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Update on the latest business

December 21, 2018

FINANCIAL MARKETS

Stocks down

NEW YORK (AP) — U.S. stock indexes are falling again as big losses for technology and internet companies and retailers add to the market’s woes this month.

Former market favorites like Amazon and Facebook are taking some of the biggest losses as investors remain nervous about the health of the global economy and the prospect of a lengthy partial shutdown of the federal government.

Markets have suffered wide losses over the last week. The major U.S. indexes have fallen more than 11 percent in December. Without a substantial gain over the final days of trading, they are headed for their single worst month since October 2008, when the market was being battered by the effects of the global financial crisis that led to the Great Recession.

ECONOMY-GDP

US economy grew at 3.4 percent rate in third quarter

WASHINGTON (AP) — The U.S. economy expanded at a solid 3.4 percent annual rate in the third quarter, slightly slower than the previous estimate as consumer spending and exports were revised lower. The economy is expected to slow further in the current quarter.

The Commerce Department says growth in the gross domestic product, the economy’s total output of goods and services, was revised down from an earlier estimate of 3.5 percent. The still-strong performance followed a sizzling 4.2 percent advance in the second quarter and a moderate 2.2 percent increase in the first quarter.

Economists believe that economic growth is slowing in the fourth quarter to around 2.5 percent. But the overall GDP performance for the year will still be the best since 2005.

CONSUMER SPENDING

US consumer spending rises solid 0.4 percent in November

WASHINGTON (AP) — Americans lifted their spending 0.4 percent in November from the previous month, a moderate gain that should sustain steady economic growth.

The Commerce Department says personal incomes rose 0.2 percent, down from 0.5 percent in the previous month.

Consumer spending jumped by the most in 13 months in October, and November’s solid gain on top of that points to healthy spending in the final three months of the year. Economists closely watch consumer spending because it accounts for about two-thirds of economic activity.

A measure of inflation slipped, rising 1.8 percent from a year ago, down from last month’s 2 percent annual gain.

That could add to recent pressure on the Federal Reserve to pause its interest rate hikes, since the Fed usually takes such steps to forestall rising inflation.

DURABLE GOODS

US durable goods orders up 0.8 pct., led by defense spending

WASHINGTON (AP) — Orders to U.S. factories for long-lasting goods rose at a modest pace last month, but the gain was driven entirely by demand for military aircraft. Excluding transportation equipment, orders fell.

The Commerce Department says that durable goods orders rose 0.8 percent in November, following a sharp drop of 4.3 percent the previous month when orders for commercial and military aircraft plunged. Orders, excluding transportation, dropped 0.3 percent. A category that reflects business spending plans declined 0.6 percent, the third drop in four months.

The figures suggest that U.S. factory output, while mostly solid, may slow in the coming months. The Trump administration’s trade battles have caused many U.S. trading partners to impose tariffs on American goods. Exports of U.S. manufactured products fell sharply in the July-September quarter.

FORD-F-SERIES RECALL

Fire risk forces Ford to recall F-Series pickup trucks

DETROIT (AP) — Ford is recalling more than 410,000 F-Series pickup trucks with engine block heaters in the U.S. because they can catch fire.

The recall covers certain F-150s from the 2015 through 2019 model years, as well as the 2017 through 2019 F-250, 350, 450 and 550.

The company says in government documents posted Friday that water and contaminants can get into the heater cable and cause corrosion. That can cause electrical shorts and possible fires.

Ford has received three reports of fires in Canada, but none in the U.S. There have been no reports of injuries.

Dealers will inspect and seal the cable or replace the heaters if needed. The recall is expected to start Jan. 7.

F-Series pickups are the top-selling vehicle in the United States.

BRITAIN-GATWICK AIRPORT-DRONES

New drone sighting shuts down London’s Gatwick

LONDON (AP) — An airport spokeswoman says flights at London’s Gatwick Airport have been suspended again because of a “suspected drone sighting.”

The shutdown came roughly 11 hours after flights had resumed Friday morning at Britain’s second-busiest airport.

British Police and transport officials had said that extra security measures had been put in place to prevent drones from intruding on the airport.

Flights at Gatwick, which serves over 43 million passengers a year, had been shut down all of Thursday and for several hours Wednesday evening due to drone sightings.

The shutdowns have caused chaos over the holiday period.

CARIBOU COFFEE HACKED

Caribou Coffee reports customer data breach at 265 stores

BROOKLYN CENTER, Minn. (AP) — The parent company of Caribou Coffee and Bruegger’s Bagels says hackers gained access to customer information at 265 of its stores, mostly in Minnesota.

The Minnesota-based company says the data breach occurred between Aug. 28 and Dec. 3. Caribou says it’s possible that customer name and credit card information may have been taken.

The company didn’t say how many people may have been affected. But it says about 200 of the affected stores are in Minnesota, while the rest are in Wisconsin, South Dakota, North Dakota, Iowa, North Carolina, Colorado, Florida, Georgia and Kansas.

The company says payments made through Caribou Coffee Perks accounts or other loyalty accounts weren’t affected, nor were orders placed online with associated bagel shops.

Caribou says it believes the breach has been contained but advises customers to monitor their credit card statements and credit reports.

GERMANY-CHINA-ESPIONAGE

Germany says link between hackers, China govt credible

BERLIN (AP) — Germany says it believes the links being drawn between the Chinese government and a group of hackers who allegedly stole trade and official secrets in the West are credible.

American and British officials on Thursday pointed the finger at Beijing over an extensive hacking campaign carried out by two alleged Chinese citizens.

German government spokeswoman Ulrike Demmer told reporters Friday that “we have great trust in the attribution of responsibility for ATP10 to Chinese government institutions that’s been made by various partner countries.”

China has responded by calling the accusations “unwarranted” and accusing Washington of hypocrisy over its own electronic espionage efforts.

German officials declined to say whether there were indications APT10 had targeted organizations in Germany, or whether the issue was raised with Chinese diplomats in Berlin.

CHINA-US-ESPIONAGE

China calls US arrogant and selfish after hacking indictment

BEIJING (AP) — China has called the U.S. arrogant and selfish after it charged two Chinese citizens with stealing trade secrets and other sensitive information from American government agencies and corporations.

Foreign Ministry spokeswoman Hua Chunying accused the U.S. on Friday of undermining other countries’ development in order to defend its own hegemony.

Hua spoke at a regular news briefing after she had condemned the U.S. in a written statement earlier in the day for “fabricating facts” on the hacking charges.

The U.S. indicted Zhu Hua and Zhang Shilong for allegedly carrying out an extensive cyberespionage campaign on behalf of Beijing’s main intelligence agency.

They are accused of breaching computers linked to companies in at least 11 other countries, including Japan, the United Kingdom and India.

SPRINT-SALES TAX SETTLEMENT

Sprint to pay NY state $330M in suit over unpaid sales taxes

ALBANY, N.Y. (AP) — New York state officials say Sprint will pay $330 million to settle a lawsuit that accused the telecommunication company of dodging more than $100 million in state and local taxes.

Attorney General Barbara Underwood and Acting Tax Commissioner Nonie Manion said Friday the agreement resolves a tax enforcement case brought in 2011.

The suit said Sprint violated the New York False Claim Act for nearly a decade by knowingly failing to collect and remit sales taxes owed on flat-rate wireless calling plans sold to New Yorkers.

Sprint spokeswoman Lisa Belot says the Overland Park, Kansas-based company disagrees with the state’s characterizations but is pleased with the settlement and believes it’s in Sprint’s best interests.

State officials say a whistleblower in the case will receive nearly $63 million of the settlement.

AMAZON AIR

Amazon’s fleet of jets is growing

NEW YORK (AP) — Amazon is expanding its airplane fleet as it tries to diminish its reliance on major delivery services like UPS, FedEx and the U.S. Postal Service.

The company said Friday it will lease 10 Boeing 767s planes, bringing its total fleet to 50 with the goal of getting orders to people faster and more reliably.

Amazon’s fleet of planes is far smaller than those at UPS and FedEx, which number in the hundreds, but it’s pushed in recent years to close that gap and gain more control over deliveries.

The Seattle company says the 10 new jets will join the rest of its fleet over the next two years.

BREAKING UP WITH FACEBOOK

Breaking up (with Facebook) is hard to do: Here’s how

NEW YORK (AP) — Every relationship has a breaking point. Even yours with Facebook. A growing number of people say they are deleting Facebook, or at least considering it.

The past two years of privacy scandals, election manipulation by Russian trolls, executive apologies and even just the political disagreements with friends and relatives have become too much for some people.

If you are one of them and want to take the plunge, remember to download your data first. Then, you can deactivate temporarily, or delete everything in a few steps.

MUSK-FLINT LAPTOPS

Flint students getting laptops thanks to Musk Foundation

FLINT, Mich. (AP) — A donation from tech billionaire Elon Musk will provide laptop computers to middle school students in Flint, Michigan, as the city recovers from a contaminated water crisis.

The Elon Musk Foundation is giving about $424,000 for the project helping seventh and eighth grade students. The announcement was made Wednesday at a Flint school board meeting.

Superintendent Derrick Lopez says the schools are also using a separate Musk grant of $480,000 to for water filtration.

The water crisis stems from lead that leached from old water pipes into homes and buildings after the city began using water from the Flint River in 2014 without adding corrosion-control chemicals. Flint returned to Detroit’s water system in 2015.

Musk is the CEO of Tesla Motors and the head of SpaceX.

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