Stock Market News: Jobs report, Lululemon surges, Target fallout

U.S. stocks closed higher on Friday after a labor market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default.

The tech-heavy Nasdaq index surged a 13-month intraday high and posted its sixth-straight week of gains that mark its best winning streak since January 2020.

U.S. job growth accelerated in May but a surge in the unemployment rate to a seven-month high of 3.7% as more people looked for employment indicated labor market conditions were easing, the Labor Department said.

The jump in the unemployment rate from a 53-year low of 3.4% in April reflected a drop in household employment and a rise in the overall workforce. A bigger labor pool is easing pressure on businesses to raise wages and helping decelerate inflation.

OPEC and its allies are discussing deepening oil production cuts, possibly by as much as 1 million barrels per day, three sources told Reuters on Friday as oil prices fell towards $70 per barrel and market analysts spoke of a new supply glut.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world's crude, meaning its policy decisions can have a major impact on oil prices.

Three OPEC+ sources said cuts were being discussed among options for Sunday, when OPEC+ ministers gather at 2 p.m. in Vienna (1200 GMT). Before then, OPEC ministers will meet at 11 a.m. on Saturday.

The sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd that was announced in a surprise move in April.

3M Co has struck a tentative settlement of at least $10 billion with a host of U.S. cities and towns to resolve water pollution claims tied to "forever chemicals," Bloomberg News reported on Friday, citing people familiar with the matter.

Hours earlier, chemical companies including Chemours Co, DuPont de Nemours Inc and Corteva Inc reached an agreement in principle for $1.19 billion to settle claims that they contaminated U.S. public water systems with the potentially harmful chemicals.

3M was scheduled to face trial on Monday against the City of Stuart, Florida. It was not immediately clear whether the trial will proceed.

Stuart claims that company made or sold firefighting foams containing per- and polyfluoroalkyl substances, or PFAS, despite knowing for decades that the chemicals can cause cancer and other ailments. The city has said it is seeking more than $100 million from 3M to pay for water filtration and soil remediation.

JPMorgan Chase & Co's President and Chief Operating Officer Daniel Pinto said loan demand is declining at a time when regional and small banks are also tightening credit.

"There is no doubt that regional banks and smaller banks are building up liquidity, building capital, so they are lending a bit less," Pinto told investors on Friday. "I don't think that the big banks have really changed their lending standards... there is not a huge amount of loan demand in the first place.

"Consumption remains positive, but there are some indications the economy is slowing, Pinto said. He expected the Federal Reserve to raise rates further.

"Likely the Fed will get to run towards 5.5% and then they will pause" to assess whether efforts to curb inflation have succeeded, Pinto said. If inflation accelerates further, the Fed could raise rates 50 basis points with a series of smaller rate hikes, he said.

Chemours Co, DuPont de Nemours Inc and Corteva Inc on Friday said they had reached an agreement in principle to settle claims that they contaminated U.S. public water systems with toxic "forever chemicals" for $1.19 billion.

The chemical companies are facing thousands of lawsuits in the U.S. over their alleged role in polluting the environment with perfluoroalkyl and polyfluoroalkyl, substances (PFAS) that have been used for decades in manufacturing nonstick coatings such as Teflon.

The companies, which deny the allegations, svaid that they expect to finalize a formal agreement by the second quarter of 2023. Chemours said it would contribute half the agreed amount, while the remainder would be provided by DuPont and Corteva.

Chemours will take a pre-tax charge in the current quarter of $592 million related to the fund.

Chrysler-parent Stellantis and General Motors paid a total of $363 million in civil penalties for failing to meet U.S. fuel economy requirements for prior model years, documents seen Friday by Reuters show.

The record-setting penalties include $235.5 million for Stellantis for the 2018 and 2019 model years and $128.2 million for GM covering 2016 and 2017, according to the National Highway Traffic Safety Administration (NHTSA), which administers the Corporate Average Fuel Economy program.

Jamie Dimon, the chief executive of U.S. bank JPMorgan Chase & Co, is visiting Taiwan on Friday, a source with direct knowledge of the matter said, his first trip to the island in a nearly a decade, after concluding a visit to China this week.

Dimon's trip to Taipei, where JPMorgan has had a banking presence since 1970, comes amid heightened tension over the democratically-governed island, which Beijing claims as its own territory. Taiwan strongly rejects China's sovereignty claims.

But China, which bristles at visits to Taiwan by foreign government officials, tends to ignore trips by business executives, who usually keep clear of politics.

"The Chinese are much more concerned about U.S. government contacts with Taiwan than they are with private firms and banks doing business," said Andrew Collier, managing director at Orient Capital Research in Hong Kong.

Volkswagen will start selling battery-powered versions of its VW bus in North America from 2024 onwards, the carmaker said on Friday, in what marks the reintroduction of the iconic model after a two-decade hiatus.

The introduction of the fully electric ID. Buzz will also include an extra-long version that can seat up to seven passengers and features a larger 85 kilowatt hour (kWh) battery to increase range.

"With the T4 generation, the VW bus left the USA and Canada 20 years ago. But the microbus – as the VW bus is called between New York and San Francisco – has retained its cult status right up to the present day," Volkswagen said in a statement.

All ID. Buzz vehicles for the North American market will be built at Volkswagen's plant in Hanover, Germany, the company said, adding batteries could be charged from 10%-80% in 25 minutes at available rapid charging stations.

Barclays Chief Executive C.S. Venkatakrishnan held a virtual town hall this week to address management changes that have led to about two dozen U.S. investment bankers fleeing in the last few weeks, people familiar with the matter said.

The bankers have left for rivals including Citigroup Inc, UBS Group AG and Jefferies Financial Group Inc, Reuters has reported. Venkatakrishnan's intervention underscores the pressure that the British bank is under to protect its U.S. investment banking franchise.

Barclays slipped to 14th from sixth in Refinitiv's Americas mergers and acquisitions league table in the first quarter of 2023, even as it jumped from ninth to fifth in the Europe, Middle East and Africa league table, as its U.S. dealmakers struggled to preserve market share amid a slowdown in transactions.

Venkatakrishnan promised during the meeting to invest in the investment banking business to boost morale, the sources said.

Boeing Co. CEO Dave Calhoun on Friday said progress on resolving supply chain problems has been "frustratingly slow" even as airlines' demand for planes has bounced back to pre-pandemic levels.

Boeing has seen progress in certain elements of its supply chain, such as engine forgings and castings, Calhoun said.

But the ability for aircraft makers like Boeing and European rival Airbus to meet customer demand for new planes will still be constrained "five years from now," he added.

"We've got to be smart about how we manage supply against that demand spike," Calhoun said at the Bernstein annual strategic decisions conference.

While other retailers, such as Macy's, struggle with a pullback in consumer spending, Lululemon is seeing just the opposite.