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Wall Street indexes close at record highs; Tesla, Micron and Micron rally
Wall Street's major indexes closed at record highs on Thursday, thanks to gains by Tesla and Micron Technology. Meanwhile, U.S. data on inflation and unemployment fueled expectations of a Federal Reserve rate cut this month. The U.S. consumer price index rose faster than expected in August, and the inflation rate was higher than it has been in the past seven months. Separately, the initial claims for unemployment benefits for the week ending September 6 reached 263,000. This is a four-year high. "Inflation is sticky. Whether you call it stagflation, or not, different people define it differently. Atsi Sheth is the Chief Credit Officer of Moody's Ratings, New York. Sheth predicts the Fed will cut interest rates 25 basis point next week and another 25 basis point by year-end. The futures market indicates that traders are confident the Fed will reduce rates by 25 basis points or more at its next policy meeting. There is a 7 percent chance of a 50 basis point reduction. This comes after a string of disappointing labor market data and Wednesday's lower-than-expected reading on producer inflation. Tesla climbed, helping the S&P 500 index and Nasdaq to reach record highs. Citigroup increased its price target for Micron Technology to $175, up from $150. The Philadelphia SE Semiconductor Index also reached a new high, rising 0.9%. Warner Bros Discovery gained after the Wall Street Journal revealed that Paramount Skydance was preparing to make a cash-only bid for the struggling media firm. The preliminary data shows that the S&P 500 rose 54.70 points or 0.84% to 6,586.74 while the Nasdaq Composite advanced 153.54 or 0.70% to 22,039.60. The Dow Jones Industrial Average increased 613.97, or 1.35% to 46,104.89. Centene's stock jumped after it reaffirmed the insurer's annual profit forecast. It also said that its Medicare plans had been rated in line with its expectations. Oracle retreated, giving up some of the previous session's 36% rise, which had given new fuel to Wall Street AI's rally. Delta Airlines' stock fell after it reaffirmed its profit forecast for the year. Purvi Agarwal, Shashwat Chohan and Noel Randewich reported from Bengaluru and San Francisco respectively; Pooja Deai and Maju Sam edited the story. Davide Barbuscia, New York: Additional reporting; editing by David Gregorio
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Boeing CEO: 777X certification is behind schedule
Boeing CEO Kelly Ortberg stated on Thursday that Boeing is behind schedule in certifying its newest widebody aircraft, the 777-9. The first 777X will be delivered in 2026. This is six years later than the company had anticipated in 2013 when the program began. Ortberg, speaking at the Morgan Stanley Laguna Conference, said that there is still a "mountain" of work to be done in order to certify the aircraft, but no technical issues have been discovered. He said that "even a small schedule delay in the 777 program can have a big financial impact for the company." The program has already cost the company several billion dollars. Boeing's supply chains are under pressure from inflation across all of its programs, he explained. Ortberg stated that he did not anticipate any supply-chain problems to stop the company from increasing the production of its most popular 737 MAX aircraft to 42 per month by the year's end, up from the current federally imposed limit of 38. He said that the company must first stabilize one of six key performance indicators before increasing 737 production. Ortberg noted that paying down debt will be a priority once the company returns profitably. He said the company had taken on too much debt in the past years to deal with its crises. (Reporting and editing by Chris Reese, Lisa Shumaker, and Dan Catchpole from Seattle)
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Southwest Airlines re-evaluates its long-haul flight strategy
Southwest Airlines CEO Bob Jordan stated on Thursday that the company was looking into long-haul flights internationally and premium airport lounges to help it turn around. Jordan said that while the company would have to consider a wide body aircraft for international long-haul service, they could first choose a narrow-body to serve these routes. After the COVID-19 epidemic, the Dallas-based carrier has struggled to find its feet. It operates mostly domestic flights using a Boeing 737 fleet. The carrier's low earnings have increased pressure on it to change its business model. It now charges for checked baggage, ending the free policy. It also introduced a basic economy fare, and will switch to a new policy of assigned seats in January. Jordan has spoken in the past about the company's ambitions to launch flights to Europe. Southwest Airlines' lack of international long-haul flights has been criticized by industry experts as limiting its appeal to customers. Southwest Airlines has been expanding its network since February by partnering with Icelandair, China Airlines and EVA Air. The company said that it is looking at new partnerships around the world. Jordan, however, said that the company would like to service long-haul routes themselves. Jordan said that the company wants to service those long-haul international routes. Southwest Airlines once had a record of 47 years of profits in a row prior to the pandemic. Since then, Southwest has struggled with regaining sustained profitability. The margins of Delta Airlines and United Airlines are far smaller than those of Air Canada. Southwest has made many recent changes to attract high-spending tourists. Jordan stated that the company loses customers to other airlines because it does not currently fly to London or offer premium airport lounges. The lounges will also increase the loyalty revenue of the company, as the co-branded cards that the company offers to its customers will be more appealing. Jordan stated that "if we want to remain relevant, as the largest domestic airline, we have to continue meeting the needs of our clients." (Reporting and editing by Franklin Paul, Aurora Ellis, and Rajesh Kumar Singh)
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Urals Diffs stable in subdued Trading
The differentials between dated Brent and Urals crude were unchanged Thursday, amid quiet trading. Market participants are expecting Washington to increase pressure on India to stop purchasing the Russian grade. The nominee of Donald Trump for Ambassador to India, said that Washington and New Delhi are "not that different" in tariffs. He also said that Trump has been very clear about India's need to stop buying Russian crude oil. India is the biggest buyer of Russian Urals crude oil seaborne cargoes. OPEC data released on Thursday showed that Russian oil production rose in August by 50,000 barrels per day to 9,173 million barrels. PLATTS WINDOW On Thursday, no bids or offers for Urals BTC, Azeri BTC Blend or CPC blend were made in the Platts Window. The International Energy Agency reported on Thursday that Russia's revenues from crude oil and petroleum products fell in August, to the lowest level since the beginning of the conflict with Ukraine. Reporting by Lisa Shumaker; Editing by Lisa Shumaker
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US sues Uber for disability discrimination
Uber Technologies was sued by the U.S. Government on Thursday, accusing it of discriminating with passengers who have disabilities. The U.S. Department of Justice filed a complaint in San Francisco Federal Court alleging that Uber drivers refuse to serve people who have disabilities, such as riders traveling with service animals and stowable chairs. Uber and its drivers are also accused of imposing unpermissible surcharges, such as cleaning fees for service dogs and cancellation fees when riders are refused service. Some drivers insult and degrade people with disabilities or refuse to comply with reasonable requests, such as allowing passengers with mobility issues to sit in the front seats. The complaint stated that Uber's discriminatory behavior has caused individuals with disabilities significant emotional and physical harm. The lawsuit is seeking an injunction to prevent further violations of Americans with Disabilities Act. It also seeks changes to Uber’s practices as well as monetary damages, civil fines and an injunction. Uber didn't immediately respond to comments. The Justice Department didn't immediately respond to an inquiry for more information.
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Canada accelerates major projects including gas plants, ports, and mines
Canada announced five major projects that would be eligible to receive fast-track approvals on Thursday as part of its campaign to diversify its economy and reduce the reliance on United States due the tariffs. A major projects office has been set up by the government of Mark Carney to reduce red tape. Companies can spend a decade to get approval for a mine, pipeline or other project. "We used build large things in this nation, and we used build them quickly." "It's time to get going again," said Prime Minister Carney at a televised news conference. One of the five projects includes a plan to increase the production of LNG at the Shell-led LNG Canada facility in British Columbia's western province. On the list are the plans of Foran to build a new copper mine in Saskatchewan, the expansion of Montreal's container terminal port, and the construction in Ontario of a small modular reactor. (Reporting and editing by Emelia Sithole Matarise; Reporting by David Ljunggren)
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Cuban capital returns to normal after national blackout
On Thursday, the Cuban Energy and Mining Ministry announced that 80% of Havana had power and the majority of the energy grid of the country had been restored 24 hours after its collapse, which left 9.7 million residents without electricity. Lazaro Güerra, the director of electricity at the Ministry, said that "electricity coverage is increasing and we will be generating about 1000 Megawatts today." The restoration process is progressing well. "We are nearing the end of the restoration process of the electrical system," said he. POWER SYSTEMS IN A LONG TERM CRISIS This system has been in crisis since years. It has a capacity effective of less than 2000 megawatts, and a demand for electricity of more than 3,000 MW. Before Wednesday's collapse, the majority of residents experienced daily blackouts lasting 16 hours or longer. Cuba's oil fired power plants, which were already outdated and struggled to keep the lights lit, reached a crisis last year when oil imports from Venezuela and Russia, as well as Mexico, decreased. This grid failure comes after four nationwide blackouts that began late last year. The Communist Party has launched a program to install 1,000 MW of solar energy this year, and another 1000 MW next year. As part of the worst economic crisis since decades, the country is also facing shortages in fuel, food and many other items. Sergio Serrano is a Havana resident who works for himself. Thalia Martinez, a housewife, was not sure. "I don't know what the government is doing to fix it. ... "It is the people that suffer, children, mothers, grandparents, the old, and this is very bad," said she.
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Nepal's protest movement targets the elite, from parliament to luxury hotels
Arsonists set fire to luxury hotels and residences as protesters stormed the Nepali parliament forcing the Prime Minister to resign. They were angry at the extravagant lifestyle of the wealthy in this poor country. The protests, also known as "Gen Z", as many participants were in teens or early twenties, caused Nepal's biggest upheavals in years. They forced K.P., an unpopular leader, to resign. Sharma Oli resigned on Tuesday after violence killed 19 protesters. Nepal's Health Ministry said that the death toll had risen since then to 34. More than 1,300 people were also injured. Leaders of Gen Z protest movement dissociated themselves from the arson attack, blaming the infiltrators. Analysts point out that frustration is growing over wealth inequality in Nepal as well as perceived corruption in Nepal's political leaders. Arsonists attacked hotels of five stars, such as the Hilton, Hyatt Regency, and Varnabas Museum Hotel, while the Parliament, Prime Minister's Office, and Supreme Court were still on fire. Bhushan Rane told the front desk manager of the hotel that protesters had damaged the Hyatt Regency. The property is located near Boudhanath Stupa which is one of the most popular Buddhist sites in Nepal. Rane said that neither guests nor staff members were injured. The hotel is closed due to political unrest. Nepal's economy is based on tourism. The Hilton Hotel was also set ablaze, sending plumes of black smoke into the air. The Kathmandu Hilton was opened last year by Shahil Agrawal, the scion of a Nepalese steelmaking business-turned-conglomerate, the Shanker Group. Hilton's spokesperson confirmed that the hotel had been evacuated after damage was sustained during protests. Guests and staff were also safely escorted out. The statement stated that a full assessment would be conducted of the building. Homes of politicians, including Oli, were also attacked. INEQUALITY In recent months, the Gen Z movement gained momentum around posts on TikTok and Instagram that purportedly showed children of Nepali political leaders living a luxurious lifestyle, including designer clothes and expensive vacations. In the meantime, every day thousands of people, mostly young, leave Nepal in search of better economic opportunities in places like Malaysia, South Korea, and the Middle East. Balaram K.C. is a retired Supreme Court justice and constitutional expert. He said: "This is the frustration of common people." He said, "You people are only taking care of yourselves and your family members and not anyone else." Rajendra Bajgain said that the arson attack on his luxury hotel Varnabas Museum also targeted guests. Bajgain, after the deaths of protesters, announced his intention to resign from the parliament. He also said that he sympathized with the Gen Z demonstrators. He said that the level of dissatisfaction with corruption in Nepal has been increasing for a long time.
JetBlue is bullish about its Atlantic strategy and wants to add more gateways
JetBlue Airways announced on Thursday that it was confident in its transatlantic strategy, and is working to connect as many passengers as possible with Atlantic Gateways.
The New York-based carrier has reorganized its network in order to focus on routes that are more profitable.
The carrier will expand its service to Southern Florida, and also focus on transiting more U.S. premium travelers to gateway cities such as New York and Boston before continuing to Europe.
JetBlue's President Marty St. George said at a Morgan Stanley Conference: "This balance of good sun market in the winter, and then European markets during the summer and fall has made for a very very good profit portfolio."
"We are very, very confident about the success of Atlantic." The company believes that connecting more passengers with gateways such as New York and Boston is important for its strategy of returning to profitability.
He added, "I'd love to have more Atlantic connectivity as quickly as possible."
JetBlue, a competitor of Southwest Airlines, said that it was satisfied with the decision made by its fleet to fly narrow-body aircraft with approximately 150 seats across the Atlantic.
The company is having difficulty securing airport slots and favorable times in cities such as London to attract more business travelers for its transatlantic flights. (Doyinsola Oladipo in New York; Editing by Nia Williams)
(source: Reuters)