Business

By Tim Hepher, David Shepardson and Eric M. Johnson

(Reuters) -Jet engine maker CFM International is facing industrial delays of six to eight weeks in the wake of supply-chain problems and some French labour unrest, but expects to claw most of this back by early in the fourth quarter, three people familiar with the matter said.

Co-owned by General Electric Co and France’s Safran, CFM is the largest jet engine maker by units sold, and powers three out of four recently developed narrowbody jetliners including all Boeing 737 MAX and about half of Airbus’ A320neo family.

Some Airbus customers have been warned deliveries of aircraft, already partially delayed by European factory congestion, could be pushed back further as a result of the CFM engine delays, said the people, who asked not to be named.

Two of the people said there had also been delays in sending engines to Boeing though there were no signs yet that this was affecting airplane deliveries. Boeing is building at a slower rate as it clears jets stored during a safety crisis.

“We are working diligently with our suppliers to mitigate supply-chain constraints, and we are closely coordinating with our air frame partners to accelerate delivery and meet customer demand,” a CFM spokesperson said in answer to a Reuters query.

An Airbus spokesman said it had nothing to add to recent supply-chain comments given with its quarterly results.

Airbus Chief Executive Guillaume Faury told analysts on May 4 that he saw “a lot of challenges” in the supply chain in the short term, but felt comfortable enough on the medium- to long-term outlook to press ahead with planned output increases.

A Boeing spokesperson declined comment.

Two of the people said the CFM delays were mainly linked to supplier bottlenecks, but had been aggravated by recent industrial action in France. A third source said the recent Safran labour dispute was not the decisive factor, however.

Aerospace workers at Safran, a major supplier of other equipment including interiors and landing gear as well as the French pillar of the transatlantic CFM venture with GE, have held slowdowns or lightning stoppages over pay in recent months.

The French group awarded staff a 3% increase late last year as the industry began emerging from the COVID-19 crisis but unions say this is not enough to counter a spike in inflation. Safran has on average agreed to add a further 1%, they add.

CFM is not alone in wrestling with fractured supply chains. Aerospace companies worldwide have been counting the cost of supply-chain shortages. At the first-quarter results stage, GE said it was navigating supply-chain pressures, while Safran said supply chains and inflation were “two major watch items.”

Boeing said on May 11 that 737 production had been slowed by shortages of a single type of wiring connector.

Raytheon Technologies, whose Pratt & Whitney engines compete with CFM on the Airbus A320neo, said on April 26 it was facing supply-chain constraints across its business.

(Reporting by Tim Hepher in Paris, David Shepardson in Washington and Eric M. Johnson in SeattleEditing by Chris Reese and Matthew Lewis)

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By Doyinsola Oladipo

(Reuters) -A small group of Activision Blizzard workers voted for unionizing at a studio that works on the popular “Call of Duty” franchise, the second victory in a push to organize the video gaming industry.

Employees in the quality assurance department at Raven Software in Middleton, Wisconsin, voted 19-3 for joining the Communications Workers of America (CWA), according to a tally by U.S. National Labor Relation Board (NLRB) officials on Monday.

The union must still bargain and reach a deal on a contract with Activision. The vote will not have to be re-certified if Microsoft succeeds in its plan to acquire Activision, according to the CWA.

“We respect and believe in the right of all employees to decide whether or not to support or vote for a union. We believe that an important decision that will impact the entire Raven Software studio of roughly 350 people should not be made by 19 Raven employees,” Activision said in a statement following the vote.

Wisconsin is a right-to-work state, meaning any worker can choose not to be a union member.

Employees are speaking up at Activision following multiple accusations of sexual harassment and misconduct. They have walked out in protest of the company response to the allegations and layoffs of quality assurance testers. Employees have circulated a petition calling for the removal of Chief Executive Officer Bobby Kotick.

In the broader market, workers are also becoming more vocal and active about better pay and working conditions.

“Employees in this sector tend to be overworked and underpaid and treated as disposable, which probably goes against the public image that people have of tech workers,” said John Logan, a professor of labor and employment studies at San Francisco State University adding that many feel the only way to gain respect is by unionizing.

In December, Vodeo became the first video game studio in North America with workers to secure union representation.

Employees at an Amazon warehouse in Staten Island, New York, recently voted to unionize and workers at an Apple store in Atlanta filed a petition for a union election.

Workers at more than 58 U.S. Starbucks cafes have elected to join Workers United, while at least four stores voted against the union, out of more than roughly 262 that have sought to hold elections since last August.

“There’s certainly a huge amount of energy and optimism, particularly amongst young workers at the moment,” Logan said.

In Wisconsin, the organizers called for a healthier work environment with realistic development timelines, appropriate compensation and career development opportunities in an industry where quality assurance is undervalued, according to the organizers official Twitter account.

The number of ballots received was 24 of 28 eligible voters. There were two challenged ballots, which is not enough to change the outcome of the vote.

“Other workers in the video game industry will be excited and inspired by the success of the Raven Software workers in forming their union. We urge Activision to respect their decision and commit to bargaining a fair contract,” said CWA Communications Director Beth Allen said in a statement before the vote.

U.S. labor board judge orders union vote at Activision studioANALYSIS-Microsoft faces challenge cleaning up Activision Blizzard’s culture

(Reporting by Doyinsola Oladipo in New York; Additional reporting by Hilary Russ; Editing by Lisa Shumaker)

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By Scott Murdoch

HONG KONG (Reuters) – Asian stocks faced an uncertain start on Monday as persistent inflation fears and the prospect of rising interest rates dogged the global economic outlook, which remains mired in negative sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.04% higher, after U.S. stocks ended the previous session with negligible gains for the day. The index is down 3.6% so far this month.

In early trade, Australian shares gained 0.2% while Japan’s Nikkei stock index was 0.85% higher.

The yield on benchmark 10-year Treasury notes rose to 2.7883% from its U.S. close of 2.787% on Friday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.5869%, up from 2.583%.

Uncertainty in market sentiment this week follows the S&P 500’s meagre gains on Friday of just 0.01%.

The Nasdaq declined 0.30% while the Dow Jones Industrial Average rose 0.03%.

Despite the marginal gains, the S&P 500 and the Nasdaq recorded their seventh straight weeks of losses, the longest losing streak since the end of the dotcom bubble in 2001.

The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

Inflationary pressures remain top of mind for investors, given German wholesale inflation figures published on Friday showed a higher than expected jump indicating prices will remain elevated in the short term future.

Germany’s producer price index for April rose 2.8% for the month, which meant annual growth was a persistently high 33.5%.

In Australia, the Labor Party ended a near 10 year rule of conservative government at a general election on the weekend

While Labor has promised climate, housing and enhanced social welfare reforms analysts do not believe the change in government will crate major implications for the nation’s economy.

“In our view there was little proposed by the incoming government during the election campaign that at this stage requires us to revisit our economic forecasts,” CBA economists wrote on Monday.

“Put another way, our economic forecasts and call on the RBA are unchanged despite the change of national leadership.”

In early Asian trade, the dollar rose 0.04% against the yen to 127.9. It is still some distance from its high this year of 131.34 on 2022-05-09.

U.S. crude dipped 0.04% to $110.24 a barrel. Brent crude rose 0.23% to $112.68 per barrel.

The concerns over global economic growth has prompted renewed support for gold.

“Gold prices saw the first weekly gain since mid-April as safe haven demand was boosted by concerns over economic growth amid high inflation,” ANZ analysts said in a research note on Monday. “A weaker U.S. dollar has also boosted investor appetite.”

Spot gold was 0.3% higher early Monday at $1847.0226 per ounce. [GOL/]

(Editing by Sam Holmes)

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TOKYO (AP) — President Joe Biden on Monday is set to launch a new Indo-Pacific trade pact designed to signal U.S. dedication to the region and address the need for stability in commerce after the chaos caused by the pandemic and Russia’s invasion of Ukraine.

The White House says the new Indo-Pacific Economic Framework will help the United States and Asian economies work more closely on issues including supply chains, digital trade, clean energy, worker protections and anticorruption efforts. The details still need to be negotiated among the member countries, making it difficult for the administration to say how this framework can fulfill the promise of helping U.S. workers and businesses while also meeting global needs.

Countries signing on to the framework were to be announced Monday during Biden’s visit to Tokyo for talks with Prime Minister Fumio Kishida. It’s the latest step by the Biden administration to try to preserve and broaden U.S. influence in a region that until recently looked to be under the growing sway of China.

Biden is in the midst of a five-day visit to South Korea and Japan — the first trip to Asia of his presidency — that wraps on Tuesday. The White House announced plans to build the economic framework in October as a replacement for the Trans-Pacific Partnership, which the U.S. dropped out of in 2017 under then-President Donald Trump.

The new pact comes at a moment when the administration believes it has the edge in its competition with Beijing. Bloomberg Economics published a report last week projecting U.S. GDP growth at about 2.8% in 2022 compared to 2% for China, which has been trying to contain the coronavirus through strict lockdowns while also dealing with a property bust. The slowdown has undermined assumptions that China would automatically supplant the U.S. as the world’s leading economy.

“The fact that the United States will grow faster than China this year, for the first time since 1976, is a quite striking example of how countries in this region should be looking at the question of trends and trajectories,” said White House national security adviser Jake Sullivan.

Critics say the framework has gaping shortcomings. It doesn’t offer incentives to prospective partners by lowering tariffs or provide signatories with greater access to U.S. markets. Those limitations may not make the U.S. framework an attractive alternative to the Trans-Pacific Partnership, which still moved forward after the U.S. bailed out. China, the largest trading partner for many in the region, is also seeking to join TPP.

“I think a lot of partners are going to look at that list and say: ‘That’s a good list of issues. I’m happy to be involved,’” said Matthew Goodman, a former director for international economics on the National Security Council during President Barack Obama’s administration. But he said they also may ask, “Are we going to get any tangible benefits out of participating in this framework?”

It is possible for countries to be part of both trade deals.

Biden’s first stop Monday was a private meeting with Emperor Naruhito of Japan at Naruhito’s residence on the lush grounds of the Imperial Palace before diving into wide-ranging talks with Kishida about trade, Russia’s invasion of Ukraine, the North Korean nuclear threat, the two countries’ COVID-19 responses and more.

Kishida and Biden will also meet with families of Japanese citizens abducted by North Korea decades ago. The Japanese premier took office last fall and is looking to strengthen ties with the U.S. and build a personal relationship with Biden. He’ll host the president at a restaurant for dinner.

The launch of the Indo-Pacific Economic Framework, also known as IPEF, has been billed by the White House as one of the bigger moments of Biden’s Asia trip and of his ongoing effort to bolster ties with Pacific allies. Through it all, administration officials have kept a close eye on China’s growing economic and military might in the region.

In September the U.S. announced a new partnership with Australia and Britain called AUKUS that is aimed and deepening security, diplomatic and defense cooperation in the Asia-Pacific region. Through that AUKUS partnership, Australia will purchase nuclear-powered submarines, and the U.S. is to increase rotational force deployments to Australia.

The U.S. president has also devoted great attention to the informal alliance known as the Quad, formed during the response to the 2004 Indian Ocean tsunami that killed some 230,000 people. Biden and fellow leaders from the alliance, which also includes Australia, India and Japan, are set to gather in Tokyo for their second in-person meeting in less than a year. The leaders have also held two video calls since Biden took office.

And earlier this month, Biden gathered representatives from nine of the 10 members of the Association of Southeast Asian Nations in Washington for a summit, the first ever by the organization in the U.S. capital. Biden announced at the summit the U.S. would invest some $150 million in clean energy and infrastructure initiatives in ASEAN nations.

Sullivan confirmed on Sunday that Taiwan — which had sought membership in the IPEF framework— isn’t among the governments that will be included. Participation of the self-ruled island of Taiwan, which China claims as its own, would have irked Beijing.

Sullivan said the U.S. wants to deepen its economic partnership with Taiwan, including on high technology issues and semiconductor supply on a one-to-one basis.

Biden will wrap up his five days in Asia on Tuesday with the Quad meeting and one-on-one talks with India’s Prime Minister Narendra Modi and Australia’s newly elected prime minister, Anthony Albanese.

The center-left leader of the Australian Labor Party this weekend defeated incumbent Scott Morrison and ended nine years of conservative rule.

Modi, leader of the world’s biggest democracy, has declined to join the U.S. and other allies in levying sanctions against Russia over the invasion of Ukraine. In a video call last month, Biden asked Modi not to accelerate its purchase of Russian oil.

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By Greg Roumeliotis

(Reuters) -Chipmaker Broadcom Inc is in talks to acquire cloud service provider VMware Inc, people familiar with the matter told Reuters.

Negotiations between Broadcom and VMware are ongoing and a deal is not imminent, the sources said. The deal terms under discussion could not be learned.

The acquisition would further diversify Broadcom’s business away from semiconductors and into enterprise software, following its $18.9 billion acquisition of CA Technologies and its $10.7 billion purchase of Symantec Corp’s security division in the last four years.

Bloomberg News first reported the deal late on Sunday. Broadcom and VMware did not immediately respond to Reuters’ requests for comment. As of Friday’s market close, the market capitalization of VMware was $40.3 billion.

Michael Dell is VMware’s biggest investor with a 40% stake as a result of Dell Technologies Inc having spun out VMWare to its shareholders last year, according to Refinitiv data.

Private equity firm Silver Lake, which has previously invested in Broadcom, is VMware’s second largest shareholder with a 10% stake, Refinitiv data shows.

(Reporting by Greg Roumeliotis in New York and Shivam Patel in Bengaluru; Editing by Christian Schmollinger, Tom Hogue and Chris Reese)

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By Aftab Ahmed

NEW DELHI (Reuters) – The Indian government is considering spending an additional 2 trillion rupees ($26 billion) in the 2022/23 fiscal year to cushion consumers from rising prices and fight multi-year high inflation, two government officials told Reuters.

The new measures will be double the 1 trillion rupees hit government revenues could take from tax cuts on petrol and diesel the finance minister announced on Saturday, both the officials said.

India’s retail inflation rose to an eight-year high in April, while wholesale inflation rose to at least a 17-year high, posing a major headache for Prime Minister Narendra Modi’s government ahead of elections to several state assemblies this year. 

“We are fully focussed on bringing down inflation. The impact of Ukraine crisis was worse than anyone’s imagination,” one official, who did not want to be named, said.

The government estimates another 500 billion Indian rupees additional funds will be needed to subsidise fertilisers, from the current estimate of 2.15 trillion rupees, the two officials said.

The government could also deliver another round of tax cuts on petrol and diesel if crude oil continues to rise that could mean an added hit of 1 trillion-1.5 trillion rupees in the 2022/23 fiscal year started on April 1, the second official said.

Both the officials did not want to be named as they are not authorised to disclose the details.

The government did not immediately comment outside office hours.

One of the officials said the government may need to borrow additional sums from the market to fund these measures and that could mean a slippage from the its deficit target of 6.4% of GDP for 2022-23.

The official did not quantify the amount of borrowing or fiscal slippage saying it depended on how much funds they eventually divert from the budget in the fiscal year.

The Indian government plans to borrow a record 14.31 trillion rupees in the current fiscal year, according to budget announcements made in February.

The other official said the additional borrowing will not impact the planned April-September borrowing of 8.45 trillion rupees and may be undertaken in January-March 2023.

($1 = 77.8500 Indian rupees)

(Reporting by Aftab Ahmed; Editing by Emelia Sithole-Matarise)

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By Nupur Anand

MUMBAI (Reuters) – India’s Paytm Payments Bank, which facilitates transactions on mobile commerce platform Paytm, expects the central bank to allow it to resume taking on new customers in the next few months, a top executive told Reuters.

In March, the Reserve Bank of India ordered a comprehensive audit of the company’s IT systems, citing “material” supervisory concerns, without elaborating further, and barring it from taking on new customers.

The bank is working with the RBI to complete the IT audit and address the regulator’s concerns.

“The process is underway and we think it should take three to five months from where we are right now,” Madhur Deora, group chief financial officer, Paytm, told Reuters on Sunday.

The central bank did not immediately respond to an email seeking comments.

Paytm in March denied a Bloomberg news report that said RBI had found its servers were sharing information with China-based entities that indirectly own a stake in the firm.

Paytm is backed by China’s Alibaba Group Holding and its affiliate Ant Group.

One 97 Communications Ltd, the parent of fintech firm Paytm, on Friday reported a wider fourth-quarter loss due to higher payment processing, marketing and employee costs.

Deora said the company was on track to achieve profitability by September 2023.

“We are seeing good growth in high margin businesses and as a result we are seeing improvements in contribution margin.”

“Our indirect expenses will not grow as fast as last year as we don’t expect to make any significant investments in new businesses or employee cost this year as we have already made those in the last year,” he added.

Paytm made its stock market debut in November last year in one of the country’s biggest-ever initial public offerings, but the shares have since sunk 70%.

(Reporting by Nupur Anand; Editing by Elaine Hardcastle)

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DAVOS, Switzerland (AP) — If you’re coming to Davos this year, try to take the train instead of flying, organizers of the World Economic Forum said.

So I did.

That meant a 12-hour journey from London to the exclusive gathering in the Swiss Alps, which I’m helping cover for The Associated Press.

Taking a train is much less convenient than a plane, but the scenery made up for it — the rolling farm fields of England and France gave way to Switzerland’s towering mountains and idyllic valleys dotted with chalets. And my carbon footprint will be a lot lower than a flight.

To many, Davos conjures up images of government leaders, billionaire elites and corporate titans jetting in on carbon-spewing private planes even as the meeting increasingly focuses on climate change.

Organizers have been stung by such criticism, even dedicating a webpage in past years to debunk those claims. Encouraging European attendees to come by train is part of their efforts to burnish the event’s sustainability credentials amid criticism it’s merely a talking shop that doesn’t produce systemic change.

I’m not the first to go by train. Swedish climate activist Greta Thunberg famously took a 32-hour train ride to get to the Davos meeting in 2019, where she astonished participants with a fiery speech. I’m also riding a broader wave of traveler interest in train trips over short-haul flights tied to climate guilt.

My journey begins at London’s St. Pancras International train station, where I board the high-speed Eurostar that whisks me through a tunnel under the English Channel to Paris in about two and a half hours. There I take a short metro ride to another train station for the next four-hour leg to Zurich.

By plane, I would have been crammed on a discount flight from London’s Gatwick Airport for the hour and 40-minute flight to Zurich, the closest airport to Davos.

But for those who don’t live in Europe, a plane ride is unavoidable. And to speed up my trip after days of back-to-back speeches from government leaders and sessions about decarbonization, the global economic outlook and the impact of Russia’s war in Ukraine, that’s how I’ll be traveling home.

Aboard the French high-speed TGV train, the first-class seats are comfy and spacious and the upper deck view offers pleasant scenes of the countryside whizzing by at 320 kilometers an hour (about 200 mph).

If I had flown, my 870-kilometer trip would have emitted up to 197 kilograms (434 pounds) of carbon dioxide per passenger into the atmosphere.

The same trip by train would contribute a fraction of that amount — 12.2 kilograms, according to ecopassenger.org.

World Economic Forum officials say climate is a priority for this year’s meeting and tout its green credentials.

“The overwhelming majority of participants arrive by shuttle or by train, and emissions in Davos actually go down during the week of the meeting,” forum Managing Director Adrian Monck told reporters ahead of the event, without elaborating.

Organizers say that since 2017 they have offset 100% of the carbon emissions from the group’s activities by supporting environmental projects in Switzerland and elsewhere. Experts say offsets can be problematic because there’s no guarantee they’ll deliver on reducing emissions.

The forum also can provide sustainable jet fuel at Zurich’s airport for those who take private jets.

“It’s probably one of the most sustainably organized meetings in the world, if not the most sustainable,” Monck said.

High-profile attendees include U.S. climate envoy John Kerry, Ugandan climate activist Vanessa Nakate and Alok Sharma, head of last year’s U.N. climate conference, COP26.

Kerry, who has been criticized for his use of a private jet belonging to his wife’s family, will be traveling by commercial plane to the Davos meeting, his spokesperson said.

Sharma, a British lawmaker who drew flak last year for his frequent flights, will travel by plane and train.

“Carbon emissions associated with the COP President’s travel will be offset for the Presidency year,” the U.K. government said, without providing further details.

Nakate declined to comment on her travel.

Aviation accounts for about 2% of global carbon emissions.

The World Economic Forum has acknowledged that “from an environmental perspective, taking a private jet is the worst way to travel to Davos.”

Private jets emit about 10 times the carbon dioxide per person that commercial flights do and about 50 times more than an equivalent train journey, said Jo Dardenne, aviation manager at Brussels-based climate policy group Transport & Environment.

Jet engines also spew soot and nitrous oxide, which contributes to pollution around airports and heat-trapping atmospheric contrails, she said.

Sustainable jet fuel is a step in the right direction, depending on the source, but carbon offsetting deserves more skepticism because of concerns such as double counting, she said.

“It’s just especially a bit socially and politically unfair for some sectors to continue to rely on offsetting instead of actually reducing their emissions,” while others face pressure to reduce their climate impact, Dardenne said.

Eymeric Segard, CEO of Swiss private jet chartering company LunaJets, said some VIPs have no other choice than to fly private.

“Because of their visibility and fact that everybody knows them, they just cannot take a commercial aircraft,” he said.

“Some don’t have three weeks free to take sailboats to cross the Atlantic like our friend Greta. So what’s the alternative?”

Segard declined to discuss how much demand he’s seeing for travel to Davos but said his company, which acts like a taxi dispatcher for private jets, tries to reduce carbon emissions by looking for “empty leg flights,” which have already been chartered but have extra seats.

Not only is it cheaper but “the planet is happy because anyway the plane was gonna fly, so at least we put someone on it,” he said.

From Zurich’s main train station, I change again, this time boarding a slower local train. This is where most people can’t avoid rail as they head to Davos, which doesn’t have an airport, unless they take a shuttle or helicopter from Zurich or two other small nearby airports.

Fashionably dressed people hauling expensive-looking luggage climbed aboard, mentioning to others what panels they’re part of in Davos.

The train skirts Lake Zurich and heads into the mountains. After another quick change at a local station, I’m down to my last hour, and the scenery becomes more impressive with each mile.

The narrow-gauge train trundles through steep valleys and alongside whitewater rivers, overshadowed by forested peaks with chalets scattered on grassy lower slopes until arriving in Davos. Here my journey ends but my work for the week begins.

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Kelvin Chan is an AP business writer in London. Follow him at http://twitter.com/chanman.

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PLANO, Texas (AP) — The actor who played Red Power Ranger in the “Mighty Morphin Power Rangers” films and television series has been charged with wire fraud conspiracy relating to the federal Paycheck Protection Program, officials said.

Jason Lawrence Geiger, 47, of McKinney, Texas, is one of 19 defendants named in a federal indictment, the FBI said. Acting under the name Austin St. John, Geiger played Jason Lee Scott, the Red Power Ranger.

Geiger was arrested Tuesday and remained jailed pending a Monday detention hearing before a federal magistrate in the Dallas suburb of Plano, according to court documents. He pleaded not guilty to the single count against him and “intends to vigorously defend himself against this allegation,” said his attorney, David Klaudt of Dallas.

The Payroll Protection Program was part of the CARES Act designed to provide emergency financial assistance to millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic.

In a statement issued Thursday, federal prosecutors said the 19 defendants made fraudulent applications for payroll protection benefits during the pandemic lockdown and used the proceeds for personal purchases and expenditures. In all, the defendants were accused of obtaining at least 16 loans worth at least $3.5 million.

If convicted, each could be sentenced to up to 20 years in federal prison.

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By Noel Randewich and Amruta Khandekar

(Reuters) – Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground.

The S&P 500 and the Nasdaq logged their seventh straight week of losses, their longest losing streak since the end of the dotcom bubble in 2001.

The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

Worries about surging inflation and rising interest rates have pummeled the U.S. stock market this year, with danger signals from Walmart Inc and other retailers this week adding to fears about the economy.

The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day.

Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition.

The tech-heavy Nasdaq was last down about 27% from its record close in November 2021.

Graphic: S&P 500 bear markets – https://fingfx.thomsonreuters.com/gfx/mkt/klpykodqmpg/Pasted%20image%201653065756392.png

Weighing heavily on the S&P 500, Tesla tumbled 6.4% after Chief Executive Elon Musk denounced as “utterly untrue” claims in a news report that he sexually harassed a flight attendant on a private jet in 2016.

Other megacap stocks also fell, with Apple Google-owner Alphabet Inc down 1.3% and Nvidia losing 2.5%.

Shares of Deere & Co dropped 14% after the heavy equipment maker posted downbeat quarterly revenue.

Pfizer rose 3.6%, helping the S&P 500 avoid a loss for the day.

Recent disappointing forecasts from big retailers Walmart, Kohl’s Corp and Target Inc have rattled market sentiment, adding to evidence that rising prices have started to hurt the purchasing power of U.S. consumers.

On Friday, Ross Stores plunged 22.5% after the discount apparel retailer cut its 2022 forecasts for sales and profit, while Vans brand owner VF Corp gained 6.1% on strong 2023 revenue outlook.

Traders are pricing in 50-basis point rate hikes by the U.S. central bank in June and July.

The S&P 500 edged up 0.01% to end the session at 3,901.36 points.

The Nasdaq declined 0.30% to 11,354.62 points, while the Dow Jones Industrial Average rose 0.03% to 31,261.90 points.

Graphic: S&P 500’s busiest trades – https://fingfx.thomsonreuters.com/gfx/mkt/gdpzyedkzvw/SPX_by_busiest_trades.png

For the week, the S&P 500 fell 3.0%, the Dow lost 2.9% and the Nasdaq declined 3.8%.

About two thirds of S&P 500 stocks are down 20% or more from their 52-week highs.

Volume on U.S. exchanges was 13.0 billion shares, compared with a 13.5 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 48 new lows; the Nasdaq Composite recorded 11 new highs and 353 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta, Arun Koyyur and Grant McCool)

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