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Walmart to raise workers’ average pay to $15 an hour

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Walmart to raise workers' average pay to $15 an hour

Walmart said it will raise workers’ average pay to $15 an hour, even as the world’s largest retailer warned that its pandemic-fueled growth is poised to slow this year, sending its shares down by more than 5 percent.

The Bentonville-based behemoth’s comparable sales surged by 8.6 percent in the fourth quarter while total revenues rose to a record $152.1 billion or a 7.3 percent increase from a year ago.

On the heels of that holiday strength, Walmart said beginning March 13 it is raising the average pay for 425,000 front-line associates to above $15 an hour while keeping its minimum starting pay at $11 an hour.

“We completed a strong year and a strong [fourth quarter] thanks to our amazing associates,” chief executive Doug McMillon said in a statement, adding, “This is a time to be even more aggressive because of the opportunity we see in front of us. We have momentum with customers and our financial position is strong.”

Nevertheless, its earnings fell short of Wall Street’s expectations, coming in at $1.39 per share, short of the $1.51 analysts expected, in large part because the company spent more than $1 billion in COVID-related expenses.

Management also warned that it expects slower sales growth this year in the low single digits and lower profits as it invests in technology, employee benefits and shopping-related habits change as the pandemic abates and consumers spend money on other things besides essential goods.

Its e-commerce sales grew by 69 percent in the fourth quarter — but it was the slowest growth rate since the start of the pandemic.

Walmart said it expects lower profits and slower growth in the new fiscal year. It forecast US comparable sales would rise by a low-single-digit percentage, compared with 8.6% growth in fiscal 2021. Walmart, like many other businesses during the pandemic, had stopped giving financial guidance in recent quarters.

The pay raise comes amid the Biden administration’s push to raise the federal minimum wage to $15 an hour along with calls by labor groups to increase workers’ pay during the health crisis given the risks they face.

Other discount retailers are either temporarily or permanently raising the base pay of their front-line workers, including Trader Joe’s, Target and Lidl, which will pay Long Island employees $16.50 an hour starting on March 8, the company said this week. 

Walmart has given employees bonuses totaling $2.8 billion in 2020, the company said in December.

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Boeing CEO waived pay but got compensation worth $21 million

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Boeing CEO waived pay but got compensation worth $21 million

Boeing CEO David Calhoun declined a salary and performance bonus for most of last year but still received stock benefits that pushed the estimated value of his compensation to more than $21 million, according to a regulatory filing Friday.

The aerospace giant struggled last year with the continuing fallout from two deadly crashes involving its 737 Max jetliner and a downturn in demand for planes because of the pandemic. Boeing lost nearly $12 billion and announced plans to cut about 30,000 jobs through layoffs and attrition.

Calhoun, who became CEO in January 2020, received $269,231 in salary for the period before he disavowed his salary in March. He also got $289,715 in other compensation, mostly perks such as the use of company planes, retirement benefits and home-security expenses.

The company said Calhoun gave up about $3.6 million by declining most of his salary and a $2.5 million bonus.

But most of Calhoun’s compensation — valued by Boeing at more than $20 million — came in the form of stock benefits that will vest in the next few years, assuming he remains CEO.

Those grants include $7 million worth of stock for returning the Max to service after it was grounded in 2019, $10 million worth of shares to compensate for pay he left behind at his previous job at The Blackstone Group, and $3.5 million in long-term incentive awards. All would vest over the next three years.

Calhoun, 63, was a longtime Boeing board member before being named CEO after the firing of Dennis Muilenburg in December 2019.

The Chicago-based company filed its proxy statement ahead of its April 20 annual shareholder meeting, which will be conducted online.

Shareholders will elect 10 directors. Pension funds in New York and Colorado are suing current and former board members and executives, including Calhoun and Muilenburg, in a Delaware state court. The funds accuse directors of lax safety oversight during the development of the 737 Max and after the first of two crashes that killed 346 people.

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Tech rebound pulls stocks out of a slump and to weekly gain

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Tech rebound pulls stocks out of a slump and to weekly gain

Wall Street ended sharply higher after a volatile session Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10 percent from its previous record high.

All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.

Microsoft rallied 2.15 percent, boosting the S&P 500 more than any other stock, with gains in Alphabet, Apple and Oracle also lifting the index.

The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626 percent after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters.

Focus is also on a $1.9 trillion coronavirus aid bill as a sharply divided U.S. Senate began what was expected to be a long debate over a slew of amendments on how that money would be spent.

The Nasdaq logged its third straight weekly decline after a recent spike in Treasury yields dented demand for high-flying technology stocks.

Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.

The tech-heavy Nasdaq is around 8 percent below its Feb. 12 closing high.

Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, said his firm in recent days has bought shares in a handful of growth companies whose prices have been pummeled in the recent selloff.

“Next week, I would expect volatility to continue, with pockets of opportunity, with certain things that sold off potentially rebounding,” Dollarhide said.

The Dow Jones Industrial Average rose 1.85 percent to end at 31,496.3 points, while the S&P 500 gained 1.95 percent to 3,841.94.

The Nasdaq Composite climbed 1.55 percent to 12,920.15.

In a busy session, volume on U.S. exchanges was 17.4 billion shares, compared with the 15.3 billion average for the full session over the last 20 trading days.

For the week, the S&P 500 rose 0.8 percent, the Dow added 1.8 percent and the Nasdaq lost 2.1 percent.

In Friday’s session, the S&P 500 energy sector index surged 3.9 percent to over a one year high as oil prices soared.

Oracle jumped more than 6 percent after Barclays upgraded the business software maker to “overweight” expecting improvement in the IT spending environment.

Advancing issues outnumbered declining ones on the NYSE by a 2.86-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored advancers.

The S&P 500 posted 55 new 52-week highs and no new lows; the Nasdaq Composite recorded 225 new highs and 134 new lows.

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Goldman Sachs reportedly set to make $200M off Texas storm

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Goldman Sachs reportedly set to make $200M off Texas storm

Traders at Goldman Sachs may reap huge profits from the winter storm last month that left many across Texas and other Southern states without electricity, clean water and heat, Bloomberg News reported Friday.

The Wall Street bank could make up to $200 million from the physical sale of power and natural gas and from financial hedges after spot prices jumped, the report said, citing people familiar with the matter.

Goldman did not immediately respond to a Reuters request for comment.

Bloomberg reported that while the bank could make $200 million on paper, the actual profits collected are likely to be less, as regulators and consumers intervene with legal challenges in the aftermath of the energy crisis and some companies go bankrupt.

Bank of America also stands to make hundreds of millions of dollars from trades related to Texas’ energy market, the Financial Times reported Friday.

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