Wall Street opens little changed as oil edges up

Posted by: Admin | Posted on: June 22nd, 2017 | 0 Comments

U.S. stocks opened little changed on Thursday as oil prices remained near multi-month lows, undermining efforts by major producers to stabilize the market.

U.S. crude CLc1 traded up 0.45 percent at $42.71 per barrel. They closed down 1.6 percent on Wednesday after touching their lowest level since August. Global benchmark Brent LCOc1 was 0.83 percent higher at $45.19.

Since peaking in late February, crude has dropped around 20 percent, skidding into bear market territory, despite OPEC-led efforts to stabilize the market.

“Oil is trying to balance, but I’m worried that it would continue to head lower,” said Aaron Clark, portfolio manager at GWK Investment Management. “I think this a situation where OPEC is ceding market share and is no longer able to control prices.”

The SP energy index .SPNY, which has lost 14.9 percent this year, is the worst performing sector, largely underperforming the broader SP 500 index.

At 9:37 a.m. ET, the Dow Jones Industrial Average .DJI was down 6.32 points, or 0.03 percent, at 21,403.71, the SP 500 .SPX was down 1.63 points, or 0.07 percent, at 2,433.98 and the Nasdaq Composite index .IXIC was down 3.89 points, or 0.06 percent, at 6,230.06.

Investors are concerned that the drop in oil prices could affect inflation. Inflation remains stubbornly below the Federal Reserve’s 2 percent target, even as the central bank adopts a hawkish tone regarding future rate hikes.

“I’ve been more worried about deflation. I know (the Fed) wants to normalize, but I think it would be tough to get one more this year and three next year in the face of a flattening yield curve,” added Clark.

A flattening yield curve is often interpreted as a negative economic indicator as it shows concerns about the future pace of growth and inflation, because buyers of long-dated debt would demand higher yields if they expected higher costs.

The yield spread between five-year Treasury notes and 30-year Treasury bonds US5US30=TWEB flattened to its narrowest level since December 2007.

Economic data on Thursday showed jobless claims for last increased by 3,000 to 241,000, but remain at levels consistent with a tight labor market.

The healthcare index .SPXHC was the biggest gainer among the 11 major SP sectors with a 0.43 percent rise.

Among stocks, Accenture (ACN.N) was off 4 percent after the consulting and outsourcing services provider trimmed its annual revenue forecast.

Oracle’s (ORCL.N) shares were up about 10 percent as the business software maker forecast an upbeat current-quarter profit, prompting brokerages to raise price targets.

American Airlines (AAL.O) was up 3 percent at $49.93 after the U.S. airline said Qatar Airways had expressed interest in buying a 10 percent stake.

The news lifted shares of other major U.S. airlines such as Delta Air Lines (DAL.N), United Continental (UAL.N) and Southwest Airlines (LUV.N), which were up about 1 percent.

Advancing issues outnumbered decliners on the NYSE by 1,444 to 1,046. On the Nasdaq, 1,284 issues rose and 915 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)

Foxconn plans U.S. display making plant for over $10 billion, scouting for location

Posted by: Admin | Posted on: June 22nd, 2017 | 0 Comments

TAIPEI Foxconn (2317.TW), the world’s largest contract electronics maker and a major Apple Inc (AAPL.O) supplier, plans to invest more than $10 billion in a display-making factory in the United States and will decide on the location of the plant next month.

The Taiwan-based firm has been eyeing U.S. investments for some time and its CEO, Terry Gou, had previously said the company hoped to spend over $7 billion to set up a display-making plant in the country – which has no panel-making industry but is the No.2 market for televisions.

Foxconn, formally known as Hon Hai Precision Industry Co, is currently considering Wisconsin, Ohio, Michigan, Pennsylvania and North Carolina as possible locations, Gou told reporters after the company’s annual shareholders meeting on Thursday.

“In July we will make a conclusion,” Gou said, adding the company would invest the money over five years.

Foxconn operates vast factories in China, where it employs a million people and makes most of Apple’s iPhones, but so far it has not invested heavily in manufacturing in the United States.

“This time we go to America, it’s not just to build a factory, but to move our entire supply chain there,” Gou told shareholders, without providing specific details.

While the plant would create jobs, Gou added it would not employ as many people as in its China plants, as the cost of labor is higher and the plant would rely on automation.

“In the U.S., the state governors’ sincerity and confidence to attract investment … is beyond my imagination,” Gou said.

President Donald Trump has called for firms to build more products in the United States. He has made several announcements since his election in November about U.S. investments by both foreign and domestic manufacturers, building on his campaign focus on preserving and creating American jobs.

According to Tai Jeng-wu, CEO of Foxconn’s Japanese unit Sharp Corp (6753.T), six U.S. states were being looked at for a possible location for the display-making plant.

Foxconn already has operations in Pennsylvania.

Gou said that an agreement announced four years ago to invest in Harrisburg, Pennsylvania, was still pending.

(Reporting by Jess Macy Yu and J.R. Wu; Editing by Stephen Coates and Himani Sarkar)