News Archive

With Amazon in mind, Wal-Mart to offer free shipping for 30 days

Wal-Mart Stores Inc on Wednesday launched a free 30-day trial of ShippingPass, its two-day shipping program for shoppers in the United States, as the world’s largest retailer looks to take on Inc’s Prime subscription service.

Wal-Mart said that existing ShippingPass subscribers will get one month free. (

While Amazon Prime also offers two-day delivery on certain items, subscription to the service costs $99 a year. Wal-Mart’s two-day service costs $49 a year.

As with Prime, Wal-Mart’s service has no minimum order but it is valid only on items that are flagged with the ShippingPass logo. Wal-Mart does not offer same-day delivery, unlike Amazon which offers that option on a minimum order of $35.

Wal-Mart has announced a number of programs for its online business this year, including a partnership with ride-hailing services Uber and Lyft for grocery deliveries.

The innovations come at a time when Wal-Mart’s online sales growth is slowing. Sales through the company’s website and mobile app increased 7 percent in the latest quarter compared with 17 percent a year earlier.

(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Shounak Dasgupta and Ted Kerr)

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GE’s finance unit sheds its ‘too big to fail’ designation

General Electric Co.’s (GE.N) slimmed down financing arm shed its “too big to fail” designation on Wednesday, no longer deemed by the U.S. government “systemically important” and so liable to wreck the economy in the event it runs into distress.

The move by the Financial Stability Oversight Council was the first time a non-banking firm has been freed from the designation, a product of the financial crash that can trigger stricter oversight and requirements to hold more capital.

It was a big victory for GE CEO Jeffrey Immelt, who since April 2015 has reached agreements to unload about $180 billion worth of GE Capital businesses to lessen the industrial conglomerate’s exposure to the finance sector and shed the designation.

The oversight council, made up of all the heads of the major U.S. regulatory agencies, voted unanimously to remove the label it put on GE Capital in 2013, according to the U.S. Treasury. One member was recused.

“The council will remove a designation when that company no longer poses risks to U.S. financial stability,” Treasury Secretary Jack Lew said in a statement. “When it identifies a company that could threaten financial stability, it acts; when those risks change, the council also acts.”

GE shares were up 1.8 percent in mid-day trading after the announcement, outperforming a 1.4 percent gain for the broader SP 500 index .SPX.

“We have transformed GE by exiting most of financial services, acquiring Alstom, and investing to be a leader in the industrial Internet,” said Immelt in a statement, adding that in the future GE Capital will support the growth of the corporation’s industrial business.

Lifting the designation is expected to allow GE Capital to free up cash from its balance sheet and allow parent company GE to deploy it for other uses, particularly share buybacks and its increased focus on aviation and energy.

GE Capital CEO Keith Sherin said on CNBC the company will now save “several hundred millions” in regulatory oversight costs over a year.

In March GE Capital formally asked the government to remove the “too big to fail” label, saying the unit had shrunk to the point where it would not pose a major threat to the country’s financial stability if it experienced distress.


Since the Dodd-Frank Wall Street reform law was passed in 2010, regulators have designated only four non-banks as systemically important. GE Capital was the first to apply to have the designation removed, and has worked for more than a year with the council on how best to address its concerns.

The designation process has come under more scrutiny lately, with a federal judge ruling in March the label does not apply to life insurer MetLife (MET.N). The U.S. government has appealed the decision, and last week the authors of Dodd-Frank filed briefs supporting it.

American International Group (AIG.N), the insurer that received a federal bailout of $182 billion during the financial crisis, is also deemed systemically important, along with Prudential Financial Inc. (PRU.N).

The council’s 23-page analysis laying out reasons for rescinding GE Capital’s designation will likely not map out how other firms can apply for their own removal, as the FSOC has said its determinations are made on company-specific evaluations taking into account unique risks posed by each company.

The FSOC designated GE Capital because of its “reliance on short-term wholesale funding and its leading position in a number of funding markets,” Lew said.

“Since then, GE Capital has made fundamental strategic changes that have resulted in a company that is significantly smaller and safer, with more stable funding,” he added.

GE Capital has said it expects to return about $35 billion in dividends to the parent company, subject to regulatory approval, including about $18 billion this year.

Most investors had expected the designation to be lifted, but later this year.

The fact it came earlier than expected could give GE Capital “some upside flexibility on its $18 billion dividend guidance for this year” and “provides a bit more flexibility on industrial balance sheet leverage,” said Morgan Stanley analyst Nigel Coe in a note.

“We think investor attention will now naturally turn to potential MA targets for GE, unless we see a sharp share price pull-back,” said Credit Suisse analyst Julian Mitchell in a note, adding that digital and software, aviation and oil and gas acquisitions could be attractive.

(Reporting by Lisa Lambert; Editing by Chizu Nomiyama and Frances Kerry)

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EU commissioner urges Volkswagen to compensate drivers for diesel scandal

BRUSSELS/BERLIN Europe’s Industry Commissioner Elzbieta Bienkowska has called on Volkswagen (VOWG_p.DE) to also compensate European drivers after the company agreed to pay out up to $15.3 billion in the United States to settle claims over the diesel emissions scandal.

Under Volkswagen’s (VW) proposed settlement of U.S. civil claims published on Tuesday, the German group has pledged to compensate 475,000 owners of VW diesel-powered cars there, giving them the option to sell their vehicles back to VW or have them fixed.

Most U.S. owners will get $5,100 to $10,000, based on the pre-scandal value of their vehicles, but spending on buybacks could be much less if owners opt for repairs instead.

Bienkowska on Wednesday reiterated her call for non-discrimination, saying it would be unfair for VW diesel car owners in Europe to be treated differently just because of a different legal system.

“European consumers have been cheated in the same way as US customers, so it is only fair to offer comparable compensation without hiding behind legal arguments,” Bienkowska said in an emailed statement.

“I remain convinced that the best way to restore consumer trust is to treat them fairly, without the need for class action threats,” she said.

Bienkowska is echoing calls by consumer groups and lawyers whose chances of winning compensation from VW in Europe are diminished by the lack of mechanisms available to marshal complaints such as U.S.-style class-action lawsuits, as well as the fact that the rules on diesel emission-control devices are less stringent.

“VW is also obliged to pay damages to its German and European customers,” Christopher Rother, Berlin-based lawyer of U.S. law firm Hausfeld told Wednesday’s edition of business daily Handelsblatt.

“In this respect the legal situation is unambiguous,” Rother said.

VW has rejected such calls, saying car owners in Europe will not suffer a loss of value in their cars as VW is implementing steps approved by regulators to remove the illicit software from the vehicles in a campaign that so far has involved about 3.7 million of 8.5 million affected vehicles in the region.

“The situation in the U.S. is not comparable to Germany and Europe,” a VW spokesman said.

(Reporting by Alissa De Carbonnel, Andreas Cremer and Jan Schwartz; Editing by Greg Mahlich)

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North America leaders meet with trade threats, Brexit on their minds

OTTAWA The leaders of the United States, Canada and Mexico gather on Wednesday to stress the importance of trade at a time of mounting international doubts about the benefits of globalization.

The three nations belong to the North American Free Trade Agreement (NAFTA), which U.S. Republican presidential candidate Donald Trump on Tuesday vowed to renegotiate or even scrap if he wins power.

Trump says free trade has been disastrous for American workers, costing countless thousands of jobs and depressing wages. Similar complaints were heard in Britain ahead of a shock referendum vote last week to leave the European Union and its own free trade area.

“We’ve seen around the world many examples of protectionism, of concern, of stepping away from trade agreements,” Canadian Prime Minister Justin Trudeau told reporters on Tuesday, stressing the need for more rather than less cooperation.

“Better partnerships are a path to prosperity and that’s a compelling example that we want to showcase at a time where unfortunately people are prone to turning inwards, which will be at the cost of economic growth and their own success.”

Trudeau, U.S. President Barack Obama and Mexican President Enrique Pena Nieto will meet in Ottawa and are scheduled to hold a news conference at 3 p.m. (1900 GMT). The leaders, known informally as the Three Amigos, usually meet about once a year.

“We anticipate that leaders will spend a significant time talking about trade, for example, how to facilitate trade by automating our borders,” U.S. National Security Council official Mark Feierstein told reporters on Tuesday.

The trio will also discuss Britain’s so-called Brexit vote, which wiped more than $2 trillion off global equity markets and dealt a huge blow to the EU.

“The president will obviously want an opportunity to discuss … how we may be able to coordinate our efforts to insulate ourselves to the extent possible,” said Feierstein.

Earl Wayne, Obama’s former ambassador to Mexico, said that amid increasing criticism of NAFTA, leaders had to find a better way to explain that up to 14 million U.S. jobs depend on trade with Canada and Mexico.

“That’s a hard story to tell,” he told reporters. “There is a lot of skepticism, and it’s easier to sell the negative arguments.”

The three men will also pledge to produce 50 percent of their nations’ electricity from clean energy by 2025.

Obama is due to address the Canadian Parliament at 5.25 p.m. (2125 GMT).

(Writing by David Ljunggren; Editing by James Dalgleish)

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For one UK firm, Brexit vote means expansion abroad, not at home

HUNTINGDON, England Britain and the European Union are likely to take years to rewrite the rules that govern their business ties after the UK voted to leave the bloc.

Mike Ashmead can’t wait that long. The managing director of Encocam, a company that makes crash-test dummies, had planned to hire 120 people between now and 2018 to work at the company’s design and production base near Cambridge.

But at a hastily called meeting on Monday, four days after the so-called Brexit referendum, Ashmead and his management team shifted their sights to the continent.

The firm, which currently employs 172 people, immediately began enquiring about grants to open a design center in Spain and is considering Portugal, Ireland, Germany and Poland too.

“We cannot wait for two years to see what will come out of this,” Ashmead said in an interview at the firm’s headquarters in the town of Huntingdon, part of a high-tech cluster centered around Cambridge.

His worry is not the markets meltdown that was unleashed by Thursday’s vote. A plunge in the value of sterling, which touched a 31-year-low against the U.S. dollar earlier this week, is likely to help Encocam’s bottom line.

Eighty percent of its revenues come from exports – including motorcycles and lightweight panels for high-speed trains – which will now be cheaper for buyers, although the aluminum it imports from Germany and Italy will be more expensive.

What worries Ashmead is the likelihood of new immigration rules that could hinder his ability to hire engineers, designers and other skilled workers from abroad. It is a concern that is reverberating among many British employers who have long relied on foreign workers.

Telecoms giant Vodafone (VOD.L) has said the continued freedom of movement of people is vital for its choice of location.

According to the Office for National Statistics, 2.1 million people from other EU countries and 1.2 million non-EU nationals are working in Britain, compared with 28.2 million Britons.

One of the key pledges of politicians who campaigned to leave the UK has been to introduce more selective immigration rules, responding to widespread concerns among voters about strains on public services.

It is not clear whether those promises will survive the renegotiation of Britain’s entire relationship with the EU as a non-member. Many issues will be on the table, including the rights of UK banks to sell their services in the EU and myriad other trade issues.

The issue of foreign workers promises to be one of the thorniest because migration featured so prominently in the Leave campaign while the free movement of people is a key element of the EU’s single market for goods and services – something to which the UK wants to keep as much access as possible.

Ashmead expects it will become too hard to keep on hiring from abroad as his firm has done until now. While most of its employees are British, a quarter come from other EU countries.

“We love making things in this country and we will continue operations here, that is for sure,” Ashmead said as workers from Poland, Spain and Britain prepared high-tech replicas of human legs for simulations of a pedestrian being hit by a vehicle.

“But we have to have the ability to do it. I need the people who can make it happen.”



Leaders of the Leave campaign say their planned changes would give priority to immigrants who are most needed by British employers. Under the current system, EU citizens can work in Britain without visas, unlike workers from outside the bloc who often have to pass a complicated application process.

Employers have long complained that they cannot find enough British workers with the right skills to fill their vacancies, especially in areas such as engineering and programming. Recruiting from abroad has been an answer to that problem.

Extending administrative controls to workers from Britain’s neighboring countries does not sound promising to Encocam. It took the company 18 months to get a work visa for an engineer from India. The process at one point required three managers to travel to Birmingham to explain how the engineer had skills they could not find among workers locally nor in the EU.

Helen Dighton, Encocam’s head of sales, said Britain was unlikely to be able to spend sufficient time on designing a visa system that worked well for employers, given how many other issues it will have to deal with as it leaves the EU.Within hours of the announcement of the referendum result on Friday, she called Spain’s embassy in London to ask about grants and other assistance for foreign investors and has followed up with enquiries with other EU embassies.

By deciding to focus abroad, the firm is necessarily reining in its plans for Britain. It canceled a 500,000-pound ($668,500) investment in 20 meter-tall, automated storage tower which would have stood in a forecourt of one of the company’s sites to open up space for more production on its shopfloor.

Encocam also dropped a plan to buy a four-bedroom home for employees moving to the Huntingdon area which would have added to the five others it owns for staff accommodation.

Ashmead is worried about morale too. He fears the vote may unsettle some of his foreign staff, despite his assurances that, as far as Encocam was concerned, nothing will change for them.

“We don’t know how many people we’re going to be able to hang on to. They have pride. They have other options,” he said.

Angel Rivero Falcon, a 30-year-old chemical engineer from Spain who has worked at Encocam for more than four years, appreciated the support from the firm.

Still, he said friends in Spain had sent him emails asking whether he felt pressure to leave the UK and he believed the vote could change Britain’s image abroad as a welcome place for young, skilled Europeans.

Rivero Falcon has noticed a difference around him.

“The atmosphere in the street and on the shop floor; there is something going on there. It’s a strange feeling. I don’t know if people want us to be here,” he said.

(Editing by Susan Thomas)

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Oil prices rise on Norway strike threat; Brexit shock fades

SINGAPORE Oil rose on Wednesday as financial traders poured money back into commodities following the initial shock of Britain’s vote to leave the European Union, and as a potential strike in Norway and crisis in Venezuela threatened to cut supply.

Brent crude futures were trading at $48.95 per barrel at 0948 GMT, up 37 cents from their last settlement. U.S. crude was had climbed 44 cents to $48.29 a barrel.

Both oil benchmarks gained on Tuesday after markets shook off some of the shock from the referendum in Britain in which most voters chose to exit the EU.

“The risk-on tone should see commodities continue to push higher,” ANZ Bank said.

“Oil led the (commodities) sector as the shock of the UK voting to leave the EU wore off. Oil gains were solidified by news that the decline in Venezuela’s oil output appears to be accelerating, while a strike in Norway also looked like it would impact production,” it added.

Standard Chartered said that it expected oil prices to return to $50 per barrel rapidly after the Brexit-related fall as the referendum’s impact on demand was limited.

On the supply side, a looming strike by Norwegian oil workers threatened to cut output from the biggest North Sea producer.

In crisis-struck Venezuela, oil producers and refiners were struggling to keep output up due to power outages and equipment shortages, also supporting prices, traders said.

Additionally, the American Petroleum Institute (API) indicated in a report on Tuesday that U.S. crude inventories fell nearly 4 million barrels for the week to June 24, some two-thirds more than the 2.4 million barrels expected by analysts.

The U.S. Energy Information Administration will issue official stockpile data on Wednesday.

Despite the tightening supply-side, there are concerns that a looming refined products glut especially in Asia, which has halved benchmark Singapore production margins since January, might spill back into the crude market as refiners cut output and orders of their main feedstock, crude.

“Refining margins … have averaged lower than the same period last year, which should be supportive of lower fuels production,” said analysts at BMI Research.

Bankers also said that knock-on effects from Britain’s EU exit vote would continue to impact oil.

Citi said that Brexit’s “uncertainty and volatility … are both likely to be persistent for a long time to come”.

And investment bank Jefferies said: “Brexit … has brought currency considerations to the fore … Near-term, a strengthening U.S. dollar makes a barrel of oil more expensive in local emerging market currencies and so likely weighs on demand.”

(Editing by Joseph Radford)

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Toyota recalls 3.37 million cars over airbag, emissions control issues

WASHINGTON/TOKYO Japan’s Toyota Motor Corp (7203.T) has recalled 3.37 million cars worldwide over possible defects involving airbags and emissions control units.

The automaker on Wednesday said it was recalling 2.87 million cars over a possible fault in emissions control units. That followed an announcement late on Tuesday that 1.43 million cars needed repairs over a separate issue involving air bag inflators.

Some of the automaker’s gasoline-electric hybrid Prius models contain both of the potential defects, taking the total number of vehicles affected by the recalls to 3.37 million.

No injuries have been linked to either issue.

Toyota on Wednesday said evaporative fuel emissions control units in models produced from 2006 to 2015 including the Prius, Auris compact hatchback and its popular Corolla models were prone to cracks, which could expand over time and lead to fuel leaks.

Late on Tuesday it recalled Prius models and Lexus CT200h cars made from 2010 to 2012 over air bag inflators that could have a small crack in a weld, which could lead to the separation of the inflator chambers.

The inflator, which was not supplied by troubled maker Takata Corp (7312.T), could partially inflate and enter the vehicle interior, increasing the risk of injury, Toyota said.

(Reporting by Naomi Tajitsu in TOKYO and David Shepardson in WASHINGTON; Editing by Sandra Maler)

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Asia stocks bounce, bonds benefit from the unknown

SYDNEY Asian shares were swept up in a global relief rally on Wednesday as the immediate drag from the Brexit vote began to ebb and investors wagered central banks would ultimately ride to the rescue with more stimulus measures.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.0 percent to recoup around one-third of Friday’s stinging loss. Japan’s Nikkei .N225 climbed 1.6 percent, while Australian stocks added 0.8 percent.

In Europe, both the FTSE and DAX were seen starting around 1 percent higher, with the CAC up 1.2 percent. EMINI futures for the SP 500 ESc1 added 0.2 percent.

Any bounce was welcome, given global equity markets shed $3 trillion in value in the two days following Britain’s shock vote, according to SP Dow Jones Indices. Investors also pointed to solid U.S. economic data as helping to steady the ship.

Yet Britain’s course out of the EU remains unknown, leaving the future of the entire bloc and its currency an open question.

“The only certainty in Europe is uncertainty,” analysts at ANZ said in a note.

“European leaders appear to want to move forward with Brexit plans as quickly as possible, but political turmoil within Britain suggests a quick turnaround is unlikely,” they wrote.

The unease was evident in sterling, which slipped a third of a U.S. cent over the session to huddle at $1.3332 GBP=, not far from the recent 31-year low of $1.3122.

The euro regained only a little ground to $1.1064 EUR=, while the safe-haven yen steadied at 102.33 per dollar JPY=.

For now, investors are counting on central banks to step in with fresh stimulus to support markets over time.

Japanese Prime Minister Shinzo Abe urged the Bank of Japan to provide ample funds to ensure market liquidity.

In the first of Federal Reserve policymakers to comment since the vote, Governor Jerome Powell said it had shifted global risks “to the downside”.

That only reinforced market expectations the Fed will no longer be able to hike U.S. rates this year, and could even be forced to cut if the domestic economy falters.


On Wall Street, the Dow .DJI ended Tuesday up 1.57 percent, while the SP 500 .SPX gained 1.78 percent and the Nasdaq .IXIC 2.12 percent. Badly beaten financials .SPSY and tech stocks .SPLRCT were among the top gaining sectors.

The calmer mood was reflected in the CBOE Volatility Index .VIX which fell about 21 percent on Tuesday to near where it was before the vote. It was its largest one-day percentage decline since August 2011.

Aiding sentiment was data showing the U.S. economy grew at a 1.1 percent annualized rate in the first quarter, rather than the 0.8 percent pace reported last month.

Yet concerns about the impact of Brexit on global growth, plus all the talk central banks might have to ease anew to offset it, kept sovereign bonds well supported.

Yields on U.S. 10-year notes US10YT=RR held at 1.47 percent, just above a near four-year low of 1.406 percent hit on Friday. Comparable German DE10YT=RR and Japanese bonds JP10YT=RR are into record territory and pay negative yields.

Indeed, all Japanese bonds out to 40 years now offer less than 0.1 percent, a nightmare for pension funds and insurers desperate for a “decent” return.

In commodity markets, gold was firmer XAU= around $1,319.00 an ounce, off a low of $1,305.23 touched Tuesday.

Oil prices gained as a looming strike by Norwegian oil and gas field workers threatened to cut output. There were also reports oil producers and refiners in crisis-struck Venezuela were struggling to keep output up.

U.S. crude oil futures CLc1 were up 27 cents at $48.12, while Brent crude LCOc1 rose 21 cents to $48.79.

(Reporting by Wayne Cole; Editing by Eric Meijer and Richard Borsuk)

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Sony upbeat on games and robots but cuts outlook for image sensors

TOKYO Japan’s Sony Corp (6758.T) on Wednesday lifted the sales target for its games division next year on hopes for its new virtual reality headset, and said it would re-enter robots a decade after it last abandoned the business.

But the electronics giant cut its outlook for image sensor sales amid slowing demand for smartphones, and maintained its operating profit target of 500 billion yen ($4.9 billion) for the year beginning April.

The announcement comes as company watchers bank on sensors to continue driving Sony’s revival after years of struggle.

While the sensor slowdown is likely to disappoint, investors can take comfort in the unchanged profit target, which highlights Chief Executive Kazuo Hirai is keeping to a recovery track and has not given up on new technologies such as artificial intelligence and virtual reality.

Hirai at a news conference said the games business was set to be Sony’s biggest growth driver, helped by strong console sales, a rise in subscribers to its PlayStation network and the launch of its virtual reality headset.

The headset will be sold from October for $399, versus the $599 of a rival product from Facebook Inc’s (FB.O) Oculus Rift.

“It’s an area where Sony can leverage its expertise in cameras, filming, content production as well as entertainment assets,” Hirai said, lifting the division’s sales target range to 1.8 trillion to 1.9 trillion yen ($17.6 billion to $18.6 billion) from 1.4 trillion to 1.6 trillion yen.

He also confirmed Sony aimed to introduce a robot “capable of forming an emotional bond”.

Sony was a pioneer in robotics, launching dog AIBO in 1999 and humanoid QRIO in 2003. But efforts stalled during a decade-long struggle to cut costs in its consumer electronics business amid price competition from Asian rivals. It produced its last AIBO and QRIO in 2006.


Sony cut its sales outlook for its devices division, which includes image sensors used in smartphones, to a range of 1 trillion to 1.05 trillion yen from 1.3 trillion to 1.5 trillion yen.

Strong demand from smartphone makers such as Apple Inc (AAPL.O) had helped Sony recover from a slump in sales of consumer electronics such as television sets.

But Apple and other smartphone makers have seen slowing sales of high-end handsets since late last year, prompting Sony to recently cancel the development of advanced camera modules designed for high-end smartphones.

“The ongoing slowdown in profit growth appears inevitable through fiscal 2017,” Hirai said.

Asked about the impact of Britain’s vote to leave the European Union, Hirai said Sony aims to achieve its targets regardless of consequent currency swings.

(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs and Christopher Cushing)

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