DOW SLIPS AFTER NEARING 20000 MILESTONE
- Expectations for stronger growth, tax cuts and less regulation from the new government have helped send U.S. stocks to all-time highs this month.
- Even as volumes have fallen sharply and moves have been muted in the final week of the year.
- The blue-chip index remains on track to end 2016 nearly 15% higher, while the S&P 500 is poised to add over 11%.
- U.S. crude oil added 0.4% to $54.10 a barrel after settling at its highest level since July 2015 in the previous session.
- The dollar continued its upward trend in thin trading following Tuesday’s better-than-expected U.S. consumer confidence data.
- A gauge of upcoming home sales dropped in November, a sign of weakening momentum for the U.S. housing market headed into 2017.
- In corporate news, shares in Toshiba fell more than 20% after a warning about a multibillion-dollar write-down.
US FINANCIAL MARKET
- Traders are waiting to see if OPEC will deliver on pledges to curtail production beginning next month.
- If carried out as planned, the deal should reduce global supply by 2%.
- Prices have hit new one-year settlement highs in recent days amid light trading over the holidays.
- Official data on U.S. crude stocks and production will be released Thursday—a day later than usual, due to the holiday.
- Regulator says Qualcomm breached antitrust law by limiting competing chip makers’ access to its patents.
- San Diego-based Qualcomm said it would contest the decision, rejecting the suggestion that it had hindered other chip suppliers’ ability to sell.
- Wednesday’s ruling won’t take effect until the commission issues a formal written order, which can take several weeks or months.
- Last year, Qualcomm agreed to a settlement with Chinese antitrust authorities that included a $975 million fine and required the company to alter its business practices.
- Delta Air Lines said on Tuesday that in agreement with Boeing it would cancel an order for 18 787 Dreamliner aircraft, which it assumed as a part of its merger with Northwest Airlines.
- The order is valued at more than $4 billion at current list prices, however Delta did not disclose specific terms of the agreement.
- The airline, which acquired Northwest in 2008 for $2.6 billion in shares, said it would continue to take delivery of 737-900ER aircraft through 2019.
U.S. Government Bonds Edge Higher After Tepid Housing Data
- U.S. government bonds edged higher Wednesday as lower stocks and a disappointing housing report stoked demand for haven debt.
- In recent trading, the yield on the benchmark 10-year Treasury note was 2.552%, according to Tradeweb.
- New debt sales keep the bond market’s strength in check.
US ECONOMY & POLITICS
- Index falls 2.5% to a seasonally adjusted 107.3 in November.
- Sales of previously owned homes account for roughly 90% of U.S. home purchases.
- The Realtors group last week reported that existing-home sales rose 0.7% in November from the prior month to a seasonally adjusted annual rate of 5.61 million.
- That was the third consecutive monthly increase and the strongest sales pace since February 2007.
- The WSJ Dollar Index, which measures the U.S. currency against 16 others, rose 0.3% to 93.65, its highest level since 2002.
- Still, other U.S. economic data this week was strong, with reports showing rising home prices and consumer confidence.
- Indictment says the traders bought shares of at least five publicly traded companies before announcements that the firms would be acquired.
- The traders earned more than $4 million in illegal profits after they hacked into the computer system of prominent U.S. law firms and stole nonpublic information on M&As.
- Manhattan U.S. Attorney Preet Bharara said the case “should serve as a wake-up call for law firms around the world: you are and will be targets of cyber hacking, because you have information valuable to would-be criminals.”
EUROPE & WORLD
- Following a 12% decline on Tuesday, shares fell more than 20% in early trading, the maximum allowed for the day.
- This movement came after the company warned investors about a multibillion-dollar write-down.
- Toshiba said the problem stemmed from cost overruns at its U.S. nuclear subsidiary, Westinghouse Electric.
- Airbus said six deliveries of the A380 would be postponed from 2017 to 2018, with another six postponed from 2018 to 2019.
- This follows an agreement between Emirates and engine maker Rolls Royce and a consecutive deal between Airbus and Emirates.
- “Airbus re-confirms the target to deliver around 12 A380s per year from 2018 as announced earlier in July 2016. Further fixed cost reduction initiatives will be accelerated so the impact on break-even in 2017 is minimal,” the company said in a statement.
- The deal adds 527 gas stations and 16 development sites to BP’s retail footprint that already spans around 1,400 sites in Australia.
- BP also owns the Kwinana oil refinery in Western Australia State, and stakes in the active North West Shelf liquefied natural gas facility and proposed Browse gas-export venture.
- Other recent deals BP has made includes a near $1 billion investment in a vast natural-gas field off the coast of Africa and a $2.2 billion all-share deal for stake in a parcel of U.A.E. oil fields.
- Woolworths—the operator of Australia’s largest supermarket chain—said in September that it was considering the sale of its fuels business.
- Personal deposits rose an annual 4.8% in November, while in the first 11 months personal deposits increased 32.4 billion pounds.
- A separate report signals minimal house-price growth in 2017.
- The Royal Institution of Chartered Surveyors also sees a slowdown in price growth in 2017, adding to the multiple reports that underscore the recent loss of momentum in Britain’s housing market.
- The BBA figures also showed that approvals for home loans fell 9 percent in November from a year earlier.
- Luxury home prices in some of the most expensive districts are down more than 10 percent this year, and land values are also dropping.
TODAY in HISTORY
John C. Calhoun became the first vice president in U.S. history to resign from office(1832)
Iowa became the 29th state in the United States (1846)
William F. Semple patented chewing gum (1869)
The Lumiere Brothers gave the first commercial movie show at the Grand Cafe in Paris (1895)
Congress officially recognized the Pledge of Allegiance(1945)
Elizabeth Jordan Carr, the first American test-tube baby, was born in Norfolk, Va (1981)
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