Oil Prices Shoot After Saudi Drone Attack

 

Crude prices shoot higher, Wall Street sank into the red on Monday, after weekend drone attacks knocked out much of Saudi Arabia’s oil production.

The lower open threatened to break an eight-day winning streak for the benchmark Dow Jones Industrial Average, with the major US stock indices just below fresh record highs.

Markets were also digesting a batch of poor economic data out of China and awaiting Wednesday’s Federal Reserve announcement on monetary policy.

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Ten minutes into the day’s trading, the Dow and broader S&P 500 were both down 0.4 percent at 27,112.32 and 2,996.52 respectively.

The tech-heavy Nasdaq was 0.5 percent lower at 8,139.64.

While the spike in oil prices — WTI benchmark crude was up a towering $5.32 at $60.17 per barrel — sent oil stocks higher, investors may fear more expensive oil could further slow an already waning global economy.

Oil supermajors Exxon Mobil and Chevron were up 2.6 percent and 2.7 percent respectively.

Fresh economic data on Monday showed activity in China slowed last month across the board, with the pace of industrial production, retail sales and investment in fixed assets all lower.

In the United States, automaker General Motors was down 2.9 percent after unionized autoworkers began a nationwide strike over disagreements on wages, health care benefits and job security.

The Federal Reserve is widely expected to announced an interest rate cut on Wednesday, the second of the year, as the American economy slows with the rest of the world and President Donald Trump’s trade conflicts drag on.

AFP

Apple Reaches New Landmark With $1 Trillion Valuation

(FILES) In this file photo taken on September 14, 2016, the Apple logo is seen at the entrance to the Fifth Avenue Apple store in New York.  PHOTO: Don EMMERT / AFP

 

Apple — the culture-changing company behind the iPod, iPhone and iPad — hit another milestone on Thursday, becoming the first private-sector company to surpass $1 trillion in market value.

Shares of Apple finished the formal Wall Street trading day at $207.39, topping the magic number, two days after the California tech giant reported strong quarterly earnings.

The landmark is the latest victory for Tim Cook, who faced scepticism when he took over as chief executive in 2011 from ailing iconic co-founder Steve Jobs.

Jobs, who founded Apple in a Silicon Valley garage in 1976 with Steve Wozniak and built it into a global powerhouse, died in October 2011.

After his death, analysts and other industry watchers wondered whether the company would lose its ability to wow the world with “the next big thing.”

But Cook has gradually won accolades from investors by pumping out a series of solid financial results and spreading Apple’s products to China and other foreign markets.

Apple is the first private sector company to reach this level. State oil company PetroChina briefly broke the $1 trillion barriers in 2007 during its initial public offering but has since dropped back down.

“Of course I’m proud of Apple, but I don’t measure the world by human simplifications like round numbers,” co-founder Wozniak was quoted as telling Yahoo Finance.

US tech companies have cemented their position in the broader market, now making up the top five most valuable enterprises based on share prices.

Behind Apple are Amazon, Google parent Alphabet, Microsoft and Facebook.

A trillion dollars is roughly the annual gross domestic product of Indonesia, and more than twice that of Belgium, according to World Bank data from 2016.

As with other landmarks — such as the Dow crossing 25,000 points for the first time — the Apple record is significant because of its resonance beyond the financial universe.

“The $1 trillion mark is more psychological, and sends a message of growth and size into the market,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

But many financial insiders view the record as a non-event.

“There’s no real excitement on the trading desk,” said Karl Haeling of LBBW. “It’s one of those things that does not mean anything by itself… it’s more a testimony of the importance of Apple on the market.”

Focus on digital content

Apple has sold more than a billion iPhones since the first model was unveiled by Jobs in 2007.

Billions of dollars that Apple has been spending to buy back shares was thought to have helped propel the company past the one-trillion-dollar mark for market value.

The company is in the unique situation of controlling the hardware and software in its mobile devices, with content for users required to go through its App Store that takes a percentage of revenue.

Apple also released a kit for developers to create augmented-reality experiences on iPhones or iPads, saying that “overnight iOS became the biggest AR platform in the world.”

It has moved to keep up with trends in artificial intelligence and voice-commanded smart speakers.

Virtual assistant Siri is built into Apple devices, and the company boasts the most popular smartwatch on the market.

Cook has consistently touted innovations in the pipeline at the famously secretive company.

Last month, an ex-Apple engineer was charged in California with stealing trade secrets from a hush-hush self-driving car technology project days before he quit to go to a Chinese start-up.

‘Making technology simple’

Apple has been credited with giving rise to lifestyles centred around mobile apps for seemingly everything from games and messaging to ordering food or summoning car rides.

“At the core, I think Apple’s biggest revolution has been putting consumer experience first and making technology simple,” said Creative Strategies analyst Carolina Milanesi.

But the phenomenal success of the iPhone led competitors to mirror certain features like touch-screens featuring rows of colourful icons — and prompted Apple to pursue those competitors in court.

Apple has fought myriad patent battles with rivals, particularly South Korean consumer electronics colossus Samsung, arguing that its product design is as much its intellectual property as the hardware and software.

In a US regulatory filing this week, Cook warned tariffs being imposed in a US-China trade war could result in Apple paying more to make its products, eating into profit or forcing up prices for consumers.

“Our view on tariffs is they show up as a tax on the consumer and wind up resulting in lower economic growth, and sometimes can bring about the significant risk of unintended consequence,” Cook said during an earnings call.

Independent technology analyst Rob Enderle said Apple’s trillion-dollar valuation defied financial trends in recent quarters and potential defeat in a legal battle with Qualcomm over mobile chips.

“My view is they are on a bubble, and it is a big bubble,” Enderle said.

“I am expecting to see a correction. Basically, it is still the iPhone company.”

China-based Huawei took the second-place spot from Apple in a tightening global smartphone market during the second quarter of this year, according to the International Data Corporation.

Samsung remained the top smartphone maker.

AFP

Dow Sheds 450 Points As US Stock Sell-Off Deepens

Traders work on the floor of the New York Stock Exchange (NYSE) on February 5, 2018 in New York City.  SPENCER PLATT / GETTY IMAGES NORTH AMERICA / AFP

 

Wall Street stocks fell sharply for a second straight session Monday with the Dow losing about 450 points amid worries over rising US interest rates.

Near 1840 GMT, the Dow Jones Industrial Average had lost 1.7 percent to 25,090.48.

The broad-based S&P 500 fell 1.5 percent to 2,721.58, while the tech-rich Nasdaq Composite Index sank 1.0 percent to 7,17052.

After streaking to numerous records in the first three weeks of the year, US stocks last week began to pull back. And Friday’s strong jobs report contributed to the sell-off amid rising concern the US Federal Reserve will accelerate the pace of interest rate hikes this year.

JJ Kinahan, chief market strategist of TD Ameritrade, said the key question as the pullback moved into its second week was whether investors would step in to purchase stocks at depressed values.

Investors have done this for than a year, each time a price decline offered bargain prices, preventing any major correction.

“We’re finally getting the (long-discussed) five percent drop,” Kinahan said. “Do the people who buy the dip come in again?”

A catalyst for the decline over the last week or so has been the rise in US Treasury bond yields.

AFP

Obama Officials Work Against Time To Wrap Banking Rules

obama-officialsU.S. officials are striving to put finishing touches on a slew of banking rules before President Barack Obama leaves office and hands regulatory power to Donald Trump who has vowed to rewrite the existing financial rule book.

President-elect Trump will take over on Jan. 20 and his fellow Republicans will have control of Congress and government agencies, allowing the new administration to block or roll back many of the last-minute changes.

But by completing far-advanced work on some banking standards in the next 10 weeks, Obama officials would raising the chances that some elements of the regulatory framework will survive.

Some rules are meant to flesh out the Dodd Frank Act of 2010 designed to prevent the next global financial crisis. Trump campaigned on a pledge to scrap the law but now he says only some provisions must go to lighten the regulatory burden.

The Federal Reserve is working on rules to govern matters such as executive pay, market stability and what investments Wall Street may hold.

Last month, Securities and Exchange Commission Chair Mary Jo White said her agency would “in the near term” finish a rule on one thorny issue: how mutual funds manage derivatives.

The SEC and bank regulators have also for years struggled to finalize a rule that would tie more banker pay to the long-term health of their firms rather than short-term performance of Wall Street firms.

With only about 40 working days until the handover, it is not clear which, if any, of those standards will get across the finishing line.

“Just look at the calendar,” said Tom Quaadman of the Chamber of Commerce. “These are intricate rules and there’s not much time.”

The executive pay rule exemplifies the challenge.

Six federal agencies have a say on the compensation standard meant as part of Dodd Frank and a final draft has not yet been offered, industry officials told Reuters.

It would be nearly impossible to circulate a final rule and get the agencies to endorse it while still satisfying standards for clearing such paperwork, several lobbyists who have opposed the rule said.

Banking regulators declined to comment on when the compensation rule might be complete

Hillary Clinton Gets Required Delegates For Democratic Nomination

Hillary ClintonReports say White House hopeful, Hillary Clinton may have clinched the democratic nomination for US President after reaching the required number of delegates.

An Associated Press (AP) count puts Mrs Clinton on 2,383 – the number needed to make her the presumptive nominee. If confirmed, she will become the first female nominee for a major US political party.

Clinton’s delegate count is expected to grow on Tuesday when six states, including California and New Jersey, hold contests.

Speaking in Long Beach, California, on Monday, Clinton said she was still focused on Tuesday and the votes that may come from those states.

“We are on the brink of a historic, historic unprecedented moment but we still have work to do, don’t we?” she said. “We have six elections tomorrow and are going to fight hard for every single vote, especially right here in California.”

Rival, Bernie Sanders, however, said that Mrs Clinton has not won as she is dependent on super delegates who cannot vote until the party’s July convention.

A Sanders campaign spokesman, Michael Briggs said that it was wrong to count the votes of super delegates before they cast ballots at the Democratic National Convention in July.

“Our job from now until the convention is to convince those super delegates that Bernie is by far the strongest candidate against Donald Trump,” Briggs said in a statement

But the AP said Mrs Clinton reached the threshold with a big win in Puerto-Rico and a burst of last-minute support from super delegates.

Clinton has 1,812 pledged delegates won in primaries and caucuses, and Sanders has 1,521. She also has the support of 571 super delegates, according to an AP count, compared to 48 for Sanders.

Clinton, Sanders In Angry Combative Debate

Bernie SandersDemocratic front-runner Hillary Clinton and rival Bernie Sanders challenged each other’s judgment and experience in a combative U.S. presidential debate ahead of Tuesday’s crucial nominating contest in New York.

Clinton and Sanders attacked each other over Wall Street, gun control and other issues on Thursday in a series of exchanges that laid bare the mounting pressures on them both but seemed unlikely to change the dynamics of the race, Reuters reports.

While far short of the brawls that have characterised Republican debates, the tone reflected a contentious turn in the Democratic contest.

Clinton and Sanders out-shouted each other while a split crowd roared its approval.

“If you’re both screaming at each other, the viewers won’t be able to hear either of you,” moderator Wolf Blitzer of CNN warned during the debate at the historic Navy Yard in the New York borough of Brooklyn.

As the two-hour debate ended, social media analyst Brandwatch said Sanders had more than 173,000 mentions on Twitter, 55 per cent of them positive, while Clinton had more than 191,000 mentions, 54 percent of them negative.

Clinton mentions were more negative than positive in two out of the three previous debates.

Sanders, 74, will take a quick break from the campaign trail on Friday to fly to the Vatican, where he will give a brief speech at a conference on the world economy and social justice.

Sanders, who will be back in New York to campaign on Sunday, has said the trip is not a political appeal for the Catholic vote but a testament to his admiration for Pope Francis.

U.S. Democratic Candidates Debate Gun Control, Healthcare Policies

SandersUS democratic presidential contenders, Bernie Sanders and Hillary Clinton have clashed on gun control and healthcare in a live television debate.

Clinton raised questions about the self-styled democratic socialist’s positions on Wall Street reform, healthcare and gun control.

Sanders pushed back painting Clinton as a defender of the status quo who accepted hundreds of thousands of dollars in speaking fees as a former secretary of state from Wall Street backers.

“I don’t take money from big banks. I don’t get personal speaking fees from Goldman Sachs,” the U.S. senator from Vermont said, adding, “I have huge doubts when people receive money from Wall Street.”

Clinton accused Sanders of voting to deregulate the financial market in 2000 in a way that led to the central causes of the financial collapse of 2008 that pitched the U.S. economy into a deep recession.

Clinton tried to undercut Sanders’ support among supporters of Obama, who remains a popular figure in the Democratic Party.

“He’s criticized President Obama for taking donations from Wall Street. And President Obama has led our country out of the Great Recession,” she said.

“Senator Sanders called him weak, disappointing, he even in 2011 publicly sought someone to run in a primary against President Obama.”

Before the debate in South Carolina, Mr Sanders unveiled a healthcare plan for all American citizens.

Mr Sanders’ universal healthcare plan, announced two hours before the debate started, would see citizens pay what he called “a 2.2% income-based premium”.

Towards healthcare, companies would pay an extra 6.2% of an employee’s income towards the plan.

But Mrs Clinton attacked him saying the move risks derailing healthcare legislation introduced under President Obama.

The debate was held across the street from the Charleston church where a white gunman killed nine black worshippers in June, and Clinton made reference to the incident while accusing Sanders of being weak on gun control.

She welcomed his decision on Saturday night to back a bill in Congress rescinding portions of a law giving gunmakers immunity from lawsuits, but said his record showed a more lenient attitude toward the demands of the powerful National Rifle Association (NRA) gun lobby.

Sanders defended himself, saying he has a strong record on trying to prevent guns from getting into the wrong hands and standing up to the NRA.

While Hillary Clinton leads the polls nationwide, she is facing a threat from Vermont senator Bernie Sanders in key states.

Sanders cast himself as the outsider who would lead a political revolution, while Clinton touted her experience and embraced President Barack Obama’s legacy.

This was the final democratic debate before Iowa caucuses launch the nominating race on February 1.

The debate followed a week of rising tension between the two leading candidates.

Facebook’s Mobile Business Expands In First Quarter

Facebook Inc’s mobile advertising revenue growth gained momentum in the first three months of the year as the social network sold more ads to users on smartphones and tablets, partially offsetting higher spending which weighed on profits.

New types of ads designed for smartphones, particularly ads aimed at enticing Facebook users to install mobile apps on their phones, helped lift revenue while traffic to the social network remained strong.

The results reassured Wall Street that the world’s largest social network was keeping up with consumers’ shift from PCs to smartphones, even if the company provided few big surprises during the first quarter.

Mobile ad revenue accounted for 30 percent of Facebook’s ad revenue in the first quarter, compared to roughly 23 percent in the fourth quarter. Sales of ads on mobile devices have been a key element in the recovery of Facebook’s overall ad revenue from a sharp slowdown early last year.

The first-quarter mobile ad revenue was at the higher end of expectations, said Macquarie Research analyst Ben Schachter. But he said it “needed to be higher for people to get really excited about trend lines”.

Shares of Facebook, which are down roughly 12 percent since the end of January, were up 7 cents at $27.50 in after-hours trading on Wednesday.

“Everyone was focused on two things, one was mobile and how big it could be, and the other thing was engagement,” said Ronald Josey, an analyst with Jefferies & Co.

Facebook delivered solid results on both fronts, Josey said, noting that consumers’ use of Facebook does not appear to have declined despite a growing array of popular social networking and mobile messaging alternative services, such as Pinterest and WhatsApp.

Mark Zuckerberg, Facebook’s 28-year-old co-founder and chief executive, told investors on a conference call on Wednesday that there was room for Facebook and rival services to thrive. He said mobile photo-sharing service Instagram, which Facebook acquired last year, was now growing faster than Facebook did at a similar stage in its history.

Facebook said it now counted 1.11 billion monthly active users and about 665 million daily active users.

The company said the number of monthly users who logged on solely through mobile devices more than doubled to 189 million users from a year ago.

Graphic: link.reuters.com/ryp77t

NEW AD PRODUCTS

Created in a Harvard dorm room in 2004, Facebook, along with other established Internet companies such as Google Inc and Yahoo Inc, are moving to reposition their businesses for a world in which consumers’ primary Internet access occurs on small-screened smartphones rather than PCs.

Facebook has rolled out a string of big product launches and revamps in recent months, including an overhaul of its newsfeed and search feature, as well an app for Android smartphones that puts Facebook features front and center on phone homescreens.

The various initiatives have contributed to rising spending, with Facebook’s 60 percent year-on-year increase in costs and expenses outpacing the 38 percent revenue increase.

Facebook said it earned $219 million, or 9 cents a share, in the first three months of the year, compared to $205 million, or 9 cents a share, in the year-ago period.

Excluding certain items, Facebook said it earned 12 cents a share. Analysts polled by Thomson Reuters I/B/E/S were looking for adjusted EPS of 13 cents.

Facebook executives reiterated previous guidance that spending would be up in 2013 as the company invests in new products and in improving the efficacy of its ads.

One nascent type of mobile advertising pioneered by Facebook — ads that encourage users to install third-party apps — could grow meaningfully, Zuckerberg said.

“We’re starting to see real revenue from mobile app installs,” Zuckerberg said, without giving details. “It’s one of our most important new ad products.”

Facebook’s revenue in the first quarter totaled $1.46 billion, versus $1.06 billion in the year-ago period, and roughly in line with analyst expectations. Advertising revenue was up 43 percent in the first quarter, the fastest growth rate since the end of 2011.

“You are seeing pretty strong revenue growth right now,” said Raymond James analyst Aaron Kessler. But he warned that the revenue growth could slow in coming quarters as Facebook faces tougher year-on-year comparisons.

iPhone 5 over $100,000 stolen in Japan before launch

With the much-awaited launch of the iphone5 in Japan, the honour of being among the first to get their hands on the iPhone 5 has gone a bit awkward as thieves in Japan broke into carrier stores and carted away over $100,000 worth of Apple’s latest smartphone.

The Wall Street Journal reports that both Softbank and KDDI’s au were the victims of burglaries just hours before the iPhone 5 was set to go on sale. Three separate incidents across Osaka resulted in a total of 191 phones being lifted. Police estimated the largest heist, which saw 116 units nabbed from Softbank, was worth an estimated 7.45 million yen ($95,000).

It’s not clear whether the incidents were connected, though proximity and timing makes it possible that all three burglaries were committed by the same perpetrators.

The high value of Apple devices makes them frequent targets of theft. Apple has had difficulty with smash-and-grab burglaries that take advantage of the glass doors in many of its retail stores. One recent high-profile incident involved a BMW SUV crashing through a storefront in Temecula, California.

Friday morning’s burglaries do slightly mar the launch of Apple’s new gadget, but expected record sales should more than make up for the unfortunate incidents. Apple pre-sold more than 2 million iPhone 5 units in the first 24 hours of availability, and the company’s own estimates suggest new orders won’t be shipped for 3-4 weeks.

In nine countries around the world, legitimate owners of the iPhone 5 will begin purchasing the iPhone 5 on Friday. The Next Web obtained two units for testing the new HD Voice feature on the Telstra network in Australia. Call quality was clearly better with the devices, though it could still stand for improvement.

Teardown experts’ iFixit also made their way out to Australia to get early access to the iPhone 5. After breaking down the handset, they found it to be substantially more repairable than previous versions of the iPhone.