As rate hike nears, Fed’s hints on future to be scrutinized
WASHINGTON (AP) — It’s not about what it will do. It’s about what it will say.
The worst-kept secret in the financial world is that the Federal Reserve is all but sure Wednesday to raise interest rates from record lows by a modest quarter point. The uncertainty hinges on what the Fed will say about how much and how fast it expects to raise rates again in coming months. A relatively aggressive pace would contribute to higher borrowing rates and risks slowing the economy. It could also roil financial markets.
Fear and loaning: Investors are running from junk bonds
NEW YORK (AP) — Investors are rushing out of junk bonds, spooked by last week’s closure of a mutual fund focused on some of the lowest-quality, highest-yielding bonds.
The shutdown comes on top of fears that a spike in bond defaults is coming, and it’s led investors to rush for the exits.
The price drops are hitting many investors who are new to junk bonds and have little experience with the notoriously volatile market. In recent years, investors have been creeping into ever-riskier options in search of more income. They’ve been attracted to junk bonds, also known as high yield, because they pay higher interest rates than high-quality bonds but they’re issued by companies more likely to default.
AP report on slave-peeled shrimp spurs calls for boycott
NEW YORK (AP) — U.S. officials and human rights activists are urging Americans to not buy fish and shrimp tied to supply chains in Thailand, where The Associated Press has found slaves are forced to work in the seafood industry.
The AP reported Monday that it found enslaved workers who were forced to peel shrimp in Thailand for up to 16 hours a day for little or no pay, and many were locked inside for months or even years on end.
U.S. customs records show the shrimp made its way into the supply chains of major U.S. food stores and retailers as well as the supply chains of some of America’s best-known seafood brands and pet foods.
Cheniere Energy replacing CEO Souki
HOUSTON (AP) — Cheniere Energy has announced the departure of its co-founder and chief executive under pressure from activist investor Carl Icahn.
Icahn first revealed a sizeable stake in Cheniere in August, then two weeks later announced that he had upped that stake to more than 11 per cent. The company agreed to seat two of his associates on the board and on Monday, announced that it was replacing Charif Souki, who helped to found the company and has ambitiously tried expand the company’s reach.
Cheniere named board member Neal Shear as interim president and CEO.
Newell Rubbermaid buying Jarden in cash-and-stock deal
ATLANTA (AP) — Newell Rubbermaid is buying Jarden Corp. in a cash-and-stock deal that it says will generate about $16 billion in revenue per year with brands such as Paper Mate, Sharpie, Elmer’s, Rubbermaid, Lenox, Yankee Candle and Graco.
Jarden shareholders will receive $21 in cash and 0.862 shares of Newell Rubbermaid stock for each share they own. The implied total value is $60 per share worth about $13.2 billion. The company says that holders of convertible bonds also qualify for the deal, boosting the price of the overall transaction to about $15.4 billion.
Newell Rubbermaid shareholders will own about 55 per cent of the combined business.
Dow Chemical’s board reaffirms support for DuPont deal
NEW YORK (AP) — Dow Chemical’s board reaffirmed its support for the company’s merger with DuPont on Monday after a news report said activist investor Daniel Loeb wants Dow’s CEO to be removed.
The Wall Street Journal said Loeb, who heads Third Point LLC, wrote a private letter to Dow’s board over the weekend that questioned the timing of the merger and pushed for Dow CEO Andrew Liveris to be removed. Loeb’s firm has a 2 per cent stake in Dow, according to FactSet.
Dow’s board said in a statement Monday that they fully support the deal. A Dow representative did not immediately respond to a request for comment.
Natural gas, used to heat homes, plunges on mild weather
NEW YORK (AP) — Mild temperatures have cooled demand for natural gas, sending its price down sharply Monday. Stocks of companies that produce natural gas also fell.
Natural gas is used to heat more than half of U.S. households, according to the American Petroleum Institute. But with unseasonably warm temperatures, there’s less demand for it. Temperatures in Chicago, Detroit, New York and Washington have been as much as 25 degrees above normal in the past five days, according to AccuWeather. And the weather forecasting company expects the mild weather to continue next week, with temperatures expected to be between 20 and 30 degrees above normal.
Besides warm weather, there’s also an oversupply of natural gas that’s pushing prices down. Raymond James analysts said last week, in a note to clients, that they expected natural gas prices to remain “depressed” into next year due to the oversupply.
FAA to require most drones to be registered and marked
The federal government will soon require that drones be registered to make it easier to identify owners and educate amateur aviators.
The move, announced Monday by the Federal Aviation Administration, comes at a time when the agency is receiving more than 100 reports per month about drones flying near manned aircraft. The FAA prohibits drones and model airplanes from flying higher than 400 feet or within 5 miles of an airport.
The FAA estimates that 1.6 million small unmanned aircraft will be sold this year, with half during the last three months of the year.
Cuba, creditors reach historic multi-billion debt deal
PARIS (AP) — Cuba has reached a landmark agreement with foreign creditors over billions of dollars in unpaid debt dating back 25 years.
The Paris Club of creditor nations announced a deal Monday under which creditors will cancel $8.5 billion in overdue interest payments, in exchange for a promise by Cuba to pay off $2.6 billion of the original debt over the next 18 years.
President Raul Castro has been working to improve relations with creditors as he tries to modernize and open up the communist island’s economy, which defaulted on its debts in 1986.
The U.S. maintains an economic embargo against Cuba, and is not among the creditor nations.
Yahoo facing more pressure from frustrated shareholders
SAN FRANCISCO (AP) — Yahoo is facing more pressure from two shareholders that want the company to pursue other alternatives besides a complex spinoff of its Internet operations.
The demands from SpringOwl Asset Management and Canyon Capital Advisors reflect shareholders’ frustration with Yahoo CEO Marissa Mayer’s inability to revive the company’s revenue growth after three-and-half years on the job. Mayer hoped to placate investors with last week’s announcement of a revised spinoff, but the company’s stock has slid by 6 per cent since then.
SpringOwl is calling for the company to lay off 9,000 of its 10,700 workers to help save $2 billion annually. Canyon Capital wants Yahoo to sell its Internet business instead of spinning it off.
Airlines on-time results among the best in 2 decades
WASHINGTON (AP) — The nation’s leading airlines posted one of their best-ever monthly on-time performances in October, the third straight month where more than 80 per cent of flights arrived punctually.
The Transportation Department said Monday that 87 per cent of flights on the top 13 U.S. airlines arrived on time in October. That was up slightly from 86.5 per cent in September. The two months now rank third and fourth, respectively, among the best on-time tallies in the 21 years where comparable records are available.
Delta Air Lines, Hawaiian Airlines and Alaska Air had the best ratings, while Spirit was the only airline with an on-time rating below 80 per cent.
The Dow Jones industrial average picked up 103.29 points, or 0.6 per cent, to close at 17,358.50. The Standard & Poor’s 500 index gained 9.57 points, or 0.5 per cent, to 2,021.94. The Nasdaq composite index added 18.76 points, or 0.4 per cent, to 4,952.23.
U.S. crude gained 69 cents at $36.31 a barrel in New York. Brent crude, a benchmark for international oils, fell a penny to $37.92 a barrel in London. In other energy trading, wholesale gasoline declined 2.6 cents, or 2 per cent, to $1.256 a gallon and heating oil lost 1.8 cents, or 1.6 per cent, to $1.128 a gallon. Natural gas fell 9.6 cents, or 4.8 per cent, to $1.894 per 1,000 cubic feet.