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Dow hits new closing high ahead of index reshuffle

Posted by: Admin | Posted on: September 21st, 2018 | 0 Comments

NEW YORK (Reuters) – Industrials led the Dow to a new closing high on Friday ahead of Monday’s major sector reshuffle, capping a week that largely shrugged off trade worries.

Trading volume spiked to the highest level since Feb. 9 in anticipation of the SP 500 sector change, when telecoms will be folded into a new sector called communications services, along with heavy-hitting stocks such as Facebook Inc (FB.O) and Walt Disney Co (DIS.N).

While the Dow closed higher, the SP 500 and the Nasdaq ended the session in negative territory. The SP and the Dow posted weekly gains, with the Dow showing its biggest weekly percentage advance in over two months. The Nasdaq lost ground on the week.

“Quadruple witching,” when stock options and futures expire, and the rebalancing of the SP 500 and the Russell 2000 indexes also contributed to heavier traffic.

“A lot of those changes have been anticipated by the index funds, and they’ve prepared for it,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “But there’s a lot going on.”

Boeing Co (BA.N), the United States’ biggest exporter to China, boosted trade-sensitive industrials .SPLRCI higher. The sector led the Dow’s advance.

Yields on long-dated U.S. Treasuries edged down on Brexit anxieties even with Federal Reserve expected to hike key interest rates next week. Financial stocks .SPSY headed lower, ending their recent rally.

“Any time there is a rate hike you potentially see a flattening of the yield curve, which is not good for financials,” said Ghriskey.

The Dow Jones Industrial Average .DJI rose 86.52 points, or 0.32 percent, to 26,743.5, the SP 500 .SPX lost 1.08 points, or 0.04 percent, to 2,929.67 and the Nasdaq Composite .IXIC dropped 41.28 points, or 0.51 percent, to 7,986.96.

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Telecoms .SPLRCL rose 1 percent on its last trading day as a discrete major SP sector, and was the index’s biggest percentage gainer.

All of the FAANG momentum stocks ended the session lower, with Facebook, Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Google parent Alphabet Inc (GOOGL.O) down between 1.1 percent and 1.9 percent.

Shares of security and alarm company ADT Inc (ADT.N) jumped for a second day in a row, closing up 5 percent as Amazon introduced its new Alexa Guard service which could notify ADT of disturbances in the home.

McDonald’s Corp (MCD.N) rose 2.8 percent after announcing it would hike its quarterly dividend by 15 percent.

Under Armour Inc (UAA.N) gained 2.9 percent following an upgrade by JPMorgan Chase.

A 2.9 percent drop in shares of Micron (MU.O) helped pull chipmakers lower after the company said U.S. tariffs on Chinese goods would weigh on its financial results for as much as a year.

Shares of Pier 1 Imports Inc (PIR.N) plunged 19.9 percent after the home furnishings retailer cut its second-quarter forecasts.

Advancing issues outnumbered declining ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners.

The SP 500 posted 56 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 64 new highs and 46 new lows.

Volume on U.S. exchanges was 10.77 billion shares, nearly 64 percent higher than the 6.57 billion average over the last 20 trading days.

Reporting by Stephen Culp; Editing by Meredith Mazzilli

United Airlines pilots resist contract changes over regional routes

Posted by: Admin | Posted on: September 21st, 2018 | 0 Comments

(Reuters) – United Airlines (UAL.O) pilots said they refuse to budge on the wording of their contract governing the outsourcing of regional flights.

President of the U.S. No. 3 carrier, Scott Kirby, has called for changes to the so-called “scope clause” which sets guidelines on the size of planes that can be operated by regional feeder carriers, among other things.

A scope clause restricts planes heavier than 86,000 pounds (39,000 kg) with more than 76 seats from regional routes, where pilots are generally paid less than their mainline counterparts.

“We are holding the line,” said Todd Insler, chairman of the unit of the Air Line Pilots Association that represents United pilots. “We have no intention of degrading scope.”

The United negotiations are being watched by other airlines entering labor talks, along with commercial planemakers Embraer SA (EMBR3.SA) of Brazil and Mitsubishi Heavy Industries Ltd (7011.T) of Japan, which are building new planes that are too heavy to be flown by regional carriers because they exceed the scope clause weight.

A United spokesman could not immediately be reached for comment. Kirby has said changing the scope clause would make the carrier more competitive against rivals American Airlines (AAL.O) and Delta Air Lines (DAL.N).

Insler disagreed with that.

“We won’t use regional jets to disadvantage our mainline employees, pilots, flight attendants, anyone else,” Kirby told analysts at a conference earlier this month. “Having competitive scope, however, is really important to being the best. We can’t have one hand tied behind our back and try to compete with AA and Delta.”

Pilots have asked United to shift flights from regional carriers to the main airline because smaller carriers use less-efficient 50-seater planes and have faced problems recruiting pilots in a competitive market, according to Insler.

Major carriers have generally been reluctant to make regional flights part of the mainline operations, citing higher costs. “It’s very difficult to make those aircraft work at any mainline airline,” United Chief Financial Officer Gerald Laderman told analysts at a conference earlier this month.

Reporting by Allison Lampert in Montreal; Additional reporting by Tracy Rucinski in Chicago; Editing by Bill Rigby