Stocks were headed lower in early trading Friday after disappointing reports on the U.S. and Chinese economies. The U.S. producer price index declined 0.1% in February. Economists were expecting to see an uptick of 0.2%. Meanwhile, there were more signs of slowing economic growth in China. The world's second-largest economy released weaker-than-expected February retail sales and industrial output figures.
Traders are watching developments in China and Ukraine as tensions rise ahead of Sunday’s vote on whether Crimea will become a part of Russia again. Concerns about developments overseas have overshadowed positive reports on the U.S. economy, such as yesterday’s retail sales and jobless claims, which were both better-than-expected.
There may be signs of progress on jobless benefits for millions of long-term unemployed Americans. A bipartisan group of Senators announced a deal yesterday to restore emergency long-term jobless benefits through late May. Under the agreement, those who lost benefits when they lapsed in December would have those benefits restored retroactively. What happens next remains unclear. The House and Senate will have to approve the extension and that is by no means certain to happen. House Republicans have said any extension of unemployment benefits would have to be offset with other spending cuts.
McDonald's (MCD) and some of its franchisees have been hit with multiple class-action lawsuits filed by workers alleging that the fast-food giant is stealing their wages by making employees work off the clock and not paying overtime. Employees in California, New York and Michigan filed suits this week alleging the company manipulated timecards and ordered employees to wait at work for several hours without being paid.
There were new developments in the General Motors (GM) recall investigation. The New York Times reported a new review of federal crash data found 303 people died after air bags failed to deploy in two of the models GM recalled last month. The recall of the two vehicles in the study, as well as four other models, was due to faulty ignition switches that could cut power to the vehicle and keep the airbag from deploying. GM, which attributed 12 deaths to the defect and criticized the methodology of the study, has come under fire for waiting until last month to recall the cars after it had received reports about the defect in 2001.
General Mills (GIS) issued a warning this morning for its fiscal third-quarter. The consumer products company said earnings will be below analysts' expectations due to lower sales volumes and increased marketing spending in its U.S. yogurt business. General Mills, maker of Yoplait yogurt, Cheerios cereal and Haagen-Dazs ice cream, said it expects adjusted earnings of $0.61 to $0.62 per share for the third quarter, below the $0.68 analysts were expecting.
Shares of Aeropostale (ARO) were down sharply in extended trading after the company reported a wider loss than Wall Street was expecting for the fourth quarter. The retailer also warned its first quarter loss will be much wider than forecast. Aeropostale also said it struck a deal with private-equity firm Sycamore partners for a cash infusion in exchange for Sycamore taking a larger stake in the company. The company said it would close 50 stores this year.
And there are more new questions about privacy issues with Facebook's (FB) latest acquisition, WhatApp. The Wall Street Journal reporting a security researcher found a glitch when WhatsApp users switch phone numbers. According to that report, messages from the number's previous owner can show up on the new user's phone. This latest issue comes after previous reports of problems with privacy on the Android app. WhatsApp said the Android app risk was "overstated".