Business

NEW YORK — The S&P 500 ended another turbulent week on an upbeat note on Friday, but major indexes posted their worst week of losses since early February as President Donald Trump's threat to impose import tariffs on steel and aluminum rattled investors. 

The gains on Friday came as investors who had been spooked by the prospect of a global trade war backed off those concerns and noted a trade war was far from certain at this point.

Trump on Thursday threatened a 25 per cent tariff on steel imports and 10 per cent on aluminum without exemptions for any countries, igniting a sell-off in a market already on edge over rising US interest rates and bond yields.

Trump struck a defiant tone on Friday, saying trade wars were "good, and easy to win", and US Commerce Secretary Wilbur Ross, appearing on CNBC, said tariffs would have a "trivial effect".

Phil Orlando, chief equity strategist at Federated Investors in New York, said Trump's announcement was made to call everyone's attention to the US trade deficit but investors decided that a full-blown global trade was not going to happen. 

"For a real estate guy like that, you pound the podium, you rattle some sabers, you get everybody's attention and then you negotiate back to some reasonable midpoint."

The tariffs could dampen profits for everything from car makers to beer companies and result in higher prices for consumers.

Shares of big US steel companies and manufacturers were under pressure on uncertainty over the effects of tariffs.

Shares in Caterpillar, a buyer of raw materials and a big exporter of construction machinery products, were down 2.6 per cent after falling 2.8 per cent in the previous day's session. General Motors was down 1 per cent.

The Dow Jones Industrial Average fell 70.92 points, or 0.29 per cent, to 24,538.06, the S&P 500 gained 13.58 points, or 0.51 per cent, to 2,691.25 and the Nasdaq Composite added 77.31 points, or 1.08 per cent, to 7,257.87.

For the week, the S&P 500 dropped 2 per cent, while the Dow was down 3 per cent and the Nasdaq fell 1 per cent. Wall Street had posted gains in the previous two weeks as it recovered from its steep early-February sell-off.

Those losses in early February pushed the S&P 500 down more than 10 per cent from a January 26 record high, confirming the market was in a correction.

The tariffs are unlikely to significantly hurt Corporate America's overall earnings, according to stock market strategists, who were not immediately adjusting their profit estimates following Trump's announcement.

"The impact on total corporate earnings first would be driven by the impact on the economy," said Keith Parker, US equity strategist for UBS in New York.

McDonald's dropped 4.8 per cent after RBC lowered its price target on the stock and cut its 2018 earnings estimate, citing a disappointing early sales impact from McDonald's value menu. The stock was the biggest drag on the S&P and the Dow. 

J.C. Penney Co. Inc. shares fell 5.4 per cent after the department store chain missed same-store sales estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.69-to-1 ratio; on Nasdaq, a 2.99-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 25 new lows; the Nasdaq Composite recorded 59 new highs and 65 new lows.

About 7.7 billion shares changed hands on US exchanges. That compares with the 8.4 billion daily average for the past 20 trading days, according to Thomson Reuters data. 

LONDON  — Sterling slipped to a seven-week low against the dollar on Thursday, as investors sold the pound on worries a Brexit transition deal might not be reached this month.

British Prime Minister Theresa May will lay out her views on how to keep trade open between all of the United Kingdom and the European Union in a key speech on Friday, just two days after the EU's chief negotiator Michel Barnier struck a downbeat tone on the progress of Brexit talks so far, weakening sterling. 

Sterling has struggled to build on a rally earlier this year amid a resurgence in political risk centred on Brexit, and a broad rebound in the dollar. It suffered its worst month since October 2016 in February, as the greenback strengthened across the board. 

Warnings by Barnier that a transition deal — designed to give Britain and the EU more time to agree the terms of their future relations — was not guaranteed have rattled investors. 

On Thursday, the pound slipped 0.4 per cent to as low as $1.3712, its weakest since January 12. 

"This is mostly about the rebound in the dollar, which is benefiting from more risk-averse trading conditions on the back of more hawkish comments from Powell," said MUFG currency strategist Lee Hardman, referring to a testimony from new Federal Reserve Chair Jerome Powell.

"But there are [also] pound-specific negative factors — the Brexit risk has picked up in the past week or so, and the comments yesterday from Barnier don't give you much confidence that a transition deal will be reached this month," he added. 

Against the euro, sterling traded down 0.2 per cent at 88.77 pence per euro. 

A closely watched gauge of British factory activity slipped to its lowest in eight months in February as output expanded more slowly, a survey also showed on Thursday.

But politics remains front and centre for sterling. "The pound is weakening basically at the moment on politics," said Michael Hewson, chief market strategist at CMC Markets.

Hewson said he believed sterling remained in an uptrend that it began early last year, but that it could fall to as low as below $1.34 as investors book profits and political risk overshadows any positive economic developments.

The market is pricing in a May interest rate hike by the Bank of England, although the central bank has said its monetary outlook is dependent on smooth negotiations with the EU over Brexit and a healthy economy.

AMMAN — Jordan Phosphate Mining Company (JPMC) and the Arab Potash Company (APC) signed a memorandum of understanding (MoUs) on Wednesday with Indian companies to bring up their exports to the Indian market, according to the Jordan News Agency, Petra. 

The MoUs were signed in the Indian capital, New Delhi, as His Majesty King Abdullah is visiting India in a bid to boost Jordanian-Indian business cooperation.

Petra said JPMC signed six agreements with different Indian companies to export phosphate to India. Under the deals, that will be implemented this year, it will initially provide the Indian market with around 3 million tonnes of phosphate. Exported quantities are expected to go up to 10 million tonnes of “raw phosphate” over the coming three years, Petra indicated. The value was not disclosed.  

The JPMC, which exports around 60 per cent of its production to the Indian market, also signed an agreement with an Indian company to acquire 250,000 tonnes of “phosphate fertilisers”, Petra reported.

Founded in 1949, the Amman Stock Exchange listed company, JPMC, operates three mining facilities in Jordan and a chemical manufacturing complex in Aqaba.

Moreover, on the sidelines of the India-Jordan Business Forum, which convened in New Delhi on Wednesday, the APC and Indian Potash Ltd. signed an MoU under which the APC will provide the Indian company with 375,000 metric tonnes of product, in addition to other quantities over five years. The two sides are to agree on prices on annual basis, in accordance with the prices at global markets.

The APC also signed a three-year MoU with Zuari Agro Chemicals Ltd. to provide it with different quantities, Petra reported. 

LONDON - Oil edged lower on Tuesday ahead of weekly data that is forecast to show a rise in U.S. crude inventories, although investor faith in OPEC’s ability to curtail production helped stem a larger price slide.

Brent crude futures LCOc1 were down 10 cents at $67.40 a barrel by 1043 GMT, while U.S. West Texas Intermediate crude CLc1 eased 17 cents to $63.74.

The American Petroleum Institute releases its weekly figures on U.S. crude inventories later on Tuesday. Stocks are forecast to have risen by 2.7 million barrels last week, according to a Reuters poll.

Inventories have fallen by more than 100 million barrels, or a quarter, in the last 12 months, to around their lowest in three years. Seasonally, stocks tend to build in the first three months of the year.

Soaring U.S. production is upending global oil markets at a time when other major producers - including Russia and the Middle East-dominated Organization of the Petroleum Exporting Countries - have been withholding output to prop up prices.

The United States will overtake Russia as the world’s biggest oil producer by 2019, International Energy Agency (IEA) Executive Director Fatih Birol said on Tuesday.

“U.S. shale growth is very strong, the pace is very strong ... The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately.

U.S. output was 10.27 million barrels per day (bpd), according to weekly government data released last Thursday, higher than the latest figures for Saudi Arabia, the world’s largest exporter, and just below Russia.

A steadier dollar also undermined the crude oil market, given the inverse relationship between the two, whereby a stronger U.S. currency can encourage investors to book profits on their holdings of dollar-priced commodities, stocks or bonds.

“Our technical analysts are saying (oil) is bearish unless we break above $67.70,” SEB head of commodity strategy Bjarne Schieldrop said.

“It’s been rejected exactly at that level ... and that is where the price action is today. It’s at a level where it’s a tie between ‘back to bullish or back to bearish’.”

LONDON — Sterling gave up all its earlier gains and was flat on the day thanks to a broad rebound in the dollar though hawkish comments from a central bank official boosted bets that interest rates may rise as early as May. 

A speech by opposition leader Jeremy Corbyn in which he said his Labour Party wanted Britain to negotiate a new customs union with the EU to ensure tariff-free trade after Brexit also helped support the pound.

The dollar rebounded from the day’s lows against a basket of currencies and was trading near the day’s highs at 89.21 with its gains more pronounced against the euro and the yen.

“We are seeing a broad-based rebound of the dollar against the euro and there isn’t a sterling-specific factor driving this,” said a trader at a European bank in London.

Despite sterling’s retreat, sentiment remained optimistic after Dave Ramsden, a deputy governor at the Bank of England (BoE) and one of the two policymakers who opposed the BoE’s decision to raise interest rates in November, said the central bank may need to raise British interest rates somewhat sooner he expected.

His comments in a newspaper interview added to the general chorus of optimism emanating from central bank officials in recent days, increasing the odds of a rate hike in May to 70 per cent, according to money markets.

“The BOE’s comments have been a big driver for sterling’s gains today and while Corbyn’s comments sound optimistic, we need to see more specifics from them on what they plan to do,” said Derek Halpenny, European head of Global Markets at MUFG. Sterling was flat on the day after having rallied as much as 0.7 per cent earlier to the day’s highs at $1.4070. 

As Prime Minister Theresa May tries to strike a divorce deal with the European Union by October, she is facing a rebellion by a small group of pro-Europeans inside her Conservative Party that Labour’s Corbyn hopes to use to undermine her authority.

Analysts said his support for a customs union made a “softer” Brexit — in which Britain retains ties that are as close as possible to the EU after leaving — more likely, helping reduce Brexit risks that weigh on the pound.

But “the predominant driver is the BoE comments”, said Manuel Oliveri, London-based FX strategist at Credit Agricole.

“It’s not a big surprise but this is another one of the members of the BoE [Ramsden] changing his view on the need for rate hikes.” 

Increased expectations of a BOE rate hike in May come after investors took profits into a sterling rally in recent weeks.

Latest positioning data by Commodity Futures Trading Commission on Friday showed that long sterling positions are down substantially to $8.2 billion compared to more than a three-and-a-half-year high of nearly $33 billion in late January.

The British pound peaked at $1.4346 in late-January, a 7.5 per cent jump from early December levels. It is now more than 2.5 per cent below that high.

NEW YORK — Berkshire Hathaway, the holding company of US billionaire investor Warren Buffett, received a stunning $29 billion last year from the US government, thanks to a new tax law that massively lowered corporate tax rates.

In his much-anticipated annual letter to shareholders, Buffett explained that the company's net gain of $65.3 billion in 2017 was only partly due to his employees' efforts.

"Only $36 billion came from Berkshire's operations," he wrote. "The remaining $29 billion was delivered to us in December when Congress rewrote the US Tax Code." 

Still, Buffett assured stockholders, "The $65 billion gain is nonetheless real — rest assured of that."

The new law, greatly touted by President Donald Trump, lowered the tax rate paid by US corporations from 35 per cent to 21 per cent, allowing many to undertake major new outlays and others to book significant fiscal gains.

Berkshire Hathaway wholly owns dozens of companies — from Dairy Queen to Duracell — and holds significant shares in large and diverse corporations including American Express, Apple, Bank of America, Charter Communications, Coca-Cola, Delta Air Lines, General Motors, Goldman Sachs, Moody's, Wells Fargo and Southwest Airlines.

'The Oracle of Omaha' 

Buffett's newsletters are read with intense interest on Wall Street and beyond. 

Known as the "Oracle of Omaha" — after his birthplace in the Midwestern state of Nebraska — he is one of the world's most successful investors and one of its richest men. Now 87, he has been investing since he first bought stock at the age of 11.

His latest newsletter reports that Berkshire's net earnings rose last year from $24.07 billion to $44.94 billion.

In the letter, he added: "2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire". 

The year also saw the company's war chest swell to $116 billion in cash and US Treasury bills, financial manna that Buffett wants to use to make significant new acquisitions.

Berkshire's often-impressive pace of acquisitions had slowed last year, he noted, when the prices asked for businesses "hit an all-time high", amid what he called "a purchasing frenzy". 

"Price seemed almost irrelevant to an army of optimistic purchasers," Buffett noted.

Still, he said, the company "will have opportunities to make very large purchases" going forward, with emphasis on those available at "a sensible purchase price". 

Buffett said Berkshire would stick with a "simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own".

A hit from hurricanes 

Buffett also said that while Berkshire's insurance holdings would take a $2 billion after-tax hit from losses caused by hurricanes last year in Florida, Texas and Puerto Rico, other reinsurance companies did far worse.

And he estimated the chances of a "mega-catastrophe" this year — one causing losses of at least $400 billion — at 2 per cent.

"No one, of course, knows the correct probability," he added. 

Buffett concluded with a little advice to fellow investors: "Though markets are generally rational, they occasionally do crazy things."

"Seizing the opportunities then offered does not require great intelligence... [or] a degree in economics," but rather "an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals", he added.

Forbes magazine estimates Buffett's personal worth at some $87 billion. 

He has undertaken — as part of the so-called Giving Pledge he co-founded with Bill Gates and Facebook CEO Mark Zuckerberg — to donate more than 99 per cent of his fortune to charities, and has already given away some $32 billion.

PARIS  — A French court on Friday threw out a complaint by Apple demanding a ban on protests at its stores by the tax campaign group Attac.

Attac had staged a sit-in at Apple's flagship Paris store on December 2, blocking access for several hours in protest at what they claimed was "massive tax evasion" by the US tech giant.

Apple said the demonstration put customers' and employees' safety at risk and sought a court order barring the activists from further protests inside its stores.

Attac had previously held protests at stores in Paris and Aix-en-Provence in November, demanding Apple pay billions of euros which the EU says it owes in back taxes.

But a Paris court dismissed Apple's claim that there was a risk of "imminent damage" from further protests, so long as these were peaceful and did not block access to the store.

It noted Apple had not reported any damage from the peaceful Paris protest in December.

Attac, which branded the lawsuit an assault on the right to protest, hailed the ruling in its favour.

"The court has recognised the legitimacy of our actions and went as far as to say we behaved in the general interest," said its spokesman Raphael Pradeau.

He added the group has no plans to stop protesting against the company.

Apple did not immediately respond to requests to comment.

In 2016, the EU said Apple owed $14.5 billion in back taxes after it negotiated highly favourable tax arrangements with the Irish government.

The tech giant also came under fire late last year when leaked financial documents known as the Paradise Papers showed it shifted tens of billions of dollars between tax havens to minimise taxes.

Last month the company announced it would pay $38 billion (31 billion euros) on profits repatriated from overseas as it boosts investments in the United States.

Apple, which claims to be the largest US taxpayer, is also one of the biggest beneficiaries of a tax-lowering bill passed by the US Congress in December.

LEIPZIG, Germany — A German court on Thursday delayed a ruling on whether major cities can ban heavily polluting diesel cars, which could hit the resale value of 15 million vehicles in Europe's largest car market and force automakers to pay for costly modifications.

Judge Andreas Korbmacher said the country's highest federal administrative court would rule on February 27 on an appeal brought by German states against bans imposed by local courts in Stuttgart and Duesseldorf over poor air quality.

There has been a global backlash against diesel-engine cars since Volkswagen admitted in 2015 to cheating US exhaust tests, meant to limit emissions of particulate matter and nitrogen oxide, known to cause respiratory disease.

While other countries are also considering restrictions on diesel cars, bans in the birthplace of the modern automobile would be a new blow for the car industry, and an embarrassment for Chancellor Angela Merkel's government, which has backed it.

"Diesel might get its final kiss of death [from the court ruling]," Evercore ISI analysts wrote in a note to clients.

Germany has long promoted diesel to help cut carbon dioxide emissions and meet climate change goals, but the Volkswagen (VW) scandal has pushed its carmakers to step up spending on electric cars, as well as investments into making diesel engines cleaner.

The federal administrative court in Leipzig is due to rule on whether bans imposed by local courts are legal after environmental group DUH sued city authorities. The DUH is also pursuing bans in many other German cities. 

During proceedings in Leipzig on Thursday, lawyers discussed whether the government would have to introduce a new way of labelling cars to enable authorities to enforce any bans.

Judge Korbmacher suggested the European Court of Justice might have to consider the issue of whether bans are permissible.

Merkel's government, which has come under fire for its close ties to the car industry, has lobbied against bans, fearing they could anger millions of drivers and disrupt traffic in cities, with public transport not in a position to take up the slack.

Meanwhile, authorities in Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centres by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year.

Bad air 

A small group of protesters from Greenpeace gathered outside the Leipzig court, with images of lungs painted on their chests and holding up signs reading "Clean Air Now".

"Because the government has failed to do anything for years about exhaust problems in the cities, judges have to decide today how residents will be protected from bad air," said Greenpeace transport spokesman Benjamin Stephan.

The threat of bans has prompted a big fall in sales of diesel cars in Germany, down to just a third of new car sales in January from almost half before the VW scandal.

In an attempt to avert bans, Merkel's government agreed a deal with carmakers last year to overhaul engine management software on 5.3 million diesel cars as well as funding for cities to help cut emissions by taxis and buses.

Environmental groups have called software updates insufficient and have lobbied for cars applying the latest Euro-6 and older Euro-5 emissions standards to have their exhaust treatment systems upgraded.

Evercore ISI has said it could cost up to 14.5 billion euros ($17.8 billion) to retrofit Germany's Euro-5 diesel fleet, and as much as double that if the entire diesel fleet is affected.