US: Wall St has worst start to year ever

US stocks closed lower on Friday, ending a volatile week with their worst five-day start to a year ever, as sliding oil prices and lingering worries about the global economy offset upbeat US job growth. 

PHOTO: AFP

JAN 9, 20167:16 AM

[NEW YORK] US stocks closed lower on Friday, ending a volatile week with their worst five-day start to a year ever, as sliding oil prices and lingering worries about the global economy offset upbeat US job growth.

Both the Dow and S&P 500 had their worst five-day starts in history, with the Dow falling 6.2 per cent for the week and S&P 500 sliding 6 per cent. The Nasdaq was down 7.3 per cent this week.

All three indexes saw losses accelerating into the close.

The market had opened higher after data showing US nonfarm payrolls surged in December and the unemployment rate held steady. But that was not enough to keep stocks in positive territory.

Oil prices fell for a fifth day and Brent lost 10 per cent for the week, while the S&P energy sector also extended this week's slide, ending the day down 1.3 per cent.

Fears of a slowdown in China and the global economy spooked investors this week, creating a turbulent start to the trading year. "The start of the year is very poor, so that's got investors on the defensive," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. "In the face of weakening global growth ... it's difficult to find reasons to commit money at this point even if one is bullish," he said, adding that he expects stocks to rebound from these oversold conditions next week.

The Dow Jones industrial average was down 167.65 points, or 1.02 per cent, to 16,346.45, the S&P 500 lost 21.06 points, or 1.08 per cent, to 1,922.03 and the Nasdaq Composite dropped 45.80 points, or 0.98 per cent, to 4,643.63.

The CBOE Volatility Index ended up 8.1 per cent Friday at 27.01, its highest close since Sept. 28.

All 10 S&P 500 sectors ended with declines.

Gap sank 14.3 per cent to US$22.91 after the apparel retailer reported a larger-than-expected drop in December same-store sales, while Container Store slumped 41.2 per cent to US$4.22, a day after storage products retailer's fourth-quarter profit forecast missed estimates.

Apple shares, however, snapped their three-day losing streak and were up 0.5 per cent at US$96.96.

Volume was again heavy. About 8.9 billion shares changed hands on US exchanges, well above the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

NYSE declining issues outnumbered advancing ones 2,092 to 980, for a 2.13-to-1 ratio on the downside; on the Nasdaq, 2,018 issues fell and 812 advanced for a 2.49-to-1 ratio favoring decliners.

The S&P 500 posted one new 52-week high and 93 new lows; the Nasdaq recorded 13 new highs and 312 new lows.

REUTERS

    
 

Spain's Princess Cristina goes on trial for tax fraud

      

Spain's Princess Cristina, the sister of King Felipe VI, and her husband will go on trial Monday for corruption in a high stakes case likely to further damage the monarchy's image. 

PHOTO: AFP

JAN 9, 201610:45 AM

[MADRID] Spain's Princess Cristina, the sister of King Felipe VI, and her husband will go on trial Monday for corruption in a high stakes case likely to further damage the monarchy's image.

The highly anticipated trial of the royal couple and 16 other accused will run until June at a court in Palma, on the Mediterranean island of Mallorca, where the Spanish royal family has a seaside holiday home.

Ms Cristina, 50, will be the first direct member of the royal family facing criminal charges since the monarchy was reinstated following the death of dictator General Francisco Franco in 1975.

The case is centred on the shady business deals of the Noos Institute, a charitable organisation based in Palma which her husband, former Olympic handball player Inaki Urdangarin, chaired from 2004 to 2006.

As a result of their indictment, last year, King Felipe VI, who took over from his father Juan Carlos in June 2014, stripped Ms Cristina and her husband of their title as Duke and Duchess of Palma de Mallorca, in a bid to undo damage to the monarchy's image ahead of the trial.

Juan Carlos had given the couple the title when they married in 1997 in a lavish ceremony at the height of the popularity of the Spanish royals.

"Felipe VI cannot allow there to be the slightest doubt over the rigour of his sister's trial," historian Pilar Urbano, who has written extensively about the royal family, told AFP.

The trial must be "exemplary, the opposite would hurt him," she added.

Urdangarin, 47, and his former business partner Diego Torres are suspected of embezzling 6.2 million euros (S$9.7 million) in public funds paid by two regional governments to the Noos Institute to stage sports and other events.

He is accused of using his royal connections to secure inflated contracts without competing bids and siphoning off some of the money into Aizoon, a firm he jointly ran with his wife Ms Cristina to fund a lavish lifestyle.

Once dubbed the "ideal" son-in-law by Spain's gossip press, Urdangarin has also been charged with influence peddling, document falsification, money laundering and tax fraud.

Ms Cristina, a mother-of-four with a master's degree from New York University, faces the lesser charge of tax evasion.

The examining magistrate in the case tried for years to prove her active involvement in her husband's business dealings.

But he ran into the firm opposition of public prosecutors who managed to get her cleared of accusations of money laundering.

The case was triggered by a complaint from anti-graft campaigners "Manos Limpias" or "Clean Hands". Public prosecutors and the tax office both declined to press charges against her.

Urdangarin faces a 19-and-a-half-year jail sentence. If convicted Ms Cristina faces a jail term of up to eight years.

The first days of the trial will be spent on procedural matters. The accused will start being questioned on February 9 with Ms Cristina last on the list to testify.

The princess, the sixth in line for the throne, has denied wrongdoing. During a preliminary hearing in February 2014 she told the court that she trusted her husband to manage their finances and repeatedly answered "I don't know" to questions.

Her lawyers are expected to ask the court to apply the so-called "Botin doctrine" to her.

In a 2007 case against the late Emilio Botin, the former chairman of Santander bank, the Supreme Court ruled that people can not be tried without the support of the public prosecutor.

Applying this jurisprudence to the princess "would give the impression that justice is not equal for all," said Urbano.

The princess, who now lives in Switzerland, has kept a low profile ahead of her trial. She has been excluded from the royal family's official functions and was not even invited to her brother Felipe's swearing in ceremony in June 2014.

Whether she gets the case against her dropped or stands trial until the end, the monarch's reputation will take a hit, Jose Apezarena, author of several books about Felipe, told AFP.

"Like it or not, it will hurt the monarchy," he said.

AFP

      

China makes five more arrests over deadly Shenzhen landslide

      

Chinese police have arrested five more officials of a company involved in a deadly landslide that buried 77 people last month, state news agency Xinhua said, taking the tally of arrests to 16. 

PHOTO: AFP

JAN 9, 201610:42 AM

[SHANGHAI] Chinese police have arrested five more officials of a company involved in a deadly landslide that buried 77 people last month, state news agency Xinhua said, taking the tally of arrests to 16.

The government has blamed breaches of construction safety rules for the disaster in the southern city of Shenzhen on Dec 20, when a dump overflowed and destroyed 33 buildings.

A State Council investigation said it was caused by work safety mismanagement, rather than geological causes.

Eleven people, including a legal representative and a deputy manager of Shenzhen Yixianglong Investment Development, which ran the dump, and officials responsible for supervising it, were arrested this month.

All 16 have been charged with negligence, Xinhua said on Friday, citing a Shenzhen prosecutor.

Calls to Shenzhen Yixianglong Investment Development were unanswered.

The disaster is the latest accident to raise questions about China's industrial safety standards and lack of oversight over years of breakneck economic growth.

REUTERS

      

China December inflation quickens to 1.6% year-on-year, meeting forecasts

China's consumer inflation quickened to 1.6 per cent year-on-year in December, meeting market expectations. 

PHOTO: BLOOMBERG

JAN 9, 20169:37 AM

[SHANGHAI] China's consumer inflation quickened to 1.6 per cent year-on-year in December, meeting market expectations.

Analysts polled by Reuters predicted the index would come in at 1.6 per cent, compared with 1.5 per cent posted the prior month.

The producer price index was unchanged at -5.9 per cent in December, the National Bureau of Statistics said on Saturday.

The market had expected producer prices to fall 5.8 per cent on an annual basis after a fall of 5.9 per cent the prior month.

REUTERS

      

Pfizer hikes US prices for over 100 drugs on January 1

Pfizer Inc, which plans a US$160-billion merger with Ireland-based Allergan Plc to slash its US tax bill, on Jan 1 raised US prices for more than 100 of its drugs, some by as much as 20 per cent, according to statistics compiled by global information services company Wolters Kluwer. 

PHOTO: REUTERS

JAN 9, 20161:09 PM

[NEW YORK] Pfizer Inc, which plans a US$160-billion merger with Ireland-based Allergan Plc to slash its US tax bill, on Jan 1 raised US prices for more than 100 of its drugs, some by as much as 20 per cent, according to statistics compiled by global information services company Wolters Kluwer.

Pfizer confirmed a 9.4 per cent increase for heavily advertised pain drug Lyrica, which generated US$2.3 billion in 2014 US sales; a 12.9 per cent increase for erectile dysfunction drug Viagra, which had 2014 US sales of US$1.1 billion; and a 5 per cent increase for Ibrance, a novel breast cancer drug launched last year at a list price of US$9,850 per month, or US$118,200 per year.

Company spokesman Steven Danehy could not immediately confirm the remaining price increases, which were compiled by a unit of Wolters Kluwer Health and published in a research note by UBS Securities.

US lawmakers, and presidential candidates, have in recent months stepped up criticism of US drug prices trends, driven in part by eye-popping price hikes from companies with recently acquired generic drugs.

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"Medicines are among the most effective and efficient use of private and public health care dollars," Pfizer said in an emailed statement. "It is important to note that the list price does not reflect the considerable discounts offered to the government, managed care organizations, and commercial health plans and certain programs that restrict any increases above the inflation rate."

UBS said Pfizer increased prices by 20 per cent for anticonvulsant Dilantin, hormone therapy Menest, angina drug Nitrostat, Tykosyn for irregular heartbeat, and antibiotic Tygacil.

The analyst report said US prices were raised on a total of 105 Pfizer drugs. No price reductions were reported.

Pfizer is by no means the only drugmaker to raise prices. Research firm Truveris found that US prescription drug prices rose 10.9 per cent in 2014, including a 15 per cent increase for brand-name products.

The planned Pfizer/Allergan deal, which would create the world's largest drugmaker and shift Pfizer's headquarters to Ireland, would also be the biggest-ever instance of a US company re-incorporating overseas to lower its taxes. US President Barack Obama has called such inversion deals unpatriotic and has tried to crack down on the practice.

Democratic presidential front-runner Hillary Clinton pledged to propose measures to prevent such deals. The merger was also slammed by her rival Senator Bernie Sanders as well as by Republican presidential candidate Donald Trump.

Pfizer, which will report its 2015 earnings February 2, posted biopharmaceutical revenue of US$45.7 billion in 2014, including US sales of US$17.2 billion.

Also in 2014 the company, currently headquartered in New York, spent US$8.4 billion on research and development, US$14.1 billion on sales, informational and administrative costs, including advertising, and nearly US$12 billion to buy back its shares and pay dividends to shareholders.

REUTERS