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Update on the latest business

December 14, 2018

FINANCIAL MARKETS

Stocks slump again

NEW YORK (AP) — Stocks are slumping again on Wall Street again on new concerns about China’s economy. Weak economic data from China Friday renewed worries that a powerful engine for global growth was slowing down. Industrial output and retail sales slowed in November.

Johnson & Johnson plunged 10.4 percent after Reuters reported that the company has known since the 1970s that its talc baby powder sometimes contained asbestos. The stock was on pace for its biggest drop since 2002.

Technology companies also fell. Software maker Adobe fell 6.2 percent after issuing a weak earnings forecast.

RETAIL SALES

US retail sales rose scant 0.2% in November

WASHINGTON (AP) — U.S. retail sales increased a slight 0.2 percent in November, as strong sales tied to holiday shopping were offset by lower gasoline prices.

The Commerce Department said Friday that retail sales have climbed a solid 5.3 percent so far this year. In November, non-store retail sales — a category that includes Internet brands such as Amazon — jumped 2.3 percent. Furnishers, electronics stores and health stores also enjoyed a solid bump as the holiday shopping season got into full swing.

But some of that sales growth was hampered by gas stations, which saw a 2.3 percent drop in purchases last month. Higher gas prices in October, along with increased auto-buying, had helped propel broader retail sales gains of 1.1 percent during that month. Excluding gas, November retail sales rose a healthy 0.5 percent.

INDUSTRIAL PRODUCTION

US industrial production climbs 0.6 percent in November

WASHINGTON (AP) — U.S. industrial production climbed 0.6 percent on surging output at mines and utilities. But manufacturing production was flat.

The Federal Reserve says that utility output rose 3.3 percent as power companies were busier because of unusually cold weather. Mining output rose 1.7 percent on higher production at coal mines and oil and gas drillers.

But manufacturing was flat in November after falling 0.1 percent in October. Factories are contending with a stronger dollar that makes their products more expensive in foreign markets, slowing global growth and import taxes that raise their costs.

UNITED STATES-CANADA-CHINA

US, Canada hold high-stakes talks amid turmoil with China

WASHINGTON (AP) — The U.S. and Canada are holding high-stakes talks amid an escalating dispute with China that threatens to further complicate ties between the North American neighbors.

Secretary of State Mike Pompeo and Defense Secretary Jim Mattis were meeting their Canadian counterparts on Friday for discussions expected to be dominated by Canada’s arrest of a Chinese tech executive at Washington’s request. China has detained two Canadians in apparent retaliation.

The case has set off a three-way diplomatic furor in which Canada is stuck in the middle.

Canada arrested the chief financial officer of telecoms giant Huawei (WAH’-way) on Dec. 1. The U.S. wants her extradited on charges she and her company violated sanctions on Iran. But a Canadian judge released her on bail Tuesday.

CHINA-US-TRADE

China suspends tariff hikes on $126B of US goods

BEIJING (AP) — China has announced a 90-day suspension of tariff hikes on $126 billion of U.S. cars, trucks and auto parts following its cease-fire in a trade battle with Washington that threatens global economic growth.

The tax agency said the suspension that takes effect Jan. 1 is intended to carry out the agreement reached by Presidents Donald Trump and Xi Jinping during a Dec. 1 meeting in Argentina.

The agency said Beijing will suspend a 25 percent import charge on $66 billion of cars and trucks and a 5 percent charge on $60 billion of auto parts.

Trump agreed earlier to suspend planned U.S. tariff hikes due to take effect Jan. 1 on Chinese imports while the two sides negotiate.

CLIMATE

US-China trade spat having role in climate talks

KATOWICE, Poland (AP) — Costa Rica’s environment minister says the trade spat between the United States and China is playing a role at the U.N. climate talks.

Carlos Manuel Rodriguez told reporters in Katowice, Poland, on Friday that “socio-economic, political issues are reflected” in the talks, including the “trade issue between the U.S. and China.”

But he said countries concerned that taking action to curb global warming might harm their economies should consider that “it is in the self-interest of prosperity and economic growth.” He added that “climate action won’t be a barrier for growth and trade,” citing his own country’s economic growth even as it cuts its use of fossil fuels.

The executive director of Greenpeace International says the U.S. delegation to the climate talks is putting itself in the way as the rest of the world tries to forge an agreement on fighting global warming.

Jennifer Morgan says the U.S. delegation is questioning the science on climate change in the latest text and is “completely out of step” with other participants at the talks. Morgan says “they shouldn’t put themselves in the way of the rest of the world.”

BREXIT

Macron: No new Brexit accord, ball in UK court

BRUSSELS (AP) — French President Emmanuel Macron says the withdrawal deal on Brexit cannot be renegotiated and that it’s now up to the British Parliament to make the next move.

Macron spoke Friday after an EU summit and a one-on-one meeting with British Prime Minister Theresa May, seeking help from EU leaders to help her sell the deal to skeptical lawmakers.

Macron insisted “there is one accord, the only one possible,” adding “we cannot renegotiate it.” He told reporters that now it’s “the British parliament’s time” to decide whether to accept or reject it.

He said EU leaders are willing to “clarify and discuss” the accord, and said EU leaders at the summit sought to debunk “fantasies” about the so-called backstop for the Irish border.

EUROPE-ECONOMY

EU leaders agree on limited budget to support eurozone

FRANKFURT, Germany (AP) — Leaders of the European Union have agreed to press ahead with a common eurozone budget to help the currency union weather future crises. But the proposal appeared to fall short of more sweeping ideas pushed by French President Emmanuel Macron.

The leaders said that finance ministers would work out the precise features of the budget and agree on them by June.

Macron has pushed for a large eurozone budget that could support member states that run into economic trouble. That would help close a key vulnerability of euro monetary union, which has one currency but 19 different governments.

The leaders said in a statement Friday that the eurozone fund would be part of the overall European Union budget, suggesting it is likely to be smaller than Macron’s proposal.

FRANCE-PROTESTS

Survey shows French protests knocked business

PARIS (AP) — A survey suggests the “yellow vest” protests in France have dealt a significant blow to business activity in the country’s services sector, which includes tourism and retail.

The so-called purchasing managers’ index, which measures activity in various parts of an economy, fell to 49.6 points in December for France’s services sector. That is down sharply from November’s 55.1 points. The index, published Friday by data firm IHS Markit, is on a 100-point scale, with the 50 mark separating expansion from contraction.

Eliot Kerr, economist at IHS Markit, said the data points to “an outright contraction in France’s private sector for the first time in two-and-a-half years, following the protests which have swept through the country in recent weeks.”

The “yellow vest” protests began as demonstrations against a fuel tax and have expanded into sometimes violent marches across the country to protest the policies of President Emmanuel Macron.

VOLKSWAGEN

Volkswagen on track to break last year’s sales record

FRANKFURT, Germany (AP) — Automaker Volkswagen says it is on track for a new annual sales record despite trouble getting vehicles certified for new European emissions tests.

Sales head Christian Dahlheim said Friday that “we are confident” 2018 will end with a figure slightly above the previous record from 2017, when the company sold 10.74 million vehicles. November sales figures left Volkswagen with 9.92 million vehicles sold during the first 11 months.

Volkswagen faced delays getting cars certified under tougher emissions regulations that went into effect Sept. 1, hurting sales in the period after. Dahlheim said the effect from those troubles was already fading.

Last year the Renault-Nissan-Mitsubishi alliance disputed the title of world’s largest automaker with Volkswagen by selling 10.6 million vehicles and saying Volkswagen boosted its figure by counting trucks.

GENERAL MOTORS-JOBS

GM says it has 2,700 jobs for workers slated to be laid off

DETROIT (AP) — The General Motors’ massive 14,000-person layoff announced last month might not be as bad as originally projected.

The company said Friday that 2,700 out of the 3,300 factory jobs slated for elimination will now be saved by adding jobs at other U.S. factories. Blue-collar workers in many cities will still lose jobs when GM shutters four U.S. factories next year. But most could find employment at other GM plants. Some would have to relocate.

GM still plans to lay off about 8,000 white-collar workers and another 2,600 factory workers in Canada.

In November, GM announced plans to end production at the U.S. factories and one in Ontario as part of a restructuring.

Legislators and President Donald Trump have hammered GM over the layoffs. GM says the factory hires were in the works before its announcement.

FACEBOOK-PHOTO BUG

Facebook says bug may have exposed user photos to developers

NEW YORK (AP) — Facebook says a software bug may have exposed a broader set of photos to app developers than users had granted permission for.

The company said Friday that the bug affected 6.8 million people who used Facebook to log in to other services and granted permission for third-party apps to access the photos for 12 days in September. The bug has been fixed.

Generally when people give apps access to their photos, this only means photos posted on their Facebook page.

Facebook says the bug potentially gave developers access to other photos, such as those shared on Marketplace or on Facebook Stories. The bug also affected photos that people uploaded to Facebook but chose not to post or could not post for technical reasons.

GAS EXPLOSIONS

Months after Massachusetts gas explosions, normalcy far off

LAWRENCE, Mass. (AP) — Some Massachusetts property owners are struggling to return to normalcy following several dramatic pipeline explosions three months ago.

The utility company responsible for the disaster says only about 150 customers who opted to do required repairs themselves are still waiting for gas service to be restored.

But that doesn’t factor in about 30 families still dealing with serious damage that could take months to repair.

Small business owners say they’re also still reeling because business hasn’t picked back up.

And some property owners complain work done by the utility’s contractors has only led to more problems. A Columbia Gas spokesman says there are not widespread problems with repairs.

The Sept. 13 disaster killed one teen, injured two dozen, damaged 131 structures and left thousands without heat and hot water for weeks.

LOAN FORGIVENESS

Obama-era rule leads to $150M in student loan forgiveness

The U.S. Education Department says it will start forgiving federal loans for 15,000 former students whose colleges closed before they could graduate.

Department officials say the $150 million in loans will automatically be wiped clean, including about $80 million for former students of the defunct Corinthian Colleges for-profit chain, which collapsed in 2015.

The loans are being forgiven under an Obama-era rule that recently took effect after a federal judge ruled that Education Secretary Betsy DeVos was unlawfully delaying it.

DeVos has said the rule is “bad policy” and still aims to replace it, but it could be 2020 before any new rule takes effect.

Borrower advocacy groups and some Democrats applauded the loan discharges, but several said it shouldn’t have taken a court order to get relief for students.

SPAIN-SHAKIRA

Spanish prosecutors file tax evasion charges against Shakira

MADRID (AP) — Spanish prosecutors are charging pop music star Shakira with tax evasion, alleging she failed to pay more than 14.5 million euros ($16.3 million) between 2012 and 2014.

The charges Friday allege Shakira listed the Bahamas as her official residence for tax purposes during those years but was in fact living in Spain with her partner, Spanish soccer player Gerard Pique.

Prosecutors in Barcelona say her travel abroad was for short periods because of professional commitments, while most of the year she stayed in Spain. They want her to pay tax in Spain on her worldwide income.

The Colombian singer officially moved to Spain for tax purposes in 2015.

A magistrate will assess whether there is enough evidence to put Shakira on trial.

Shakira’s representatives said they had no immediate comment.

SEXUAL MISCONDUCT-CBS

Scandal-plagued CBS grants $20M to 18 women’s rights groups

NEW YORK (AP) — CBS is pledging $20 million in support of 18 organizations dedicated to eliminating sexual harassment in the workplace as the network tries to recover from a scandal that led to the ouster of its top executive, Les Moonves.

CBS said Friday that the money will go toward helping the organizations expand their work and “ties into the company’s ongoing commitment to strengthening its own workplace culture.”

The money is coming out of Moonves’ severance package. Whether Moonves will receive the remaining $120 million of his severance hinges on the outcome of an investigation into his conduct.

In a joint statement, the 18 organizations praised the donations as a significant step while also calling on CBS to disclose the results of the Moonves investigation.

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