BEIJING — Faced with a renewed stock market slide that has wiped out $5 trillion in trading value, China is again on the prowl for scapegoats.
Authorities announced a probe of allegations of market malpractice involving the stocks regulator on Tuesday, while the official Xinhua News Agency called for efforts to “purify” the capital markets. The news service also carried remarks by a central bank researcher attributing the global rout to an expected Federal Reserve rate increase.
The Shanghai Composite Index has plunged more than 40 percent from its peak, after concerns over the Chinese economy helped snap a months-long rally encouraged by state-run media. Authorities have repeatedly blamed market manipulators and foreign forces since the sell off began in June and led officials to launch an unprecedented stocks-support program.
Now, after suspending that program, the administration has embarked on a new round of allegations and fault-finding.
“The authorities have been too involved in the stock market and now they’re trying to pass the responsibilities to others,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “In fact, they have to be responsible for the market crisis. It’s the authorities trying to act like a referee and a player at the same time.”
Police are investigating people connected to the China Securities Regulatory Commission, Citic Securities Co. and Caijing magazine on suspicion of offenses including illegal securities trading and spreading false information, Xinhua reported.
They’re probing suspects linked to the CSRC, including a former employee, over insider trading and forging official document stamps, Xinhua said. Eight people at Citic Securities are suspected of illegal securities trading and the Caijing employees are under investigation for allegedly fabricating and spreading fake stock and futures trading information.
Citic Securities said Wednesday in a statement posted to the Shanghai stock exchange that it hasn’t received notice related to the report and said the company’s operating as normal. Caijing in a statement Wednesday confirmed a reporter had been summoned by police. The magazine said it didn’t know the reason and would cooperate with authorities. Calls and a fax to the CSRC went unanswered.
Meanwhile, Xinhua published a commentary urging stricter enforcement to cleanse the markets.
“We have reason to believe that more criminals and their hidden crimes will be exposed,” it said. “We also believe judicial departments will investigate thoroughly and impose punishments no matter who is involved in crimes.”
The probes will help make the “Chinese stock market a just place and give the market a future that is healthy and stable,” it said.
Another Xinhua report, citing Yao Yudong, head of the People’s Bank of China’s Research Institute of Finance, attributed the global market rout to expectation of a Fed rate increase in September, not concern about the Chinese economy.
Separately, Haitong Securities, GF Securities, Huatai Securities and Founder Securities -- four of China’s largest brokerages -- said they’re being investigated by the CSRC on suspicion of failing to comply with identity verification and “know-your-clients” requirements, according to statements to the Hong Kong and Shanghai exchanges Tuesday.
“The company will fully cooperate with the CSRC and strictly fulfill any obligations of information disclosure under regulatory requirements,” Haitong said in its statement. “So far, the business of the company is under normal operations.”
GF, Huatai and Founder made similar pledges of cooperation with the probes in their filings.
The actions ease investors’ concerns by showing that the government will pursue activities that could destabilize the market, said Han Meng, a senior researcher at the Chinese Academy of Social Sciences’ Institute of Economics in Beijing. “At this volatile moment, it’s very important for authorities to demonstrate the determination to crack down on illegal activities that could disrupt the market,” Han said.
In July, the Ministry of Public Security said it would help the CSRC investigate evidence of “malicious” short selling of stocks and indexes. Vice Public Security Minister Meng Qingfeng visited the regulator’s offices in Beijing, in a pointed message to violators.
Hu, the economics professor, said government cheerleading for the rally helped push the market to an unreasonable level.
“The authorities carry the greatest responsibility for the crisis because they tried to push forward the market by intervening and encouraging the public to go mad in the stock market,” Hu said.
“At the end of the day, the most overwhelming key to a child’s success is the positive involvement of parents.”
— Jane D. Hull
After 31 years as an educator I learned that each school year brings new challenges. There is a lot for families to adjust to when going to a new school or a new grade. It’s hard for many kids to be separated from parents and friends. It’s also hard for both parents and kids to bond with new teachers.
Parents have to learn to let go a little, trust the teachers, and support their children’s independence and embrace their differences. They must recognize that their kids may not approach school and learning the way their siblings did or the way they did. Everybody adapts and learns in their own way at their own pace.
These first weeks are a time to help your child get comfortable with routines, get excited about learning, make new friends, adapt to a new teacher and become more independent. To help you and your kids settle happily into the new school year, try these strategies I used to share with parents:
1. Create a learning environment. Make sure your kids have what they need for academic success at home and school: supplies, a quiet place for homework, good sleeping and eating habits, and ample physical exercise.
2. Support good work habits. Build a strong foundation for learning, including organizational and time management skills, effort, and persistence. When kids are organized, they stay focused instead of always hunting things down.
3. Teach study skills. Studying for a test can be scary and parents can help a lot with this. Teaching your child study skills will pay off with good learning habits throughout school and life.
4. Support homework. Homework reinforces and extends classroom learning and helps kids practice study skills. It helps them develop responsibility and a work ethic that will benefit them beyond the classroom.
5. Re-establish family routines. Starting the school routine helps both parents and children make a smooth transition. Regular dinner times, bedtimes and wake-up times and unhurried healthy breakfasts are good places to start.
6. Talk about school. Make time to talk with your kids every day so they know that school is important to you. When they know parents are interested in their academic lives, they'll take school seriously as well.
7. Problem solve together. It’s common for kids to worry about playing on the playground with bigger kids, or getting picked on. Help them learn how to solve problems that may arise. If necessary get the teacher involved.
8. Be positive. Provide the reassurance your kids need as they encounter academic challenges, new teachers and making new friends. Help them learn to trust that (with your support) they can find their way through tough times.
9. Seek help. If adjusting remains stressful after a few weeks, meet with the teacher, the guidance counselor and/or principal. Schedule a separate meeting with your child present so everyone can be involved in the plan.
10. Make connections. Your kids will be more engaged in learning if they see the relevance of what they are being asked to do. Talk about why the subject they’re learning matters in the real world.
11. Encourage exploration. Look for ways to expand your kid’s world, whether it’s sports, cultural activities, second languages, museum trips, etc. Encourage them to ask questions, and to find answers from various sources.
12. Make time for play. Unstructured play is where children consolidate learning and discover their interests and talents. Talk together about making enough time for free play in their schedule.
13. Find a balance. Kids need challenge, stimulation, and a broad range of physical activities and learning opportunities. They also need time for reflection and daydreaming, even if it means limiting technology time.
14. Communicate often. Communication between student, parent, and teacher is crucial. Keep teachers informed on special needs your children may have. Utilize technology to talk with teachers and access grades and attendance.
15. Take attendance seriously. Sick kids should stay home only if they have a fever, are nauseated, vomiting, or have diarrhea. Kids should arrive at school on time. Catching up is stressful and hinders teaching and learning.
16. Get involved. Find volunteer opportunities that fit your schedule. Even giving a few hours a year can make an impression on your child. It also helps you see your child’s world and meet and associate with the people in it.
17. Build bridges. The faster you establish a positive relationship with teachers, the faster children find success. Help your children form that important bond with the teacher, as well. The safer they feel, the better they learn.
Our children’s education is too important to be left solely to educators. Parents' guidance, involvement and support play a critical role in helping kids adjust and succeed in school.
Brad Larsen is a life coach and corporate consultant from northern Utah. He can be reached at firstname.lastname@example.org
PYONGYANG, North Korea — Pyongyang’s shiny new airport building has all the features international travelers have come to expect, though some lose their luster upon closer examination. Case in point: Its Internet room appears to be missing the Internet.
On two recent trips through the airport by The Associated Press, the room’s three terminals were either occupied by North Korean airport employees, making it impossible for others to use them, or were completely empty, with their keyboards removed. Attempts to open any browser with a mouse resulted in a failure to connect.
Maybe it was a temporary glitch. It’s hard to say, since airport officials have refused to comment to the AP.
But a quick check of the history on two of the terminals showed one was either empty or had been cleared, and the other had a record only of a visit to Naenara, the North’s official website.
At first glance, Internet at the airport would seem like quite a concession for a country that is almost completely sealed off from the World Wide Web.
Hardly any North Koreans have personal-use computers and most of those with online access can see only the country’s domestic version of the Web — an intranet that has only websites that are sanctioned by the government and is for internal use only.
The Internet itself can be seen only by a small number of elites, IT experts or others with a clear need to use it, and always under close supervision.
The Internet room at the airport, which opened a few months ago, is just part of efforts there to give visitors the sense that North Korea is just like any other modern travel destination.
Arriving passengers see coffee and well-stocked souvenir shops, a DVD stand, information desk and a slickly produced billboard showing a crew of the nation’s flag-carrier, Air Koryo, looking sharp in their blue and red uniforms. There are even two chocolate fountains, one for white chocolate and the other for dark.
Another nod to international norms can be seen right behind the Internet room, in the smoking room.
In something almost never seen in the North, where just about every adult male who can afford it, including leader Kim Jong Un, is a smoker, the room has a big sign warning that the habit is hazardous to one’s health.
WASHINGTON (AP) — More jobs and cheaper gasoline come with a big, honking downside: U.S. roads are more clogged than ever now that the recession is in the rearview mirror.
Commuters in Washington, D.C., suffer the most, losing an average of 82 hours a year to rush-hour slowdowns, a new study finds. Los Angeles, San Francisco and New York come next on the list of urban areas with the longest delays.
But the pain reaches across the nation.
Overall, American motorists are stuck in traffic about 5 percent more than they were in 2007, the pre-recession peak, says the report from the Texas A&M Transportation Institute and INRIX Inc., which analyzes traffic data.
Four out of five cities have now surpassed their 2007 congestion.
Rounding out the Top 10 worst commuting cities are San Jose, Boston, Seattle, Chicago, Houston and Riverside-San Bernardino.
Cities with fast-growing economies and the most job growth are the most plagued by traffic. Other factors: Urban populations are increasing and lower fuel prices are making driving less expensive, so more people are taking to city roads.
Congestion increased in 61 of the nation’s 101 largest cities from 2012 to 2013, the data showed. The following year, nearly all cities — 95 out of 101 — experienced greater congestion.
The findings are based on federal data about how many cars are on the roads and on traffic speed data collected by INRIX on 1.3 million miles of urban streets and highways.
The growth is outpacing the nation’s ability to build the roads, bridges, trains and other infrastructure to handle all these people on the move. Congress has kept federal transportation programs teetering on the edge of insolvency for nearly eight years because lawmakers have been unwilling to raise the federal gas tax and haven’t found a politically palatable alternative to pay for needed improvements.
Frustrated by Washington’s inaction, nearly a third of states have approved measures this year that could collectively raise billions of dollars for transportation through higher fuel taxes, vehicle fees and bonds. But that’s just a down payment on decades of delayed maintenance, repairs and replacements.
“Our growing traffic problem is too massive for any one entity to handle — state and local agencies can’t do it alone,” said Tim Lomax, a co-author of the report. The report recommends a mix of solutions, including making existing road and transit systems more efficient, encouraging more flexible work schedules, adding capacity to high-growth travel corridors, and creating more high-density neighborhoods where homes, offices, stores and other development can be reached through walking, biking or public transit.
Transportation analyst Alan Pisarski said the nation missed a “tremendous opportunity” to catch up on building additional transportation capacity during the recession, when construction costs plummeted. “We didn’t take advantage of it and now we’re back in the soup again,” he said.
The national average time that commuters wasted stuck in traffic last year was 42 hours, about the same as in 2007 and more than twice the delay in 1982, when the transportation institute first began assessing urban mobility. But because there are so many more commuters today and far more congestion in off-peak hours, total delay across the country has increased over 2007.
Overall, Americans experienced 6.9 billion hours of traffic delays in 2014 compared to 6.6 billion in 2007 and 1.8 billion in 1982.
The problem has become so bad in major urban areas that drivers have to plan for more than twice as much travel time as they would normally need to account for the possibility of congestion delays caused by bad weather, collisions, construction zones and other impediments, the report said.
Other findings in the report:
—Trucks account for about 18 percent of urban congestion, although they represent just 7 percent of urban travel.
—The cost of congestion to the average auto commuter was $960 in lost time and fuel in 2014, compared to an inflation-adjusted $400 in 1982.
—About 40 percent of delays occur in midday and overnight hours, making it more difficult to avoid delays by avoiding commuter rush hours.
—Severe or extreme congestion levels affected one of every four trips in 2014, up from one in nine trips in 1982.
The report comes on the heels of other evidence that Americans are embracing driving more than ever. The Department of Transportation said Americans drove more than 3 trillion miles in the last 12 months, surpassing the previous record set in 2007. And the National Safety Council said preliminary data for the first six months of this year shows traffic deaths are up 14 percent, a turnaround after years of fewer fatalities.
If the economy remains strong, congestion will continue to worsen, the report projects. In the next five years, the annual delay per commuter would grow from 42 to 47 hours, the total delay nationwide would grow from 6.9 billion hours to 8.3 billion hours, and the total cost of congestion would jump from $160 billion to $192 billion, researchers estimated.
Follow Joan Lowy on Twitter at http://twitter.com/AP_Joan_Lowy
WASHINGTON — Even as anxious investors send stock prices plunging, many Americans are sounding a rather different note:
They’re staying calm and carrying on.
Some wonder if they may have to work a few extra years to recoup some of their shrunken retirement savings. Others concede that the meltdown might have wiped out investments needed to pay for a vacation.
Yet conversations Monday with roughly a dozen everyday Americans suggest that people generally expect stock prices to rebound, just as they have after previous swoons. For now, the panic on Wall Street does not appear to have spread very far.
“I’m certainly not panicking or looking for tall buildings,” said Vincent Signorotti, 62, a San Diego-based executive for a company that builds geothermal plants in Southern California.
Signorotti said he has no plans to cut back on his spending or even adjust his investment strategy.
The Standard & Poor’s 500 stock index sank nearly 4 percent on Monday and has now tumbled 9.5 percent in five days. The dizzy fall revealed how global turmoil emanating from China’s slowing economy could affect the finances of U.S. households.
Carolyn Gaver, a 67-year-old from Clifton, New Jersey, said she plans to phone her broker to check on her portfolio. But she said her investments are more conservative now, since she’s older, “so hopefully it’s not too bad.”
The biggest impact will be on how long she continues to work as a paralegal.
“Do I work another year? Another two years, if I can?” she said. “Do I just have faith? In the past, (the market has) come back and balanced pretty well. I have to hope for that.”
In St. Louis, Shannon Miller refused to check her 401(k) plan Monday, just to stop herself from having a knee-jerk reaction to the stock plunge.
“I did, however, lose a few hundred of my ‘Monopoly money’ trying to play the stocks short-term for say, vacation or a roof repair,” said Miller, a digital content manager. “But I’m 27 and have a while to right the ship.”
John Cosgrove, 30, of Raleigh, North Carolina, said he moved his 401(k) savings to cash in July, anticipating the possibility that he might be buying a house.
“I moved it to cash knowing that that value will stay the same so that I can continue on my house hunt,” said Cosgrove, a software application engineer. “I’m glad I’m on the sideline now.”
Cosgrove said his shopping routine and other daily spending decisions won’t be affected by the stock market. He said he still has room to budget.
Instead of reaching for antacid, Frank Bowles, a 71-year-old Missouri retiree, plans to maintain his investment portfolio and even seek bargain-priced stocks.
“My broker has called me a couple of times (in recent days) and sent me a big old email about what not to do, like not to be fearful,” said Bowles, who formerly owned a company that specialized in invoices and other business forms. “I kind of already knew that.”
“If it goes down too far, we’ll just buy something” that becomes alluringly discounted, he said.
Others said they were grateful for the sell-off because it might delay plans by the Federal Reserve to raise interest rates.
The Fed has kept its benchmark short-term rate at a record low near zero since late 2008. But before the recent stock market downturn, solid job growth had led Chair Janet Yellen to say the Fed would likely raise that rate later this year, potentially as early as September. A Fed rate hike could lead eventually to higher U.S. Treasury yields and mortgage rates.
For homeowners with adjustable-rate mortgages, such as Conal Crawley, the stock market decline was welcome news that the Fed would put off a rate hike and that his home loans would remain manageable.
“I’m just trying to get the low rates,” said Crawley, 49, who lives in Boston.
Associated Press writers Deepti Hajela in New York, Elliot Spagat in San Diego, Jim Suhr in St. Louis and Emery Dalesio in Raleigh, North Carolina, contributed to this report.
NEW YORK — U.S. investors were jittery on Monday morning after fears of an economic slowdown had rocked markets around the world.
Their concern was realized when the Standard & Poor’s 500 Index plunged 5.3 percent in the opening minutes of trading, the biggest intraday loss in four years. It was the start of a roller-coaster ride, as the market bounced up only to fall again. The pattern repeated through the day until the close, when the benchmark finished down 3.9 percent.
Along the way there were wild price swings, trading halts and volatility at levels not seen in years. Things got so bad that former Treasury Secretary Larry Summers took to Twitter to compare the day’s events to previous meltdowns and say, “we could be in the early stage of a very serious situation.”
As investors ponder what it all means, we answer some of the day’s biggest questions.
Was it a flash crash?
The rout on May 6, 2010, was dubbed the flash crash, and it was a shock. Out of nowhere, the stock market lost almost $1 trillion in value before almost immediately recovering most of its losses. While prices fell rapidly Monday, it appeared to be a fair reflection of investor sentiment: Indexes were falling worldwide, led by an 8.5 percent plunge by China’s Shanghai Composite Index, amid concern that the global economy is worsening. There’s also worry that the Federal Reserve will soon raise interest rates, which some think could snarl the six-year bull market for stocks. Reflecting that pessimism, the S&P 500 ended the day with its biggest loss since August 2011. The morning’s plunge wasn’t just a head fake.
Didn’t some stocks crash?
Many stocks opened low, including General Electric Co. and JPMorgan Chase & Co. Within minutes, things got much worse and both GE and JPMorgan were briefly down as much as 21 percent.
What protections were in place?
After the 2010 flash crash, a system of curbs were introduced that are meant to prevent errant trades from driving down prices. Traders aren’t supposed to quote prices outside a certain percentage above and below a stock’s average price. This restriction didn’t kick in for GE, JPMorgan and other stocks early Monday possibly because the acceptable price bands are wider in the first few minutes of the day. The losses — though big — weren’t big enough. By the end of the day, GE and JPMorgan were down by less eye-catching amounts: 2.9 percent and 5.3 percent, respectively.
Were there any trading halts?
Yes, on 1,278 occasions on Monday, a security was paused for 5 minutes, according to the owner of the New York Stock Exchange, which usually sees less than 10 halts per day. Nine hundred and ninety-nine of the halts were on NYSE Arca, which lists more exchange-traded funds than any other market. That suggests that many less-traded ETFs experienced difficulties as the prices of their underlying stocks swung wildly.
“When you wind up with a lot of volatility, you’re going to see that,” especially under new rules put in place after the flash crash, said Larry Tabb, chief executive officer of research firm Tabb Group.
How bad could things have gotten?
If the S&P 500 had fallen 7 percent before 3:25 p.m. New York time, the entire stock market would have shut for 15 minutes. It only got to a 5.3 percent decline. A 13 percent loss would have prompted another 15-minute pause, while a 20 percent plunge would have shut the market for the rest of the day.
Was the rest of the day smooth?
Not really. The market’s most famous measure of expected price swings — or, probably more accurately, a gauge of fear — reached a level last seen in October 2011 as investors panicked. Things were so extreme at the start of the day that the measure, called the Chicago Board Options Exchange Volatility Index, or VIX, couldn’t be calculated during the first half hour of trading.
Were there any malfunctions at exchanges?
More than 14 billion shares traded, way above the past year’s daily average of 6.6 billion and the greatest amount since August 2011. Despite the pressures caused by volumes and volatility not seen for years, there were no reported breakdowns. That should be a relief to exchange executives who’ve come under fire from regulators and the trading public for a series of mishaps in recent years.
It’s still unclear what impact China’s falling stock market will have on the real American economy, but the worst will likely be felt in one state: Washington.
China is the United States’ third-biggest export market, buying $120.8 billion worth of U.S. products in 2014. That total might sounds like small potatoes compared to our $17.4 trillion economy, but Washington state accounts for the biggest chunk, selling $15.3 billion worth of stuff to China last year — largely in the form of airplanes, but also in agricultural products like apples and timber. One of the state’s corporate bellwethers, Amazon.com, saw its stock slide 6.14 percent Monday, as investors sold shares in Internet companies on doubts about expansion in China, potentially tempering Seattle’s red-hot economy.
And therein lies a lesson about today’s China-driven roller coaster: The effects could be significant, but selective. Certain sectors that do lots of business in China could shed some jobs if the dip gets any worse. For other sectors, the economic slowdown might have negligible or even positive effects.
To figure out the industries that could potentially be impacted the most, it helps to look first at what products China buys the most: Soybeans ($14.5 billion), civilian aircraft ($13.9 billion) and passenger cars ($11.2 billion).
Soybean futures closed down 2.54 percent and Boeing was off 3.42 percent. Detroit’s three automakers fell between 4.87 and 6.08 percent — all more than the Dow Jones Industrial Average’s 3.88 percent slide.
How is that playing out across the country? Well, it could take a while for Washington to feel the effect of reduced demand for Dreamliners. Robert Hamilton, a trade policy advisor for the governor of Washington, says the lead time needed for plane orders means the Chinese downturn would only impact his state down the road. “This could change if these troubles continue,” Hamilton says.
Meanwhile, farm states like Iowa are already worried about the potential impact of declining global appetite for agricultural commodities. China has also ranked among several Asian and Middle Eastern markets driving U.S. car exports higher . A softening in demand could take the edge off growth in Southern states that have attracted lots of foreign car manufacturers over the past few decades, for example.
But remember, all the fear that showed up in the markets this week could be overblown. A slowdown in China does not necessarily mean consumers there will stop spending. The service sector has grown even as manufacturing has weakened, and wages continue to rise at a quick clip. So if U.S. exports start to flag, it might have more to do with the fact that the dollar is a lot stronger against the yuan than it used to be. China’s sudden devaluation of its currency a couple weeks ago -- and the potential for reciprocity from other countries in the region -- won’t help.
“Let’s assume that the slowdown did materialize,” says Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics. “I think the short answer is the effect of that would be much less than the fact the dollar has appreciated so much over the past year.”
Plus, there could be some silver linings in China’s weakness.
The price of oil, which has been falling for years, continued its slide on news of China’s slowdown. If the drag on growth continues, the demand for oil is likely to stay low, holding down energy prices -- which would further reduce costs in industries that require a lot of energy, like concrete construction (i.e. roads and tall buildings).
The broader commodity sell-off might not be good for farmers, but it would help reduce pressure on anyone who buys food, potentially allowing for more hiring in the restaurant industry.
Those effects are likely to be diffuse, though, and not make up for the damage a flailing China might cause.
“The benefits will be very broadly spread, and the impacts will be relatively modest,” says Eswar Prasad, a senior professor of trade policy at Cornell University. “The problem is with China and the world economy no longer driving growth, the world will be trying to ride the coattails of the U.S. consumer once again.”
Take oil and gas: While lower prices help consumers and some businesses, they have already dealt a heavy blow to areas that started pumping it out of the ground during the 2000s, making it difficult to tell whether continued decline is a boon or a blow to the U.S. economy. “You’re not only seeing a pullback in investments and hiring in the energy sector alone, but huge ripple effects across the supply chain,” says Chad Moutray, chief economist for the National Association of Manufacturers. And a lost job can hurt a community more than lower heating bills might help it.
Want to avoid China’s troubles almost entirely? Move to Maine, which is among China’s smallest trading partners, with exports falling over the past few years to just $185 million in 2014.
Best Buy Co. Chief Executive Officer Hubert Joly is making good on the second part of his turnaround plan at the world’s largest electronics chain: revenue growth.
The retailer posted its fourth straight quarter of same-store gains on Tuesday, with growth of 3.8 percent in the latest period. That’s the biggest increase in four years and more than triple the 1 percent projected by analysts, according to estimates compiled by Consensus Metrix. The results sent the stock up as much as 16 percent in early trading.
Joly is in the third year of a comeback bid at Best Buy, with mixed results so far. He initially focused on cutting costs, including selling off foreign divisions in China and Europe. That has left Best Buy as more of a U.S.-focused retailer, which given the relative strength of America’s economy looks like a wise move. But investors have been waiting for a sign that the company can post consistent revenue growth.
After showing signs of progress on that front, Best Buy stock jumped as high as $33.88 in premarket trading. Before the rally, the shares were down 25 percent this year. And they had fallen 10 percent in the past six trading days alone, hurt by the broader market rout and concerns about a slowing global economy.
“These better-than-expected second quarter results are affirmation that our strategy of offering advice, service and convenience at competitive prices is paying off,” Joly said in a statement.
Sales were lifted by demand for big-screen TVs, phones and major appliances, the Richfield, Minnesota-based company said. Still, Best Buy voiced uncertainty about future growth, especially with the markets in turmoil this week. In the current quarter, U.S. sales will probably be flat or grow by a low single-digit percentage rate, the company said.
“It is difficult to know, though, if the recent volatility in the financial markets will affect overall consumer spending,” Chief Financial Officer Sharon McCollam said in the statement. “To date, however, we have not seen a measurable impact versus our original expectations.”
Second-quarter profit also topped analysts’ estimates. Earnings amounted to 49 cents a share in the period, excluding some items. Analysts had projected 34 cents for the quarter, which ended Aug. 2.
Joly and McCollam have complained about a lack of hot new tech products that could help drive sales — a problem for the broader electronics industry. Given that reality, Best Buy is searching for ways to generate sales growth on its own. That’s included revamping its website, selling more returned items, and adding space dedicated to home-theater setup.