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Daily Business Briefing

July 14, 2021, 1:15 a.m. ET

July 14, 2021, 1:15 a.m. ET

Gov. Larry Hogan with Maryland’s labor secretary, Tiffany Robinson, in Annapolis last year.
Credit…Susan Walsh/Associated Press

A state judge on Thursday blocked a move by Maryland officials to cut off federal pandemic unemployment benefits two months before they were scheduled to expire.

Judge Lawrence P. Fletcher-Hill of the Circuit Court for Baltimore City granted a preliminary injunction in a case challenging the decision by Gov. Larry Hogan, a Republican, to discontinue the benefits beginning July 3. The judge ordered the state to “immediately take all actions necessary to ensure that Maryland residents continue to receive any and all expanded and/or supplemental unemployment benefits.”

The Maryland Department of Labor did not respond to a request for comment on whether it would appeal the injunction, which is to remain in place until the case comes to trial.

More than two dozen states, all but one led by Republican governors, have moved to cut off some or all of the federal benefits, saying they are discouraging people from seeking work at a time when some businesses are scrambling to staff up as the pandemic fades. The benefits, administered by the states, include a $300 weekly supplement to other unemployment insurance. They are funded by the federal government until Sept. 6.

Legal challenges to the early cutoff of the benefits have been raised in at least five states. In Indiana, the state’s court of appeals ordered officials on Monday to continue paying federal unemployment benefits.

Andrew Stettner, senior fellow at the Century Foundation, a progressive think tank, said the lawsuits essentially objected to “the rug being pulled out from under unemployed workers who were promised something” through September and were getting a receptive hearing from judges. “It’s a national economic policy,” he said, “but it will play out on a state-by-state basis.”

Oklahoma is the latest state to face a lawsuit seeking to compel it to continue the benefits. A woman in Tulsa filed a lawsuit on Wednesday and said she could not afford her expenses without the additional federal benefits after she lost her job.

Lawsuits in Ohio and Texas are pending.

A Norwegian cruise ship sits at the Port of Miami. The three major cruise lines have lost a combined $900 million each month since March 2020.
Credit…Chandan Khanna/Agence France-Presse — Getty Images

The fight over requiring vaccinations for travel is heating up.

Norwegian Cruise Line Holdings sued Florida’s surgeon general on Tuesday, accusing the state of preventing it from “safely and soundly” resuming trips by barring it from requiring customers to be vaccinated against the coronavirus.

The filing represents the latest twist in a monthslong fight over the resumption of cruises from Florida, a hub for the industry. Under Gov. Ron DeSantis, the state has fought vaccine requirements by cruises and other businesses, claiming that such policies are discriminatory. Supporters of vaccine requirements have argued that requiring vaccines is necessary to protect public health.

Under a state law approved in May, businesses that force customers to provide proof of vaccination could face fines of up to $5,000 per violation. In its lawsuit, filed in the U.S. District Court for the Southern District of Florida, Norwegian said it was forced to sue Scott Rivkees, the state’s surgeon general, “as a last resort.”

“One anomalous, misguided intrusion threatens to spoil N.C.L.H.’s careful planning and force it to cancel or hobble upcoming cruises, thereby imperiling and impairing passengers’ experiences and inflicting irreparable harm of vast dimensions,” the company said in the lawsuit.

Norwegian is claiming that Florida’s ban is not valid because it pre-empts federal law and violates various provisions of the Constitution, including the First Amendment. Neither Norwegian nor the Florida Department of Health immediately responded to requests for comment.

After banning cruises nearly a year and a half ago, the Centers for Disease Control and Prevention said in the fall that it would allow cruises to set sail again. The agency later developed a set of stringent conditions that cruise lines are required to follow.

Florida sued the C.D.C., arguing that the health agency had overstepped its authority in setting those standards. In June, a federal judge temporarily blocked the agency from enforcing the rules in the state while the case proceeds. Later that month, Celebrity Cruises, a subsidiary of Royal Caribbean Group, began the first major cruise from a U.S. port since the pandemic began, sailing from Fort Lauderdale, Fla. Norwegian hopes to restart cruises from Miami on Aug. 15.

The industry was devastated by the pandemic, with ridership falling 80 percent last year compared with 2019. The three major cruise companies — Carnival Corp., Royal Caribbean and Norwegian — have lost a combined $900 million each month since March 2020, according to a recent report by Moody’s, the credit rating firm.

A unit of TIAA, the investment firm that runs retirement plans for many educators and others, will pay $97 million to settle charges from both the Securities and Exchange Commission and New York State that it misled thousands of investors.

Attorney General Letitia James of New York said the company had “relied on its reputation as a trusted and objective financial adviser to profit off of clients through fraudulent and manipulative sales practices.”

The state and federal securities regulators said TIAA employees had encouraged investors to move money out of retirement plans with their employers, where fees were lower, to different plans that helped the company make more money.

TIAA’s tactics have come under scrutiny before, including in reporting by The New York Times.

TIAA neither admitted nor denied the findings as part of the settlement. “We regret the times that we did not live up to our clients’ expectations of us,” the company said in a statement. “We have learned some valuable lessons and have applied those lessons to enhancing our training, supervisory controls and disclosures.”

President Biden’s economic team, which has quietly concluded that rising prices could linger in the economy slightly longer than administration officials initially expected.
Credit…Sarahbeth Maney/The New York Times

A Labor Department report on Tuesday that showed prices rising at their fastest monthly pace since 2008 in June presents a new political challenge for President Biden’s economic team, which has quietly concluded that rising prices could linger in the economy slightly longer than administration officials initially expected.

Mr. Biden’s aides continue to say that the current rate of inflation — a 5.4 percent increase in the Consumer Price Index from a year ago, according to the data released on Tuesday — is temporary and largely a product of special circumstances from the pandemic. They point to snarled supply chains in areas like automobile manufacturing, where a shortage of semiconductor chips is slowing production and contributing to a rapid rise in used car and truck prices. Used vehicles accounted for one third of June’s price increases, the Labor Department said.

Administration officials did not appear to be expecting that magnitude of a surge for June. But they continued to insist on Tuesday that the pressures were not going to lead to 1970s-style calamity.

“Headline inflation is up but we need to look under the hood to understand what’s really going on,” Heather Boushey, a member of the White House Council of Economic Advisers, wrote on Twitter on Tuesday. “Used cares, new cars, auto parts, and car rentals accounted for 60% of month-over-month price increases.”

The Biden team sees early signs that the used-car market is beginning to cool off and that other supply pressures, like a jump in lumber prices earlier this year, were also starting to ease, an official said Monday on condition of anonymity because he was not authorized to discuss the inflation report publicly.

Officials were also hopeful that consumers were beginning to shift more of their spending from goods that have been affected by the supply chain disruptions, like lumber and cars, toward services like dining and tourism.

The official repeated the administration’s long-running view that the sharp uptick in prices this spring and summer was the product of those supply constraints, and that it will prove temporary and not the start of a sustained cycle of wage and price increases like the 1970s.

The administration also continues to view the price increases as being inflated by data quirks given that prices fell substantially last year during the depths of the recession, making their rebound this year look larger than it actually is. Those “base effects,” as they are known, are still affecting the inflation data, though they began to moderate in June.

Still, administration officials have subtly shifted their views on how long the so-called transitory price effects will linger in the economy, according to two administration officials, even before this month’s report was released.

In Mr. Biden’s official budget request, released this spring, officials forecast an inflation rate that stayed near historical averages for 2021 and never rose past 2.3 percent per year over the course of a decade. But internally and publicly, administration officials have now begun to acknowledge the possibility that higher inflation could stay with the economy for a year or more.

A recent post from Mr. Biden’s Council of Economic Advisers, titled “Historical Parallels to Today’s Inflationary Episode,” concludes that the past period of inflation most comparable to today’s economy in the United States came immediately after World War II, when supply disruptions drove up prices. That period, the post notes, lasted about two years.

PepsiCo said it expected robust revenue and earnings growth for the entire year.
Credit…Mario Anzuoni/Reuters

The return of restaurants and other activities away from the home was a big boon to PepsiCo, which reported a huge jump in revenue in its drinks and snacks businesses in the second quarter. But the company warned that inflationary pressures were likely to lead to higher prices.

The food and beverage giant, home to popular brands like Pepsi, Mountain Dew, Doritos and Cheetos, said its net revenue in the second quarter surged 20.5 percent to $19.2 billion from a year earlier. Organic revenue, which strips out the effects of currency swings and acquisitions, grew 12.8 percent. Its profit rose 43 percent to nearly $2.4 billion from about $1.7 billion a year earlier.

In trading on Tuesday, PepsiCo’s stock was up 2.2 percent to $152.86, a record high and a gain of about 13 percent in the past year.

“You are seeing an acceleration in our North American business, but also globally, with our beverage business growing much faster in ‘away-from-home’ as stores are opening and people are moving around,” Ramon Laguarta, the chief executive and chairman of PepsiCo, told analysts on a call Tuesday morning.

The food and beverage giant said it expected robust revenue and earnings growth for the entire year, and it raised full-year guidance for both targets. But the company also noted several challenges on the horizon, including difficult retail comparisons as people shift to consuming more outside the home, as well as pandemic restrictions around the world that continue to keep some people at home.

On top of that, executives said, higher costs for raw materials, labor and freight are likely to result in higher prices for consumers after Labor Day, when PepsiCo traditionally changes prices.

“Is there somewhat more inflationary pressures out there? There is. Are we going to be pricing to deal with it? We certainly are,” said Hugh Johnston, the chief financial officer of PepsiCo.

Consumers are still adjusting to a postpandemic environment in some parts of the world, but executives at PepsiCo said they expected several behavioral changes to remain, including the search for healthier, lower-sugar options in drinks and snacks and the ability to shop online versus going into stores.

Employees are starting to trickle into offices in the United States, but the home will remain a hub with much of the work force adapting to a hybrid model, executives said. “We see that as an opportunity for our snacks, our breakfast and our food business in general,” Mr. Laguarta said.

JPMorgan Chase reported net income of $11.9 billion in the second quarter, up from $4.7 billion a year earlier.
Credit…Johannes Eisele/Agence France-Presse — Getty Images

The big banks are booking big profits as customers shake off the pandemic and dealmakers seize on busy markets.

JPMorgan Chase, the country’s largest bank by assets, and Goldman Sachs both beat analysts’ earnings expectations on Tuesday. JPMorgan reported a profit of $11.9 billion in the second quarter, up from $4.7 billion a year earlier. Its earnings per share of $3.78 and revenue of $30.5 billion exceeded analysts’ expectations. And Goldman’s profit was $2 billion more than predicted.

“The pandemic is kind of in the rearview, hopefully,” Jamie Dimon, JPMorgan’s chief executive, told analysts on a conference call. Consumers are “raring to go,” bolstered by rising incomes, savings and house prices, while businesses are also in good shape, Mr. Dimon said.

Consumers are starting to spend more on travel and entertainment, and they’re also buying homes and cars at a faster clip, the bank said. Its investment banking fees were the highest they had ever been, buoyed by a hot market for mergers and acquisitions.

The company’s confidence in the rebound was reflected in the release of $3 billion from the rainy-day fund that it had set aside for an expected onslaught of loan defaults that never emerged, thanks to robust government stimulus efforts that helped keep many Americans afloat. Debt that the bank has given up trying to recoup fell 53 percent, “reflecting the increasingly healthy condition of our customers and clients,” Mr. Dimon said in a statement.

Goldman Sachs earned nearly $5.5 billion on revenue of nearly $15.4 billion. Analysts had expected a profit of just $3.4 billion. On a per-share basis, Goldman’s $15.02 showing was much higher than Wall Street’s prediction of $9.88.

The bank’s earnings also jumped from last year, when Goldman had to pay billions in fines over a foreign bribery scandal linked to the 1Malaysia Development Berhad fund, known as 1MDB.

But compared with the first three months of 2021, the bank’s earnings were smaller — an indication that Wall Street firms may be reaching the end of the frenetic, and profitable, period of trading that began when the pandemic threw the financial system in turmoil.

Goldman’s trading revenue for the quarter was lower than earlier this year and the same quarter last year. Its trading in fixed-income, commodities and other financial products brought in $4.9 billion in revenue for the quarter, compared with almost $7.6 billion earlier this year and $7.2 billion in the same period a year ago. Analysts had predicted that the bank would take in just over $5 billion from such trades. At JPMorgan, revenue from its markets division dropped 30 percent from a record in 2020.

Even with rosier-than-expected reports, investors remain concerned that the economic recovery is losing steam. Shares of JPMorgan and Goldman each slid after the results were announced on Tuesday morning, before closing the day of trading down about 1 percent. A broader index of bank stocks has fallen almost 5 percent in the last month.

Consumer activity has grown, but the banks’ results showed only modest growth in borrowing, which allows them to earn more from interest payments.

“Investors need more evidence of a potential improvement in loan demand to boost confidence,” said Alison Williams, an analyst at Bloomberg Intelligence. Analysts also quizzed executives about their outlook for rising prices and the Federal Reserve’s monetary policy, which influences how much banks can charge in interest. A key measure of inflation jumped sharply in June, an increase that is sure to keep concerns over rising prices front and center at the White House and the Fed.

For now, the prospects for economic recovery outweigh concerns about inflation, said Jeremy Barnum, JPMorgan’s chief financial officer.

“We’re bullish on the economy,” Mr. Barnum said. “We believe that comes with higher inflation and, therefore, higher rates,” which will eventually allow banks to earn more from lending.

Bank of America, Citigroup and Wells Fargo will report earnings on Wednesday. Leaders of U.S. banking behemoths have become increasingly optimistic this year as a speedy vaccine rollout helped Americans emerge from the torpor of the coronavirus pandemic.

“Obviously, if there was some sort of disruption or an economic slowdown sometime in the future, that would wear on confidence,” Goldman Sachs’s chief executive, David M. Solomon, told analysts on a conference call. “But at the moment, it feels quite constructive.”

Emily Flitter contributed reporting.

Lananh Nguyen

Google’s logo was displayed at the La Defense business and financial district in Courbevoie, just west of Paris. 
Credit…Charles Platiau/Reuters

Google was fined 500 million euros, or $593 million, by French antitrust authorities on Tuesday for failing to negotiate a deal in “good faith” with publishers to carry news on its platform, a victory for media companies that have been fighting to make up for a drop in advertising revenue that they attribute to the Silicon Valley giant.

French officials said Google had ignored a 2020 order from French regulators to negotiate a licensing deal with publishers to use short blurbs from articles in search results. The case has been closely watched because it is one of the first attempts to apply a new copyright directive adopted by the European Union intended to force internet platforms like Google and Facebook to compensate news organizations for their content.

“When the authority imposes injunctions on companies, they are required to apply them scrupulously, respecting their letter and their spirit,” Isabelle de Silva, president of the French antitrust body, said in a statement.

Google has two months to come up with fresh ideas for compensating news publishers or risks further fines of up to €900,000, about $1.065 million, per day, the French authorities said.

The French decision is the latest in a battle between news publishers and internet platforms over the use of news content. In Europe and elsewhere, policymakers have increasingly sided with publishers who argue that internet companies are profiting from the unfair use of their content. Companies like Google and Facebook have argued that they are driving traffic to the news websites.

Internet companies fought a copyright law passed this year in Australia that gave publishers more negotiating leverage. It led to a showdown in which Facebook briefly removed news from its platform for users inside the country, before quickly relenting.

As policymakers crack down, Google has been trying to strike deals with individual publishers. In October, the company said it would spend more than $1 billion to license content from international news organizations. And in February, it announced a three-year deal with News Corp, owner of The New York Post, The Wall Street Journal and other prominent news outlets.

Google, which can appeal the fine, said that it was “very disappointed” with the French decision and that it was continuing to negotiate with publishers. “We have acted in good faith throughout the entire process,” Google said in a statement. “The fine ignores our efforts to reach an agreement, and the reality of how news works on our platforms.”

The French authorities said Google placed unfair restrictions on its negotiations with publishers, including requiring them to participate in the company’s new licensing program, News Showcase. Google had reached a deal with some prominent French news outlets — including Le Monde, L’Obs and Le Figaro — but others raised concerns about the process.

Google said it was completing a global licensing deal with Agence France-Presse, one of France’s largest media organizations.

Cargo containers stacked at Yantian Port in Shenzhen, China, last month.
Credit…Agence France-Presse — Getty Images

BEIJING — China has prospered during much of the coronavirus pandemic as the world’s factory, making everything from face masks to exercise equipment for housebound consumers. Demand for its products doesn’t appear to be slowing even as Western economies reopen.

China’s General Administration of Customs announced on Tuesday that the country’s exports surged 32.2 percent in June compared with the same month last year. The increase caught many economists by surprise, as one of China’s biggest ports was partly closed for most of June and China’s exports of medical supplies have begun to level off.

China’s export performance in June “is quite impressive and not so easy to understand,” said Louis Kuijs, the head of Asia economics in the Hong Kong office of Oxford Economics.

Mr. Kuijs said a little more than a third of the increase in value of Chinese exports might reflect rising prices. Chinese factories are passing on their own higher costs to foreign consumers.

Chinese manufacturers face escalating costs these days because prices have increased worldwide over the past year for commodities like iron ore and copper and for industrial materials like steel.

China’s currency, the renminbi, has also strengthened against the dollar. So Chinese producers need to charge more dollars to pay the same wages and other costs denominated in renminbi.

By raising prices for foreign buyers, Chinese factories can preserve their profit margins — at the risk of contributing to inflation elsewhere.

Port and shipping delays are driving the price tags for Chinese goods even higher in foreign markets. The cost of shipping a 40-foot cargo container across the Pacific has ballooned from the usual $4,000 to $5,000 to a record $18,000 or more.

Part of the problem lies in China’s drastic actions to prevent new coronavirus variants from spreading. These measures have included forcing port workers into lengthy lockdowns at the first sign of outbreaks.

China’s policies have been effective in keeping virus cases to a minimum, but at some economic cost.

One of the world’s largest ports, Yantian Port in the southeastern Chinese city of Shenzhen, partly shut down from late May through much of June. Shenzhen acted in response to fewer than two dozen coronavirus cases.

When the port fully reopened on June 24, shipping executives and freight forwarders hoped that trade would start returning to normal.

It has not worked out that way.

Dozens of huge container ships fell far behind schedule when they had to wait weeks to dock in Shenzhen. That meant ships later showed up in bunches at ports in other countries, causing further congestion. Chinese export factories also sent goods by truck to alternative ports, like Shanghai’s, leaving them overcrowded as well.

Zhao Chongjiu, China’s deputy minister of transport, defended his country’s tough coronavirus measures. “Everyone knows that during an epidemic, workers in ports must be placed under lockdown, and various countries have taken corresponding measures, so the efficiency of loading and unloading would be reduced,” he said when Yantian reopened.

By mid-June, the freight yard was so crammed with containers at Shanghai’s vast, highly automated Yangshan Deep Water Port that the stacking cranes barely had room to lift containers on and off ships. Dong Haitao, a senior administrator at the adjacent free trade zone, blamed foreign ports for failing to handle arriving containers on time.

“Their schedule of shipments has been disrupted, but not ours,” he said.

Shipping rates for containers have continued to rise steeply in the weeks since Yantian Port reopened. The increase is widely expected to keep going as stores in the United States in particular race to restock shelves for returning shoppers and start preparing for the Christmas shopping season.

“Each week these rates go up another few hundred dollars,” said Simon Heaney, the senior manager for container shipping research at Drewry Maritime Research in London. “Nobody seems to have any answers, and the only thing we can hope for is Chinese New Year — and that’s obviously a long way off.”

Factories in China typically close for several weeks during the Lunar New Year celebration, which could give the world’s ships time to catch up. But next year’s holiday does not start until the end of January.

Liu Yi and Li You contributed research.

A Boeing 787 Dreamliner flown by British Airways. Boeing said that it expected to deliver less than half of the Dreamliners in its inventory this year.
Credit…Andy Rain/EPA, via Shutterstock

Boeing said on Tuesday that it would temporarily slow production of the 787 Dreamliner after it identified new work that needed to be done on the troubled wide-body jet.

The slowdown will cause the company to fall short of a target production rate of five 787s per month as it conducts inspections and completes the extra work, Boeing said. Reuters reported on the new production problem on Monday.

Boeing also said that it expected to deliver less than half of the Dreamliners in its inventory this year, a shift from April when its chief executive, Dave Calhoun, said the company would hand over the majority by 2022.

“We will continue to take the necessary time to ensure Boeing airplanes meet the highest quality prior to delivery,” the manufacturer said in a statement. “Across the enterprise, our teams remain focused on safety and integrity as we drive stability, first-time quality and productivity in our operations.”

Boeing had stopped delivering the 787 last year amid quality concerns related to shims used where parts of the plane’s fuselage, or main body, are joined. The company resumed deliveries in March, but said in May that it had stopped again after the Federal Aviation Administration said it was unconvinced by Boeing’s inspection methods, which relied on using a statistical analysis to identify where inspections were needed. Boeing said on Tuesday that discussions with the F.A.A. are ongoing.

Mr. Calhoun addressed the general 787 production disruptions at an investor conference last month.

“We will work our way and get to a stable delivery rate, which is, right now, our biggest challenge,” he said, adding, “But we think we’re doing this the right way, and we’re doing it alongside the F.A.A.”

News of the production slowdown comes as Boeing released strong, new monthly production and sales figures.

The company said on Tuesday that it had delivered 45 planes to customers in June, the most since March 2019, when its popular 737 Max plane was banned from flying around the world. The grounding of the Max, which was prompted by two fatal crashes, devastated Boeing’s finances and led to the ouster of Mr. Calhoun’s predecessor. The plane was allowed to start flying passengers again late last year.

Boeing also said on Tuesday that it had booked 219 gross orders in June, the most in three years. Nearly all of the orders were part of a record expansion of United Airlines’s fleet. And June was also Boeing’s fifth straight month of positive net sales, after accounting for cancellations.

China’s crackdown on foreign initial public offerings is quickly zooming beyond Didi Chuxing, the ride-hailing giant that government officials banned from app stores just days after it sold shares in the United States. Now, Beijing is proposing new regulatory requirements for all tech companies planning to list their shares abroad and erecting barriers around fintech firms, some of the country’s biggest start-up successes.

At the same time, President Biden is reportedly preparing to warn American companies about the increasing risks of doing business in Hong Kong, further fraying relations between the United States and China. As bankers assess what all this posturing means — economics has trumped politics before — the DealBook newsletter has started to do the math.

I.P.O. fee revenue for U.S. listings of Chinese companies

Chinese companies listing their shares in New York have been hugely lucrative for Wall Street in recent years. Investment banks have already brought in nearly $460 million in underwriting revenue this year, according to Dealogic. More was expected: Bloomberg estimates that about 70 companies based in Hong Kong and China have been set to go public in New York.

U.S. listings of Chinese companies have accounted for nearly 8 percent of Goldman Sachs’s underwriting fees so far this year, and more than 12 percent of Goldman’s underwriting revenue over the previous five years.

Value of private equity deals in China with U.S. investors

Investment firms’ portfolios could suffer, too. If an American I.P.O. is off the table, at least for now, hedge funds and private equity firms that doubled down on Chinese investments in search of growth may see the value of those holdings decline. (Investment firms could, of course, take Chinese companies public in China, but the shallow investor pool and proximity to the government can make that a less desirable path.)

It’s difficult to quantify the exact exposure investment firms have to China, but it looks substantial. U.S. private equity firms were involved in deals worth $45 billion in Greater China in the five years to 2019, according to PitchBook. Carlyle and Warburg Pincus have been among the biggest investors in recent decades.

  • U.S. stocks fell on Tuesday after data showed inflation in the United States rose in June more than economists had expected. The S&P 500 index closed 0.4 percent lower.

  • The Consumer Price Index rose 0.9 percent from the previous month, compared with expectations of a 0.5 percent increase. The core index, which strips out volatile food and energy prices, also rose 0.9 percent in June.

  • The yield on 10-year U.S. Treasury notes rose to 1.42 percent after the report was released. Rising inflation erodes the value of fixed-income assets, which tends to send bond prices lower and their yields higher. Also, rising inflation might encourage the Federal Reserve to reduce stimulus measures sooner than previously anticipated, which would push interest rates higher.

  • Shares in JPMorgan Chase fell 1.5 percent even as the giant bank reported a profit of $11.9 billion in the second quarter, up from $4.7 billion a year earlier. But the bank said its expenses on technology and hiring rose and that demand for loans was flat.

  • Goldman Sachs stock fell 1.2 percent. The investment bank reported a second-quarter jump in revenue from advising on deals that helped offset a slump in trading revenue.

  • Shares in British banks rose in early trading in London after the Bank of England lifted restraints on dividend payments and share buybacks that had been introduced during the pandemic. But by early afternoon in London, as U.S. bank earnings were reported, the shares had reversed their gains. Barclays shares fell 1.6 percent having risen as much as 2.2 percent. NatWest shares fell 2.6 percent and shares in Standard Chartered declined 1.3 percent.

  • Boeing fell 4.2 percent after the aircraft maker said it would temporarily slow production of the 787 Dreamliner to fix another problem with the model. Boeing also said that it expected to deliver less than half of the Dreamliners in its inventory this year.

  • PepsiCo rose 2.3 percent after the company reported a huge jump in revenue in the second quarter in its drinks and snacks businesses.