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Update on the latest in business:

December 18, 2018

FINANCIAL MARKETS

Asian shares slip as traders ready for Fed rate hike

SINGAPORE (AP) — Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve.

On Monday, broad selling knocked U.S. indexes to their lowest levels in over a year. Investors sold almost everything, from technology and retail stocks to steadier high-dividend companies. Less than 40 of the 500 stocks comprising the S&P 500 finished the day higher. The benchmark index gave up 2.1 percent to 2,545.94, its lowest level since Oct. 9, 2017. The Dow Jones Industrial Average skidded 2.1 percent to 23,592.98 and the Nasdaq composite was down 2.3 percent at 6,753.73. The Russell 2000 index of smaller company stocks lost 2.3 percent to 1,378.14.

The Federal Open Market Committee begins a two-day meeting on Tuesday. It is expected to raise its short-term interest rate by a modest quarter-point, to a range of 2.25 percent to 2.5 percent a day later.

Oil prices fell on worries about oversupply and softening growth in China, which could hit demand. Benchmark U.S. crude oil fell below $49.50 a barrel.

The dollar weakened against the yen and the euro.

TRUMP-SPACE COMMAND

AP sources: Trump plans to create US Space Command

WASHINGTON (AP) — President Donald Trump is expected to sign an executive order soon, possibly as early as Tuesday, creating a U.S. Space Command that will better organize and advance the military’s vast operations in space, U.S. officials say.

Two U.S. officials said Vice President Mike Pence will make the announcement Tuesday at the Kennedy Space Center, in Cape Canaveral, Florida.

Trump’s order is separate from his oft-stated goal of creating a “Space Force” as an independent armed service branch, but it’s considered a step in that direction. The move will launch a long and complicated process, requiring the Defense Department to pull together various space units and agencies from across the military services into a more coordinated, independent organization.

The U.S. Air Force’s existing Space Command would be a key component of the new joint entity, raising space to the same status as U.S. Cyber Command.

The U.S. officials said the order will be signed by the end of the year, but could happen as early as Tuesday. They spoke on condition of anonymity because they weren’t authorized to speak publicly on the matter.

The move would actually recreate a U.S. Space Command, which existed from 1985 to 2002. It was disbanded in the aftermath of the 9/11 terrorist attacks so U.S. Northern Command could be established, focusing on defense of the homeland.

JAPAN-DEFENSE

Japan to spend more on defense, refit 1st aircraft carrier

TOKYO (AP) — Japan plans its first aircraft carrier and big increases in defense spending and weapons capability in the coming years, according to new defense guidelines approved Tuesday that cite the need to counter potential threats from North Korea and China and other vulnerabilities.

The guidelines approved at a meeting of Prime Minister Shinzo Abe’s Cabinet call for refitting an existing helicopter carrier into a ship that can deploy 42 expensive, U.S.-made F-35B stealth fighters capable of short takeoffs and vertical landings. Japan plans to buy 147 F-35s over the next decade.

The guidelines would replace the current defense plan halfway through and underscore Abe’s push to expand Japan’s military role and capability to make it “a normal country” in Abe’s words. He has long wanted to revise Japan’s U.S.-drafted constitution that renounces war and has already broadened the concept of self-defense to allow Japanese personnel to defend allied military forces as Japan increasingly works alongside American troops.

Defense officials say Japan needs higher deterrence and increased missile defense and fighter capability to cope with threats from North Korea and China and other changes in the region’s security environment. The new guidelines say Japan needs to be well-prepared and to show it can withstand threats, noting the archipelago is prone to natural disasters and its coastline is dotted with vulnerable nuclear power plants.

FEDERAL RESERVE

After the Fed’s likely rate hike this week, all bets are off

WASHINGTON (AP) — Having raised interest rates with steady regularity in recent months, the Federal Reserve may embrace a new message this week: Flexibility.

On Wednesday, the Fed is set to announce its fourth rate hike of the year. But after this week, no one is sure what it will do. Neither, most likely, is the Fed itself.

A confluence of factors — a global slowdown, a U.S.-China trade war, still-mild inflation, stomach-churning drops in stock prices — may have left Fed officials weighing a shift in policy. Many analysts think the Fed will signal Wednesday that it’s considering whether to slow or suspend its rate hikes in 2019 to avoid weakening the economy too much. And some predict that the rate increases, which began three years ago, will end altogether next year.

In September, Fed officials collectively forecast that they would raise rates three times in 2019. But this week, in the view of many analysts, the central bank could indicate that no more than two rate hikes are likely next year.

Yet the overarching message — in a statement after its latest policy meeting, in updated forecasts for the economy and interest rates and in a news conference by Chairman Jerome Powell — may be that the Fed plans to suit its rate policy to the latest economic data. In Fed parlance, it will be “data-dependent.”

Economists appear unified, though, in the view that whatever the Fed does, it won’t be influenced by the attacks President Donald Trump has made.

CHINA-FORCED LABOR

US sportswear traced to factory in China’s internment camps

HOTAN, China (AP) — Chinese minorities held in internment camps are sewing sportswear that can end up on U.S. college campuses and sports teams.

The Associated Press has tracked recent, ongoing shipments from one such factory inside an internment camp to a leading supplier -- Badger Sportswear-- in North Carolina. The factory is one of a growing number in the Xinjiang (shihn-jahng) region, where by some estimates 1 million Muslims are detained. They are forced to give up their language and their religion and are subject to political indoctrination.

Barbed wire and hundreds of cameras ring the massive compound of more than 30 dormitories, schools, warehouses and workshops. Dozens of armed officers and a growling Doberman stand guard outside.

TRUMP-TRADE

Agriculture Dept. launches 2nd round of payments to farmers

WASHINGTON (AP) — President Donald Trump has authorized the Agriculture Department to launch the second and final round of $11 billion in trade mitigation payments to farmers hard hit by tariffs.

In a tweet on Monday, Trump said he is fulfilling a promise to protect farmers against “unjustified trade retaliation by foreign nations.”

The Trump administration in July announced it would provide up to $12 billion to offset losses from Trump’s trade disputes with China and other countries.

The first round of checks went out in September.

In total, producers of almonds, corn, cotton, dairy, hogs, sorghum, soybeans, fresh sweet cherries and wheat will receive roughly $9.5 billion. Soybean farmers will get the largest share.

Roughly $1.2 billion is earmarked for a food purchase and distribution program and $200 million to promote trade.

CBS-MOONVES

CBS denies former CEO Les Moonves $120 million severance

NEW YORK (AP) — Former CBS CEO Les Moonves will not receive his $120 million severance package after the company’s board of directors determined he was fired “with cause” over sexual misconduct allegations.

The board said Monday it reached its decision after finding that Moonves failed to cooperate fully with investigators looking into the allegations. The board also cited what it called Moonves’ “willful and material misfeasance,” violation of company policies and breach of his contract.

Moonves was ousted in September after allegations from women who said he subjected them to mistreatment including forced oral sex, groping and retaliation if they resisted.

WILDFIRE CLEANUP-WORKER PHOTOS

California utility fires contractor from wildfire recovery

SAN FRANCISCO (AP) — A Northern California utility on Monday said it terminated one of its contractors helping with wildfire recovery after three workers posted on social media insensitive photos and comments poking fun at victims and the region.

Pacific Gas & Electric said Bigge Crane and Rigging Co. will no longer help the utility repair widespread damage to its power lines caused by the state’s most destructive wildfire on Nov. 8.

The posts were widely shared on social media and the photos showed the former workers sitting in front of destroyed homes, pretending to drive a burned out vehicle and jumping through the remnants of child’s trampoline. One photo showed a dead cat with a beer bottle in its mouth.

PG&E is facing a growing number of lawsuits alleging its equipment started the Camp Fire that killed at least 86 people, destroyed 14,000 homes and leveled Paradise, a city of 27,000 residents. PG&E reported an equipment malfunction at the time and location where the fire started.

ARTIC OFFSHORE DRILLING-LAWSUIT

Groups sue to block oil production in Alaska’s Beaufort Sea

ANCHORAGE, Alaska (AP) — Five conservation groups filed a lawsuit Monday seeking to block oil production from a proposed artificial gravel island in federal Arctic waters.

The groups asked the 9th U.S. Circuit Court of Appeals to review an offshore production plan approved for the Liberty project in the Beaufort Sea off Alaska’s north coast.

The groups said the plan violates federal law governing outer continental shelf drilling, the environment and endangered species. The Trump administration failed to consider impacts of an oil spill in remote Arctic waters or effects of drilling on polar bears and other endangered species, said Kristen Monsell of the Center for Biological Diversity, one of the groups that sued.

The site is 15 miles east of Prudhoe Bay, North America’s largest oil field.

PACIFIC OCEAN-PLASTIC CLEANUP

Barrier isn’t trapping trash in Pacific Ocean after months

LOS ANGELES (AP) — A floating device deployed three months ago to corral a swirling island of trash between California and Hawaii has not swept up any plastic waste — but the young innovator behind the project said Monday that a fix was in the works.

Boyan Slat, 24, who launched the Pacific Ocean cleanup project, said the speed of the solar-powered barrier isn’t allowing it to hold on to the plastic it catches.

A crew of engineers will reach the U-shaped boom Tuesday and will work for the next few weeks to widen its span so that it catches more wind and waves to help it go faster.

A ship towed the 2,000-foot-long barrier in September from San Francisco to the Great Pacific Garbage Patch — an island of trash twice the size of Texas.

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