Business briefing

The daily business briefing: July 23, 2021

Jobless claims rise unexpectedly, Intel chief says semiconductor chip shortage could last into 2023, and more

1

Jobless claims jump unexpectedly

Weekly jobless claims unexpectedly rose last week, fueling fears about the state of the economic recovery. Initial applications for unemployment benefits reached 419,000 in the week that ended July 17, the Labor Department said Thursday. The total exceeded the 350,000 estimated by Dow Jones and the upwardly revised figure of 368,000 for the week before. The news rattled Wall Street and fueled fears that rising coronavirus cases stemming from the highly infectious Delta variant could disrupt the pandemic recovery. Still, several factors suggest strong potential for hiring gains. Job placement site Indeed estimates there were 9.8 million job openings in mid-July; there were 9.5 million workers unemployed through June.

2

Intel chief says semiconductor chip shortage could last into 2023

Intel Corp. CEO Pat Gelsinger said Thursday that the global semiconductor shortage could continue into 2023. Chip-supply disruptions have driven up prices for consumer gadgets and forced automakers to reduce production. Taiwan Semiconductor Manufacturing Company (TSMC), which plans to increase production of auto chips in the next few months, said last week that shortages could start easing in the next few months. TSMC and Intel are working on adding new chip-making factories, but some of the new production won't crank up for two years. Intel reported that its second-quarter sales and profit were flat compared to a year earlier at $19.6 billion and $5.1 billion, respectively. Wall Street analysts surveyed by FactSet had expected sales of $17.8 billion and profit of $4.2 billion.

3

Internet outage briefly knocks corporate websites offline

A broad internet outage briefly knocked numerous corporate websites offline, including those for FedEx, Delta Air Lines, HSBC, and McDonald's. The problems came as two key infrastructure service providers, Akamai and Oracle, reportedly faced systems disruptions. Oracle said Thursday afternoon that its outage was the result of Akamai's Edge DNS service disruption. "We are monitoring a global issue related to a partner Edge DNS that is impacting access to many internet resources, including Oracle cloud properties," Oracle said. Akamai, whose Edge DNS service helps route web browsers to their desired destinations, said it had "implemented a fix" for a software update that triggered a bug in its system.

4

Stock futures rise, aiming for 4-day winning streak

U.S. stock futures rose early Friday, putting Wall Street on track for a possible fourth straight day of gains as concerns about the threat to economic growth from a surge in Delta variant coronavirus cases eased. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq were up by 0.5 percent several hours before the opening bell. The 10-year Treasury yield, which had fallen when investors sought safer assets just days ago, rose to 1.29 from a five-month low of 1.13 percent earlier this week, easing concerns about the state of the economic recovery. Twitter and Snap surged by 5 percent and 16 percent in premarket trading after both released better-than-expected second-quarter earnings reports. Facebook gained 2 percent, boosted by the rival social-media companies' results.

5

Existing-home prices hit record high

U.S. existing-home prices increased to a record high in June, the National Association of Realtors said Thursday. The median price reached $363,300, up 23.4 percent from a year earlier. June sales were up by 1.4 percent over the prior month, and 22.9 percent compared to the same time in 2020. The steady upward trend in sales prices was fueled by a shortage of inventory in a time of robust demand. Homes are getting snapped up as soon as they come on the market, said Robert Frick, corporate economist at Navy Federal Credit Union. Many homes are receiving multiple offers above the listing price. The average house sold in June was on the market a record-low 17 days, the NAR said. "Demand is trumping everything," Frick said. "Higher inventory isn't going to take the brakes off price increases."

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