News Archive


Japanese stocks, dollar up as robust U.S. GDP lifts holiday mood


TOKYO (Reuters) – Japanese stocks rallied and the dollar stood tall on Wednesday thanks to surprisingly robust U.S. economic growth, helping investors head into the Christmas holidays in a more relaxed mood after the global markets turbulence of the past two weeks.

Risk appetite got a helping hand from revised data showing the U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear.

That drove both the Dow .DJI and the SP 500 .SPX to record closing highs overnight.

Tokyo’s Nikkei .N225 followed suit, rising 1 percent and South Korea’s Kospi .KS200 was up 0.2 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was steady.

The strong U.S. GDP prompted markets to bring forward the timing of a likely hike in interest rates by the Federal Reserve, pushing Treasury yields up and giving an already strong dollar fresh momentum.

The two-year U.S. Treasury yield US2YT=RR rose to a high not seen in almost four years in light of the Fed expectations.

The greenback fetched 120.650 yen JPY=, approaching a 7-1/2 year peak of 121.86 yen touched earlier this month. The euro sank to a fresh 28-month low of $1.2165 EUR=.

“Risk appetite is returning at a faster pace than expected, thanks to the temporary pull back in Russia risk and a well balanced statement from the Fed last week,” said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

However, given holiday-thin trading conditions and continued instability in crude oil prices, equities and currencies could experience volatility, he said.

The Russian rouble plunged to an all-time low in mid-December on the back of lower oil prices and Western sanctions, which make it almost impossible for Russian firms to borrow from the West.

The rouble has since pulled back a little, shored up by informal capital control measures designed to head off a repeat of the inflation and protests that marked Russia’s 1998 financial crisis.

U.S. crude oil dipped 38 cents to $56.74 a barrel CLc1 after gaining $1.86 overnight after the U.S. growth figures. The GDP data bolstered demand expectations for the commodity that sank to a 5-1/2-year low last week and spooked global financial markets.

Gold moved sideways as the improved sentiment dampened investor appetite for the safe-haven metal. Spot gold XAU= stood little changed at $1.177.00 an ounce.

(Editing by Shri Navaratnam)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6DQ9_rqMD5Y/story01.htm

Oil up on stronger-than-expected U.S. GDP growth data


NEW YORK (Reuters) – Oil rose by more than $2 a barrel on Tuesday, rallying for a second time in three days, after data showing the fastest rate of U.S. economic growth in 11 years bolstered expectations for crude demand.

Crude markets pared gains after preliminary data from industry group American Petroleum Institute showed a build of more than 5 million barrels in U.S. crude stockpiles last week versus expectations for a drop. The U.S. Energy Information Administration will release official inventory data at 10:30 a.m. ET on Wednesday. [API/S][EIA/S]

After a brief decline in early New York trade, oil resumed an upward trend seen during its Asian and London hours, with daily gain accelerating to nearly 3 percent after release of stronger-than-expected U.S. gross domestic product data.

“I was kind of surprised that we rose that much, though the GDP data was good, as fundamentally, nothing has changed much in the oil supply situation,” said Joseph Posillico, senior vice president of energy futures at Jefferies in New York.

“We’re likely to see more of these sort of exaggerated moves over the next week due to the thinner trading volumes around the holidays.”

The Commerce Department revised its estimate of U.S. economic growth in the third quarter to a 5.0 percent annual pace from 3.9 percent previously. It was the fastest growth pace since the third quarter of 2003.

Traders, betting oil prices had bottomed somewhat after last Thursday’s 5-1/2 year lows, pounced on the GDP data and ensuing rally in U.S. equity markets to push up prices of both benchmark Brent oil and U.S. crude.

Brent LCOc1 settled up $1.58 at $61.69 a barrel, continuing its rise in post settlement to $62.14.

Brent has almost halved in value over the past six months as high quality crude from North America overwhelmed demand. It hit 5-1/2 year lows of $58.50 last week.

U.S. crude CLc1 finished the session up $1.86 at $57.12, and rose thereafter to as high as $57.56.

After the API data, both Brent and U.S. crude pared about 50 cents in gains.

Some analysts say Brent’s apparent floor at near $60 is an illusion as a much deeper sell-off is on the cards technically.

Arab producers in OPEC expect oil to rebound to between $70 and $80 by the end of next year as a global economic recovery revives demand, OPEC delegates told Reuters this week.

(Additional reporting by Christopher Johnson and Henning Gloystein in Singapore; Editing by William Hardy, W Simon and David; Gregorio)

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

Shares gain on strong U.S. GDP data; oil rises


NEW YORK (Reuters) – U.S. and European shares rose on Tuesday, with the Dow industrials ending above 18,000 for the first time after an unexpectedly strong report on U.S. economic growth supported risk appetite and lifted oil prices.

Both the Dow and the SP 500 hit record closing highs after the Commerce Department said the final estimate of U.S. gross domestic product for the third quarter was revised up to a 5 percent annual pace, its quickest in 11 years, from 3.9 percent reported last month. Stronger consumer and business spending fueled the surge.

The data reassured investors that the U.S. economic expansion could buoy the global economy and that recent declines in oil prices were a boon for consumers. The data also boosted oil prices by supporting expectations of greater demand for crude.

The gains in U.S. shares pushed the Dow over 18,000 for the first time in its history. The index rose as high as 18,069.22 and is up about 175 percent from a 12-year closing low hit on March 9, 2009. The SP’s record close was its 51st such record this year.

“The GDP data just further emboldened investor confidence to buy stocks in the near term,” said Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds in San Francisco.

Other data showed U.S. consumer sentiment jumped in December to its highest level in nearly eight years on cheaper gasoline and better job and wage prospects.

The data strengthened the U.S. dollar, which hit its highest level against a basket of major currencies in over 8 years, while the euro plumbed 28-month lows against the greenback.

The U.S. data combined with positive economic news from Spain and Portugal to push European equities higher. A fall in Greek stocks limited gains in European shares, however, on the prospect of early elections that could put Greece’s rescue package at risk.

Weak sentiment in China, meanwhile, halted a four-day rally in emerging market shares and resulted in a measure of worldwide equity markets trading mostly flat.

MSCI’s all-country world index .MIWD00000PUS was last down just 0.05 percent at 419.93. Europe’s broad FTSEurofirst 300 index .FTEU3 closed up 0.57 percent at 1,374.8.

The Dow Jones industrial average .DJI closed up 0.36 percent at 18,024.17. The SP 500 .SPX closed up 0.17 percent at 2,082.17. The Nasdaq Composite .IXIC closed down 0.33 percent at 4,765.42.

U.S. safe-haven Treasury yields, which move inversely to prices, jumped following the U.S. data and a tepid five-year note auction. Benchmark 10-year Treasury yields US10YT=RR were last at 2.26 percent, from a yield of 2.16 percent late Monday.

The dollar index .DXY, which tracks the greenback versus a basket of six currencies, was last up 0.39 percent at 90.121.

Brent crude LCOc1 settled up $1.58 at $61.69 a barrel. U.S. crude CLc1 settled up $1.86 at $57.12 per barrel.

Spot gold prices XAU= were last up 5 cents at $1,174.71 an ounce.

(Additional reporting by Chuck Mikolajczak and Barani Krishnan in New York and Sudip Kar-Gupta and Christopher Johnson in London; Editing by Dan Grebler and Meredith Mazzilli)

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

Dow ends above 18,000 for first time on strong GDP report


NEW YORK (Reuters) – U.S. stocks rose on Tuesday, with the Dow closing above 18,000 for the first time ever and the SP 500 ending at a record after an unexpectedly strong report on economic growth.

The Nasdaq ended modestly lower, pressured by the biggest selloff in biotech names in many months, while trading was light ahead of the Christmas holiday. Markets will close early on Wednesday and will be closed all of Thursday.

Both the Dow and SP 500 hit intraday records in their fifth-straight day of gains. The Dow rose as high as 18,069.22 and is up about 175 percent from a 12-year closing low hit on March 9, 2009. The SP’s record close was its 51st such record this year.

The final estimate for third-quarter U.S. economic growth was revised up to a 5 percent annual pace, its quickest in 11 years and easily topping expectations for growth of 4.3 percent.

“Everyone is surprised, and I’m definitely pleased,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York. “But the question is, how can inflation be so low when GDP is so high? Either this is just a one-off and GDP will fall back dramatically, or we’ll see a pickup in inflation, which could put more pressure on the Fed.”

The report spurred a broad rally, with nine of the ten primary SP 500 sectors higher on the day. The only group to fall was healthcare .SPXHC, down 2.2 percent alongside a massive drop in biotech stocks.

The Nasdaq biotech index .NBI fell 4.6 percent, its biggest one-day decline since April 10. Components of the index made up the top six percentage decliners on the SP; Celgene Corp (CELG.O) fell 6.5 percent to $106.12 while Biogen (BIIB.O) lost 4.7 percent to $335.76. Regeneron Pharmaceuticals (REGN.O) fell 4.6 percent to $394.05.

Gilead Pharmaceuticals (GILD.O) fell 3.7 percent to $89.45, extending Monday’s drop of 14 percent, which came after Express Scripts (ESRX.O) said it would abandon covering Gilead’s hepatitis C treatment in favor of a cheaper option.

“This is just a knee-jerk reaction, based on a bear thesis that Express Scripts will start to dictate prices,” said Kaufman. “I don’t see how this is any different than any other company in another sector getting more competition. Soon people will go through the stocks one-by-one to see which got oversold.”

The Dow Jones industrial average .DJI rose 64.67 points, or 0.36 percent, to 18,024.11, the SP 500 .SPX gained 3.64 points, or 0.18 percent, to 2,082.18 and the Nasdaq Composite .IXIC dropped 16.00 points, or 0.33 percent, to 4,765.42.

Advancing issues outnumbered declining ones on the NYSE by 1,990 to 1,090, for a 1.83-to-1 ratio on the upside; on the Nasdaq, 1,399 issues rose and 1,353 fell for a 1.03-to-1 ratio favoring advancers.

The benchmark SP 500 index was posting 124 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 182 new highs and 53 new lows.

About 5.41 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 7.78 billion.

(Editing by Meredith Mazzilli)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/XNn_El73Bcw/story01.htm

Coke to cut up to 2,000 jobs in coming weeks: WSJ


(Reuters) – Coca-Cola Co (KO.N) plans to cut 1,000-2,000 jobs globally in the coming weeks, the Wall Street Journal reported, citing people familiar with the matter.

The job cuts are part of Coke’s $3 billion cost-cutting program, which it announced in October after posting a 14 percent drop in third-quarter profit, according to the Journal.

Job-cut notices will go out to North American staffers by Jan. 8 and international employees will be given a timeline for job cuts by Jan. 15, the Journal said. (on.wsj.com/1CCr0re)

The impact is expected to be significant at Coke’s headquarters in Atlanta and global regional offices, where more than 10 percent of corporate staff could lose their jobs, according to the newspaper.

The company’s bottling and distribution divisions, which account for more than 85 percent of its over 130,000 employees, are largely out of the firing line for now, the Journal said.

A Coke spokeswoman said the company had informed employees that the restructuring would impact jobs, but she did not confirm the estimated number of job cuts.

She said Coke was still figuring out how many jobs it would cut and employees in some eliminated positions would be allowed to apply for other jobs in the company.

Coke is also introducing stricter budgeting such as asking executives to swap limousines for taxis, and has canceled its Christmas party for Wall Street analysts, the Journal reported.

The company raised in October its cost-savings target to $3 billion by 2019 from $1 billion announced in February.

Wintergreen Advisers, a minority shareholder of Coke, called last week for the replacement of Chief Executive Muhtar Kent, calling him “incapable of leading Coke’s turnaround”.

Atlanta-based Coke’s shares were up 1.7 percent at $43.08 in late afternoon trading on the New York Stock Exchange.

(This story corrects paragraph 3 to say “international employees will be given a timeline for job cuts”, not “job-cut notices”, by Jan.)

(Reporting by Yashaswini Swamynathan in Bengaluru and Anjali Athavaley in New York; Editing by Sriraj Kalluvila, Saumyadeb Chakrabarty and Kirti Pandey)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/k7r5mOWxH-E/story01.htm

Keurig recalls 7.2 million single-serve brewers, stock falls


(Reuters) – Keurig Green Mountain Inc said on Tuesday it was recalling about 7.2 million single-serve brewing machines because they could overheat and spray hot liquids on users.

Keurig’s shares fell 2.2 percent to $136.77 in afternoon trading. The recall comes as the company tries to roll out new brewers and expand beyond the single-serve coffee business.

“We believe the earnings impact specifically from the recall is unlikely to be material but that it could hurt brand perception, negatively impacting future brewer sales,” Mark Astrachan, an analyst at Stifel, Nicolaus Co, said in a note.

The company said the machines could malfunction especially if used to brew more than two cups in quick succession. The recall affects 6.6 million machines in the United States and 564,000 in Canada.

The affected machines are Keurig Mini Plus brewers made between December 2009 and July 2014 with the model number K10 and serial numbers starting with 31, the company said on its website. (bit.ly/1GT8a1G)

Keurig has received about 200 reports of hot liquid escaping from the brewer, including 90 reports of burn related injuries, the U.S. Consumer Product Safety Commission said.

Health Canada said Keurig had recorded 17 incidents of minor burns in Canada. (bit.ly/1vjxlmz)

In a November filing, Keurig said it had informed the Commission and Health Canada about a potential issue involving certain Mini Plus brewers.

The company said that after accounting for expected insurance claims, it had recorded a net charge in its fiscal year 2014 of $10 million to remediate the issue.

Keurig spokeswoman Suzanne DuLong said no lawsuits have been filed against the company over injuries associated with the Mini Plus.

Keurig is working to determine how many of the reports in the United States and Canada are related to problems associated with the recall, DuLong said in a statement.

The Keurig Mini Plus is a single-serve brewing machine used to prepare hot beverages. It costs about $100 and is sold through retailers, department stores and Keurig’s website.

DuLong said the company “recently identified the issue and took immediate action.” The timing of Tuesday’s recall was determined by the Consumer Product Safety Commission, she said.

(Reporting by Ramkumar Iyer in Bengaluru; Editing by Ted Kerr and David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/CUBD-7g6EsI/story01.htm

Third-quarter U.S. economic growth strongest in 11 years


WASHINGTON (Reuters) – The U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear.

Some of the strength appears to have been sustained, with other data on Tuesday showing consumer spending rising solidly in November, offsetting surprisingly weak durable goods orders.

The reports further set the U.S. economy apart from the rest of the world, where growth is sputtering or activity shrinking.

“Our economy is firing on most cylinders, whereas the global economy is essentially in dire need of a spark,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester Pennsylvania.

In revising up its third-quarter gross domestic product estimate, the Commerce Department cited stronger consumer and business spending than previously assumed. It was the fastest pace since the third quarter of 2003.

Previously, the economy was reported to have expanded at a 3.9 percent annual rate. Growth has now been revised up by a total of 1.5 percentage points since an initial estimate in October.

Coupled with a hearty 4.6 percent advance in the prior three months, the economy has now experienced the two strongest back-to-back quarters of growth since 2003. Underscoring the firming fundamentals, growth in domestic demand was revised up to a 4.1 percent pace, the fastest in nearly four years.

Wall Street had expected growth would be raised to only a 4.3 percent rate.

U.S. and European shares rose as the data reassured investors that the U.S. economic expansion could buoy the global economy and that recent declines in oil prices to 5-1/2-year lows were a boon for consumers.

The Dow Jones industrial average .DJI broke through 18,000 points for the first time and the SP 500 .SPX set a new intraday high. Prices for U.S. Treasury debt fell, while the dollar reached a fresh eight-year high against a basket of currencies and oil prices gained.

WEAK ORDERS

In a second report, the Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, were unchanged in November after a decline of 1.9 percent in October.

Economists, who had expected a strong rebound, largely shrugged off the data, which was at odds with sturdy readings on industrial production and fairly upbeat factory surveys.

“We think this report paints an unrealistically bad picture of the current orders environment and payback is likely,” said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, North Carolina.

In a third report, the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6 percent in November after gaining 0.3 percent in October.

Economists raised their fourth-quarter consumer spending estimates by as much as four-tenths of a percentage point, but mostly left their GDP growth forecast unchanged between a 2.2 percent and 2.8 percent rate, given the apparent weakness in business investment.

A rapidly strengthening labor market and lower gasoline prices are boosting consumer outlays, which should help to cushion the economy from slowing growth in China and the euro zone, and a recession in Japan. It should also ensure sufficient momentum to keep the Federal Reserve on course to start raising interest rates by mid-2015.

Consumer spending grew at a 3.2 percent pace in the third quarter, a sharp upward revision from the previously reported 2.2 percent rate, partly due to stronger healthcare spending.

Growth in business investment was raised by 1.8 percentage points to an 8.9 percent rate.

Inventories were also revised higher, with restocking now being neutral to growth instead of being a mild drag. But that means inventories could undercut output in the fourth quarter.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/F3g_ob9oelo/story01.htm

Family Dollar adjourns shareholder meeting on Dollar Tree deal


(Reuters) – Family Dollar Inc (FDO.N) shareholders voted not to proceed with a vote on an agreed takeover by Dollar Tree Inc (DLTR.O) in the face of a higher hostile bid from Dollar General Corp (DG.N).

Dollar General, the biggest U.S. discount retailer, took its $9.1 billion offer directly to Family Dollar shareholders in September after Family Dollar’s board rejected its offer, citing antitrust concerns.

Instead, Family Dollar stuck to its agreement to be bought by smaller rival Dollar Tree for $8.50 billion in cash and stock.

The delay in the vote will give the Federal Trade Commission more time to evaluate the Dollar General offer, Joseph Feldman, an analyst at brokerage Telsey Advisory Group, said.

Family Dollar said the meeting to vote on the Dollar Tree deal would now be held on Jan. 22 after it was determined that there were insufficient votes to approve the deal on Tuesday.

About 72 million shares were voted in favor of the adjournment, with 15 million against.

Dollar Tree declined to comment.

Dollar General extended its tender offer to Jan. 30 from Dec. 31.

“Investors are interested in having a greater hearing of the higher bid by Dollar General,” SP Capital IQ’s Efraim Levy told Reuters. “I would have been surprised if voters had accepted the current offer.”

The adjournment of Tuesday’s meeting — postponed from Dec. 11 — could lead to a higher offer from Dollar Tree, analysts said.

Family Dollar shares were up marginally at $79.38 in late morning trading on the New York Stock Exchange, while Dollar General’s shares were up 1.6 percent at $69.76.

Dollar Tree shares were up 1.8 percent at $70.33 on the Nasdaq.

(Additional reporting by Shailaja Sharma in Bengaluru; Editing by Kirti Pandey and Joyjeet Das)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/q1cnrEJzELU/story01.htm

Standard Chartered replaces long-time advisor UBS with Bank of America


LONDON (Reuters) – Standard Chartered (STAN.L) has replaced UBS (UBSG.VX) as one of its corporate advisors as it attempts to improve its relationship with major shareholders.

The Asia-focused bank said on Tuesday it had replaced UBS as one of its corporate brokers with Bank of America Merrill Lynch (BAC.N). JPMorgan Cazenove (JPM.N) will remain as the other broker.

Reuters reported on Dec. 2 that Standard Chartered was considering replacing UBS, which has been a long-standing advisor to the bank. One of UBS’s most senior bankers, Tim Waddell, left the bank to join Bank of America in September, and was close to Standard Chartered.

Standard Chartered is battling to turn around its business after a trio of profit warnings and a slump in its share price this year.

Several of its biggest shareholders have told Reuters Chief Executive Peter Sands should be replaced, probably next year, and other investors said they were unhappy with governance.

Corporate brokers act as a link between a listed company and its investors. Chiefly a British business relationship, it can be a way into more lucrative advisory business, such as fundraising and mergers and acquisitions.

(Reporting by Steve Slater; Editing by Greg Mahlich)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/U8R8kFyDt7o/story01.htm