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Exclusive: U.S. minimum wage hikes to affect 1,400-plus Walmart stores


CHICAGO (Reuters) – Minimum wage increases across the United States will prompt Wal-Mart Stores Inc (WMT.N) to adjust base salaries at 1,434 stores, impacting about a third of its U.S. locations, according to an internal memo reviewed by Reuters.

The memo, which was sent to store managers earlier this month, offers insight into the impact of minimum wage hikes in 21 states due to come into effect on or around Jan. 1, 2015.

These are adjustments that Wal-Mart and other employers have to make each year, but growing attention to the issue has expanded the scope of the change. Thirteen U.S. states lifted the minimum wage in 2014, up from 10 in 2013 and 8 in 2012.

Wal-Mart spokeswoman Brooke Buchanan said the company was making the changes to “ensure our stores in the 21 states comply with the law.”

For Wal-Mart, the biggest private employer in the United States with 1.3 million workers, minimum wage legislation is not a small thing. Its operating model is built on keeping costs under close control as it attracts consumers with low prices and operates on tight margins.

In recent years, it has been struggling to grow sales after many lower-income Americans lost jobs or income in the financial crisis.

The Wal-Mart memo shows that there will be changes to its pay structure, including a narrowing of the gap in the minimum premium paid to those in higher skilled positions, such as deli associates and department supervisors, over lower grade jobs.

Wal-Mart will also combine its lowest three pay grades, which include cashiers, cart pushers and maintenance, into one base rate.

The changes appear in part to be an effort to offset the anticipated upswing in labor costs, according to a manager who was implementing the changes at his store.

“Essentially that wage compression at the upper level of the hourly associate is going to help absorb that cost of the wage increase at the lower level,” said the manager, who spoke on condition of anonymity.

MORE CHANGE TO COME?

Wal-Mart’s critics – including a group of its workers backed by labor unions – say the retailer pays its hourly workers too little, forcing some to seek government assistance that effectively provides the company with an indirect taxpayer subsidy. Labor groups have been calling for Wal-Mart, other retailers and fast-food chains to pay at least $15 an hour.

Wal-Mart has indicated it may make more changes to its compensation structure in 2015. Chief Executive Doug McMillon recently said the company would improve opportunities for workers, including getting the roughly 6,000 people who make the federal minimum wage of $7.25 an hour at its stores off that rate.

“In the world there is a debate over inequity, and sometimes we get caught up in that,” he told TV presenter Charlie Rose in an interview this month. McMillon said he would take steps to ensure the company is “a meritocracy, an opportunity for people to do more.”

The state minimum wage changes range from a 17 percent increase in South Dakota to $8.50 to a modest rise of 2 percent to $8.05 in Arizona. They will also impact many of Wal-Mart’s big retail rivals, such as Target Corp (TGT.N), and fast-food chains like McDonald’s Corp (MCD.N).

A Target spokeswoman said she could not provide details on how many employees might be impacted by the changes on Jan. 1. McDonald’s could not be immediately reached for comment.

   Wal-Mart estimates its average full-time hourly wage is $12.92, and says that it pays competitive wages and offers its employees ample opportunity for advancement.

Edward Jones analyst Brian Yarbrough said it is tough to estimate the cost impact of the minimum wage changes without knowing the number of Wal-Mart employees affected. While many employees might start out at the minimum rate, they advance to higher pay rates over time, he noted.

Wal-Mart said last month that investment in wages and higher health care costs drove a 3.5 percent increase in operating expenses in its most recent quarter. Wal-Mart is unlikely to cut staff or reduce hours to keep those costs in check, given that it has made a renewed push to improve service in its stores, Yarbrough said.

(Reporting by Nathan Layne; Editing by Michele Gershberg and Martin Howell)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/qPLXUYxEYyw/story01.htm

U.S. jobless claims fall to seven-week low


WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, underscoring the economy’s sustained strength.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 280,000 for the week ended Dec. 20, the Labor Department said on Wednesday. It was the lowest reading since Nov. 1 and marked the fourth straight week of declines.

“The labor market is tightening up. Any job losses are just normal frictional unemployment in a healthy growing economy,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

The report came a day after the government reported the economy expanded at its fastest pace in 11 years in the third quarter and consumer spending increased solidly in November.

Economists polled by Reuters had forecast claims ticking up to 290,000 last week. The prior week’s data was unrevised.

U.S. stocks were trading higher on the report, adding to a five-day winning streak that had pushed the Dow Jones Industrials .DJI and SP 500 .SPX to closing records.

Yields on U.S. Treasury debt rose to two-week highs. The dollar dipped against a basket of currencies after scoring its highest level in nearly nine years earlier this week.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 8,500 to 290,250 last week.

“What we have seen in the data over the past few months looks favorable for the labor market,” said Daniel Silver, an economist at JPMorgan in New York.

The Federal Reserve last week gave the economy a vote of confidence, lowering its unemployment rate forecast and signaling it could start raising interest rates in mid-2015.

The U.S. central bank has kept its short-term interest rate near zero since December 2008.

Broadening job gains are starting to spur faster wage growth, which together with lower gasoline prices should boost consumer spending and help the economy weather slowing global demand.

The claims report showed the number of people still receiving benefits after an initial week of aid rose 25,000 to 2.40 million in the week ended Dec. 13.

The so-called continuing claims data covered the week during which the government surveys households to compile the unemployment rate for December.

Continuing claims rose by 80,000 between the November and December survey periods, suggesting the jobless rate probably held at a six-year low of 5.8 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/j50I_Ue4ys4/story01.htm

Wall St. inches higher after five-day run, jobless data


NEW YORK (Reuters) – U.S. stocks edged higher on Wednesday, extending a five-day winning streak that pushed the Dow and SP 500 to new closing records and on the latest piece of economic data indicating the U.S. economy is strengthening.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 280,000, its fourth straight week of declines, and below the forecast of 290,000.

“Economic data has been consistently positive,” said Peter Kenny, chief market strategist at Clearpool Group in New York.

“We are positioned well into the close of the year and we have all sorts of validation that the economy, the corporate earnings story and markets are on the most solid footing they have been on in quite some time.”

The Dow closed above 18,000 for the first time ever on Tuesday and the SP 500 ended at its 51st record of the year after an unexpectedly strong report on U.S. economic growth. The 51 new closing highs are the most since 1995 and fourth best in history.

Equity markets will operate on a shortened trading schedule Wednesday, closing at 1 p.m. EST (1800 GMT) ahead of the Christmas Day holiday on Thursday. Volume is expected to be light, which could exacerbate volatility.

The benchmark SP index has risen 5.5 percent in its latest rally, the best 5-day run since December 2011, fueled by a commitment by the U.S. Federal Reserve last week to take a “patient” approach toward raising interest rates amid solid economic data.

The Dow Jones industrial average .DJI rose 38.42 points, or 0.21 percent, to 18,062.59, the SP 500 .SPX gained 2.78 points, or 0.13 percent, to 2,084.95 and the Nasdaq Composite .IXIC added 9.72 points, or 0.2 percent, to 4,775.15.

Adamas Pharmaceuticals Inc (ADMS.O) jumped 22.6 percent to $17.96 after the U.S. Food and Drug Administration approved a drug developed with Actavis Plc (ACT.N) to treat dementia in Alzheimer’s patients. Actavis shares rose 0.3 percent to $256.67.

U.S. surgical implant maker Stryker Corp (SYK.N) is planning to make an offer for British medical device maker Smith Nephew Plc (SN.L) that may come within weeks, Bloomberg reported, citing sources. U.S.-listed shares of Smith Nephew (SNN.N) were down 2.5 percent to $37.10 while Stryker edged up 0.2 percent to $96.63.

Advancing issues outnumbered declining ones on the NYSE by 1,429 to 1,232, for a 1.16-to-1 ratio on the upside. On the Nasdaq, 1,203 issues rose and 976 fell for a 1.23-to-1 ratio favoring advancers.

The benchmark SP 500 index posted 59 new 52-week highs and 5 new lows. The Nasdaq Composite recorded 36 new highs and 9 new lows.

(Editing by Chizu Nomiyama and Jeffrey Benkoe)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/S4NVqUItujc/story01.htm

U.S. jobless claims fall for fourth straight week


WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, underscoring the economy’s enduring strength.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 280,000 for the week ended Dec. 20, the Labor Department said on Wednesday. It was the fourth straight week of declines in claims.

The report came a day after the government reported the economy expanded at its fastest pace in 11 years in the third quarter and consumer spending increased solidly in November.

Economists polled by Reuters had forecast claims ticking up to 290,000 last week. The prior week’s data was unrevised.

U.S. financial markets were little moved on the data ahead of an early close for the Christmas Day holiday.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 8,500 to 290,250 last week.

The Federal Reserve last week gave the economy a vote of confidence, lowering its unemployment rate forecast and signaling it could start raising interest rates in mid-2015.

Broadening job gains are starting to spur faster wage growth, which together with lower gasoline prices should boost consumer spending and help the economy weather slowing global demand.

A Labor Department analyst said there were no special factors influencing last week’s claims data.

The report showed the number of people still receiving benefits after an initial week of aid rose 25,000 to 2.40 million in the week ended Dec. 13.

The so-called continuing claims data covered the week during which the government surveys households to compile the unemployment rate for December.

Continuing claims rose by 80,000 between the November and December survey periods, suggesting the jobless rate probably held at a six-year low of 5.8 percent.

(Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/j50I_Ue4ys4/story01.htm

Ruble stable, but S&P downgrade warning weighs


MOSCOW (Reuters) – Russia’s ruble stabilised on Wednesday, as exporters selling foreign currency countered the effect of a ratings agency saying it could downgrade Russia’s sovereign debt to ‘junk’ status as soon as next month.

At 1310 GMT (8.10 a.m. ET), the ruble was around 0.3 percent weaker against the dollar at 54.65 RUBUTSTN=MCX.

It lost 0.6 percent versus the euro to 66.85 EURRUBTN=MCX but traded in narrow ranges against both currencies in thin afternoon trading. The ruble has swung back and forth wildly in recent weeks, with intraday moves of more than 10 percent at times, the widest fluctuations since the 1998 financial crisis.

Late on Tuesday, Standard and Poor’s revised Russia’s credit ratings to creditwatch negative from negative, warning a deterioration in the country’s monetary flexibility could lead the agency to put its sovereign rating in ‘speculative’ territory as soon as mid-January.

“A review of the ratings in foreign and local currency to ‘junk’ level threatens to strengthen outflows from portfolio investments and to pressure the ruble,” Dmitry Polevoy, chief economist for Russia and CIS at ING Bank, said in a note.

“Therefore, the near-term prospects for the ruble remain highly uncertain.”

Central bank plans announced on Wednesday to start lending money in foreign currencies to companies and banks willing to use their foreign loans as collateral did little to help the currency.

The ruble’s decline was checked by exporters selling part of their foreign-currency earnings, both to meet tax payments due before the end of the month and in response to a government order from Tuesday forcing certain state exporters to start selling hard currency.

“It’s more or less calm at the moment … exporters are selling foreign currency, perhaps not entirely of their own free will,” said Pyotr Neimyshev, a forex trader at Okritie bank.

“We could end the year at around 52-53 rubles per dollar, but after the holidays (Jan. 1-11), I don’t rule out that foreign currency will strengthen. I wouldn’t leave long positions in the ruble over the holidays.”

(Reporting by Lidia Kelly, Alexander Winning and Vladimir Abramov; Editing by Thomas Grove and Robin Pomeroy)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7SxsEiur6nM/story01.htm

Buffett-backed BYD’s chairman increases stake, may buy more


SHANGHAI (Reuters) – BYD Co Ltd 002594.SZ(1211.HK), the Chinese carmaker backed by Warren Buffett, said on Wednesday its chairman has increased his stake in the company and may buy more shares as a sign of confidence following the stock’s record slump last week.

Wang Chuanfu, BYD’s chairman, president and CEO, bought one million of BYD’s Hong Kong-listed shares on Tuesday, raising his stake in the company to 23.1 percent, BYD said in statements posted on the Shenzhen and Hong Kong stock exchanges.

“Mr Wang has indicated that he does not rule out the possibility of further increasing his shareholding in the company if and when appropriate in the future,” BYD said.

The move shows that Wang “has confidence toward the future prospects of the company,” according to the statements.

BYD’s Hong Kong shares fell 29 percent on Thursday in record trading, logging their biggest one-day drop, in an unexplained slide that wiped out around $1.2 billion of its market capitalization.

The shares have since stabilized after BYD held calls with analysts and issued statements saying the company’s fundamentals remained healthy.

BYD’s statements came after the China and Hong Kong markets closed.

On Wednesday, its shares rose 3.5 percent, outperforming the main Hang Seng Index’s .HSI 0.07 percent rise, while its Shenzhen stock was up 4.3 percent versus the Shenzhen composite index’s .SZSME 1.8 percent gain.

(Reporting by Samuel Shen in Shanghai and Lee Chyen Yee in Singapore, editing by Louise Heavens)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/QQH0vOvFWAw/story01.htm

China offers fresh support for outbound investment


BEIJING (Reuters) – China will simplify currency rules and step up credit support for firms investing overseas, the cabinet said on Wednesday.

It was the government’s latest move to encourage use of excess factory capacity at home and help local firms grow globally.

The government will allow firms investing abroad to exchange money directly at banks without first registering with the authorities.

It will also help firms to “go out” to expand abroad with more bank support for major equipment makers, the cabinet said, calling for “diversified use of foreign exchange reserves”.

Increased outbound investment helps China to export surplus capacity and makes Chinese products, especially equipment products, more competitive internationally, the cabinet said.

The government has been encouraging firms to invest abroad to help slow down the rapid build-up of foreign exchange reserves and help local firms become more competitive internationally.

The government will simplify its approval procedure for banks to set up branches overseas, and for firms to list shares abroad and pursue mergers and acquisitions, it said.

The geographical limit on issuing yuan-denominated bonds by domestic firms and banks in overseas markets will be abolished.

In September, the Ministry of Commerce simplified rules to make it easier for domestic companies to invest overseas.

China’s outbound investment by non-financial firms hit $89.8 billion in the first 11 months of 2014, up l1.9 percent from a year earlier. China drew $106.2 billion in foreign direct investment (FDI) in the first 11 months.

At the meeting, the cabinet also pledged to “revitalise” fiscal funds to support the slowing economy. It aimed to channel some leftover money into public facilities and infrastructure projects, the cabinet said.

But it pledged to crack down on “special fiscal accounts” that local governments have used to contain off-budget funds that are out of the central government’s reach.

(Reporting by Kevin Yao; Editing by Jeremy Gaunt/Ruth Pitchford)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/0R2G6O8fDEY/story01.htm

Oil falls, near $60 on supply glut, strong dollar


LONDON (Reuters) – Brent oil fell on Wednesday, trading around $60 per barrel weighed down by strong supply in the United States and a rising dollar.

Brent for February delivery was down $1.50 to $60.19 at 1327 GMT after gaining $1.58 on Tuesday. It hit a low of $59.93 earlier in the session.

U.S. crude was down $1.17 to $55.95 a barrel, after closing $1.86 higher in the previous session.

Trade was thin as many in the European and U.S. market were off for the Christmas break.

Data from the American Petroleum Institute (API), an industry group, showed U.S. crude stocks rose by 5.4 million barrels in the week ended Dec. 19. Analysts had expected a drop of 2.3 million barrels.

In Europe, gasoline stocks reached their highest in five months in the Amsterdam-Rotterdam-Antwerp oil hub, data from PJK International showed.

A supply glut in the United States and elsewhere has helped push oil down some 46 percent since it reached this year’s peak above $115 per barrel in June.

“There was a large build in the API data and there are high stocks for now, although strong U.S. GDP growth should help demand,” said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.

The dollar index stayed close to its highest since April 2006 after a revised third-quarter U.S. gross domestic product report surprised with the fastest growth in 11 years.

A strong dollar makes commodities priced in the greenback more expensive for holders of other currencies.

Investors were awaiting official U.S. oil inventory data to be released by the U.S. government’s Energy Information Administration on Wednesday. [EIA/S]

(Additional reporting by Keith Wallis in Singapore; Editing by Jason Neely)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fRXie1zQjSw/story01.htm

U.S. mortgage applications rose last week: MBA


(Reuters) – Applications for U.S. home mortgages rose last week as activity picked up and rates fell, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 0.9 percent in the week ended December 19.

The MBA’s seasonally adjusted index of refinancing applications rose 1.1 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.3 percent.

Fixed 30-year mortgage rates averaged 4.02 percent in the week, down 4 basis points from 4.06 percent the week before. The 4.02-percent rate is the lowest since May 2013, MBA said.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By David Gaffen; Editing by Diane Craft)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/cbYomC7R7II/story01.htm