TIME stock market

U.S. Stocks End the Day Lower After Dropping Sharply Near Close

New York Stock Exchange
Brendan McDermid—Reuters A screen displays the Dow Jones Industrial Average as a trader passes by on the floor after the closing bell at the New York Stock Exchange on Aug. 25, 2015.

The Dow Jones fell another 200 points as the day's early recovery faltered

Just when it looked as if the bleeding had stopped, it started up again.

A rally in U.S. stocks evaporated in the minutes before the closing bell Tuesday, sending the Dow Jones industrial average down more than 200 points and extending Wall Street’s losing streak to six days — the longest such stretch in more than three years.

Where the market might bottom out is anyone’s guess — not exactly comforting news to anyone whose retirement savings or down payment on a house are tied up in stocks.

The rally came after China lowered interest rates to try to boost its slowing economy. Other world markets surged on the news out of Beijing, and for a while, it looked as if U.S. stocks would follow suit and the global sell-off might stop.

Stocks also got a lift from economic reports showing a rebound in U.S. consumer confidence and sales of new American homes.

At one point Tuesday, the Dow was up as much as 441 points. But sell orders began pouring in in the last 15 minutes of trading, and stocks swung abruptly from positive to negative territory.

The Dow ended with a loss of 204.91 points, or 1.3 percent, at 15,666.44. The Standard & Poor’s 500 index fell 25.60 points, or 1.4 percent, to 1,867.61. The Nasdaq composite declined 19.76 points, or 0.4 percent, to 4,506.49.

“The return to a more traditional stimulus from China helped excite many investors,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “But, in fact, this is more likely the start of a longer-term period of volatility.”

The three major U.S. indexes have now lost ground six days in a row, with the Dow falling about 1,900 points over that period.

The S&P 500 is down 12 percent from its record close of 2,130.82 on May 21. That puts it in what Wall Street calls a “correction” — a drop of at least 10 percent from its most recent high. It is the S&P’s first correction in nearly four years.

The last time the S&P declined six days straight was July 2012.

China, the world’s second-largest economy, cut its interest rates for the fifth time in nine months in a renewed effort to shore up growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.

A slowdown in China has the potential to significantly crimp demand for oil and other commodities, a ripple effect that could dampen global economic growth.

“The Chinese economy is going to be on this bumpy road for a while, and it will have ebbs and flows that will no doubt have a serious impact on the global economy,” said Kamel Mellahi, professor at the Warwick Business School. “What we are seeing now is a dress rehearsal of things to come.”

Beyond China, traders are waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. The Fed isn’t expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.

European markets recovered almost all their losses from Monday’s sell-off. Germany’s DAX jumped 5 percent, while France’s CAC-40 rose 4.1 percent. The FTSE 100 index of leading British shares gained 3.1 percent.

China’s central bank took action hours after the country’s main stock index closed sharply lower for a fourth day. The Shanghai stock index slumped 7.6 percent, on top of Monday’s 8.5 percent loss.

Tokyo’s Nikkei 225 also closed lower, sliding 4 percent. But other markets in Asia posted modest recoveries, including Hong Kong and Sydney.

Energy company Pepco Holdings declined the most in the S&P 500 on Tuesday after regulators in Washington rejected its proposed merger with Exelon. Pepco stock shed $4.44, or 16.5 percent, to $22.51.

Best Buy recorded the biggest gain in the index, climbing $3.68, or 12.6 percent, to $32.95, after the home electronics chain reported better-than-expected results for the quarter.

Oil rebounded from its lowest closing level in more than six years. The price of U.S. crude rose $1.07, or 2.8 percent, to $39.31.

U.S. government bond prices fell, pushing up the yield on the 10-year Treasury note to 2.07 percent.

___

AP Business Writer Joe McDonald in Beijing contributed to this story.

MONEY Travel

Dreamliner Gets ‘Nose Job’ After Hail Damage

American Airlines Dreamliner Nose Job.
Huh, Nam Y.—AP American Airlines' first Boeing 787 Dreamliner prepares to depart O'Hare International Airport for Dallas-Fort Worth, Thursday, May 7, 2015, in Chicago.

American Airlines' cheeky Twitter announced the successful operation.

Last month, a Chinese hailstorm pushed in the nose on a $224.6 million Boeing 787 Dreamliner that had only been in service for three months.

The incident didn’t result in any injuries, but the plane’s nose cone area and cockpit had to be replaced in Beijing as well as a slew of lights and flight surfaces that were damaged by the violent storm.

Yesterday, American Airlines tweeted a picture of the mended nose with the text “Oh hail, I’m not afraid to say it: I’ve had a little work done,” which delighted the public, garnering 329 retweets.

The 787 Dreamliner is Boeing’s most efficient plane in its fleet, made in part by advanced materials like carbon fiber in the fuselage—which was not damaged by the hail. American Airlines currently has nine Dreamliners in its fleet and has moved them into long-range routes servicing Buenos Aires, Tokyo, Shanghai and Beijing.

TIME chicken sandwich

This Man Found Out the Hard Way that You Can’t Copyright a Chicken Sandwich

Fast-Food Ban
Damian Dovarganes—AP A Church's Chicken restaurant.

Food isn’t considered ‘intellectual property’

Norberto Colón Lorenzana recently filed a lawsuit against South American Restaurant Corporation (SARCO) claiming it stole his idea for a chicken sandwich recipe. He lost.

Colón was working at SARCO, an operator of Church’s Chicken locations in Puerto Rico, when he developed a concept for a new chicken sandwich. The company then performed taste tests with this original idea in mind, and the result was a new menu item that Colón called the “Pechu Sandwich.” Years later, SARCO decided to protect themselves by trademarking the name.

Colón then accused the company of stealing and capitalizing on his “intellectual property,” claiming that he should receive a percentage of the profits. The district court of Puerto Rico dismissed his case, and the appellate court affirmed its decision.

In explaining the court’s decision, Chief Judge Howard listed the eight categories of intellectual property that qualify for copyright protection:

(1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works.

Not surprisingly, “chicken sandwich” does not fall under any of these categories. Howard said a recipe is simply a list of “functional directions to achieve a result,” and does not qualify for copyright protection. This particular recipe listed fried chicken, lettuce, tomato, cheese, and mayo.

As for the name “Pechu Chicken,” the law states that words and short phrases are not copyrightable.

MONEY Autos

Toyota Could Ban Dealers From Advertising Below Invoice Price

Toyota Bans Advertising Below Invoice Pricing
Stroshane, Matt—Bloomberg/Getty Images Toyota dealers will no longer be able to advertise cars below invoice price.

Toyota set to follow Honda's lead.

While Lexus tests out a new, no-haggling policy at its dealerships, Toyota is keeping the haggle alive with a plan to prohibit dealers from advertising below invoice price.

Toyota dealers across the country told Automotive News that starting in January new guidelines from the car maker will explicitly prohibit them from advertising vehicles below invoice. They said they learned of the plan from national and regional Toyota sales representatives, who added that Toyota plans to release details at its National Dealer meeting next month. Toyota declined to comment on the plan, saying, “As is customary at our National Dealer Meeting, we will discuss a number of business-related topics, including marketing covenants.”

Since dealers get a check from the manufacturer each time they sell a car, they still make money off cars sold below invoice. For high-volume dealers, selling the majority of cars with a one-price strategy below invoice can make for good business and happy customers, who don’t have to get stressed out haggling. One high-volume dealer in Florida told Automotive News he doesn’t want to stop advertising the below invoice pricing because consumers would have a hard time searching online for cheaper local prices.

Other dealers back the proposed change, saying below invoice pricing encourages a “race to the bottom” and increases risk of bait-and-switch selling practices, when a customer will come in on the strength of an attractive advertisement and find the desired car unavailable and a more expensive option in its place.

Prohibiting the advertising of a below invoice price isn’t new. Honda has a similar ban in place and has implemented severe penalties like withdrawing marketing assistance of $400 per car if dealers break the marketing covenant three times by pricing too low.

Read next: This Car Safety Demo Went Terribly Wrong

TIME CEO pay

These Companies Have the Biggest CEO-Worker Pay Gaps

<> on July 7, 2015 in Sun Valley, Idaho.
Scott Olson—2015 Getty Images Discovery Communications CEO David M. Zaslav.

Glassdoor offers sneak peek into future pay disclosures

Glassdoor released a report Tuesday that shows the average CEO earns around 204 times what the company’s median worker receives.

The SEC adopted a new rule this month that will require publicly traded companies to disclose the ratio of CEO pay to median worker pay. Glassdoor has been ahead of the curve on this pay transparency mission, collecting voluntary and anonymous salary reports from employees since 2008. Glassdoor used the data to compile a report that shows what the ratios might look like once the SEC rule goes into effect in January 2017.

The highest CEO-worker pay ratio was found at Discovery Communications, where CEO David M. Zaslav makes 1,951 times more than his median workers. Zaslav took home $156 million in 2014, while median pay at the media company was $80,000.

Chipotle Mexican Grill came second on the list, with a pay ratio of 1,522, while CVS Health was third with a ratio of 1,192.

Microsoft’s CEO-worker pay ratio of 615 was the highest of the companies Glassdoor measured in the technology sector. Google’s ratio was 0, as CEO Larry Page receives a $1 annual salary. CEOs such as Page often get the vast majority of their income from their large share holdings.

MONEY online shopping

The Reason You First Started Shopping at Amazon Is Disappearing

An employee pushes a cart past bays of merchandise as she processes customer orders at the Amazon.com Inc. fulfillment center in Poznan, Poland, on Friday, June 12, 2014.
Bartek Sadowski—Bloomberg/Getty Images

Amazon's reputation for low-price supremacy is called into question.

First and foremost in its rise to the top of retail, Amazon grabbed the attention of consumers simply by undercutting the competition on price. It started in the mid-’90s with books “priced close to cost, in order to increase sales volume,” as an in-depth New Yorker story about the company put it. In lieu of profits on book sales, the business plan was this: “After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet.”

And that’s pretty much what Amazon did. The Jeff Bezos aphorism “Your margin is my opportunity” became the unofficial Amazon mantra, and the world’s biggest e-retailer competed ruthlessly on price. The advent of “showrooming”—in which shoppers scoped out merchandise in stores, then whipped out smartphones to see how much they’d save by purchasing it at Amazon—hammered home the idea that saving money was the biggest reason to do business with the world’s largest e-retailer.

Why, then, does it seem that more and more consumers are grumbling that Amazon’s prices aren’t that cheap lately? In a thread on Reddit posted this week that’s gathering a lot of attention, the initial commenter griped about Amazon’s “pricing getting a little ridiculous,” explaining, “Most of the stuff I’m trying to buy, from clothes to food, is way overpriced, sometimes marked up 100%.”

Many of the 400+ comments that followed were in agreement that Amazon’s prices aren’t as cheap as they used to be. What’s especially frustrating is that shoppers routinely see that prices for many items are higher if they qualify for free two-day delivery via Amazon Prime, which costs $99 per year. So in one way or another, consumers are getting the strong impression that shopping at Amazon isn’t quite the savings proposition it once was.

This is hardly the first time that Amazon’s status as the retail world’s low-cost leader has come into question. During the 2014 winter holiday season, Amazon’s online customer satisfaction ratings dropped significantly, and the overwhelming reason cited for the decrease is that pricing didn’t meet up with consumer expectations. In many instances, Walmart had cheaper prices than Amazon.

Research released just after the holidays revealed some of the strategies behind Amazon prices: While the e-commerce giant tended to have the cheapest prices on the most popular items, prices for many other goods were far higher than what shoppers might find at Walmart and other retailers. What Amazon appears to be hoping is that, after seeing low prices on one or two popular items, customers are lulled into believing that the site has the cheapest prices for everything—and this is just not the case.

Based on the recent discussion at Reddit, though, more and more consumers are becoming aware that the competition may be able to beat Amazon on price. This could be a huge problem for Amazon—after all, low prices were what originally attracted most people to the site—but at the same time, it seems as if shoppers’ main reason(s) for using Amazon are shifting.

Instead of always having the rock-bottom cheapest prices, Amazon now reliably has prices that are decent, if not the absolute lowest available. What keeps Amazon’s sales humming along, then, is that it’s convenient. The site that used to be all about saving money is now the Internet shopper’s “prime”—pun intended—resource for saving time.

The importance of Amazon Prime cannot be understated in Amazon’s quest to increase profits. Early on, Amazon discovered that Prime subscribers overwhelmingly made their online purchases via Amazon, and therefore they stopped shopping elsewhere. Naturally, a customer’s Amazon purchases skyrocket once he or she is signed up for Prime. With the assurance of free two-day shipping on most purchases, and the assumptions that Amazon’s prices are at least in the same ballpark as the competition, it might seem unnecessary for a Prime member to bother taking the time to shop around for a better deal.

What seems to be happening is that as more customers automatically, almost unconsciously turn to Amazon out of habit, convenience, and the desire to get the most out of one’s $99 Prime membership, the door has opened and it has become easier for Amazon to raise prices.

When you look at it this way, that “free” shipping that comes with Amazon Prime might not seem quite so free.

Read next: 5 Ways That Amazon Is Still Far Superior to New Upstart Jet.com

TIME recycling

Got a Great Recycling Idea? H&M Wants To Give You 1 Million Euros

Shoppers And Retail Economy As German Investor Confidence Jumps
Bloomberg—Bloomberg via Getty Images

H&M's chief exec: 'No company, fast-fashion or not, can continue exactly like today'

The world’s second largest fashion retailer, H&M, is offering an annual 1 million euro prize — about $1.15 million — to those who come up with new recycling techniques, Reuters reports.

The move is part of a larger effort by the retailer to reduce its impact on the environment, operate more ethically, and address raw material shortages.

The fast-fashion model that H&M follows, providing good quality products at inexpensive prices, encourages people to buy more clothes than they probably need, likely leading them to throw away a lot of what they’ve purchased. Consumers are starting to become aware of the huge negative impact this has on the environment.

Karl-Johan Persson, Chief Executive of H&M, told Reuters: “No company, fast-fashion or not, can continue exactly like today. The (prize’s) largest potential lies with finding new technology that means we can recycle the fibers with unchanged quality.”

Existing methods of recycling cotton produce low quality material.

The prize is funded by H&M and the Persson family, the retailer’s main owners.

TIME Careers & Workplace

I Learned All of My Business Lessons From Selling on a Street Corner

street-fair
Getty Images

It wasn’t enough that I loved my creations and thought they were clever

For about six or so years, I hocked goods I had made on the street, at state fairs, county fairs, art fairs and festivals up and down the state of California.

It was the late 1970s. I was 21 years old. I had dropped out of college at San Jose State University, needing only three units to graduate. I had loved studying sculpture, but I was dubious, to put it mildly, about my employment prospects. Who was going to hire me?

When I looked in the paper, the only jobs were for graphic artists and art galleries — neither of which I was qualified for. I knew I would not be creating fine works of art, but I decided then that if I could make things with my hands and make a living — I’d be satisfied. I’d be more than satisfied: I’d be rich.

At the time I was living in the Santa Cruz Mountains with a ragtag group of friends. There was a lot of kicking back and hanging out. I was fortunate to cross paths with someone who was extremely creative. As we sat in front of the television watching Dallas (Dallas was always on), I remember watching Marlena make little funny-looking characters out of stuffing a nylon stocking with cotton using a needle and thread. With their wrinkly faces, they looked like little old men.

It seemed fun, so I started to design a few of my own. When some of our friends told us they thought they were cool, an idea dawned on me — could I sell these?

Driving home on Summit Road one day, I noticed a sign advertising an upcoming craft fair at a local elementary school. I took down the phone number, called it, showed up the following weekend with my folding table and soft sculptures, and had an absolute blast. I felt like I had met a community of like-minded people. They didn’t have jobs either. They weren’t mainstream. They caravanned across the state like gypsies, and that appealed to me. What freedom! As I felt the warm sun on my face, I was sure of it: This was the life for me.

There weren’t many vendors, but I could see that some booths were doing a lot of business, because every so often a wad of cash would peak out from someone’s hand. They’d figured out that magical sweet spot, the one that exists when you sell something for the right price point in the right place. You can make it as complicated as you want, but if you’ve made something, brought it to market, and someone has paid you for it, you’ve completed the circle. You’ve done what every major business does. I wanted to duplicate their success.

Later that afternoon, my father stopped by the show to see how I was doing. “Great!” He saw how wide my grin was and asked me how many things had I sold.

Zero. I hadn’t sold anything.

To his credit, and this really was not his scene, he didn’t say or do anything that might have put out my fire. He simply smiled in a way that said, “You’ll figure it out.”

I learned a very important lesson that day. If I was going to make rent and feed myself, I had to come up with ideas that would sell. It wasn’t enough that I loved my creations and thought they were clever. I started thinking, “Who is my audience?”

So I went back to the drawing board to examine why I had failed. The nylons I had used were very plain — you could even see the cotton through them. The characters weren’t very recognizable either. When I reflected on the day, I remembered seeing mostly women, and that the fruit and vegetable stands were a big hit. Fruits. Vegetables. Women. I came to the conclusion that I needed to invent something that was fun, whimsical and for the kitchen.

So I changed directions. I bought colored nylons and formed them into playful fruits and vegetables. I called the tomato “Mr. Tom-a-toe.” The banana’s face peaked out of its peel. There were peas in a pod, each of their three faces silly and cheery. My carrots had shaggy green “hair” that I cut to look like the Beatles.

The next time I set up my table, I smoothed out a red and white checkered tablecloth on top of it. I staged my creations inside a wooden crate. And I waited.

That day, I sold out.

Immediately I thought (like every entrepreneur who has ever lived), how do I duplicate this? How do I scale up? I’ve been trying to do just that ever since.

So what did I learn? Know your audience. Create something they desire. Test it quickly to see if it sells. And by all means, have fun doing it. For me, these lessons are as foundational today as they were then. How could they not be? The path was as plain as day. When I sit in boardrooms with major corporations, I ask myself the same questions. Who is my audience? And how am I going to get them to open their wallets?

You can learn so much from observing successful operations. And I think there’s something to be said for having your back up against the wall. It actually works in your favor. If you have to support yourself, you get darn creative — fast.

This article originally appeared on Entrepreneur.com

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TIME Companies

Amazon’s Newest Feature Is Great If You Need a Drink Right Now

Amazon Prime Summer Soiree Hosted By Erin And Sara Foster
Rachel Murray—Getty Images A general view of atmosphere during the Amazon Prime Summer Soiree hosted by Erin Foster and Sara Foster at Sunset Towers on July 16, 2015 in West Hollywood, California.

Well, an hour from now

Running out of beer or wine for that barbecue you are hosting? If you are in Seattle, and are a member of Amazon.com’s Prime program, you are in luck.

Starting Tuesday, Prime members in Amazon’s hometown of Seattle can get one- and two-hour delivery of beer, wine and hard liquor like whiskey, rum, and vodka with the launch of Prime Now there, making Seattle the first U.S. city to include alcohol in the assortment of products eligible for the quick-delivery service.

Prime Now, which operates via a stand-alone app on iOS and Android devices, already operates in a number of major U.S. cities, including Atlanta, Austin, Baltimore, Chicago, Dallas, Indianapolis, Miami, and New York, where it launched last year.

The program is available to member of the $99 a year Prime membership but offers a more limited assortment than Prime. Still, eligible products can be delivered within two hours at no charge, and in one hour for $7.99. The selection tends to be focused on last-minute needs such as party supplies, cleaning products, electronics and some food.

This article originally appeared on Fortune.com.

TIME Gadgets

Here’s How Apple Is Saving Best Buy

US-ECONOMY-BLACK FRIDAY
Paul J. Richards—AFP/Getty Images A salesperson scans an iPod Touch at the Best Buy store in Fairfax, Virginia on Nov. 27, 2014.

The two companies are getting even closer

Best Buy continued its remarkable turnaround last quarter, with a big assist from Apple.

The largest U.S. electronics retailer reported a rise in domestic comparable sales of 3.8% for the second quarter, well ahead of Wall Street’s expectations, and posted a better than expected profit. While Best Buy has helped its cause by cutting costs and adding floor space to growing categories like smart homes, home theaters, and shops-within-a-shop for top brands, it has also been getting a lot of help from Apple and its roster of red-hot products.

“Demand for Apple Watch has been so strong in the stores and online,” Best Buy CEO Hubert Joly told Wall Street analysts on a conference call. The retailer expects to be selling the device, which hit the market in June, at all of its 1,050 big-box stores by the end of September, he added. Initially, Best Buy had planned to have watches in 300 stores by the holiday season. (It started selling the watches in early August.) Apple did not provide specific sales numbers for the watch in its second-quarter earnings last month, but Best Buy’s comments provide more evidence of the device’s success.

Joly also announced steps that will deepen Best Buy’s relationship with Apple. It is currently updating its Apple shop-in-shops at 740 stores, including new fixtures and more display tables for phones, computers, and tablets. The work is already complete at 350 stores, and will be finished at another 170 in time for the key holiday season. He also said that Best Buy will begin selling AppleCare product service and support this quarter, and will start testing out being an authorized service provider at 50 stores.

Beyond Apple, there was a lot for investors to cheer: e-commerce sales grew by 17%, showing that Best Buy can hold its own against Walmart, Target, and Amazon.com, and suggests it has licked the “show rooming” phenomenon, where shoppers go to a store to browse and try products out, then buy them on Amazon, behavior that a few years ago led many to question Best Buy’s long term viability.

“The company continues to gain meaningful traction online and therefore enhance its formidable competitive position,” said Moody’s analyst Charlie O’Shea in a research note. Moody’s raised its credit rating on Best Buy to Baa1 on Monday.

And in a development that should worry Sears, Best Buy reported strong appliance sales, a key driver of its comparable sales jump.

Still, Best Buy sounded a note of caution about the current quarter, forecasting U.S. sales to be flat or grow by a low single-digit percentage rate.

As for all the stock market drama of late? The jury is still out on whether consumers will pull back.

“It is difficult to know, though, if the recent volatility in the financial markets will affect overall consumer spending,” Chief Financial Officer Sharon McCollam said in a statement. “To date, however, we have not seen a measurable impact versus our original expectations.”

This article originally appeared on Fortune.com.

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