The daily business briefing: August 19, 2020

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1. S&P 500 returns to record level, erasing coronavirus losses
2. Target shares rise after retailer reports record profit
3. Trump delays China trade talks, repeats finger-pointing over virus
4. FDA says salmonella outbreak that sparked onion recall has reached 47 states
5. Walmart, Home Depot report strong quarterly sales

published 19 August 2020

1. S&P 500 returns to record level, erasing coronavirus losses

The S&P 500 rose by 0.2 percent on Tuesday to close at a record high of 3,389, completing its rebound from a March plunge fueled by the coronavirus crisis. The broad market index has risen by more than 54 percent since bottoming out on March 23. The market gains have been driven partly by surging major tech stocks, including Facebook, Amazon, Apple, Netflix, and Google-parent Alphabet. Big Tech has been among the winners as Americans shifted more of their work, education, shopping, and entertainment online during coronavirus lockdowns. Shares of retailers continued to struggle despite better-than-expected earnings reports from Walmart and Home Depot. U.S. stock index futures edged higher early Wednesday following the S&P 500's record, which ended the shortest bear market in U.S. history.

Target shares jumped by 4.8 percent in pre-market trading on Wednesday after the retail giant reported a record-setting second quarter. Target said same-store sales surged by a record 24.3 percent, beating analysts' expectations of a 7.6 percent gain. Online sales nearly tripled. Target's income came in at $1.69 billion, or a record $3.35 per share. That was up from $938 million, or $1.82 per share, in the same period last year. The FactSet consensus estimate was $1.63 per share. Customer service options helped attract shoppers seeking safety during the coronavirus pandemic. In-store pickup rose by more than 60 percent in the quarter, and Drive Up, where employees put items in customers' cars, soared by more than 700 percent.

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President Trump said Tuesday that he called off trade talks with China that were scheduled for last weekend. "I don't want to talk to China right now," Trump said in Arizona. The news came after Trump has stepped up complaints over China's handling of the outbreak of the coronavirus. The first outbreak was reported late last year, and Trump has repeatedly referred to COVID-19 as the "China Virus," deflecting criticism for his handling of the crisis by blaming China. "What China did to the world was unthinkable," he said. The trade talks had been scheduled to review progress six months into the "phase one" trade deal between the world's two biggest economies after months of tit-for-tat tariffs launched by Trump in response to Beijing trade practices he called unfair.

The Food and Drug Administration said Tuesday that a salmonella outbreak linked to recalled onions had spread to 47 states. The FDA said it was analyzing samples from Thomson International of Bakersfield, California. The company has recalled all bulk red, white, yellow, and sweet yellow onions shipped to wholesalers, restaurants, and grocery stores from May 1 and Aug. 1. The recall applies to onions delivered in all 50 states under brand names that include Thomson Premium, TLC Thomson International, Kroger, Food Lion, and Onions 52. The Centers for Disease Control and Prevention reported Tuesday that 869 cases of salmonella have been reported, with 116 hospitalizations. Salmonella causes about 420 deaths a year, the CDC said.

Walmart and Home Depot on Tuesday reported quarterly earnings exceeding analysts' expectations. Walmart's online sales nearly doubled in the fiscal second quarter as it expanded delivery services and Americans stocked up on supplies during coronavirus lockdowns. Same-store sales surged by 9.3 percent. Home Depot, the biggest U.S. home-improvement chain, reported a 23.4 percent same-store sales increase, nearly twice the 12.2 percent gain industry analysts had projected. Home Depot benefited from a surge in do-it-yourself projects by customers sticking close to home during a spike in coronavirus cases over the summer. Department store chain Kohl's, however, reported a 23 percent drop in quarterly revenue. "Some parts of retailing are thriving; some parts are being devastated," said Neil Saunders, managing director of GlobalData Retail.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.