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►  China’s Great Wall considers bid for Fiat Chrysler Jeep unit

Chinese SUV maker Great Wall Motors is considering making a bid to buy Fiat Chrysler’s Jeep unit, spokespeople for the company said Monday, in a possible ambitious new step onto the global stage for China’s fast-growing auto brands.

Great Wall has yet to formally declare its interest in Jeep, but a possible acquisition would be in line with chairman Wang Jianjun’s goal, announced in February, of becoming the top specialty SUV producer by 2020.

Great Wall “has this intention,” said the public relations director for its Haval SUV brand, Zhao Lijia, when asked about a report by Automotive News that the Chinese automaker wants to buy Jeep. An employee of the press office for the company headquarters, who would give only his surname, Zhang, said, “Yes, we are interested in Jeep.”

Zhao and Zhang said they had no other details when asked about a possible price. Zhao said it may take some time to assemble a formal bid.

Fiat Chrysler CEO Sergio Marchionne has said the company is for sale and cannot compete globally without a tie-up to a bigger partner due to the high costs of developing and marketing vehicles.

In a statement Monday, Fiat Chrysler Automobiles NV said it had not been approached by Great Wall.

Marchionne said in April that Jeep and Chrysler’s Ram truck brand are strong enough to stand alone. The company spun off its Ferrari brand in 2015 into a separate business.

Chinese companies in industries from autos to robots are spending billions of dollars to acquire brands and technology to strengthen their competitive position at home and speed their development.

Great Wall Motors Ltd., headquartered in Baoding, southwest of Beijing, is one of a series of independent Chinese automakers that have grown up alongside state-owned giants such as Shanghai Automotive Industries.

If it goes ahead with a Jeep bid, Great Wall could become the second Chinese automaker, after Geely Holding Group, to expand onto the global stage by acquiring an established foreign brand.

Geely bought Sweden’s Volvo Cars from Ford Motor Co. in 2010 and has launched a third brand, Lynk & Co., as a partnership between Volvo and Geely’s Chinese brand.

In June, Geely bought a 49.9 percent stake in Malaysian automaker Proton and a controlling interest in British sports car maker Lotus.

In 2011, a state-owned Chinese automaker, Dongfeng Motor Group, bought 14 percent of France’s PSA Peugeot Citroen, Europe’s second-largest automaker.

Great Wall sold just under 1.1 million SUVs last year, behind Jeep’s 1.4 million. Its revenue of 98.6 billion yuan ($14.4 billion) was a fraction of FCA’s global total of $118 billion (111 billion euros), but its $1.5 billion profit was almost equal to the Italian-U.S. automaker’s $1.8 billion.

Great Wall also can draw on strong demand in China, the biggest auto market by units sold. Total SUV sales rose 16.8 percent over a year earlier to 4.5 million in the six months ending in June.

Great Wall emerged from a collective founded in the 1980s to repair and customize vehicles. Wei, then 26, took control in 1990 and shifted into auto manufacturing. The company launched its first sedan in 1993 but narrowed its focus a decade ago to SUVs.

Wei said in February that the company’s “globalization strategy” included improving technology to meet U.S. safety standards. But he gave no indication when Haval might export to the United States or major European markets such as Germany.

Great Wall shares rose 1.6 percent in Hong Kong, while Fiat Chrysler Automobiles NV gained 2.8 percent in Milan.


►  Sempra Energy bids $9.45B for Oncor, topping Buffett offer

Sempra Energy is buying Texas power transmitter Oncor for $9.45 billion in cash, wresting it away from Warren Buffett’s Berkshire Hathaway.

Sempra said Monday that it will also pick up $9.35 billion of the company’s debt. To gain possession of Oncor, Sempra will acquire the reorganized Energy Future Holdings Corp. Energy Future entered bankruptcy in 2014, saddled with more than $40 billion in debt due to cratering energy prices.

Berkshire Hathaway said last month that it would buy Oncor for $9 billion, and last week it stuck to that bid. Hedge fund Elliott Management, which owns a significant portion of Oncor’s debt, opposed Berkshire’s takeover bid, saying it wasn’t enough. But Berkshire Hathaway stood firm on its offer, saying last week that it would not be increasing the bid.

Elliott spokesman Michael O’Looney said the hedge fund supports Sempra’s bid because it will provide more to all of Oncor and Energy Future’s creditors.

Greg Abel, who leads Berkshire Hathaway Energy, said he’s disappointed the Oncor deal was terminated by Energy Future. But Berkshire is entitled to receive a $270 million termination fee that was negotiated.

Sempra expects to close the sale in the first half of next year. The deal still needs the approval of the Public Utility Commission of Texas, U.S. Bankruptcy Court of Delaware, Federal Energy Regulatory Commission and the U.S. Department of Justice.

Once the transaction is complete, Oncor CEO Bob Shapard will become executive chairman of Oncor’s board. Allen Nye, currently Oncor’s general counsel, will succeed Shapard as Oncor CEO. Both will serve on Oncor’s board.

This is the fourth time that that an acquisition attempt has been made for Oncor. There was Berkshire Hathaway’s offer last month. Previously, in April Texas regulators rejected a proposed $18 billion sale of Oncor to NextEra Energy Inc. That price tag included debt. Regulators failed to accept that the NextEra transaction was in the public interest — a requirement for the deal.

A buyout attempt last year backed by the Ray Hunt family of Dallas also faltered.


►  U.S. stock indexes hold steady after back-to-back down weeks

U.S. stock indexes were little changed in midday trading on Monday, holding relatively steady following back-to-back losses for the Standard & Poor’s 500 index over the last two weeks.

The S&P 500 is close to its lowest level in six weeks, but this week may be a calmer one for stocks with few market-moving events approaching on the calendar. The highlight will likely arrive as the weekend approaches, when central bankers from around the world gather in Wyoming.

KEEPING SCORE: The S&P 500 flipped between modest gains and losses through the morning. It was up nearly 2 points, or 0.1 percent, at 2,427, as of noon Eastern time. The Dow Jones industrial average gained 1 points, or less than 0.1 percent, to 21,676. The Nasdaq composite fell 7 points, or 0.1 percent, to 6,210.

CALM CALENDAR: The beginning of this week may be slow for markets. Earnings reporting season is almost over, and roughly 95 percent of companies in the S&P 500 have already said how much they earned during the spring quarter. Few major economic reports are on deck, meanwhile.

A calm week may be welcome, following a second straight, shaky week where the S&P 500 had its biggest one-day loss in three months. Worries about politics, both domestic and international, contributed to the nervousness. The S&P 500 has had two days in the last two weeks where it’s dropped by more than 1 percent. It’s had only four for the year so far, which is well below typical levels.

ROCKY MOUNTAIN HIGH: This week’s highlight will likely be a mountain gathering in Jackson Hole, Wyoming, for central bankers, economists and policy makers. Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi are both expected to speak at the symposium, which begins Thursday and is hosted by the Fed’s regional bank in Kansas City.

Tremendous stimulus from central banks has been one of the main reasons for the stock market’s surge since the Great Recession. But the Federal Reserve is now slowly raising interest rates and preparing to pare back the vast trove of bonds that it bought following the 2008 financial crisis. Investors are wondering when the European Central Bank may follow suit.

Jackson Hole has been the site of market-moving news in the past, including in 2010 when former Fed Chair Ben Bernanke signaled the central bank may embark on another round of bond buying to shore up the economy.

KOREA DRILLS: One wild card for markets may lie in Asia, where U.S. and South Korean forces on Monday started their annual joint military exercises. Tensions are higher than usual with North Korea, and Pyongyang in the past has responded to the drills with weapons tests and a string of belligerent rhetoric.

MARKETS ABROAD: In Asia, South Korea’s Kospi index dipped 0.1 percent, Japan’s Nikkei 225 index fell 0.4 percent and the Hang Seng in Hong Kong rose 0.4 percent.

In Europe, France’s CAC 40 fell 0.5 percent, Germany’s DAX lost 0.8 percent and the FTSE 100 in London slipped 0.1 percent.

BENCHED AGAIN: Stocks of athletic-gear companies sank a second straight day, and the 5.3 percent drop for Foot Locker was one of the largest losses among companies in the S&P 500.

Shares tumbled across the industry on Friday after both Foot Locker and Hibbett Sports said revenue fell last quarter. Under Armour’s Class A shares lost 3.4 percent Monday, and Nike fell 2.5 percent.

POWERED UP: Sempra Energy rose 1.3 percent after saying it will buy Texas power-transmission company Oncor for $9.45 billion in cash. The deal snatches Oncor away from Warren Buffett’s Berkshire Hathaway, which last month said that it would buy the company for $9 billion.

YIELDS: Treasury yields fell. The yield on the 10-year Treasury note dipped to 2.19 percent from 2.20 percent late Friday. The two-year yield slipped to 1.30 percent from 1.31 percent, and the 30-year yield fell to 2.77 percent from 2.78 percent.

CURRENCIES: The dollar dipped to 108.87 Japanese yen from 109.26 yen late Friday. The euro rose to $1.1812 from $1.1760, and the British pound rose to $1.2902 from $1.2876.

COMMODITIES: Benchmark U.S. crude fell 88 cents to $47.78 per barrel. Brent crude, the international standard, lost $1.12 to $51.60.

Natural gas rose 7 cents $2.97 per 1,000 cubic feet, heating oil fell 4 cents to $1.59 per gallon and wholesale gasoline lost 4 cents to $1.58 per gallon.

Gold rose $4.00 to $1,295.60 per ounce, silver rose 2 cents to $17.02 per ounce and copper gained 5 cents to $2.99 per pound.

Business and Financial News

The Free Press WV

►  11 U.S. states added jobs in July

Hiring increased in 11 U.S. states in July, while the unemployment rate tumbled to record lows in two states.

The Labor Department said Friday that unemployment rates were relatively stable in most states. They fell in 15 states and rose in 23, but many of the changes were statistically insignificant.

The jobs report for states reflects the steady job gains in a recovery from the Great Recession that has entered its ninth year. The overall unemployment rate fell to 4.3 percent last month as employers added 209,000.

Several states saw strong job growth between June and July. California added 82,600 jobs. Florida gained 32,700. Pennsylvania saw hiring of 29,000.

North Dakota’s unemployment rate fell to 2.2 percent, a record low. Tennessee’s rate of 3.4 percent is also a record low for that state.

When unemployment drops that to that low level, businesses may be forced to raise pay to compete for talented workers. So far, wage gains nationwide remain at about 2.5 percent a year, below the 3.5 percent pace normally associated with a healthy economy. But inflation has stayed relatively low, so the wage growth is still leaving many workers better off

Over the past year, Oregon, Arkansas, Florida, New Hampshire, Utah and Texas saw the largest percentage job gains — with growth of at least 2.4 percent. Texas added the most jobs in the past 12 months: 293,400.

Alaska’s unemployment rate of 7.0 percent is the nation’s highest, followed by New Mexico at 6.3 percent.

The unemployment rate fell by 1.4 percentage points in Indiana, Tennessee and Wyoming over the past year — the biggest declines in the country.


►  Fixed mortgage rates continue their slide, falling to two-month lows

Global and domestic unrest put downward pressure on mortgage rates this week.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 3.89 percent with an average 0.4 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.90 percent a week ago and 3.43 percent a year ago. The 30-year fixed rate is at its lowest level since late June.

The 15-year fixed-rate average slid to 3.16 percent with an average 0.5 point. It was 3.18 percent a week ago and 2.74 percent a year ago. The five-year adjustable rate average moved slightly higher to 3.16 percent with an average 0.4 point. It was 3.14 percent a week ago and 2.76 percent a year ago.

Tensions over North Korea and the racist violence in Charlottesville had already stoked anxiety among investors. Then came Donald Trump’s decision to disband two corporate advisory councils in the wake of the mass resignation of business leaders. Although the president’s move came too late in the week to affect Freddie Mac’s survey, political drama tends to drive investors toward bonds and away from stocks, pushing rates lower.

How much lower rates will fall depends on what lies ahead. Besides concerns over domestic and international turmoil, investors are beginning to lose faith the administration will enact fiscal reforms.

Bankrate.com, which puts out a weekly mortgage rate trend index, found that half of the experts it surveyed say rates will remain relatively stable in the coming week. Brett Sinnott, vice president of capital markets at CMG Financial, is one who expects rates to hold steady.

“Even with the political gridlock and ever-widening division between government parties, mortgage rates have been able to avoid any major disruptions and remained relatively calm for almost all of the summer,“ Sinnott said. “The Fed is still contemplating another rate increase in December and is still expected to release a plan in regards to balance sheet correction when they meet next month. Unfortunately, it is difficult to tell whether or not it would be positive or negative.“

Meanwhile, mortgage applications were flat last week, according to the latest data from the Mortgage Bankers Association. The market composite index – a measure of total loan application volume – ticked up slightly 0.1 percent. The refinance index rose 2 percent, while the purchase index fell 2 percent.

The refinance share of mortgage activity accounted for 47.8 percent of all applications.

The latest downturn “in rates led to an increase in refinance activity, as borrowers took advantage of the opportunity,“ said Michael Fratantoni, MBA’s chief economist. “Purchase application volume was little changed for the week, dropping 1.5 percent, but remains about 10 percent ahead of last year’s pace.“

Business and Financial News

The Free Press WV

►  3 charities cancel Mar-a-Lago events amid Trump backlash

Donald Trump’s comments about the white nationalist rally last weekend are hurting not just his political standing, but his pocketbook.

Three charities announced Thursday that they were canceling fundraisers at Trump’s Mar-a-Lago resort, a sign the president’s business is starting to suffer backlash from his comments Tuesday about the violence in Charlottesville, Virginia.

The Cleveland Clinic said in a statement that it decided not to hold its annual event at his Palm Beach resort after “careful consideration” of a number of issues. It didn’t elaborate, but the Ohio-based hospital was already under pressure to shift venues.

Doctors, nurses and medical students of the hospital had signed a public letter earlier this year objecting to Mar-a-Lago given Trump’s plans to cut funding of medical research and other policies.

The Cleveland Clinic has held its annual fundraiser at the resort for eight years.

A few hours after the hospital pulled out, the American Cancer Society said it also planned to shift the venue of its annual fundraiser, called the 2018 Island of Palm Beach gala.

“Our values and commitment to diversity are critical as we work to address the impact of cancer in every community,” spokeswoman Miriam Falco said in statement. “It has become increasingly clear that the challenge to those values is outweighing other business considerations.”

Falco declined to elaborate.

Late Thursday, the American Friends of Magen David Adom announced it had decided not to hold its 2018 fundraiser at Mar-a-Lago. The group, which raises money for an ambulance service in Israel, has been holding its annual gala at the resort since 2012.

Its spokesman, Erik Levis, gave no reason but said the decision came after “considerable deliberation.” His statement noted the organization is “apolitical.”

The Trump Organization did not respond to requests for comment. The managing director of Trump’s properties in Florida, Bernd Lembcke, did not respond to a phone call seeking comment, either.

The president has drawn widespread and bipartisan criticism for his comments at a Trump Tower news conference where he insisted that “both sides” were to blame for violence at a white nationalist rally in Charlottesville where a counterprotester was killed. The president dissolved two business councils after members who are CEOs began quitting.

Cleveland Clinic CEO Toby Cosgrove was a member of one of those panels designed to advise the president on the economy and jobs.

The gilded and glittering Mar-a-Lago has been a favorite spot for holding charity events and a money maker for the Trump Organization. Dubbed the Winter White House, it is one of the few places in the area that can hold a large crowd. Its 20,000 square-foot ballroom has massive archways and columns decorated in gold leaf.

Palm Beach town records showed that 21 charities held events at Mar-a-Lago between last November and April, during the active social season.

But the resort has also become the site of protest by groups who oppose the president’s policies and statements.

The American Red Cross faced pushback in January, when demonstrators rallied outside its annual fundraiser at Mar-a-Lago as the worldwide humanitarian relief organization was offering aid to those affected by Trump’s moratorium on the U.S. refugee program.

The organization did not immediately respond to questions about whether it plans to hold its fundraiser next year at the resort.

Some charities contacted by The Associated Press said they had no plans to change venues.

The Kravis Center said it plans to keep its annual wine auction at the Mar-a-Lago.

“The event has been held there for a number of years, and the folks supporting it want to continue to have it there,” spokesman Gary Schweikhart said.

The Palm Beach Police Foundation said in a statement that it plans to keep its annual ball at Mar-a-Lago because it is not a political event and no other venues in town can accommodate 700 guests.

The event raised $700,000 this year, according to town records, with the proceeds used to buy equipment for the Palm Beach Police Department, help its officers and families when they are in need, and provide scholarships for officers’ children. The foundation declined further comment.

Laurel Baker, executive director of the Palm Beach Chamber of Commerce, said in an email that “each organization should examine their mission statements to ensure that any fundraising efforts are not compromising their efforts.”

She said she is not implying that charities should shun Trump.


►  U.S. stocks slide again as industrial companies and banks drop

U.S. stocks continue skid Friday as industrial companies fall after a weak report from farm equipment giant Deere. Banks are also down as bond yields continue to slide, and sporting goods companies continue to take sharp losses as investors did not like what they heard from Foot Locker and Hibbett Sports. European markets continue to decline after terrorist attacks in Spain. Stocks are coming off their biggest loss in three months.

KEEPING SCORE: The Standard & Poor’s 500 index sank 4 points, or 0.2 percent, to 2,425 as of 10:05 a.m. Eastern time. The Dow Jones industrial average fell 50 points, or 0.2 percent, to 21,669. The Nasdaq composite gave up 15 points, or 0.3 percent, to 6,206. The Russell 2000 index of smaller-company stocks declined 6 points, or 0.5 percent, to 1,352.

On Thursday stocks took their second-biggest loss of 2017. Investors were troubled by a pair of deadly car attacks in Spain, which killed a combined 14 people, and stocks in the U.S. traded lower as investors expected the Federal Reserve will raise interest rates more slowly than previously anticipated. Wall Street also became more pessimistic about Donald Trump’s proposals for infrastructure spending. Late Thursday the White House said it abandoned plans to form an infrastructure advisory council.

NO, DEERE: Deere tumbled after its sales in the fiscal third quarter came in lower than investors hoped. The company’s profit got a large boost after the company sold some of its stake in SiteOne Landscape Supply, and analysts said they were disappointed with the company’s equipment sales. The stock dropped $10.64, or 8.6 percent, to $113.34. Other industrial companies also stumbled. General Electric dipped 15 cents to $24.60 and Honeywell lost 74 cents to $135.11.

BLOWING THE WHISTLE: Athletic gear retailer Foot Locker plunged $11.70, or 24.5 percent, to $36 percent after a weak quarter. The company said some high-priced sneakers didn’t sell as well as it hoped, and there aren’t a lot of exciting new shoes on the market. It doesn’t expect that problem to clear up in the next few quarters. Foot Locker now plans to close at least 135 stores, up from its previous forecast of 100.

Hibbett Sports cut its annual forecasts and its stock tumbled $1.93, or 16.7 percent, to $9.57. Foot Locker is down 49 percent this year and Hibbett has lost 74 percent.

Sporting goods retailers and apparel makers have nosedived this week after a disappointing report from Dick’s Sporting Goods. Friday morning, Nike sank $3.02, or 5.3 percent, to $54.44 and Under Armour shed 76 cents, or 4.3 percent, to $17.05.

SEEKING SAFETY: Bond prices rose further. The yield on the 10-year Treasury note fell to 2.18 from 2.19 percent. Gold rose to its highest price since right before the U.S. presidential election. It gained 0.8 percent at $1,302.30 an ounce.

CURRENCIES: The dollar fell to 108.64 yen from 109.67 yen. The euro edged up to $1.1745 from $1.1742.

ENERGY: Benchmark U.S. crude oil lost 16 cents at $46.93 a barrel in New York. Brent, the international standard, shed 16 cents to $50.86 a barrel in London.

OVERSEAS: The British FTSE 100 index declined 1.1 percent while France’s CAC 40 fell 1.2 percent. Germany’s DAX was down 0.5 percent. Japan’s benchmark Nikkei 225 index lost 1.2 percent and the Kospi in South Korea shed 0.1 percent. Hong Kong’s Hang Seng sank 1.1 percent.

U.S. Market Weekly Summary – Week Ending 08.18.2017

S&P 500 Posts 0.6% Weekly Drop as Energy Sector Leads Slide for Second-Consecutive Week
The Free Press WV

The Standard & Poor’s 500 index fell 0.6% this week as the energy sector led the market benchmark lower for the second-consecutive week.

The S&P 500 closed Friday’s session at 2,425.55, down from 2,441.32 last week. This follows a 1.4% drop posted last week; combined, the benchmark has lost 2.1% over the past two weeks.

The index’s drop this week was led by the same sector that led last week’s slide: Energy. The energy sector’s decline came as US crude-oil futures sank to three-week lows amid continued concerns about rising oil output. Among the decliners, shares of Marathon Oil (MRO) dropped 10% this week while Baker Hughes (BHGE) shares were down 4.4% and Phillips 66 (PSX) shed 2.2%.

Consumer-discretionary stocks were also weak this week, slipping 1.8%, as quarterly reports from a number of retailers disappointed. Shares of Dicks Sporting Goods (DKS) tumbled 21% on the week after the sporting-goods retailer reported fiscal Q2 results below analysts’ expectations and cut its earnings guidance for 2017.

Shares of luxury-accessories maker Coach (COH) fell 15% this week as the company reported weaker-than-expected fiscal Q4 revenue and projected fiscal 2018 revenue below the Street’s consensus estimate.

On the upside, the utilities sector had the biggest percentage gain of the week, up 1.3% for the week, as investors tend to find safety in utilities companies for their typically steady dividend income and consistent earnings. The week’s gainers included NRG Energy (NRG), up 4.5%, and Alliant Energy (LNT), up 2.1%.

The real-estate sector edged up 0.2% this week, erasing part of last week’s drop. Gainers included Alexandria Real Estate Equities (ARE), whose shares rose 0.4% on the week as filings showed a lower-than-average level of insider transactions in the latest quarter.

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