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Nasdaq drops further as techs fall out of favor

(Reuters) – The tech-heavy Nasdaq Composite index slipped further in early afternoon trading on Wednesday as investors shifted to financials that have been bolstered by strong economic data and encouraging comments from Fed officials.

The SP technology index .SPLRCT, the best performing sector this year, dropped as much as 3.3 percent, its worst single-day decline since June 2016.

The high-flying FAANG stocks – Facebook (FB.O), Amazon (AMZN.O), Apple (AAPL.O), Netflix (NFLX.O) and Google parent Alphabet (GOOGL.O) – fell between 2.8 percent and 5.3 percent.

In contrast, JPMorgan (JPM.N) and Bank of America (BAC.N) climbed about 2 percent, putting the SP financial index .SPSY on track for its best two-day gains in nearly a year.

“What we’re seeing is a combination of defense positioning, with people taking some profit out of the high growth areas, technology specifically, and rotating into sectors that should hold up better if we get any negative news on tax bill or the debt ceiling,” said Jonathan Mackay, investment strategist at Schroders.

Fed chair Janet Yellen said on Wednesday that a strengthening economy would warrant continued rate increases. Her comments come a day after Fed chair nominee Jerome Powell said that the case for a December rate hike was coming together and hinted at lighter bank regulation.

The second revision of third-quarter gross domestic product showed growth increased at a 3.3 percent annual rate, up from the previously reported 3 percent.

The data and the upbeat comments helped U.S. 10-year note and 30-year bond yields climb to two-week peaks.

Investors are also tracking progress on the U.S. tax bill. Senate Republicans on Tuesday rammed forward the bill, which corporate America is hoping will slash business tax rates, in an abrupt, partisan committee vote that set up a full vote by the Senate as soon as Thursday.

At 12:32 p.m. ET (1732 GMT), the Dow Jones Industrial Average .DJI was up 50.27 points, or 0.21 percent, at 23,886.98, the SP 500 .SPX was down 4.05 points, or 0.15 percent, at 2,622.99 and the Nasdaq Composite .IXIC was down 92.29 points, or 1.34 percent, at 6,820.07.

Chipotle Mexican Grill (CMG.N) gained 3.03 percent after the burrito chain said it would seek a turnaround expert to replace founder Steve Ells as chief executive.

Autodesk (ADSK.O) was the biggest loser on SP 500, slumping about 16 percent following the AutoCAD maker’s weak revenue forecast and restructuring plan.

Declining issues outnumbered advancers on the NYSE by 1,540 to 1,335. On the Nasdaq, 1,454 issues rose and 1,416 fell.

Reporting by Sruthi Shankar in Bengaluru; editing by Bernard Orr and Sriraj Kalluvila

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Apple to review software practices after patching serious Mac bug

(Reuters) – Apple Inc (AAPL.O) said on Wednesday it would review its software development process after scrambling to patch a serious bug it learned of on Tuesday in its macOS operating system for desktop and laptop computers.

The bug could potentially give attackers with physical access to a machine unfettered access to it without a password. Apple said a patch was available for download as of 8 a.m. Pacific Time (1600 GMT) on Wednesday and that the patch would be automatically installed on machines running the latest version of its macOS operating system later in the day.

“We greatly regret this error and we apologize to all Mac users, both for releasing with this vulnerability and for the concern it has caused,” Apple said in a statement. “Our customers deserve better. We are auditing our development processes to help prevent this from happening again.”

Reporting by Stephen Nellis in San Francisco; Editing by Frances Kerry

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Bubble trouble? Bitcoin tops $11,000 after $1,000 surge in 12 hours

LONDON/NEW YORK (Reuters) – Bitcoin zoomed past $11,000 to hit a record high for the sixth day in a row on Wednesday after gaining more than $1,000 in just 12 hours, stoking concerns that a rapidly swelling bubble could be set to burst in spectacular fashion.

After soaring more than 1,000 percent since the start of the year, bitcoin rose as much as 15 percent on Wednesday.

It topped $10,000 for the first time in early Asia trading, before surging above $11,000 less than 12 hours later to reach $11,395 on Luxembourg-based Bitstamp BTC=BTSP, one of the largest and most liquid cryptocurrency exchanges, and then dipping back below $11,000. (Graphic: Bitcoin’s blistering ascent –

Bitcoin’s rapid ascent has led to countless warnings that it has reached bubble territory.

But the warnings have had little effect, with dozens of new crypto-hedge funds entering the market and retail investors piling in. (Graphic: Bitcoin’s blistering ascent Image –

London-based, one of the biggest global bitcoin wallet-providers, told Reuters on Wednesday that it had added a record number of new users on Tuesday, with more than 100,000 customers signing up, taking the total number to more than 19 million. (Graphic: Bitcoin price rockets –

The evidence suggests that few of the users are buying bitcoin to use it as a means of exchange, but are speculating to increase their capital.

“What’s happening right now has nothing to do with bitcoin’s functionality as a currency – this is pure mania that’s taken hold,” said Garrick Hileman, a research fellow at the University of Cambridge’s Judge Business School.

“This is very much a bubble that will very much correct itself at some point and people need to be very careful.”

Hileman, who last week gave a lecture to the Bank of England on the risks of bitcoin and other cryptocurrencies, also flagged the risk of the whole market collapsing entirely.

“There’s always the possibility that some fundamental cryptographic flaw that we can’t solve craters the whole space, or that regulators unite and decide this represents systemic risk and actually could trigger the next financial crisis,” he said.


Created in 2008, bitcoin uses encryption and a blockchain database that enables the fast and anonymous transfer of funds outside of a conventional centralized payment system.

It has far outstripped gains seen in any traditional asset classes or currencies this year. It rise accelerated in recent months as exchanges such as the CME Group Inc (CME.O) and the Chicago Board Options Exchange announced plans to offer futures contracts for the cryptocurrency.

Skeptics say it a classic speculative bubble with no relation to real financial market activity or the economy – most famously JPMorgan boss Jamie Dimon, who labeled it a “fraud”.

But even Dimon and others who say bitcoin represents a bubble – now the consensus view among mainstream investors – do not deny its price rise could still have further to go.

“It’s got all the shapings of your tulip bubble chart (but) that tells you nothing about where that price line could go depending on the number of people who wish to own it,” Standard Life’s head of investment strategy, Andrew Milligan, said on Wednesday. “Who is to say it doesn’t reach $100,000?”

In some emerging markets, bitcoin had hit well over $10,000 previously. In Zimbabwe, bitcoin traded at $17,875 on Monday. Tuesday’s price in Zimbabwe was not available.

In South Korean exchanges, too, bitcoin was already close to $11,000 or higher early this week.

The fact that bitcoin now provides “exit ramps” from national currencies that were becoming easier to use, Hileman said, could exacerbate any future financial crisis. Coordinated regulatory action might therefore be necessary in order to stave off an “economic calamity”, he said.

Despite its mushrooming value, however, Bank of England Deputy Governor Jon Cunliffe said on Wednesday bitcoin was not big enough to pose a risk to the global economy.

Mike Novogratz, a former macro hedge fund manager at Fortress Investment Group, said in a Reuters Investment Summit earlier this month that mainstream institutional investors were about six to eight months from adopting bitcoin.

Additional reporting by Marius Zaharia in Hong Kong, Vidya Ranganathan in Singapore, and Helen Reid and Dhara Ranasinghe in London; Editing by Alison Williams

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Fox’s Lachlan Murdoch says company would never buy CNN

(Reuters) – Twenty-First Century Fox would never be interested in buying CNN, Fox Executive Chair Lachlan Murdoch said on Wednesday at a conference organized by the news website Business Insider in New York.

Last week, the U.S. Department of Justice filed suit to block ATT’s planned $85.4 billion acquisition of Time Warner Inc (TWX.N), the parent of CNN, because of antitrust concerns about the merged company owning too much content and distribution.

Before the suit, Justice Department staff had recommended ATT sell either its DirecTV unit or Time Warner’s Turner Broadcasting unit, which includes CNN, to win antitrust approval, sources have told Reuters.

Earlier this month, Reuters first reported that Rupert Murdoch, who shares the title of executive chair of Fox, telephoned ATT CEO Randall Stephenson twice to discuss CNN during the past six months.

”We wouldn’t be allowed to buy CNN and we would never be interested in buying CNN,” Lachlan Murdoch, Rupert’s oldest son, said at the Business Insider conference.

Fox owns Fox News and while there is no law against a company owning two cable networks, a deal could raise antitrust concerns.

Stephenson has said he has no intention of selling CNN to gain approval of the acquisition of Time Warner.

Lachlan Murdoch declined to comment on reports that Fox has been approached by a number of suitors, including Walt Disney Co, for a sizeable piece of its business, adding that he feels strongly about the company’s standing as a standalone company.

He did acknowledge the challenges facing media companies today, noting as the pace of cable subscribers declines in the United States increased, international revenue and having a direct to consumer offering is increasingly important.

Reporting By Jessica Toonkel; Editing by Bill Trott

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Exclusive: Goldman strengthens Italy foothold with bigger Milan office

LONDON (Reuters) – Goldman Sachs (GS.N) is poised to sign a lease for a new office in Milan that will significantly boost its presence in Italy as Britain prepares to leave the European Union, sources familiar with the matter told Reuters.

The Wall Street bank is finalizing the details of a new office for more than 100 people in the bustling heart of Milan, near the Duomo cathedral, increasing its Italy headcount almost six-fold, said the sources who declined to be named as the plans are confidential.

This is a radical move for Goldman which currently employs about 20 people in Italy and has the smallest presence on the ground of the top five U.S. investment banks, despite making the biggest fees.

Goldman’s move comes as Italy’s slow economic recovery is finally gathering pace and business morale is at its highest for a decade.

Export volumes climbed 2.8 percent in the first eight months and GDP is forecast to grow this year at its fastest rate since 2010, prompting Standard Poor’s to raise its rating on Italy’s sovereign credit for the first time in 35 years.

While the economic recovery may generate more fees for investment banks, several sources said that Goldman’s decision to bet on the euro zone’s third-largest economy is partly driven by its efforts to reorganize its operations in Europe for when Britain leaves the EU, scheduled for 2019.

The New York-based lender, which has around 6,000 employees in Britain, needs to ensure it will be able to service clients in the EU in the event of a hard Brexit.

Goldman Sachs denied the Italian expansion was motivated by Brexit. “These moves reflect our ongoing investment in our Italian franchise. This investment is made independently of our Brexit contingency plans,” a spokesman for the bank said.

Goldman said on Oct. 4 that it had agreed to lease 10,000 square meters of office space at the new ‘Marienturm’ building in Frankfurt, providing space for up to 1,000 staff.

But the bank, whose boss Lloyd Blankfein recently called for a second vote on Brexit, wants to raise its game in other European cities where its presence on the ground has so far been weak.

Blankfein has also said the bank would have hubs in Frankfurt and Paris after Brexit and that it would be up to the staff to decide whether or where they want to move to from London.

Goldman is set to move into its new Milan office in the first quarter of 2019, the sources said.

Its new office, which is only a short walk from its existing base in Piazzetta Bossi, will accommodate several investment bankers who are currently based in London.


Reuters reported on Sept. 15 that Goldman’s co-head of Italy Francesco Pascuzzi is among a series of London-based bankers looking to move to Milan early next year.

Other jobs will also be shifted from London to Italy at the start of 2018, the sources said, with one adding the U.S. bank is making a global push to better penetrate local markets by having its bankers based close to the companies they cover.

Relocation packages for many Italian nationals on Goldman’s London payroll are currently being negotiated, two of the sources said.

There is no final tally of how many will move from London as opposed to hirings in Italy but the decision to open a bigger office in Milan is expected to have an impact on Goldman’s London operations where most Italian bankers have so far been based.

Goldman Sachs currently leases its Milan office from law firm Clifford Chance but the lease will expire in the first half of 2019.

Unlike HSBC and BNP Paribas which recently moved to the new financial district of Porta Nuova, Goldman has decided to stay in Milan’s city center.

Goldman currently employs about eight wealth managers, five investment managers and two investment bankers in Milan together with back office, compliance and other administrative staff.

Several Italian financiers who handle some of their country’s biggest deals from London have recently returned to their homeland.

Earlier this year, former Goldman Sachs banker Antonino Mattarella became Bank of America’s Italy head in Milan.

For those returning, Italy is offering significant perks, including a 50 percent income tax break.

JPMorgan and other financial institutions are also looking for new offices in Italy’s financial capital.

Editing by Adrian Croft

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Alphamin’s secondary listing approved

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Filo’s flagship looking good

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NQ Minerals proposes Hellyer clean-up

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Barrick could face Veladero glacier heat

Federal judge Sebastian Casanello accused five people including three former members of the Cristina Kirchner government – Omar Judis, Sergio Lorusso and Juan José Mussi -who worked in the environment secretariat, of abuse of authority relating to the glacier law and requested the government take urgent measures to establish the possible damage caused by their actions, reported La Nacion.

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