News Archive

Peru’s President Kuczynski says may sue Odebrecht

LIMA Peruvian president Pedro Pablo Kuczynski said on Saturday that he is evaluating the possibility of suing Brazilian construction firm Odebrecht [ODBES.UL] for damages after the company admitted to using bribes to secure public contracts in the Andean nation.

Odebrecht, Latin America’s largest construction outfit, acknowledged in a U.S. settlement earlier in December to having doled out hundreds of millions of dollars in bribes to public officials in 12 nations.

That led the Peruvian government to announce on Wednesday that the company would not be permitted to participate in the country’s future public works tenders.

“We’re analyzing various alternatives. Without doubt one of them is that, but it has to be looked at case by case,” Kuczynski said in an interview with local radio station RPP, when asked about the possibility of suing the company.

“Because otherwise, we’re going to get into interminable judicial processes with terrible complexities.”

Odebrecht, which could not immediately be reached for comment, has won contracts worth some $12 billion in Peru in the last decade and paid $29 million in bribes between 2005 and 2014, according to the U.S. settlement. It began operations in the nation in 1979, its first foray into markets outside of Brazil.

(Reporting by Marco Aquino; Writing by Gram Slattery; editing by Diane Craft)

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Chinese firms ordered to pay Disney, Pixar $194,000 for copying ‘Cars’: Xinhua

SHANGHAI A Shanghai court ordered two Chinese firms to pay Walt Disney Co and Pixar more than 1.35 million yuan ($194,440) compensation for copying parts of their hit movies “Cars” and “Cars 2”, the official Xinhua news agency reported on Saturday.

The ruling is the latest in a slew of intellectual property wins for large foreign firms, who have complained about widespread copyright infringement in China.

Disney and Pixar took the Chinese firms to court saying the characters, titles and posters from local animation “The Autobots” were substantially similar to those from “Cars” and “Cars 2”.

The court agreed that the Autobots characters K1 and K2 were similar to Disney and Pixar’s animated cars Lightning McQueen and Francesco Bernoulli, Xinhua said.

The court ordered infringement activity to stop immediately, and said Disney and Pixar should receive 1 million yuan to cover economic losses, as well as 350,000 yuan for legal expenses.

Disney is making a major push into China with the recent opening of a $5.5 billion theme park in Shanghai, its first on the mainland. Its animated movies including “Zootopia” and “Big Hero 6” have been big box office hits there.

Disney, Pixar and the two Chinese firms were not immediately available for comment.

Xinhua said the total order covered more then 1.35 million yuan, but did not list any other payments.

German carmaker BMW and basketball star Michael Jordan have both won intellectual property cases in China this year.

(Reporting by Engen Tham)

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Investors brace for 2017 shocks after surprise 2016 run

NEW YORK After a late-year rally fueled by the U.S. election pushed stocks to surprising new peaks, investors are wary that the market could be primed for a spill to start 2017.

The benchmark SP 500 .SPX is set to post a roughly 10 percent price gain for 2016 and around 12 percent on a total return basis, including reinvested dividends. That tops the single-digit increase expected by market participants polled by Reuters a year ago, with more than half of the advance coming after Donald Trump’s Nov. 8 presidential victory.

The Dow Jones Industrial Average .DJI was on pace to rise more than 13 percent for 2016, with a total return above 16 percent.

From here, though, investors expect the SP 500 to rise by mid-single-digits in 2017, according to a Reuters poll earlier this month.

Reflecting the renewed bullishness for equities, U.S.-based stock funds pulled in $11.8 billion in the week ended Dec. 28, data from Lipper showed on Thursday, marking a sharp reversal from most of the year.

But investors see several warning signs for 2017, including stocks at traditionally expensive valuations; investors registering particularly bullish sentiment; and the Federal Reserve primed to raise interest rates several times this year.

Meanwhile, a market lifted in part by hopes for Trump’s policy agenda could be deflated should any of those hopes be dented once he begins in office. The SP has rallied by more than 5 percent since Election Day, while the Dow has climbed by more than 8 percent.

“If anything, we head into the new year with the likelihood we will probably see some near-term weakness in equities primarily because of the move we’ve seen higher,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York. “You will see some winning trades being taken off the table and, in general, a reset.”


January has proven to be a difficult month for equities in recent years, with the SP 500 falling at least 3 percent in each January of 2014, 2015 and 2016. The beginning of 2016 was marked by the worst 10-day start ever for the SP, plagued by worries about a rout in commodities, a China slowdown and a potentially over-aggressive Fed after it hiked interest rates for the first time since 2008.

A year later, a test for the market could come as soon as next week. Investors may have been holding off on selling their winners until 2017 with hopes that any profits will be taxed at a lower rate under a Trump administration.

“A lot of people have postponed selling gains this year, expecting that they are going to have lower tax brackets next year,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “So we might see a weaker open to the year as investors take some of those gains that they have waited to do.”

Trump takes office on Jan. 20, so investors will begin to assess how easily the new administration will be able to fulfill its reflationary policies that were anticipated in the wake of the election and that helped drive the end-of-year rally.

“There was a tinge more enthusiasm not only because Trump won, and that is perceived as less headwinds for business, but also because the Republicans were able to hold onto the Senate, which was unexpected,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St. Louis.

“But it’s not like all these deals are rubber-stamp deals. They are going to have to be refined, debated, you don’t know what the magnitude is, and they have to be implemented.”

(Reporting by Lewis Krauskopf and Chuck Mikolajczak; Editing by Dan Burns and Nick Zieminski)

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Tesla owner files lawsuit in California claiming sudden acceleration

SAN FRANCISCO Tesla Motors Inc was sued on Friday by a Model X owner who said his electric SUV suddenly accelerated while being parked, causing it to crash through the garage into owner’s living room, injuring the driver and a passenger.

The Model X owner, Ji Chang Son, said that one night in September, he slowly pulled into his driveway as his garage door opened when the car suddenly sped forward.

“The vehicle spontaneously began to accelerate at full power, jerking forward and crashing through the interior wall of the garage, destroying several wooden support beams in the wall and a steel sewer pipe, among other things, and coming to rest in Plaintiffs’ living room,” the lawsuit said.

The lawsuit, filed in U.S. District Court in the Central District of California, seeks class action status. It cites seven other complaints registered in a database compiled by the National Highway Traffic Safety Administration (NHTSA) dealing with sudden acceleration without warning.

The lawsuit alleges product liability, negligence and breaches of warranty, and seeks unspecified damages.

Tesla did not immediately return an email seeking comment.

NHTSA did not return a phone call seeking verification.

The luxury Model X, launched in late 2015 X, was Tesla’s first sport utility vehicle.

In its marketing, Tesla claims the Model X is the safest SUV in history.

(Reporting by Alexandria Sage; Editing by Leslie Adler)

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Wall St. ends solid 2016 on dour note

NEW YORK U.S. stocks slumped on the last trading day of the year on Friday, led down by Apple and other big tech stocks, but major indexes still posted solid gains in 2016.

In subdued holiday trading, the SP 500 declined for a third consecutive session.

But the benchmark index still tallied an annual gain of 9.5 percent. The Dow Jones Industrial Average climbed 13.4 percent for 2016, even as it recorded its first weekly decline since the U.S. election on Nov. 8.

Stocks stalled this week after surging in the wake of Donald Trump’s presidential election. Investors have bet Trump will cut taxes and regulations and introduce fresh economic stimulus.

“It’s been such a significant run-up that there’s been a pause,” said Bucky Hellwig, senior vice president at BBT Wealth Management in Birmingham, Alabama. “We are to the point now where there’s uncertainty with regard to what policies are implemented, when are they implemented and how are they going to affect the economy as a whole and industries specifically.”

The Dow Jones Industrial Average .DJI fell 57.18 points, or 0.29 percent, to 19,762.6, the SP 500 .SPX lost 10.43 points, or 0.46 percent, to 2,238.83 and the Nasdaq Composite .IXIC dropped 48.97 points, or 0.9 percent, to 5,383.12.

The Dow slipped further from the 20,000 milestone, after coming within 13 points of the mark but not yet breaching it.

The Dow is now up about 8 percent since the election.

“It’s been quite a rally, so not surprised to see some profit taking,” said Tim Ghriskey, chief investment officer with Solaris Asset Management in New York.

“There might be some reality setting in that a lot of this rally is based on assumptions of stimulus legislation occurring, and it’s really the market’s hope that those actions occur and that there isn’t a heated battle and a water down of some of these indicated proposals by the soon-to-be new administration,” Ghriskey said.

Apple (AAPL.O) shares fell 0.8 percent after a report that the company will trim iPhone production. Shares of Apple suppliers such as Cirrus Logic (CRUS.O) and Qualcomm (QCOM.O) also declined.

Tech was the worst-performing major SP sector, falling 1 percent. Big tech names such as Microsoft (MSFT.O) and Alphabet (GOOGL.O) slumped more than 1 percent.

Investors are wary that the market could be primed for a spill to start 2017, after the SP 500 posted a surprisingly strong gain in 2016.

In other corporate news, OPKO Health (OPK.O) shares fell 18.8 percent after the company said its experimental drug for growth hormone deficiency in adults failed to provide a statistically significant benefit in a late-stage study.

About 5.6 billion shares changed hands in U.S. exchanges, below the 6.8 billion daily average over the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored decliners.

The SP 500 posted 1 new 52-week high and 1 new low; the Nasdaq Composite recorded 58 new highs and 48 new lows.

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Nick Zieminski)

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U.S. dollar posts 2016 gain on Trump victory, Fed forecasts

NEW YORK The U.S. dollar slipped on Friday but notched its fourth straight year of gains against a basket of major currencies.

The dollar index .DXY, which measures the greenback against a basket of six major rivals, gained about 3.7 percent for the year.

The index rose about 7.1 percent during the fourth quarter, more than half that gain coming since the Nov. 8 U.S. presidential election on expectations that U.S. President-elect Donald Trump’s plan to boost fiscal stimulus would benefit the currency. A faster projected pace of rate hikes from the Federal Reserve next year also contributed.

Several analysts have said the dollar’s uptrend remains intact next year, but noted the risk of dollar weakness given doubts surrounding how much dollar appreciation a Trump White House will tolerate.

“Much depends on how the Trump presidency and the Chinese economy work out,” said Marshall Gittler, chief market analyst for retail broker FX Primus.

For the day, the dollar index was last off 0.38 percent at 102.290, down from a 14-year high of 103.65 hit on Dec. 20, and was up 0.18 percent against the yen at 116.74 yen JPY=. The greenback was still set to post its first yearly loss in five against the Japanese currency, of about 2.9 percent.

Sterling, which fell roughly 16.2 percent against the dollar to mark its worst year since 2008 on worries over Britain’s June 24 “Brexit” vote to leave the European Union, was last up 0.62 percent GBP=D4 at $1.2340.

Sterling bore the brunt of concerns this year over Britain’s trade policy with Europe which flared up following the Brexit vote, said Jason Leinwand, founder and chief executive of FirstLine FX in Randolph, New Jersey.

The euro was up 0.39 percent against the dollar at $1.0529, but was set to fall 3 percent for the year to notch its third straight yearly loss.

The dollar posted sizable gains this year against the Mexican peso MXN= and the Chinese yuan CNY=CFXS of 20.6 percent and 7 percent, respectively. [nL4N1EP2AM]

The peso suffered from Trump’s proposals to build a border wall and rewrite trade agreements with Mexico, while the yuan has been pressured by worries about slowing Chinese economic growth.

For more on the dollar’s performance in the fourth quarter and 2016, click: [nL1N1EP0Z0]

(Reporting by Sam Forgione; Additional reporting by Patrick Graham in London; Editing by David Gregorio)

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Oil down, but ends year with biggest gain since 2009

Oil prices settled slightly lower on Friday, the year’s last trading day, but attained their biggest annual gain since 2009, after OPEC and partners agreed to cut output to reduce a supply overhang that has depressed prices for two years.

A two-rig rise in the oil rig count in the United States, the ninth weekly increase in a row, as reported by oilfield services provider Baker Hughes Inc (BHI.N), added to bearish sentiments.

But the total count of 525 for the week, the last for the year, was still below last year’s level by 11 rigs.

U.S. benchmark West Texas Intermediate (WTI) CLc1 crude futures were down 5 cents, or 0.1 percent, at $53.72 a barrel, while Brent LCOc1 fell 3 cents, or 0.1 percent, to $56.82.

“Some profit-taking … very light trading – a lot of people have already done what they needed to do for the year.” said Elaine Levin, president of Powerhouse, an energy-specialized commodities broker in Washington.

Brent rose 52 percent this year and WTI climbed around 45 percent, the largest annual gains since 2009, when the benchmarks rose 78 percent and 71 percent respectively.

Oil prices have slumped since the summer of 2014 from above $100 a barrel. The price rout, due to an oversupply thanks in part to the U.S. shale oil revolution, was accentuated later that year when Saudi Arabia rejected any deal by the Organization of the Petroleum Exporting Countries (OPEC) to cut output and instead fought for market share.

But a historic OPEC agreement struck over three months from September that will reduce production from Jan. 1, marked a return to the 13-country group’s old objective of defending prices.

Oman told some customers it will reduce term allocations by 5 percent in March, but did not say whether the supply reduction would continue after that.

The rise in prices can be seen as “proof of international credibility,” for OPEC and partners, said Igor Yusufov, founder of the Fund Energy investment firm and a former Russian energy minister.

He said the rise, a “ponderable New Yew present” for producers, is propelled by expectations of expectations of oil demand growth.

Analysts at JBC said major forecasters diverge on their specific predictions.

“We see a big variation in demand growth assessments for 2017, ranging from +1.22 million bpd (barrels per day) … to +1.57 million bpd,” they said in a note to clients.

(Reporting by Ethan Lou in Kingston, Ontario; Additional reporting by Sabina Zawadzki in London and Mark Tay in Singapore; Editing by Marguerita Choy and Chizu Nomiyama)

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Apple to cut iPhone production in first quarter of 2017: report

Apple Inc (AAPL.O) will trim production of iPhones by about 10 percent in the January-March quarter of 2017, the Nikkei financial daily reported on Thursday, citing calculations based on data from suppliers.

The company had slashed output by 30 percent in January-March this year due to accumulated inventory, the paper said.

Apple’s shares were down 0.84 percent in midday trading, in line with the Nasdaq stock index.

An Apple spokeswoman declined to comment on the report.

(Reporting by Aishwarya Venugopal in Bengaluru and Stephen Nellis in San Francisco; Editing by Bernadette Baum)

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FTC seeks more info on Bass Pro-Cabela’s deal

U.S. fishing and hunting equipment retailer Cabela’s Inc (CAB.N), which is being bought by privately held rival Bass Pro Shops, said the Federal Trade Commission had sought more information from the companies about the deal.

Cabela’s shares were down 7.6 percent at $56.98 in premarket trading on Friday.

Cabela’s did not provide details about the FTC’s request.

As part of the proposed $5.5 billion deal, announced in October, Capital One Financial Corp (COF.N) had said it would buy Cabela’s credit card business and signed a 10-year partnership with Bass Pro to issue credit cards to Cabela’s customers.

On Friday, Cabela’s said Capital One had informed the company that it does not expect to get approval for acquiring the credit card business, called World’s Foremost Bank, before Oct. 3, 2017, hence not allowing the deal to close in the first half of 2017. (

Cabela’s said it is looking for “potential alternative structures” to allow both the transactions to close on or before Oct. 3, the date after which the companies have the right to terminate the deal.

Cabela’s said it continues to expect to get antitrust clearance for the deal in the United States and Canada during the first half of 2017.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Maju Samuel)

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