Stocks post best quarter since 2013; JetBlue offering a no-frills fare

By Post & Courier

Stocks had best quarter in 5 years

U.S. stocks ended back where they started Friday as the stock market wrapped up its best quarter in almost five years. Electric car maker Tesla plunged after federal regulators moved to oust CEO Elon Musk following his tweet last month saying that he was close to a deal to take Tesla private.

Health care companies did better than any part of the market during the third quarter and they continued to rise Friday, while technology companies rose as chipmakers also traded higher.

Global banks fell and European stocks skidded after Italy’s new government announced a big increase in spending. Italy’s main stock index fell almost 4 percent as investors worried that the plan will lead to a clash with European Union leaders who want Italy to reduce its debt level.

Through the third quarter, pain in other markets led to gains for U.S. stocks, and that was true again Friday. The S&P 500 rose 7.2 percent, its biggest increase since the end of 2013. One reason is that investors are worried about other regions, especially emerging markets.

“Investors do pivot to the U.S. when they have concerns about other regions,” said Marina Severinovsky, an investment strategist at Schroders.

JetBlue: fewer frills on cheapest fares

JetBlue is following the lead of larger rivals by offering a stripped-down ticket with fewer options than regular economy fares.

The airline, which serves Charleston International, says customers who take the cheapest fare might have to accept limits on when they board, their seat, and whether they can change or cancel a reservation.

JetBlue president Joanna Geraghty said in a note to employees Friday that the new fare class will take effect sometime next year. Geraghty says “our success is at risk” if JetBlue doesn’t offer the lower fares, which are called “basic economy” on Delta, American and United.

The big airlines introduced basic economy to compete with discount carriers like Spirit Airlines. Buyers can’t pick a seat when they book their ticket, can’t change a reservation once booked, and they board last.

Consumer spending up 0.3% in Aug.

WASHINGTON – U.S. consumer spending edged up a moderate 0.3 percent in August, the smallest gain in six months, as purchases of cars and other durable goods fell. A key gauge of inflation slowed slightly after posting its biggest annual gain in six years.

The Commerce Department said Friday that the rise in spending was the weakest since spending fell 0.1 percent in February. Spending had been up 0.4 percent in July. Consumer spending is closely watched because it accounts for two-thirds of economic activity.

An inflation gauge closely watched by the Federal Reserve edged up 0.1 percent in August, a tiny gain which left prices rising 2.2 percent over the past 12 months, down from a 2.3 percent 12-month rise in July which had been the fastest pace in six years.

SEC: Walgreens, ex-execs misled investors

NEW YORK – Walgreens and two former top executives are settling charges that they misled investors about the profit potential of its pending $16 billion merger with the European retail chain Alliance Boots.

In an agreement with the Securities and Exchange Commission, Walgreens Boots Alliance Inc. agreed to pay a $34.5 million penalty. Former CEO Gregory Wasson and Wade Miquelon, former chief financial officer, will each pay $160,000, without acknowledging wrongdoing.

According to the settlement announced Friday, Walgreens in 2012 projected a combined, adjusted profit of $9 billion to $9.5 billion for 2016. Though internal forecasts later revealed significant risks of not hitting that goal, the executives stuck the original forecasts.

Finally, in August 2014, the company issued a 2016 forecast that was 20 percent lower. Shares tumbled 14 percent in one day.

Harvard endowment grows to $39B

CAMBRIDGE, Mass. – Harvard University says its endowment has grown to $39.2 billion after returning 10 percent on its investments in the last fiscal year.

It marks a slight improvement over an 8.1 percent return that disappointed Harvard officials last year but still falls short of returns recently announced by some other elite universities.

The Massachusetts Institute of Technology says its investments returned 13.5 percent last year, while the University of Pennsylvania saw a return of 12.9 percent.

Harvard’s endowment chief, Narv Narvekar, said the school’s portfolio is “still in the early stages of a multi-year transition, with much work ahead.” Further details about the endowment’s performance will be released in October.

Harvard’s endowment is the nation’s largest but has lagged in recent years. Narvekar was hired in 2016 to turn it around.

This article provided by NewsEdge.