Recession fears spook Wall Street; Netflix co-CEO to pass baton as users surge

Stocks lose ground on recession fears

NEW YORK — Wall Street’s losses deepened Jan. 19 as worries that the U.S. may be headed for a painful recession kept stock traders in a selling mood.

The S&P 500 and Dow Jones Industrial Average each fell 0.8 percent, for their third straight drop. The Nasdaq composite lost 1 percent.

The major indexes are on track for a weekly loss after the market kicked off the year with a two-week rally. Analysts expect the broader market to remain unsteady as investors try to get a clearer picture of inflation and the economy’s path.

“It’s very reflective of the conflicting views that investors have with respect to where things are headed here in early 2023,” said Greg Bassuk, CEO at AXS Investments.

Reports showed weakness in several areas of the economy, including the housing industry and manufacturing in the mid-Atlantic region, though the job market appears to remain healthy. They follow worse-than-expected readings a day earlier on retail sales and industrial production. The mixed data “has investors a little bit on edge, questioning how much consumer resilience is left in the tank,” said Ross Mayfield, investment strategist at Baird.

Netflix users surge; Hastings passes baton

SAN FRANCISCO — Netflix’s subscriber growth is surging again, providing an early sign that its shift to include ads in a cheaper version of its video streaming service is helping to combat tougher competition and attract cost-conscious customers grappling with inflation.

The company on Thursday disclosed a gain of 7.7 million subscribers during the October-December period, a stretch that included the debut of an ad-supported option for $7 per month — less than half the price of its most popular commercial-free plan. The performance followed subscriber gains that topped analysts’ modest expectations during a July-September period that followed Netflix’s second consecutive quarter of customer losses.

Netflix also said co-founder Reed Hastings will relinquish its title of co-CEO, completing a transition that began in July 2020. He becomes executive chairman.

Amazon charity program axed amid cuts

NEW YORK — Amazon is ending a charity donation program it ran for a decade in its latest cost-cutting move.

In a blog post this week, the company said the program, called AmazonSmile, will shut down by Feb. 20 because it had “not grown to create the impact” the retailer had hoped.

The program allowed Amazon to donate a small percentage of eligible purchases to a charity selected by shoppers.

“With so many eligible organizations—more than 1 million globally—our ability to have an impact was often spread too thin,” the company said.

The decision also comes as the Seattle-based company is laying off workers and axing different areas of its business in an effort to trim costs.

Amazon CEO Andy Jassy said earlier this month the layoffs at his company will impact about 18,000 employees.

P&G ups outlook as costs hit profits

NEW YORK — Procter & Gamble Co., the maker of Crest toothpaste and Charmin toilet paper, raised its full-year sales outlook though it cautioned that higher commodity prices continue to squeeze profits.

The upgraded outlook issued Jan. 19 came as the Cincinnati-based company reported lower fiscal second-quarter earnings and sales from a year ago, though the results beat Wall Street expectations.

Like many consumer product makers, P&G has been forced to raise prices on its wide array of products to offset higher costs in transportation, labor and other areas. In the latest quarter, P&G said it had to hike prices by 10 percent, and it will continue to raise prices where necessary. Still, shoppers have remained fairly resilient to buying essentials.

P&G reported earnings of $3.93 billion, down 7 percent from the year-earlier quarter. Revenue totaled $20.77, down 1 percent. 

Fewer in US filed for jobless aid last week

WASHINGTON — The number of people seeking unemployment benefits in the U.S. reached a four-month low last week, a sign that employers are holding on to their workers despite the Federal Reserve’s efforts to slow the economy and tamp down inflation.

The Labor Department said Jan. 19 that the number of Americans applying for jobless aid for the week ending Jan. 14 fell by 15,000 to 190,000, from 205,000 the week before. The four-week moving average of claims declined by 6,500 to 206,000.

About 1.65 million people were receiving jobless aid the week that ended Jan. 7, an increase of 17,000 from the week before.

WhatsApp fined over EU privacy rules

LONDON — Ireland has fined WhatsApp for breaching strict European Union privacy rules by forcing users to consent to allow their personal data to be used to provide “service improvements and security.”

The Data Protection Commission issued the equivalent of $5.9 million penalty in the case Jan. 19. It has exposed divisions with regulators in other EU countries over regulating the chat app’s parent, Meta.

The commission is Meta’s lead European privacy regulator because the company’s regional headquarters is in Dublin. It originally sided with the Silicon Valley giant but a slew of other EU data protection watchdogs objected to its draft decisions, forcing the Irish watchdog to issue a stiffer punishment.

Energy fuels record trade gap for Japan

TOKYO — Japan has reported a record-high trade deficit for 2022 of about $156 billion, as energy imports surged.

The Finance Ministry reported Jan. 19 that imports jumped almost 40 percent while exports grew 18 percent from a year earlier. It was the biggest deficit since Japan began keeping comparable records in 1979.

Both imports and exports hit record highs. Resource-scarce Japan imports almost all its oil, and prices for crude oil and other commodities surged last year, partly due to the war in Ukraine. The value of the Japanese yen fell against the U.S. dollar and other currencies, meanwhile, as central banks raised interest rates to fight inflation.