The daily business briefing: November 7, 2018

Harold Maass
The Toyota logo in Detroit, Michigan
SAUL LOEB/AFP/Getty Images
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Stock futures rise as midterm results provide clarity, gridlock

U.S. stock futures rose early Wednesday as the U.S. midterm elections resulted in a divided Congress with Democrats seizing the House but Republicans increasing their Senate majority. Investor sentiment was buoyed by the clarity the results provided after months of uncertainty, and by the historic gains the stock market has made whenever there is gridlock in Washington. That means the markets don't expect President Trump's business-friendly actions to be rolled back, though he will face new resistance to combative trade policies. Futures for the Dow Jones Industrial Average gained 0.8 percent, while those of the S&P 500 and Nasdaq-100 were up by 0.9 percent and 1.3 percent, respectively. On Tuesday, the Dow gained 0.7 percent, while the S&P 500 and the Nasdaq Composite rose 0.6 percent. [CNBC, MarketWatch]


Toyota shares gain after quarterly profit surges despite U.S. sales dip

Toyota shares closed up by 2.1 percent on Tuesday after the Japanese automaker reported a 28 percent increase in its quarterly net profit and raised its forecast for the full year. Toyota said its July-September profit reached $5.2 billion, up from $4 billion the year before. Quarterly sales rose by 2 percent. Toyota sold 2.183 million vehicles in the quarter, up from 2.175 million vehicles in the same quarter last year. The slight increase came as sales dipped in the U.S. and Japan, but rose in Europe, Central and South America, and in other countries in Asia. Executives said the company is considering dropping underperforming models in the U.S. [The Associated Press]


Mortgage applications fall as interest rates rise

Mortgage applications fell by 4 percent last week compared to a week earlier, according to the Mortgage Bankers Association's seasonally adjusted index. The drop marked a 16 percent decline from a year ago. It came as mortgage rates hit an eight-year high, rising to 5.15 percent from 5.11 percent for 30-year fixed-rate mortgages, the highest rate since April 2010. Rising rates are pinching the housing market by making homes less affordable. "Housing supply has been quite constrained for several years. As a result, the housing market has been out of whack, with home prices increasing at twice the rate of income growth," said Michael Fratantoni, the MBA's chief economist. "That was not sustainable." [CNBC]


Theresa May says she won't accept Brexit deal 'at any cost'

British Prime Minister Theresa May said Tuesday that she would not accept a Brexit deal "at any cost" as tense talks continue as the U.K.'s planned exit from the European Union approaches. The two sides remained deadlocked on the issue of keeping trade and travelers flowing freely across the border between Ireland, which is a member of the EU, and the U.K.'s Northern Ireland. May met with her Cabinet on Tuesday to brief them on progress toward a deal. The meeting followed unconfirmed reports that May and the EU had neared a breakthrough on customs issues, reportedly including the Irish border, but May faces pressure from pro-Brexit Cabinet members to avoid any solution that would bind Britain to EU trade rules indefinitely after it exits the bloc in March. [The Associated Press]


Conagra recalls 2.4 million boxes of Duncan Hines cake mixes

Conagra Brands said Tuesday it had recalled 2.4 million boxes of Duncan Hines cake mixes because of possible salmonella contamination. The Food and Drug Administration and the Centers for Disease Control and Prevention found salmonella in a sample of Duncan Hines Classic White cake mix during an investigation into a salmonella outbreak. Five cases of salmonella are being investigated, and several people affected reported eating a cake mix before becoming sick. Conagra recalled boxes of Classic White and three other varieties — Classic Butter Golden, Signature Confetti, and Classic Yellow — "out of an abundance of caution," the company said in a statement to USA Today. The company also said it always encourages customers to make sure they follow baking instructions on the box. [USA Today]