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BUSINESSThursday 15 October 2015
Financial services US stockpiles unchanged in August; sales fall
startup Square files
$275M IPO papers PAUL WISEMAN sales were down 3.1 per- sales rose just 0.1 percent ticipated increase in short-
cent from a year earlier, in September, held down term interest rates, which
SAN FRANCISCO (AP) — AP Economics Writer and inventories were up 2.4 by plummeting gasoline it has kept near zero since
Square, the financial-ser- percent from August 2014. prices and a strong dol- December 2008. The Inter-
vices startup that helps WASHINGTON (AP) — Firms’ caution in building lar that made imported national Monetary Fund
small businesses process inventory could be a drag goods cheaper. has urged the Fed to delay
credit card payments, is U.S. businesses kept their on economic growth in the An economic slowdown a rate hike until next year.
planning to go public. July-September quarter. in China has clouded the Worried about the pros-
The six-year-old company stockpiles unchanged Economists are expecting global business outlook, pects for emerging market
is known for its white, cube- growth to slow in the sec- driving down prices of economies, investors have
shaped card readers that and registered lower sales ond half of the year from commodities and rattling flocked to the U.S. dol-
plug into smartphones and the robust 3.9 percent an- financial markets. The Fed- lar, driving up the Ameri-
tablet computers, turning in August, numbers that nual growth rate recorded eral Reserve cited weak- can currency and putting
them into electronic sales from April through June. ness in the global econo- U.S. exporters at a price
terminals. It’s also known in could weigh on third-quar- Commerce reported ear- my when it decided last disadvantage in foreign
the tech industry for being lier in the day that retail month to delay a long-an- markets.q
founded and led by Jack ter economic growth.
Dorsey, 38, who was sepa-
rately named CEO of the so- The Commerce Depart-
cial networking service Twit-
ter last week. ment said Wednesday
Dorsey, who owns 24.4 per-
cent of Square, co-founded that business inventories
Twitter in 2006 and has said
he’ll continue to run both were flat from July. Sales
companies.
Square filed regulatory pa- slid 0.6 percent, the big-
pers on Tuesday for an initial
public stock offering val- gest drop since a 2.3 per-
ued at up to $275 million,
although that figure could cent fall in January. August
change. While some larger
tech startups have recent- Wall Street dips on Wal-Mart, tepid reports
ly delayed going public,
Square’s filing has been ex- STEVE ROTHWELL index closed down 9.45 its worst one-day decline the year after a big slump
pected and records show AP Markets Writer points, or 0.5 percent, to since January 1988. in the previous two months
the company previously NEW YORK (AP) — Weak 1,994.24. The Dow Jones in- Investors were also assess- on worries about the out-
filed a confidential declara- earnings guidance from dustrial average fell 157.14 ing earnings reports from look for global economic
tion of its plans over the sum- Wal-Mart and a couple of points, or 0.9 percent, to three big banks. growth. Some investors say
mer. tepid reports on the econ- 16,924.75. The Nasdaq Bank of America gained the declines are overdone,
San Francisco-based Square omy pushed stocks lower composite fell 13.76 points, after reporting its results, and they’re expecting a
says it had $850 million in rev- on Wednesday. or 0.3 percent, to 4,782.85. but JPMorgan and Wells bounce back in the final
enue last year. Revenue for Wal-Mart logged its big- Wal-Mart was the biggest Fargo declined. JPMorgan quarter of the year.
the first half of this year was gest one-day decline in decliner in the S&P 500 said late Tuesday that its Worries about the health
$560.6 million, an increase almost three decades af- and also dragged the Dow profit climbed 22 percent, of China’s economy are
of 51 percent over the same ter the retailer stunned in-
period last year. vestors with an announce- Specialist James Sciulli, right, works with traders at his post on the floor of the New York Stock
But the company had a ment that it expects its Exchange. Weak earnings guidance from Wal-Mart and a couple of tepid reports on the
net loss of $154.1 million in profit to fall as it works to economy pushed stocks lower on Wednesday.
2014, and a loss of $77.6 mil- fend off intensifying com-
lion for the first half of 2015; petition. JPMorgan led fi- (AP Photo/Richard Drew)
overall, it’s piled up an ac- nancial stocks lower after
cumulated deficit of almost the lender’s third-quarter lower. but its earnings still fell short overdone, said Michael
a half billion dollars since its earnings fell short of ana- The retailer forecast that of analysts’ estimates. Scanlon, managing direc-
inception. It warned that lysts’ expectations. sales for its full fiscal year JPMorgan’s stock fell tor and portfolio manager
it may continue to gener- A rally for stocks has stalled would be flat as the com- $1.56, or 2.5 percent, to at John Hancock Asset
ate losses as it invests to ex- this week as worries about pany was hurt by unfavor- $59.99. Wells Fargo report- Management.
pand the business. Square weakening global growth able currency exchange ed a slight gain in profits for He’s expecting a strong
also warned that a major have resurfaced. A Fed- rates. Wal-Mart had previ- the quarter, but its lending fourth quarter for stocks.
customer, Starbucks, is plan- eral Reserve report on ously forecast sales growth margins fell. Wells Fargo “The U.S. is in pretty good
ning to stop using its service Wednesday showed that of 1 to 2 percent. For its edged down 36 cents, shape,” said Scanlon. “You
sometime before the third factory output was sluggish next fiscal year, it said prof- or 0.7 percent, to $51.50. can overreact and take a
quarter of 2016. in the late summer, in part it could fall by as much as Bank of America rose 12 view on every economic
Square has added new ser- because of the strong dol- 12 percent. cents, or 0.8 percent, to data point that we get,
vices in an effort to diver- lar. A separate report on The stock slumped $6.70, $15.64. The S&P 500 and but that’s probably not in
sify its business over recent retail sales indicated that or 10 percent, to $60.03, the Dow are still lower for your best interest.”q
years. The company pro- Americans are still spend-
vides financing to small busi- ing cautiously.
nesses and a payment ser- After a sharp summer sell-
vice known as Square Cash off in stocks that was fol-
that lets individuals and- lowed by an early Octo-
businesses transfer funds to ber rebound, investors are
each other. It also operates split as to what comes next
Caviar, a food delivery ser- for the market. Some are
vice for restaurants.q expecting a strong fourth
quarter, while others think
that there could be more
selling to come.
“I’m pretty much in the
bearish camp,” said Ken
Winans, president of Wi-
nans Investments, an in-
vestment advisory and re-
search firm. “The fear has
come back in.”
The Standard & Poor’s 500
