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Update on the latest business

November 29, 2018

FINANCIAL MARKETS

Stocks slightly lower

NEW YORK (AP) — Stock indexes are slightly lower in midday trading on Wall Street.

Technology companies are taking some of the largest losses, and banks are down amid expectations of slower increases in interest rates. But energy companies are rising as oil prices turn higher. Health care companies, which have done far better than the rest of the stock market recently, continue to rise.

Bond prices edged higher. The yield on the 10-year Treasury note fell to 3.03 percent

The S&P 500 index is coming off its largest rally in eight months and has climbed 4 percent this week.

CONSUMER SPENDING

US consumer spending up strong 0.6 percent in October

WASHINGTON (AP) — Consumers boosted their spending in October at the fastest pace in seven months, while their incomes rose by the largest amount in nine months — both good signs for future economic growth.

The Commerce Department says consumer spending rose a sharp 0.6 percent last month. It was the biggest increase since a similar gain in March and was three times faster than the 0.2 percent September performance. Incomes, which provide the fuel for spending, were up 0.5 percent in October, a significant pickup from a 0.2 percent September gain.

A key gauge of inflation tied to consumer spending posted a 2 percent rise in October compared to a year ago, hitting the annual target for inflation set by the Federal Reserve.

Excluding volatile food and energy costs, inflation has posted a 12-month gain of 1.8 percent in October, down from a 1.9 percent September advance.

MORTGAGE RATES

US average mortgage rates steady; 30-year stays at 4.81 pct.

WASHINGTON (AP) — U.S. long-term mortgage rates barely budged this week after marking the biggest drop in nearly four years a week earlier.

Home borrowing rates remain much higher than they were a year ago. Mortgage giant Freddie Mac says the average rate on the benchmark 30-year, fixed-rate mortgage held steady at 4.81 percent this week. That compares with 3.90 percent a year ago.

The rate on 15-year fixed-rate loans edged up to 4.25 percent from 4.24 percent the previous week.

PENDING HOME SALES

US pending home sales fell 2.6 percent in October

WASHINGTON (AP) — Pending home sales sank in October, as higher mortgage rates have worsened the affordability of home ownership and dampened enthusiasm among would-be buyers.

The National Association of Realtors says that its pending home sales index fell 2.6 percent last month to 102.1. The index based on contract signings has tumbled 6.7 percent from a year ago.

The housing downturn has corresponded with a jump in mortgage rates that began last year after President Donald Trump’s tax cuts led to higher budget deficits and interest rates charged on U.S. Treasury notes.

Contract signings dropped most sharply in the West, but they also declined in the Midwest and South. The index increased in the Northeast.

Pending sales are a barometer of home purchases that are completed a month or two later.

G20

World leaders arriving for pivotal G-20 summit in Argentina

BUENOS AIRES, Argentina (AP) — World leaders have begun arriving in Buenos Aires on Thursday for the summit of the globe’s largest economies, with attention expected to focus on issues including a trade war between the United States and China, a new North American trade deal and the conflict in Ukraine.

President Donald Trump has canceled a meeting with Russian President Vladimir Putin planned for Saturday, citing Russia’s seizure of Ukrainian vessels over the weekend.

COAL TAX-BLACK LUNG

Coal miners urge Congress extension of black lung funding

LOUISVILLE, Ky. (AP) — Former Appalachian coal miners and supporters are in Washington this week to urge lawmakers to extend a tax that benefits miners sick with black lung disease.

The excise tax paid by coal companies funds the Black Lung Disability Trust Fund, but the tax is set to decrease by half at the end of the year.

Calling it a matter of life and death, supporters say the fund could be in jeopardy without the extension. Kenny Fleming had to retire early from coal mining in eastern Kentucky when he got sick. He called the fund a “lifesaver.”

Rates of black lung, an incurable disease, have been on the rise in Appalachia in recent years.

House Republicans inserted a one-year extension for the tax into a tax bill released this week.

GERMANY-AMAZON-INVESTIGATION

German antitrust agency opens Amazon investigation

BERLIN (AP) — Germany’s antitrust agency says it has begun an investigation of online retailer Amazon to over complaints it’s abusing its position to the detriment of sellers who use its “marketplace” platform.

The Federal Cartel Office said Thursday that Amazon’s “double role as the largest retailer and largest marketplace has the potential to hinder other sellers on its platform.”

It says “because of many complaints” it will examine Amazon’s business and practices toward sellers. The office says it will investigate Amazon’s liability provisions, rules on product reviews and other practices.

The office says its own investigation will “supplement” an ongoing European Commission investigation into Amazon’s use of data to the possible disadvantage of marketplace sellers, with a focus strictly on terms of business and practices toward sellers on its German Amazon marketplace.

GERMANY-BAYER

German pharmaceutical company Bayer cutting 12,000 jobs

BERLIN (AP) — German pharmaceutical giant Bayer AG says it’s cutting 12,000 jobs worldwide as it seeks to reduce costs.

The Leverkusen-based company said Thursday that details of the cuts to its 118,200-stong workforce would be worked out in coming months but that “a significant number” of the reductions would come in Germany.

Bayer acquired U.S. seed and weed-killer maker Monsanto Co. this year. It says with the “synergies expected from the acquisition of Monsanto” and other efficiency and structural measures, including the job cuts, “Bayer anticipates annual contributions of 2.6 billion euros from 2022 on.”

The company says a portion of the funds will be used to strengthen competitiveness and innovation in its divisions.

Bayer shares rose on the news and were up 3 percent in afternoon trading in Frankfurt.

RENAULT-NISSAN

Prosecutors to hold Ghosn for as long as needed

TOKYO (AP) — Japanese prosecutors say they will detain former Nissan Motor chairman Carlos Ghosn (gohn) for as long as needed to finish their investigation into suspicions of financial irregularities.

Shin Kukimoto, deputy chief prosecutor for the Tokyo District Public Prosecutors’ Office told reporters Thursday the authorities have no intention of releasing Ghosn because of international attention or concern about his case.

Ghosn and another Nissan executive, Greg Kelly, were arrested on Nov. 19. They are being held at a detention center in Tokyo. Kukimoto refused to confirm reports that both men have denied the allegations against them.

Last week, prosecutors got approval to hold Ghosn without formally charging him until Friday, as is standard in Japanese investigations. The prosecutors can detain suspects for up to 20 days per charge, gaining time with more charges.

ITALY-FIAT CHRYSLER

Fiat Chrysler announces production plans for Italian plants

MILAN (AP) — Fiat Chrysler Automobiles CEO Mike Manley says the Italian-American carmaker will build a fully electric version of the 500 city car and a compact Alfa Romeo SUV at plants in Italy.

Manley and other executives met with unions leaders in Turin on Thursday, some four months after Manley took over as CEO following the unexpected death of Italian-Canadian CEO Sergio Marchionne.

Unions have been seeking confirmation of plans for Italian manufacturing since a new five-year strategy was announced last June.

The all-electric 500 will be built in Mirafiori, in Turin, while the Alfa Romeo SUV will be built in Pomigliano, near Naples, along with the Panda. The company will also add production of a hybrid plug-in Jeep Renegade and the Jeep Compass to its plant in Melfi in the south.

GENERAL MOTORS-CRUISE MANAGEMENT

Cruise control: GM’s No. 2 exec to run self-driving car unit

SAN FRANCISCO (AP) — General Motors’ No. 2 executive is moving from Motor City to Silicon Valley to run the automaker’s self-driving car operations as it attempts to cash in on its bet that robotic vehicles will transform transportation.

GM President Dan Ammann will become CEO of the company’s Cruise Automation subsidiary at the beginning of next year. He will replace Cruise co-founder Kyle Vogt, who will become chief technology officer.

The transition announced Thursday comes as Cruise gears up to up introduce a ride-hailing service deploying its driverless technology in GM’s Chevy Bolt next year. The service is supposed to debut at some point next year in a major U.S. city, with Cruise’s home city of San Francisco considered to be among the top candidates.

ICELANDAIR-WOW AIR

Icelandair abandons takeover of rival budget airline Wow

UNDATED (AP) — Icelandair is dropping its $18 million purchase of financially troubled Wow Air, a rival Iceland-based budget airline that touts cheap flights between the U.S. and Europe.

Icelandair Group said Thursday it’s unlikely terms of the Nov. 5 deal could be met in time for a shareholder meeting scheduled for Friday.

Wow faces a challenging outlook as a stand-alone carrier. Earlier this week, it returned four planes to leasing companies in a move it called a necessary restructuring.

Airlines have faced pressure from higher fuel prices for most of this year until a very recent slide in oil prices.

Icelandair’s interim president, Bogi Nils Bogason, calls the deal’s collapse disappointing. Wow CEO and founder Skuli Mogensen says trying to pull off the deal in just a few weeks was ambitious.

MEDIA-SINCLAIR-EPSHTEYN

Sinclair distances itself from commentary after protest

NEW YORK (AP) — The Sinclair Broadcast Group is distancing itself from commentary by its chief political analyst Boris Epshteyn, who this week supported the Trump administration’s efforts to stop migrants at the U.S. border with Mexico.

The commentary has triggered protests, and the National Association of Hispanic Journalists said it is reconsidering allowing Sinclair representatives to attend its job recruitment events.

Sinclair tweeted that Epshteyn’s opinions “in this segment do not reflect the views of Sinclair Broadcast Group.” The company owns dozens of local television stations across the country.

Sinclair representatives did not immediately return messages Thursday about whether it required its stations to run commentary it didn’t agree with, or even confirm this was the specific Epshteyn statement that it was referring to.

BILLY BASS-ALEXA

Alexa hooks up with Big Mouth Billy Bass

DALLAS (AP) — Kitsch and high-tech are linking up just in time for Christmas.

Big Mouth Billy Bass is programmed to respond to Alexa voice commands through a compatible Amazon Echo device. That means the singing and talking fish will lip synch to Alexa’s responses and will dance to songs from Amazon music. When it’s first plugged in, it will respond “Woo-hoo, that feels good!”

Gemmy Industries product development vice president Steven Harris says “this is not your father’s Big Mouth Billy Bass.” But like the original, it includes the song “Fishin’ Time” and can be mounted on the wall or on an easel.

Big Mouth Billy Bass was first sold in 1999. A developer first connected it to Alexa in 2016.

The new version will be released Saturday for $39.99.

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