News Archive


Canada says Boeing is trusted partner despite Bombardier dispute


OTTAWA Canada’s Defence Minister Harjit Sajjan said on Wednesday that Boeing Co will be a trusted military partner in the decades to come, even though the government has threatened to scrap plans to buy Boeing’s fighter jets..

In the prepared text of a speech, Sajjan called on Boeing to abandon an anti-dumping challenge it has launched against Canadian plane maker Bombardier Inc, saying Ottawa was disappointed by the U.S. firm’s behavior.

Earlier this month, in response to the trade challenge, Canada said it was reviewing the planned purchase of 18 Boeing Super Hornet jets. Boeing accuses Bombardier of selling airliners on the U.S. market at artificially low prices.

Sajjan says the Super Hornets are needed as an interim measure until Ottawa can run a competition to replace its ageing fleet of CF-18 fighters.

“The interim fleet procurement requires a trusted industry partner. For decades, Boeing has been an outstanding partner with the Canadian Armed Forces … I expect that to be the case in the decades to come,” he said.

“However, our government is of the view that their action against Bombardier is unfounded. It is not the behavior we expect of a trusted partner, and we call on Boeing to withdraw it,” he continued.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama; Editing by Denny Thomas)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/HYmEwaJ9-_k/us-boeing-bombardier-idUSKBN18R1QC

Asia stocks rise as China factories see steady growth, sterling soft


HONG KONG Asian stocks climbed on Wednesday, capping a fifth consecutive month of gains, as data showed China’s factory activity grew at a steady clip this month, bucking expectations of a slowdown.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2 percent on Wednesday, with Chinese stocks .SSEC .SZSC leading the region higher as investors returned from a long holiday break.

Japan’s Nikkei .N225 dipped 0.1 percent.

“The market remains positive and the favorable PMI data reinforces the trend, though investors should be careful of chasing markets higher as liquidity conditions can change quickly,” said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management.

Activity in China’s manufacturing sector grew at the same pace in May as in April, with a headline reading of 51.2, official data showed, in a reassuring sign the world’s second-biggest economy is not losing too much steam after a solid first quarter performance.

Analysts had seen a slight slowing to 51.0.

Growth in China’s steel industry rebounded to the strongest level in a year, supported by an increase in new orders, according to an industry survey, buoying prices of iron ore and steel rebar futures in Shanghai.

In a further vote of confidence, Moody’s Investors Services said the improving outlook for global growth in 2017 appeared sustainable as some of the biggest risks to the developed economies seem to have subsided.

Despite signs of improvement in the global economy, investors are wary of chasing markets higher with stock trading volumes on the mainland and Hong Kong trending lower in recent days, signaling diminishing investor confidence.

On a price-to-earnings basis, Hong Kong is now valued in line with its 20-year average while the broader Asia-ex Japan market is above its long term average, indicating Asian stocks aren’t cheap any more after a 17 percent rise this year.

In currency markets, the pound fell briefly to $1.2791 GBP=D4, near a one-month low of $1.2775 touched on Friday before recovering slightly. It also slipped to 0.8738 pound per euro EURGBP=D4, near Friday’s eight-week low of 0.8750.

New constituency-by-constituency modeling by YouGov showed the Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats, The Times said.

“The UK election chances will likely see the pound go through a bad case of yo-yo syndrome in the weeks ahead,” said Stephen Innnes, senior trader at OANDA.

The news came after a string of opinion polls showed a narrowing lead for May’s Conservatives, shaking investors’ confidence that May would easily win a majority in a national election on June 8 and potentially fuelling market uncertainty.

The dollar held near two-week lows against the safe-haven yen as investors turned cautious amid political worries in Europe as well as weaker stock and commodity markets after a long U.S. holiday weekend.

The dollar fell to near two-week low of 110.665 yen JPY= and last traded at 110.85 yen.

The greenback’s weakness was also accentuated after the U.S. Treasury yields resumed their downward trend after a brief spike earlier this month. Ten-year yields were trading at 2.21 percent compared to 2.41 percent, two weeks ago.

In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.

U.S. crude futures CLc1 slipped about 0.1 percent to $49.61 a barrel. Global benchmark Brent LCOc1 was flat at $51.84 per barrel.

Gold XAU= edged lower to $1,262 an ounce.

(Reporting by Saikat Chatterjee; Editing by Shri Navaratnam and Kim Coghill)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ptYeYDC8_x4/us-global-markets-idUSKBN18R01V

Uber fires self-driving car chief at center of court case


SAN FRANCISCO Uber Technologies Inc said on Tuesday it fired the technology whiz it had hired to lead its self-driving unit, Anthony Levandowski, after he failed to comply with a court order to hand over documents at the center of a legal dispute between Uber and Alphabet Inc’s (GOOGL.O) Waymo unit.

Uber had hoped Levandowski, one the most respected self-driving engineers in Silicon Valley, would help the ride services company catch up to rivals including Waymo, in the race for self-driving technology. Instead the hiring led to a court fight and the threat of criminal charges. Uber replaced him as the head of its self-driving car unit in April before finally making the decision to fire him.

Levandowski formerly worked for Alphabet’s Waymo self-driving division, which says he stole trade secrets by downloading more than 14,000 documents before he left. Levandowski is not a defendant, but his actions are at the heart of Alphabet’s lawsuit against Uber.

Uber said in a letter to Levandowski filed in federal court on Tuesday that it was firing him because he had not complied with a court order to hand over the documents. (tmsnrt.rs/2rBPNzW)

He has declined to cooperate, citing his Fifth Amendment right not to incriminate himself. Levandowski’s lawyer did not immediately respond to a request for comment.

Uber and Alphabet are battling over technology expected to revolutionize the way people use cars. Waymo claims its trade secrets made their way into Uber’s Lidar technology, which bounces light pulses off objects so self-driving cars can “see” the road. Uber denies these claims.

Levandowski has 20 days to comply with the court orders, according to the Uber letter.

Last month, Uber named Eric Meyhofer to replace Levandowski as head of its Advanced Technologies Group. Meyhofer will continue to lead the team, an Uber spokeswoman said via email.

The New York Times reported Levandowski’s exit earlier on Tuesday, citing an internal email sent to employees. (nyti.ms/2qD4X3h)

“Over the last few months Uber has provided significant evidence to the court to demonstrate that our self-driving technology has been built independently,” Angela Padilla, Uber’s associate general counsel for employment and litigation, wrote in an email to employees, cited by the Times.

An Uber spokeswoman confirmed the letter’s authenticity and said the company has urged Levandowski to “fully cooperate.”

Waymo has said Levandowski received stock worth more than $250 million for joining Uber, along with his portion of the $680 million that Uber paid last year for Otto, the self-driving truck company he formed after leaving Google. That amount assumes certain targets would be met, and it was not clear how his firing would affect those payments.

A source familiar with the matter said Levandowski had not yet vested his Uber shares.

LEVANDOWSKI REFUSAL

Levandowski, a top engineer on self-driving technology, has turned into a liability for Uber in court. The company has acknowledged that his refusal to testify has hurt its defense efforts. Uber has never denied that he took the Waymo documents.

Asked last month why Uber did not threaten to fire Levandowski to pressure him into turning over the documents, Uber attorney Arturo Gonzalez told Reuters, “We can fire him but we still don’t get the documents.”

Uber had argued that it was acceptable to sideline Levandowski by preventing him from working on Lidar technology, but not firing him. But U.S. District Court Judge William Alsup criticized the company, telling lawyers: “You keep on your payroll someone who took 14,000 documents and is liable to use them.”

The judge theorized that Levandowski could have used Waymo’s documents himself even if he did not turn them over to Uber.

“What prevented him from bringing a laptop to work every day and consulting the files?” Alsup asked Uber lawyers in April.

Uber has been hit by a string of departures of senior executives and other negative news. Earlier this year, Uber was caught using its technology to avoid government regulators. Chief Executive Officer Travis Kalanick was seen on video berating an Uber driver, and the company also faced accusations of sexual harassment that led to an internal probe led by former U.S. Attorney General Eric Holder.

The Holder report will be shown to the board this week, a source familiar with the matter said, adding that next week, Uber plans to speak with employees about it.

(Additional reporting by Subrat Patnaik in Bengaluru, Editing by Peter Henderson; Editing by David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/5ieMAFq6syw/us-uber-alphabet-lawsuit-idUSKBN18Q2CW

Venezuelan opposition condemns Goldman for $2.8 billion bond deal


CARACAS/NEW YORK (Reuters/IFR) – Goldman Sachs Group Inc’s statement that it never transacted directly with the government of Venezuelan President Nicolas Maduro when it bought $2.8 billion of bonds for pennies on the dollar was dismissed by the country’s opposition on Tuesday as an effort to “put lipstick on this pig.”

Goldman, in a statement late Monday confirming the purchase, said its asset-management arm acquired the bonds “on the secondary market from a broker and did not interact with the Venezuelan government.” (A look into Venezuela’s economic crisis here)

The New York-based investment bank came under fire from Venezuelan politicians and protesters in New York opposed to Maduro, who said the deal provided the cash-strapped government hundreds of millions of dollars in badly-needed hard currency. The deal, first reported by the Wall Street Journal, made Goldman complicit in alleged human rights abuses under the government, they said.

“As hard as it may try, Goldman Sachs … cannot put lipstick on this pig of a deal for Venezuelans,” the head of the opposition-led congress Julio Borges said.

Goldman Sachs did not respond to an email requesting comment on Borges’ statement. In its original statement, Goldman had said: “We recognize that the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will.”

The opposition-led National Assembly later on Tuesday voted to ask the U.S. Congress to investigate the deal, which they called immoral, opaque, and hypocritical given the socialist government’s anti-Wall Street rhetoric.

Goldman shares fell nearly 2 percent on Tuesday and were the biggest drag on the Dow Jones Industrial Average, which fell 0.24 percent.

“31 CENTS ON THE DOLLAR”

With Venezuela’s inefficient state-led economic model struggling under lower oil prices, Maduro’s unpopular government has become ever more dependent on financial deals or asset sales to bring in coveted foreign exchange. Venezuela’s international reserves rose by $749 million on Thursday and Friday, reaching around $10.86 billion, according to the central bank.

In New York, about two dozen protesters chanting “Shame on you Goldman Sachs” picketed outside of Goldman’s headquarters in lower Manhattan on Tuesday afternoon.

“By giving $900 million to a dictatorship, they are funding a systematic human rights violator, they are funding immorality and for Maduro to stay in power while he keeps killing people,” said Eduardo Lugo, 23, a Venezuelan attending college in New York and a leader of the protest.

Another protest was planned for Miami, home to a large community of Venezuelans who have fled the country’s economy crisis, on Thursday.

In Venezuela, Maduro’s critics have for two months staged street protests, which have left nearly 60 people dead, to demand he hold early elections. Maduro says the protests are a violent effort to overthrow his government, and insists the country is the victim of an “economic war” supported by Washington.

Meanwhile, emerging market bond market participants familiar with Venezuelan debt said there was no effective secondary market for the bonds in question, which were first issued by the state-owned oil company PDVSA [PDVSA.UL.] in 2014 and held entirely by the country’s central bank until recently.

Goldman paid 31 cents on the dollar for the bonds, which mature in October 2022, Borges’ letter said. At that price, the bonds would yield more than 40 percent compared with their stated coupon of 6 percent.

Goldman acquired the bonds from Dinosaur Financial Group, two sources familiar with deal told Reuters.

A person answering the phone at Dinosaur’s New York office said the firm had no comment on the matter.

Opposition lawmakers said they wanted to investigate intermediaries in the deal.

“We’re going to put a magnifying glass on this financial middleman. This small company called Dinosaur, who is behind it, what power does it have?” said lawmaker Carlos Valero before the vote.

One U.S. broker deeply involved in trading Venezuelan securities told Thomson Reuters IFR that fair value for the bonds should be around 44 cents to 46 cents on the dollar, based on where other bonds issued by PDVSA and the Venezuelan government were trading on Tuesday.

The broker said he did not expect the bonds to trade unless Goldman chose to sell them. At $2.8 billion of face value, the firm now owns the vast majority of that series of bonds originally issued by PDVSA, which totaled around $3 billion.

Most Venezuelan bond prices were up in Tuesday trading.

(Reporting by Brian Ellsworth, Corina Pons, Eyanir Chinea, and Alexandra Ulmer in Caracas, Marianna Parraga in Houston, David Scigliuzzo, Olivia Oran and Laila Kearney in New York; Writing by Dan Burns; Editing by Nick Zieminski and Andrew Hay)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/foPtSt1CCTM/us-venezuela-goldman-sachs-idUSKBN18Q1D6

Analysts see more gains as Amazon shares break $1,000


NEW YORK Amazon.com on Tuesday became the second of the current SP 500 components to hit the $1,000 price mark, beating Google parent Alphabet to the punch and underscoring a massive rally in large-cap technology-related stocks.

Shares of Amazon have risen 33 percent so far in 2017 alone, adding roughly $120 billion to its market value. Priceline was the first SP 500 stock to hit $1,000, doing so in September 2013. Analysts on average expect Amazon to rise another 10 percent according to the median price target of $1,100.

“The world is becoming more and more aware of how unstoppable the business plan is,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York. He said Amazon accounts for 3.5 percent to 5 percent of the firm’s portfolios.

“The $1,000 is a bit of a psychological barrier for any stock, but it is just another number and we’re still big believers in it.”

Among the other four largest U.S. companies by market cap, Apple and Facebook share prices have also risen nearly 33 percent this year while Alphabet has gained 26 percent and Microsoft has added 13 percent.

The combined market cap of the top five is near $3 trillion, or more than 13 percent of the SP 500 index stocks’ capitalization.

Amazon, the only one of the top five not in the technology sector, accounts for 17 percent of the market cap of the SP 500 consumer discretionary sector.

In terms of stock prices, Amazon’s high of $1,001.20 is second among the SP 500 behind Priceline, which recently hit $1,850.50. Priceline’s near $92 billion market cap is, however, runs far below Amazon’s $476 billion.

Apple dominates that metric with a capitalization of more than $800 billion.

Amazon beat Alphabet, which recently hit $994.32, in a race to $1,000. The other SP component above $900 per share is Intuitive Surgical, at $912.80.

Apple three years ago split its stock in seven. If it had not, its current stock price would be about $1,080.11.

Amazon is ahead of Facebook in the race to become the fourth U.S. company with a market cap of more than half a trillion dollars, joining Apple, Alphabet and Microsoft.

(Reporting by Rodrigo Campos; Editing by Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/olc68ZPaMJs/us-amazon-com-stocks-idUSKBN18Q25B

U.S. proposes fining United $435,000 over 2014 flights


WASHINGTON The U.S. Federal Aviation Administration on Tuesday proposed fining United Airlines (UAL.N) $435,000 for operating 23 flights in 2014 with a Boeing 787 that the government alleged was not in airworthy condition.


The FAA alleged that in June 2014, United mechanics replaced a fuel pump pressure switch on the Boeing Co (BA.N) aircraft but failed to perform a required inspection before returning the aircraft to service. A United spokesman said, “The safety of our customers and employees is our top priority. We immediately took action after identifying the issue and are working closely with the FAA in their review.”

(Reporting by David Shepardson; Editing by Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ajLApRxf3Mw/us-united-fine-idUSKBN18Q2EQ

Daimler aims to expand supplier base in Alabama


FRANKFURT Daimler’s (DAIGn.DE) Mercedes-Benz “sees value” in having more suppliers in the U.S. state of Alabama, where it has a factory in Tuscaloosa, the group said on Tuesday.

Daimler said having more local suppliers increased overall flexibility, reduced transport times and improved manufacturing and logistics costs.

“Overall, this results in considerably increased efficiency,” the company said in a statement.

Two years ago the company had unveiled plans to invest another $1.3 billion to expand sport utility vehicle (SUV) production at the Tuscaloosa Mercedes-Benz factory.

“These are exciting times for our Alabama facility as we prepare to take on this new challenge to build the next generation of SUVs,” Jason Hoff, President and CEO of Mercedes-Benz US International, said in a statement that followed discussions with selected suppliers last week.

Daimler’s comments come after renewed focus on Germany’s trade surplus with the United States.

On Tuesday, U.S. President Donald Trump took to Twitter to attack Germany partly for its trade policies, flagging the United States’ “massive trade deficit with Germany.”

Both Daimler’s Mercedes-Benz and BMW (BMWG.DE) have factories in the United States where they build higher-margin sports utility vehicles (SUVs) for export to Asia and Europe.

Trump in January had warned German car companies he would impose a border tax of 35 percent on vehicles imported to the U.S. market, a plan that drew sharp rebukes from Berlin and hit the automakers’ shares.

(Reporting by Christoph Steitz. Editing by Jane Merriman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/UWPG0Ui0uYI/us-daimler-usa-idUSKBN18Q29C

BlackRock CEO Fink says second-quarter earnings could disappoint


NEW YORK BlackRock Chief Executive Larry Fink said on Tuesday that U.S. financial markets are “probably fully priced at this moment,” and that second-quarter earnings and growth could disappoint investors.

Fink, who spoke at a conference in an interview by Deutsche Bank AG Chief Executive John Cryan, said that businesses in the current quarter are not seeing the acceleration the markets are expecting.

He also pointed to the flattening yield curve as a sign that bond markets reflect less optimism for economic growth than stocks do.

A flattening yield curve refers to a decline in the premium investors demand for longer-dated U.S. government bonds over those maturing sooner. After spiking following the November U.S presidential election, that spread between short- and long-term bonds has declined.

“The rates markets are saying something entirely different from equity markets,” Fink said.

“Rates are not going to go up as much as, I think, consensus, which is probably consistent with an equity market that is not going to go as fast as people think either.”

But Fink said the low reading on the closely followed CBOE Volatility Index, sometimes called the fear index, is a sign of capital market strength and the amount of cash that investors have stockpiled and can use to buy when markets sell off.

That index remains below its long-term average.

Fink said the stock rally since the election had at least been partly validated by strong first-quarter earnings growth as well as political stability in Europe after centrist victories in elections in the Netherlands and France.

But he said it remained unclear what impact the forthcoming British exit from the European Union would mean for the finance industry.

(Reporting by Trevor Hunnicutt; Editing by Jonathan Oatis and Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/-Awi6EXyBLA/us-usa-banks-conference-fink-idUSKBN18Q24C

Supreme Court tightens rules on where companies can be sued


The U.S. Supreme Court on Tuesday tightened rules on where injury lawsuits may be filed, handing a victory to corporations by undercutting the ability of plaintiffs to bring claims in friendly courts in a case involving Texas-based BNSF Railway Co.

The justices, in a 8-1 ruling, threw out a lower court decision in Montana allowing out-of-state residents to sue there over injuries that occurred anywhere in BNSF’s nationwide network. State courts cannot hear claims against companies when they are not based in the state or the alleged injuries did not occur there, the justices ruled.

BNSF [BNISF.UL] is a subsidiary of Berkshire Hathaway Inc.

“BNSF is grateful to the Supreme Court for the clarification they provided in deciding this case,” the company said in a statement.

Businesses and plaintiffs have been engaged in a fight over where lawsuits seeking financial compensation for injuries should be filed.

Companies typically can be sued in a state where they are headquartered or incorporated, as well as where they have significant ties. They want to curb plaintiffs’ ability to “shop” for courts in states with laws conducive to such injury lawsuits.

Plaintiffs contend that corporations are trying to limit their access to compensation for injuries by denying them their day in state courts.

“Going forward, some injured rail workers may have to travel far from home just to reach a courthouse that can hear their claims. Workers already suffering from disabling injuries caused by their employers shouldn’t have to bear that burden,” said Julie Murray, a lawyer for the plaintiffs.

Her clients will still be able to press their claims in Montana state court, Murray added.

The case involves two lawsuits against BNSF brought under the Federal Employers’ Liability Act, a U.S. law that allows injured railroad employees to sue for compensation from their companies.

BNSF fuel truck driver Robert Nelson sued in 2011 over a slip-and-fall accident in which he injured his knee. Kelli Tyrrell, the widow of railroad employee Brent Tyrrell, sued in 2014 alleging her husband was exposed to chemicals that caused him to die of kidney cancer.

Neither BNSF employee lived in Montana and their allegations did not occur in the state, according to court filings.

BNSF argued that the Montana courts did not have jurisdiction over the cases. The Montana Supreme Court in May, however, ruled that state courts there can hear cases against BNSF without violating due process rights guaranteed in the U.S. Constitution because the company does business in the state.

Writing for the majority on Tuesday, liberal Justice Ruth Bader Ginsburg said that even though BNSF has more than 2,000 miles (3,200 km) of track and 2,000 employees in Montana, it cannot be held liable for “claims like Nelson’s and Tyrrell’s that are unrelated to any activity occurring in Montana.”

Liberal Justice Sonia Sotomayor dissented, calling the ruling a “jurisdictional windfall” for large multistate or multinational corporations.

“It is individual plaintiffs, harmed by the actions of a far-flung foreign corporation, who will bear the brunt of the majority’s approach and be forced to sue in distant jurisdictions with which they have no contacts or connection,” Sotomayor wrote.

The Supreme Court is also expected to rule before the end of June in a similar challenge brought by drug maker Bristol-Myers Squibb, which says it should not have to face injury suits filed by hundreds of out-of-state residents in California over its blood-thinning medication Plavix. The company is incorporated in Delaware and headquartered in New York.

Conservative Justice Neil Gorsuch joined the majority on Tuesday, the first ruling he has participated in since joining the court in April.

(Reporting by Andrew Chung; Additional reporting by Lawrence Hurley in Washington; Editing by Will Dunham)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/o6W18l0pqPI/us-usa-court-bnsf-rlwy-ptt-idUSKBN18Q1N7