filed for bankruptcy this past week, adding to a growing list of companies going bust in 2023. By the end of September, 516 U.S. companies had declared bankruptcy, according to S&P Global, twice the 263 insolvencies in the first nine months of 2022 and just shy of 518 in the first nine months of 2020, when Covid-19 lockdowns forced many businesses to shutter. Besides 2020, this year’s bankruptcy toll has been the worst since 2010.
Insolvencies have ticked up as companies with low cash reserves get squeezed by inflation and rising interest rates. Companies with weak balance sheets have been especially vulnerable to debt defaults. Last year, Barron’s flagged seven companies at risk of liquidity squeezes from weak cash balances and high short-term debt. Three on the list have filed this year, including Rite Aid.
The pharmacy chain has long struggled with a declining business, a dwindling number of stores, and losses—aggravated by lawsuits over its role in the opioid epidemic. Rite Aid said it would close more stores following the filing and sell assets.
Consumer-discretionary companies like Rite Aid have led the insolvency parade, squeezed by e-commerce and shoppers tightening their belts. As of September, 64 in the sector had filed. Across all sectors, 18 had liabilities of over $1 billion, notes S&P Global, including SVB Financial in March,
Bed Bath & Beyond
in April, and SmileDirectClub in September. Get ready for more.
Write to Evie Liu at [email protected]
President Joe Biden flew to Israel just after an explosion at a Gaza hospital, which the U.S. believes was caused by an errant Palestinian missile. Tensions spread. Markets opened strongly, then dipped as chip stocks took a hit after the U.S. imposed limits on
AI chips made for China. Treasury yields rose again after strong retail sales data, and stocks fell. The House also still needs a speaker. On the week, the
Dow Jones Industrial Average
lost 1.6%, the
was off 2.39%, and the
joined the S&P 500, replacing
Activision Blizzard. China’s Country Garden defaulted on its offshore debt after failing to pay $15 million during a grace period.
reported a 33% drop in quarterly earnings,
wealth unit slowed,
Bank of America
added nine million subscribers and raised prices.
filed for Chapter 11, felled by lawsuits over its role in the opioid crisis, and began selling assets. First up: its pharmacy benefit management business, for $575 million…Albemarle’s $4.2 billion bid for Australian lithium producer
fell apart after iron-ore miner Hancock Prospecting built a large minority stake…
said it would buy Swedish protein specialist Olink for $3.1 billion…Wyndham Hotel & Resorts rejected a $7.8 billon takeover bid from
Write to Robert Teitelman at [email protected]
Big Tech earnings kick off with results from
and Microsoft after the market closes on Tuesday.
and Amazon.com follow with reports on Wednesday. The four stocks make up about 18% of the S&P 500 index’s weight, according to Dow Jones Market Data.
two of three Detroit auto makers where the United Auto Workers are striking, announce earnings on Tuesday and Thursday, respectively. Management might provide an update on talks with the UAW. The strike also targets Chrysler parent
A busy week for economic data starts with an estimate of third-quarter gross domestic product on Thursday and ends with the personal-consumption expenditures price index for September on Friday. Economists see GDP at a seasonally adjusted 3.3%, and core PCE, which strips out food and energy prices, rising to 3.6%, according to FactSet.
and Exxon Mobil report financial results. The price of crude has remained below $100 a barrel despite geopolitical turmoil, which may be a major focus of the companies’ management.
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