DAILY MARKET REPORTS
- U.S. stocks were little changed Friday, following a week of dramatic swings on Wall Street that capture the uncertainty gripping investors heading into 2019.
- On Thursday, the Dow closed 260 points higher after falling as much as 611 points.
- That reversal marked the 30-stock index’s biggest intraday turnaround in eight years.
- All three major U.S. indexes are up at least 3% this week, on course to snap a three-week losing streak.
- Despite the gains, the blue-chip index and S&P 500 are on pace for their worst December since 1931.
- In Friday’s action, nine of the 11 sectors in the S&P 500 were higher, led by gains in defensive-oriented sectors including consumer staples and real estate. Technology and industrial shares were mildly lower.
- Top of mind in the U.S. this week is the partial government shutdown, which is expected to continue into January as the issue of funding a wall on the border with Mexico cleaves further open a partisan split in Congress.
- Concerns that the U.S. economy is set for a slowdown have weighed on markets in recent months, as the effects of President Trump’s tax reforms wear off and the U.S. central bank tightens monetary policy.
US FINANCIAL MARKET
Tesla Adds Two New Independent Directors to Board
- Tesla named a pair of new independent directors—including Oracle Chairman Larry Ellison, a tech-industry luminary who has been a public booster of the company—to a board that has been under fire for its oversight of Chief Executive Elon Musk.
- The additions bring to 10 the number of active directors on Tesla’s board, which in the past two years has added two other outsiders to a group stacked with longtime Musk allies. An 11th director has been on leave since last year.
- Mr. Ellison, who co-founded enterprise software giant Oracle in 1977 and is one of the best-known executives in Silicon Valley, has expressed support for Mr. Musk, disclosing in October that Tesla was his second-largest personal investment.
Yankees in Talks with Amazon, Sinclair to Bid for YES Sports Network
- The New York Yankees are in talks with Amazon.com and broadcaster Sinclair Broadcast Group about partnering to bid for the team’s regional sports network YES, according to people familiar with the matter.
- The Yankee Entertainment and Sports Network LLC, which carries Yankee baseball and Brooklyn Nets basketball, is among the Fox assets that Walt Disney is required to sell for the government to approve its purchase of the majority of the company.
- The Yankees own 20% of YES and have first dibs on acquiring the remaining 80%. The team has been talking to a variety of potential partners to purchase the network, for which Disney is seeking a valuation of $5 billion to $6 billion.
Green Growth to launch hostile bid for pot producer Aphria
- U.S. cannabis retailer Green Growth Brands said on Thursday it would make a hostile takeover bid for Aphria in an all-stock deal valuing the Canadian pot producer at C$2.8 billion ($2.06 billion).
- Several companies are looking to partner with or buy pot firms to explore opportunities in the Canadian cannabis sector after the country legalized recreational use of marijuana in October.
- Green Growth would offer 1.5714 shares for each Aphria share, representing a premium of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24. The offer is based on a valuation of C$7.00 per Green Growth share.
Foxconn to begin assembling top-end Apple iPhones in India in 2019
- Apple will begin assembling its top-end iPhones in India through the local unit of Foxconn as early as 2019, the first time the Taiwanese contract manufacturer will have made the product in the country, according to a source familiar with the matter.
- Importantly, Foxconn will be assembling the most expensive models, such as devices in the flagship iPhone X family, the source said, potentially taking Apple’s business in India to a new level.
- Until now, Apple has only assembled the lower-cost SE and 6S models in India through Wistron’s local unit in the Bengaluru technology hub.
Dell debuts at $46 in return to market
- Dell’s Class C shares opened at $46 in their return to public markets on Friday, after the company bought back shares tied to its interest in software maker VMware earlier in the month.
- Dell bought back its shares for $23.9 billion, up from its earlier offer of $21.7 billion.
- The deal, which was announced in July, allowed Dell to become a publicly listed company without an initial public offering, which would likely have involved grilling by stock market investors over Dell’s $52.7 billion debt pile.
Ex-Insys CEO to plead guilty to opioid kickback scheme
- The former chief executive of Insys Therapeutics has agreed to plead guilty to participating in a scheme to bribe doctors to prescribe a powerful opioid medication in order to boost its sales, U.S. prosecutors said on Wednesday.
- The case centers on Subsys, Insys’ under-the-tongue spray for managing pain in cancer patients. It contains fentanyl, an opioid 100 times stronger than morphine.
- Michael Babich, who resigned as the Arizona-based drugmaker’s CEO in 2015 and was due to face trial next month, has agreed to plead guilty to conspiracy and mail fraud charges, federal prosecutors in Boston disclosed in a court filing.
Netflix releases interactive episode of TV show ‘Black Mirror’
- Streaming giant Netflix released a new interactive show Friday that allows users to choose how the story develops and ends.
- When the episode is accessed by computer for the first time, a short tutorial instructs viewers to “keep your mouse or trackpad close at hand,” as different storyline options are presented throughout the viewing.
- Viewers are offered simple “Yes” or “No” choices as to what might befall characters in subsequent chapters.
After a Comeback and a Name Change, Priceline Bets Big on China
- Nearly two decades ago, Priceline.com was the poster child of the U.S. internet stock frenzy before the bursting of the dot-com bubble erased most of its market value.
- Now called Booking Holdings, it is once again one of America’s most valuable technology companies. And it is making a large bet on another frothy market: China’s crowded online travel space.
- Over the past year, Booking has spent nearly $1 billion on Chinese tech companies, including Didi Chuxing Technology and Meituan Dianping, whose all-in-one app lets hundreds of millions of users post reviews, buy tickets and book rides, food delivery or hotel rooms.
- More than 130 million Chinese citizens traveled abroad last year, up 7% from the previous year, and they spent more than $115 billion, according to data from the China Tourism Academy, a government-backed think tank.
US ECONOMY & POLITICS
U.S. pending home sales fall unexpectedly in November
- Contracts to buy previously owned homes fell unexpectedly in November, the National Association of Realtors said on Friday, the latest sign of weakness in the U.S. housing market.
- The NAR’s pending home sales index decreased 0.7% from the prior month to 101.4. October’s index was unrevised.
- Economists had forecast pending home sales to rise 0.7% last month.
- Compared to one year ago, pending sales were down 7.7% in November, the eleventh straight year-over-year drop.
Congress meets briefly, takes no steps to end shutdown
- Both chambers of the U.S. Congress convened for only a few minutes late on Thursday, but took no steps to end a partial federal government shutdown before adjourning until next week.
- Showing little sense of urgency over the shutdown, now in its sixth day, the Senate and the House of Representatives did nothing to restore funding for the roughly 20% of the government affected.
- The shutdown was on track to continue into next week and possibly drag on well into January.
Trump threatens to close southern border if not given wall funding
- President Donald Trump threatened on Friday to close the U.S. southern border if Congress does not agree to provide $5 billion in taxpayer funds for his promised wall along the border with Mexico.
- With large parts of the federal government shut down for lack of funding in a dispute over the proposed wall and Congress adjourned until next week, Trump was in the White House firing off angry tweets.
- The Republican president also reiterated threats to cut off all U.S. aid to Honduras, Guatemala and El Salvador, which he said were not doing anything to stop the flow of migrants toward the United States.
Barr’s Push for Iran-Contra Pardons Likely to Emerge in Confirmation Hearing
- When President George H.W. Bush pardoned six Reagan administration officials involved in the Iran-Contra scandal in 1992, he had the blessing of a powerful ally: then-Attorney General William Barr.
- Mr. Barr, Trump’s pick for AG, recommended pardons of former Defense Secretary Caspar Weinberger and five others, saying he thought they had been “unjustly treated” by a special counsel who charged them with offenses including lying to Congress.
- Mr. Barr’s role in those pardons will be a focal point at his confirmation hearing as soon as next month, congressional aides say.
- Democrats have promised to press Mr. Barr on his reasoning at the time and on how he would react to potential pardons of Trump aides who have been convicted in special counsel Robert Mueller’s Russia probe.
Teachers Quit Jobs at Highest Rate on Record
- Teachers and other public education employees, such as community-college faculty, school psychologists and janitors, are quitting their jobs at the fastest rate on record, government data shows.
- In the first 10 months of 2018, public educators quit at an average rate of 83 per 10,000 a month.
- While that is still well below the rate for American workers overall—231 voluntary departures per 10,000 workers in 2018—it is the highest rate for public educators since such records began in 2001.
- In at least 12 states, public education budgets are down at least 7% from 2009 levels, adjusted for inflation, according to an analysis of census data by the left-leaning Center on Budget and Policy Priorities.
- Teacher pay across the country, adjusted for inflation, is now 5% lower than it was in 2009, according to data from the National Education Association, the nation’s largest teachers union.
EUROPE & WORLD
Former McKinsey Executive Imprisoned by Saudis
- Saudi Arabian officials arrested a partner at consulting giant McKinsey in the fall of 2017 and have been holding him in detention since then, people familiar with the matter say. In recent months, he has been repeatedly beaten.
- The detention and alleged physical abuse of Hani Khoja, a Saudi national who was arrested as part of a sweeping crackdown, underscore the ethical quandaries multinational companies face working in Saudi Arabia.
- Three years into an ambitious economic reform effort, the kingdom’s crown prince, Mohammed bin Salman, has created billions of dollars in business opportunities for companies and investors and lifted some of the kingdom’s tight social restrictions.
- But officials in his government have also locked up dissidents, attacked neighboring countries, been accused of manipulating the Saudi stock market and allegedly ordered the killing of dissident columnist Jamal Khashoggi.
Chinese Gene-Editing Experiment Loses Track of Patients, Alarming Technology’s Inventors
- Chinese scientists have raced ahead in experimenting with gene-editing on humans in the last few years, using a powerful new tool called Crispr-Cas9 to edit the DNA of dozens of cancer patients.
- Information gathered by The Wall Street Journal shows one such trial has lost touch with patients whose DNA was altered, alarming some Western scientists who say subjects should be monitored for many years.
- Now, these Crispr trials are coming under scrutiny from health authorities in Beijing after a controversial gene-editing announcement in China last month sparked international concern over adequate regulation and oversight in the country.
- Crispr holds the promise to correct intractable diseases by rewriting a person’s genetic code, or DNA. But it isn’t foolproof and can cause changes in genes other than the ones sought.
TODAY in HISTORY
- William F. Semple patented chewing gum. (1869)
- Congress officially recognized the Pledge of Allegiance. (1945)
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