as the HPAI outbreak is ongoing,” but has not required confinement.

The U.S. outbreak is the second-worst in history, with more than 35 million birds wiped out this year. France has culled nearly 16 million birds in its worst outbreak ever, while infections have also hit nations including Britain, Italy and Spain. read more

European requirements to confine chickens have left some consumers dissatisfied even when retailers post signs notifying customers of the change.

“At the end of the day you still pay the price of ‘free range’ or organic eggs when the fowls have actually never seen the sky,” said Marc Dossem, 52, a shopper who spoke in a large supermarket in Paris.

EU and British marketing standards allow for free-range laying hens to be kept inside for up to 16 weeks before companies must issue advisories to customers.

Britain temporarily required eggs from “free-range” hens kept indoors to be labeled “barn eggs,” but has allowed farmers to let hens outside again starting in May. read more

In Spain, hens must be kept indoors in special risk and surveillance areas of the country, said Mar Fernández, Spanish head of the Interprofessional Organisation of Eggs and Egg Products. They have not yet been indoors for more than 16 weeks, she said.

“There are countries that no longer have eggs from free-range hens available for months,” Fernández said.
U.S. authorities do not require organic egg producers to update labels when unexpected events like bird flu change production practices, the agriculture department said. Eggs labeled “organic” as well as “free range” must come from hens with access to the outdoors in the United States.

Among the suppliers now prohibiting outdoor access is Pete and Gerry’s, which says it is the leading U.S. producer of organic, free-range and pasture-raised eggs. The business sells eggs in stores owned by Kroger Co (KR.N) and Amazon.com Inc’s (AMZN.O) Whole Foods Market.

“We will be constantly evaluating the exposure risk and will have them back outside in the sunshine as soon as possible,” Pete and Gerry’s said.

Vital Farms Inc (VITL.O), another U.S. producer of pasture-raised eggs, said it confined hens after outbreaks in Europe. Both producers have information online about the switch, but their “free-range” and “pasture raised” labels remain the same.

Whole Foods, Kroger and Target Corp (TGT.N) did not respond to questions about whether they would post notices for shoppers.

“Consumers should get what they pay for and they’re not getting the product as advertised,” said Danielle Melgar, a food advocate for the U.S. Public Interest Research Group.

Some European producers are resisting orders to confine poultry, despite the risks.

“Laying hens can be quite aggressive so we let them out a little bit every day or they will kill each other,” said Emilie Ravalli, who runs an organic farm in Corcoue-sur-Logne in western France.

But barns can be comfortable, and chickens do not always go outside each day even when they are able to, said Gregory Martin, a poultry scientist at Pennsylvania State University.

“Confinement gives us safety,” Martin said. “Only live birds produce eggs, so it’s to our advantage to keep our birds safe.”

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Reporting by Tom Polansek in Chicago and Sybille de La Hamaide in Paris
Additional reporting by Nigel Hunt in London and Emma Pinedo Gonzalez in Madrid; Editing by Caroline Stauffer and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

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$10 toothpaste? U.S. household goods makers face blowback on price hikes

A display of Colgate toothpaste is seen on a store shelf in Westminster, Colorado April 26, 2009. REUTERS/Rick Wilking/Files

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March 1 (Reuters) – Get ready for the $10 tube of toothpaste.

Colgate-Palmolive Co (CL.N) CEO Noel Wallace said last week at an industry conference that the household goods maker sees its new Optic White Pro Series toothpaste as the type of premium product “vital” to its ability to raise prices, which will help drive profit growth this year.

His remarks come when many consumer products companies are hiking prices as much as they can to offset their own rising costs, a trend that could continue due to the conflict between Russia and Ukraine, whose economic risks include driving up gasoline prices. read more

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So far retailers and consumers seem largely unfazed by higher prices. But some lawmakers and consumer advocates argue that companies are excessively raising prices in order to fuel profits and return money to shareholders.

“We’re seeing significant price hikes on virtually every item consumers purchase,” said U.S. Representative David Cicilline, who is working on proposed antitrust legislation aimed at bringing down prices. “They’re imposing real hardships. People are taking things out of their grocery carts because it’s too expensive.”

In the past, major retailers such as Walmart Inc (WMT.N) pushed back on price hikes. But now, retailers like Walmart and Target Corp (TGT.N) are mostly going along with them, though they are still trying to undercut rivals and protect their market share when possible.

Target said on Tuesday in an earnings call that bumping up pricing is the last lever it pulls when faced with increased costs. read more

The U.S. Federal Trade Commission over the last three months has probed sky-high prices and supply chain disruptions, requiring companies including Procter & Gamble, Kraft Heinz Co (KHC.O), Kroger Co (KR.N) and Walmart to turn over internal documents on profit margins, pricing and promotions.

Comments on the inquiry are due March 14 and so far show small grocers angry with having to pay more and receive less of crucial products. Consumers wrote in about being unable to find oatmeal, cereal and cat food.

In an interview with Reuters, Cicilline cited Colgate as an example of a company touting price hikes, making basic items too costly, and paying out more to investors.

Colgate expects its margins to widen this year, due in part to higher prices. It also bought back almost 50% more shares last year, a boon for investors.

Raising prices is a “key capability” for Colgate that will help drive profit growth, Wallace said last week.

A Colgate spokesperson said in a statement that the company has a wide portfolio of products at different price points, and touted its new $10 toothpaste as the first with 5% hydrogen peroxide, with “demonstrated efficacy to whiten teeth.”

Consumer goods companies last year started hiking prices in response to rising raw material costs and labor shortages due to the pandemic. read more

“There is incredible appetite for our products,” said Katie Denis, a spokeswoman for the Consumer Brands Association, a trade group for consumer packaged goods companies including Colgate. “We make essentials. And there is no option of not delivering.”

Prices also rose on competing private label items, analysts said.

The White House is targeting corporate profits as it grapples with inflation. Bharat Ramamurti, deputy director of the White House’s National Economic Council, said there are examples of companies outside of the meatpacking industry — which has particularly been in the White House’s crosshairs — increasing prices beyond their own climbing costs. read more

Lindsay Owens, executive director of the progressive non-profit Groundwork Collaborative, named diapers as a category with little competition, paving the way for aggressive price hikes.

Kimberly-Clark Corp’s (KMB.N) margins took a hit in 2021 due to rising costs. The maker of Huggies diapers is betting that consumers will buy pricier options made with plant-based material, helping its profits recover, executives said at last week’s conference.

P&G executives said last week that they expect margins to continue to improve as higher prices hit stores. The company also plans to buy back more stock than originally planned. read more

Reuters Graphics

“Many companies are taking advantage of high consumer demand to continue to raise prices when they don’t need to,” said Jack Gillis, executive director of the Consumer Federation of America, a non-profit consumer interest group. “As long as consumers are willing to pay those prices, there’s no incentive to lower them.”

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Reporting by Jessica DiNapoli in New York; Editing by Leslie Adler and Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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