Fed betting it will avoid central banks’ errors of the past
LONDON (AP) — The Federal Reserve is poised to raise interest rates Wednesday for the first time in 9 1/2 years. It may not take so long to know whether its decision was correct.
History is filled with cases when central banks raised rates prematurely, sometimes with dire consequences. Raising rates or otherwise tightening credit too soon can slow borrowing, jolt confidence and choke growth.
Some economists have suggested that the Fed could wait a bit longer before raising rates, especially with inflation still low amid slumping oil and commodity prices. In a survey of top academic economists, the University of Chicago found that while 48 per centfavoured a rate hike, 36 per cent felt the Fed should hold off.
US consumer prices unchanged but core inflation up
WASHINGTON (AP) — U.S. consumer prices were unchanged in November as declines in energy and food held down overall costs. But core inflation was up 2 per cent over the 12 months ending in November. That was the fastest pace in more than a year and the kind of increase Fed officials want to see to justify the start of a round of interest rate increases.
The flat reading for consumer prices last month followed a modest 0.2 per cent increase in October and outright declines in August and September, the Labor Department reported Tuesday.
US homebuilder sentiment slips in December
U.S. homebuilders are feeling slightly less confident about their sales prospects in coming months, though they remain positive overall that the housing market will continue to improve next year.
The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday slipped to 61 this month, down one point from a reading of 62 in November.
Readings above 50 indicate more builders view sales conditions as good, rather than poor. The index has been consistently above 60 since June.
Valeant in new distribution deal with Walgreens
TRENTON, N.J. (AP) — Valeant Pharmaceuticals regained some credibility with upset investors thanks to its announcement Tuesday of a new distribution deal with Walgreens and plans to line up more pharmacies to sell its products after a scandal forced it to cut ties with a key distributor, Philidor.
The news drove up shares of the beleaguered Canadian drug company, but it still faces U.S. government scrutiny over big medicine price hikes and allegations it used Philidor, a mail-order pharmacy, to steer payers toward Valeant’s more expensive drugs, rather than cheaper alternatives.
Investors will be listening for more details on the deal with Walgreens and Valeant’s other plans on Wednesday, when it hosts an investor webcast to update its financial forecast and discuss business operations.
France fines 20 delivery companies for price collusion
PARIS (AP) — France’s competition regulator has fined 20 package delivery companies, including the French operations of FedEx and DHL, a total of 672 million euros ($740 million) for colluding on price increases over a period of six years.
The competition authority’s ruling Tuesday outlined secret meetings from 2004-2010, and said the price rises implemented were especially damaging to small businesses that use package delivery services.
Regulators discovered the activity thanks to a special program of clemency for whistleblowers.
General Electric sells Japan lending unit for $4.8 billion
TOKYO (AP) — U.S. industrial conglomerate General Electric Co. is selling its Japan commercial lending business to Sumitomo Mitsui Finance and Leasing for about $4.8 billion.
The deal, announced Tuesday, marks the withdrawal of GE Capital from Japan, except for a minor joint venture.
General Electric, based in Fairfield, Connecticut, has been focusing on industrial businesses, based on making large complicated equipment for other companies, and shrinking its other businesses that focus on finance.
Seattle’s Uber unionization measure a new economy test case
SEATTLE (AP) — Seattle has become the first city in the nation to allow drivers of ride-hailing companies such as Uber and Lyft to unionize over pay and working conditions. The legislation approved by the City Council Monday is seen as a test case for the changing 21st century workforce.
Supporters erupted into cheers after councilmembers voted 8-0 in favour of the legislation, which the city expects to be challenged in court.
It requires companies that hire or contract with drivers of taxis, for-hire transportation companies and app-based ride-hailing services to bargain with their drivers, if a majority show they want to be represented. Drivers would be represented by non-profit organizations certified by the city.
Howard Stern announces 5-year deal with Sirius XM
NEW YORK (AP) — Much has changed for Howard Stern and SiriusXM since their first deal a decade ago — except for their desire to stay in business together.
The company announced Tuesday its third five-year deal to keep Stern’s radio show at SiriusXM, together with a longer-term video arrangement that will allow fans to see as well as hear his program and have access to 30 years of career highlights.
Financial terms were not disclosed.
Peru plans to fine Kimberly-Clark for alleged price fixing
LIMA, Peru (AP) — Peru is planning to sanction Kimberly-Clark for allegedly conspiring with a competitor to set prices for toilet paper and other products.
Antitrust regulators on Tuesday said that executives of Kimberly-Clark’s local subsidiary and their counterparts from Chile’s CMPC worked together from 2005 to 2014 to set prices and co-ordinate promotions. They say the scheme helped inflate prices by as much as 20 per cent.
The two companies together control 88 per cent of a personal hygiene market in Peru worth more than $250 million in annual sales.
British police arrest 21-year-old man in VTech hacking
NEW YORK (AP) — Police in the UK say they’ve made an arrest in the hacking of kids’ technology maker VTech, which compromised the personal information of more than 6 million children around the world.
The South East Regional Organised Crime Unit, a regional task force made up of a handful of English police departments, says its cybercrime unit arrested a 21-year-old man was on hacking-related charges Tuesday morning in Bracknell, a town about 30 miles west of London.
Police seized a number of electronic items that will be examined by a cybercrime forensics unit.
AMC theatre chain names Starwood boss Aron as new CEO
LOS ANGELES (AP) — Theater chain AMC Entertainment Holdings Inc. is naming Starwood Hotels and Resorts’ interim CEO Adam Aron as its new chief executive, replacing interim CEO Craig Ramsey. Aron starts Jan. 4.
Aron, 61, headed Starwood as interim boss since February. He is also the former CEO of the Philadelphia 76ers and has been chief executive of Vail Resorts Inc. and Norwegian Cruise Line Ltd. Ramsey will remain chief financial officer and report to Aron.
AMC, the nation’s second largest movie theatre chain, is controlled by Chinese theatre giant Dalian Wanda Group Co. Ltd.
The Dow Jones industrial average rose 156.41 points, or 0.9 per cent, to close at 17,524.91. The Standard & Poor’s 500 index climbed 21.47 points, or 1.1 per cent, to 2,043.41. The Nasdaq composite climbed 43.13 points, or 0.9 per cent, to 4,995.36.
U.S. crude rose $1.04, or 2.9 per cent, to $37.35 a barrel in New York. Brent crude, a benchmark for international oils, rose 53 cents, or 1.4 per cent, to $38.45 a barrel in London. Natural gas fell 7.2 cents, or 3.8 per cent, to $1.822 per 1,000 cubic feet. Wholesale gasoline fell 1.1 cents, or 0.9 per cent, to $1.2444 a gallon and heating oil rose 1.9 cents, or 1.7 per cent, to $1.147 a gallon.