A consortium of tech companies, including Facebook Inc. and Alphabet Inc.’s Google, has released a set of benchmarks for evaluating the performance of artificial-intelligence tools, aiming to help businesses navigate the fast-growing field.

The benchmarks—which cover image recognition, object detection and voice translation—are meant to help companies compare various AI tools to see which work best for them as they pursue their own AI initiatives, said Peter Mattson, general chairman of the consortium, MLPerf, which counts 40 companies as members.

“For CIOs, metrics make for better products and services they can then incorporate into their organization,” said Mr. Mattson, a Google engineer.

The MLPerf benchmarks could, for example, evaluate the performance of an AI image-recognition model built with open-source machine-learning software from Google using data sources like RestNet50 or MobileNets, both of which specialize in image recognition. Companies can use the results as a starting point in implementing AI by seeing which software, hardware and data source work best.

There are separate benchmarks for how AI tools perform on various platforms and devices, such as mobile phones, servers and chips in the cloud or in data centers. The results will vary. For example, a mobile phone typically doesn’t have as much processing capability as a desktop computer, limiting the phone’s ability to perform AI tasks like image recognition.

Organizations have been slow to adopt AI, despite the hype surrounding the emerging technology. In a survey of 2,473 organizations of various sizes across industries world-wide by International Data Corp. in 2018, 18% had AI models in production; 16% were in the proof-of-concept stage and 15% were experimenting with AI.

Among the roadblocks to AI adoption: the myriad tools and services available and the many decisions organizations need to make, from whether or not to run AI in the cloud to whether to use graphics processors, which specialize in video and graphics but are now also handling AI, or central processing units, which mainly run central computer operations, for experimentation.

David Schubmehl, research director for AI systems at IDC, said benchmarks can help companies better address the complexities around AI adoption, allowing them to make apples-to-apples comparisons on the many AI software and hardware tools available.

“It’s coming at a useful time as we’re seeing more organizations move from experimentation to production,” he said.

Pleasanton, Calif.-based startup ServiceChannel Inc., which provides facilities-management services via the cloud to clients in sectors including retail and food, sees benchmarks like MLPerf’s as an important consideration in automating how it sends contractors to locations to provide services, said Chief Executive Tom Buiocchi.

The company is in the process of using AI and other technologies to verify the identity and performance of its contractors, and a benchmark will give the company confidence that it is deploying the right solution, Mr. Buiocchi said.

MLPerf was formed in 2018 to fill a void for standardized AI benchmarks. Its first measurement tool, released in May 2018, focused on training models—the brains behind AI implementations and a reference point for recognizing images or voice. The newer benchmarks focus on results from trained models. MLPerf’s current lineup includes representatives from Microsoft Corp., Intel Corp. and Landing AI, started by AI pioneer Andrew Ng.

For the new set of benchmarks, MLPerf pursued metrics around popular applications like voice recognition and computer vision that are universally applicable, said Vijay Janapa Reddi, associate professor of electrical engineering at Harvard University and co-chairman of MLPerf’s inference working group, which came up with the standards.

There are many ways to implement AI, but the benchmarks are meant to identify optimal solutions.

“You can literally look at the results and understand the trade-offs at a higher level,” Mr. Reddi said.

Write to Agam Shah at agam.shah@wsj.com

(END) Dow Jones Newswires

June 25, 2019 15:30 ET (19:30 GMT)

Energy shares are sliding this week despite oil’s climb—a divergence some analysts say could linger if geopolitical tensions in the Middle Eastcontinue to escalate.

The relationship between oil prices and shares of oil-producing companies has weakened recently after Iran shot downa U.S. military drone last week. Shares of energy companies in the S&P 500 slipped 0.4% Tuesday and are down 1.4% so far this week. The sector has shed 5.2% this quarter, on pace for its worst quarterly percentage drop since the broader-market selloff in the final three months of 2018.

Energy stocks in the S&P 500 have shed 15% over the past 12 months amid fears of oversupply and worries about slowing demand in a weakening global economy.

The most recent declines come as U.S. crude prices have rallied nearly 8% over the past week amid rising frictionbetween Washington and Tehran, though oil prices pulled back from multiweek highs Tuesday.

“Investors are looking through the recent strength in oil prices because they don’t buy that the recent geopolitical tensions will shoot oil materially higher, or the idea that demand for crude will remain at steadfast levels,” said Mike Tran, managing director and global energy strategist at RBC Capital Markets.

Declines in shares of oil conglomerates Exxon Mobil Corp. and Chevron Corp. weighed on the energy sector Tuesday, with each falling 0.7% apiece.

Meanwhile, oil-field services companies have been among the hardest hit this week within the S&P 500’s energy sector, a corner of the energy market that has been vulnerable as crude production has slowed, some analysts said. Shares of Baker Hughes and Schlumberger Ltd. dropped 0.5% Tuesday while Halliburton Co.’s stock edged up 0.3%. All three stocks have fallen at least 1.1% this week.

The slide may not last, however, if the U.S. and Iran don’t reach a detente soon.

“As geopolitical tensions escalate and there’s risk that gets priced back into oil prices, it’ll be something that equity investors just simply can’t ignore,” Mr. Tran said.

Write to Jessica Menton at Jessica.Menton@wsj.com

(END) Dow Jones Newswires

June 25, 2019 15:20 ET (19:20 GMT)

PG&E Corp. bondholders have challenged the California utility over control of its bankruptcy proceeding, offering Wall Street’s version of a solution to wildfire liabilities that are estimated at $30 billion or more.

Investors including Elliott Management Corp. and Pacific Investment Management Co. filed court papers outlining a chapter 11 plan that would include up to $18 billion for victims of blazes linked to PG&E’s equipment.

Bondholders say they would raise $30 billion, most of it in the form of equity investment, to help PG&E pay off its damages, according to court papers.

Ratepayers wouldn’t pay more, California’s green power future would be assured and Gov. Gavin Newsom would see the state’s largest utility exit from bankruptcy by next year, if PG&E and its creditors accept the offer, the bondholders say.

PG&E is looking at all options, according to a statement from the company.

Providers of wind and solar power that count PG&E as a big customer were thrown into financial jeopardy when PG&E filed for chapter 11 bankruptcy in January. The utility earlier this month since won a round in court, when Bankruptcy Judge Dennis Montali said he, not the Federal Energy Regulatory Commission, would decide whether PG&E can get out from its alternative power contracts.

The San Francisco utility has been under pressure to produce a chapter 11 exit plan quickly, with Mr. Newsom and others complaining publicly about a lack of action from a company blamed for years of fires that took lives and erased homes.

The Jan. 29 bankruptcy filing gave PG&E a limited period of exclusive chapter 11 plan rights, but that time runs out near the end of September.

At a hearing in May, Judge Montali said he would take seriously a request to open the door to competing restructuring proposals, if such a request was accompanied by a concrete offer.

Tuesday, an ad hoc group of bondholders outlined terms of an offer, and said its members are “an obvious source of new capital” that PG&E has been ignoring. They have set their challenge for a court hearing July 23.

The offer that arrived Tuesday in the U.S. Bankruptcy Court in San Francisco likely won’t be the only one to be floated in PG&E’s bankruptcy proceeding. At least two other major groups of investors with money riding on the outcome of the case are exploring the possibilities.

Rich in assets and cash flow and an irreplaceable element of California’s power grid, PG&E is considered a prime opportunity for Wall Street investors, despite its poor safety record.

In addition to the $16 billion to $18 billion trust for wildfire damages, the Elliott and Pimco bondholder group says its plan calls for a $4 billion contribution to a broad-based wildfire fund for utilities serving California, as the state grapples with the effects of climate change.

Bondholders say customers wouldn’t see higher bills, and they would get to nominate a board member for PG&E. Ratepayer groups have criticized the company for paying dividends to shareholders while they say it let the aged power structure fall into dangerous disrepair.

Other members of the bondholder group include large private-equity funds and distressed debt players, including Apollo Global Management LLC, Centerbridge Partners LP, and Citadel Advisors LLC, all of them with hundreds of millions of dollars invested in PG&E bonds.

In March, Pimco had nearly $2 billion tied up in PG&E senior bonds, and had provided $700 million of the bankruptcy loan. Elliott had money riding on PG&E’s stock, as well as nearly $1.2 billion invested in bond debt.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

June 25, 2019 15:10 ET (19:10 GMT)

By Jessica Menton

Energy shares are sliding this week despite oil's climb -- a divergence some analysts say could linger if geopolitical tensions in the Middle East continue to escalate.

The relationship between oil prices and shares of oil-producing companies has weakened recently after Iran shot down a U.S. military drone last week. Shares of energy companies in the S&P 500 slipped 0.4% Tuesday and are down 1.4% so far this week. The sector has shed 5.2% this quarter, on pace for its worst quarterly percentage drop since the broader-market selloff in the final three months of 2018.

Energy stocks in the S&P 500 have shed 15% over the past 12 months amid fears of oversupply and worries about slowing demand in a weakening global economy.

The most recent declines come as U.S. crude prices have rallied nearly 8% over the past week amid rising friction between Washington and Tehran, though oil prices pulled back from multiweek highs Tuesday.

"Investors are looking through the recent strength in oil prices because they don't buy that the recent geopolitical tensions will shoot oil materially higher, or the idea that demand for crude will remain at steadfast levels," said Mike Tran, managing director and global energy strategist at RBC Capital Markets.

Declines in shares of oil conglomerates Exxon Mobil Corp. and Chevron Corp. weighed on the energy sector Tuesday, with each falling 0.7% apiece.

Meanwhile, oil-field services companies have been among the hardest hit this week within the S&P 500's energy sector, a corner of the energy market that has been vulnerable as crude production has slowed, some analysts said. Shares of Baker Hughes and Schlumberger Ltd. dropped 0.5% Tuesday while Halliburton Co.'s stock edged up 0.3%. All three stocks have fallen at least 1.1% this week.

The slide may not last, however, if the U.S. and Iran don't reach a detente soon.

"As geopolitical tensions escalate and there's risk that gets priced back into oil prices, it'll be something that equity investors just simply can't ignore," Mr. Tran said.

Write to Jessica Menton at Jessica.Menton@wsj.com

(END) Dow Jones Newswires

June 25, 2019 15:05 ET (19:05 GMT)

15:03 ET - US oil prices tick slightly lower, ending the session down 0.1% at $57.83 as investors await two weekly reports on US oil inventories. Trade group API releases its report at 4:30 pm ET, while the EIA releases official government stats Wednesday at 10:30 am. A WSJ survey is expecting a rather large, 2.6M-barrel decline in crude-oil inventories, which would add to last week's 3.1M decline and likely give oil prices a bump higher. All 12 analysts surveyed are expecting a crude-oil inventory decline of some degree. While WTI fell slightly Tuesday, the global benchmark Brent managed a 0.3% rise to $65.05, giving it a $7.22 premium to WTI. (dan.molinski@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 15:03 ET (19:03 GMT)

By Stephen Nakrosis

BAE Systems PLC (BAESY) on Tuesday said it, along with teammate Iveco Defence Vehicles, received a $67 million modification from the U.S. Marine Corps to develop variants of the Amphibious Combat Vehicle.

The Amphibious Combat Vehicle, or ACV, program aims to find new vehicles to replace the Marine Corp's older Assault Amphibious Vehicle.

Under the terms of the deal, BAE will design and develop a command variant of the vehicle, the ACV-C, and a variant armed with a 30mm medium caliber cannon, the ACV-30.

"The ACV has proven to be a versatile platform capable of numerous configurations to meet current and future mission requirements," said John Swift, director of amphibious programs at BAE Systems. "With this award, BAE Systems will be able to develop a family of vehicles that will deliver the technology and capability the Marines require to accomplish their mission in support of our national security."

BAE said work on the contract will be carried out in Stafford, Virginia; San Jose, California; Sterling Heights, Michigan; Aiken, South Carolina; and York, Pennsylvania.

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

June 25, 2019 15:03 ET (19:03 GMT)

Ex-UBS Compliance Officer and Day Trader Found Guilty of Insider Trading
Lennar Shares Drop After Warnings About Higher Costs
Mitsubishi to Acquire Bombardier's Regional Jet Unit
YouTube Content for Children Should Be Barred, Advocacy Groups Tell FTC
AbbVie Strikes Deal to Acquire Allergan for About $63 Billion
GE Reaches Labor Deal With Union Leaders
U.S. Steel Seeks to Make More With Fewer Furnaces
Deutsche Bank's Equities Chief Expected to Leave
UnitedHealth Buys PatientsLikeMe After Startup Was Forced to Divest Chinese Investment
Global Telecom Carriers Attacked by Suspected Chinese Hackers

A U.K. jury convicted a former UBS AG compliance officer and a wealthy trader of insider trading.

Shares of Lennar slid more than 6% after a top company executive warned a labor shortage and trade tariffs on goods from China were concerns for the largest U.S. homebuilder.

Mitsubishi said it would acquire Bombardier's regional-jet business for $550 million in a transaction that puts the companies on different paths in the aviation sector.

Two privacy-advocacy groups are calling on the FTC to remove from YouTube all content aimed at children and to impose tens of billions in fines.

AbbVie agreed to buy the maker of Botox for about $63 billion, betting a combination will deliver new sources of growth they have struggled to find on their own.

General Electric reached a tentative four-year agreement with a group of unions after a few weeks of negotiations, keeping a labor peace as the conglomerate restructures operations.

Falling steel prices are adding pressure to U.S. Steel's plan to get better performance from its mills by making overdue repairs and equipment upgrades.

Deutsche Bank's global head of equities is expected to leave the bank, the latest move in a planned downsizing of the German lender's investment bank.

UnitedHealth Group bought PatientsLikeMe, a company that helps connect people who have similar health conditions, after the startup was forced to divest an investment by a Chinese firm.

Hackers believed to be backed by China's government have infiltrated the cellular networks of at least 10 global carriers, swiping users' whereabouts, text-messaging records and call logs.

(END) Dow Jones Newswires

June 25, 2019 15:00 ET (19:00 GMT)

Powell: Trade Uncertainty, Global Growth Worries Could Prompt Rate Cuts
Gold Rally Picks Up Steam as Investors Pile In
Stocks Fall Amid Fed Comments;  Tech Slides
Trump Administration to Take on Local Housing Barriers
Sagging Trade Flows Spark Alarm Before G-20 Meeting
EU Expands Its Stack of Trade Deals
Trump Push on Housing Finance Nudges Up Mortgage Costs
EU-Swiss Dispute Threatens Stocks
Is There a Big Short in Bitcoin?
Consumer Confidence Slid in June on Trade Tensions

Fed Chairman Jerome Powell said central-bank officials are debating whether uncertainty over the Trump administration's trade policy will cause the economy to slow and warrant rate cuts later this year.

The most-active gold futures contract rose more than 1% Tuesday to $1,435 a troy ounce, heading for a fresh six-year high as investors anticipate lower interest rates and seek alternatives to currencies and bonds.

U.S. stocks fell Tuesday, as investors weighed commentary from Federal Reserve officials and shares of technology companies slumped.

The Trump administration will explore using federal programs to push local governments to soften or eliminate rules that block housing construction, an issue that has stymied officials at all levels of government for years.

World trade flows have sagged again in 2019, a sign that higher U.S. tariffs and other trade barriers are cooling growth as leaders from the Group of 20 large economies prepare to meet in Japan.

The European Union is building a free-trade coalition of the willing, one deal at a time, as Vietnam joins countries including Canada, Japan, Mexico and Singapore that in recent years signed trade accords with the EU.

Investor anxiety about a Trump administration push to overhaul housing finance is showing up in prices in the market for mortgage-backed securities.

Switzerland and the EU are at loggerheads over an overhaul of the complex ties that have guided the relationship for decades. The ability of some investors to trade blue-chip Swiss companies could be affected by the spat.

Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.

U.S. optimism about the economy deteriorated in June to its lowest level in 21 months as consumers fretted over escalating trade tensions and a cooling jobs market, according to a monthly barometer of Americans' mood.

(END) Dow Jones Newswires

June 25, 2019 15:00 ET (19:00 GMT)

14:52 ET - Natural gas prices end the session a modest 0.2% higher at $2.3080/mmBtu as a decent-sized relief rally continues, but prices remain well within reach of three-year lows the market fell to last week. Stratas Advisors analysts, looking at the current $2.31 level, say: "At the same time last year, the natural gas prices were $3.00. The downward trend would have been tough to foresee at its peak of nearly $5.00 late last year." The analysts say strong production levels, higher than five-year average storage builds and "lack of pre-summer cooling demand" are all contributing factors in 2019. (dan.molinski@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 14:52 ET (18:52 GMT)

By Peg Brickley

PG&E Corp. bondholders have challenged the California utility over control of its bankruptcy proceeding, offering Wall Street's version of a solution to wildfire liabilities that are estimated at $30 billion or more.

Investors including Elliott Management Corp. and Pacific Investment Management Co. filed court papers outlining a chapter 11 plan that would include up to $18 billion for victims of blazes linked to PG&E's equipment.

Bondholders say they would raise $30 billion, most of it in the form of equity investment, to help PG&E pay off its damages, according to court papers.

Ratepayers wouldn't pay more, California's green power future would be assured and Gov. Gavin Newsom would see the state's largest utility exit from bankruptcy by next year, if PG&E and its creditors accept the offer, the bondholders say.

PG&E is looking at all options, according to a statement from the company.

Providers of wind and solar power that count PG&E as a big customer were thrown into financial jeopardy when PG&E filed for chapter 11 bankruptcy in January. The utility earlier this month since won a round in court, when Bankruptcy Judge Dennis Montali said he, not the Federal Energy Regulatory Commission, would decide whether PG&E can get out from its alternative power contracts.

The San Francisco utility has been under pressure to produce a chapter 11 exit plan quickly, with Mr. Newsom and others complaining publicly about a lack of action from a company blamed for years of fires that took lives and erased homes.

The Jan. 29 bankruptcy filing gave PG&E a limited period of exclusive chapter 11 plan rights, but that time runs out near the end of September.

At a hearing in May, Judge Montali said he would take seriously a request to open the door to competing restructuring proposals, if such a request was accompanied by a concrete offer.

Tuesday, an ad hoc group of bondholders outlined terms of an offer, and said its members are "an obvious source of new capital" that PG&E has been ignoring. They have set their challenge for a court hearing July 23.

The offer that arrived Tuesday in the U.S. Bankruptcy Court in San Francisco likely won't be the only one to be floated in PG&E's bankruptcy proceeding. At least two other major groups of investors with money riding on the outcome of the case are exploring the possibilities.

Rich in assets and cash flow and an irreplaceable element of California's power grid, PG&E is considered a prime opportunity for Wall Street investors, despite its poor safety record.

In addition to the $16 billion to $18 billion trust for wildfire damages, the Elliott and Pimco bondholder group says its plan calls for a $4 billion contribution to a broad-based wildfire fund for utilities serving California, as the state grapples with the effects of climate change.

Bondholders say customers wouldn't see higher bills, and they would get to nominate a board member for PG&E. Ratepayer groups have criticized the company for paying dividends to shareholders while they say it let the aged power structure fall into dangerous disrepair.

Other members of the bondholder group include large private-equity funds and distressed debt players, including Apollo Global Management LLC, Centerbridge Partners LP, and Citadel Advisors LLC, all of them with hundreds of millions of dollars invested in PG&E bonds.

In March, Pimco had nearly $2 billion tied up in PG&E senior bonds, and had provided $700 million of the bankruptcy loan. Elliott had money riding on PG&E's stock, as well as nearly $1.2 billion invested in bond debt.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

June 25, 2019 14:50 ET (18:50 GMT)

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

June 25, 2019 14:50 ET (18:50 GMT)

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           107.08-09      107.29-30  -0.19   107.41   106.78  -2.28 
EUR/USD Euro            1.1374-77     1.1397-400  -0.20   1.1415   1.1345  -0.82 
GBP/USD U.K.           1.2698-700      1.2741-43  -0.34   1.2782   1.2671  -0.47 
USD/CHF Switzerland     0.9744-48      0.9719-23  +0.26   0.9777   0.9693  -0.71 
USD/CAD Canada          1.3180-85      1.3178-83  +0.02   1.3209   1.3153  -3.36 
AUD/USD Australia       0.6962-66      0.6960-64  +0.03   0.6979   0.6943  -1.25 
NZD/USD New Zealand     0.6645-51      0.6616-22  +0.44   0.6662   0.6616  -1.07 
 
Euro Rates 
 
EUR/JPY Japan           121.80-84      122.29-33  -0.40   122.48   121.65  -3.09 
EUR/GBP U.K.            0.8956-59      0.8947-50  +0.10   0.8965   0.8917  -0.37 
EUR/CHF Switzerland     1.1086-89      1.1079-82  +0.06   1.1126   1.1063  -1.50 
EUR/CAD Canada        1.4991-5001      1.5019-29  -0.19   1.5050   1.4981  -4.12 
EUR/AUD Australia       1.6330-40      1.6364-74  -0.21   1.6401   1.6315  +0.44 
EUR/DKK Denmark         7.4651-58      7.4661-68  -0.01   7.4674   7.4633  -0.01 
EUR/NOK Norway         9.7096-146      9.6637-87  +0.47   9.7146   9.6643  -1.98 
EUR/SEK Sweden        10.5393-493    10.5722-822  -0.31  10.5919  10.5182  +3.86 
EUR/CZK Czech Rep.      25.447-77      25.550-80  -0.40   25.596   25.438  -0.97 
EUR/HUF Hungary         323.19-59      323.47-87  -0.09   324.60   322.93  +0.73 
EUR/PLN Poland          4.2565-81      4.2525-41  +0.09   4.2587   4.2500  -0.75 
 
Yen Rates 
 
AUD/JPY Australia        74.54-58       74.69-73  -0.20    74.86    74.33  -3.53 
GBP/JPY U.K.          135.96-6.02      136.67-73  -0.52   136.84   135.80  -2.79 
CAD/JPY Canada           81.22-25       81.39-43  -0.21    81.50    80.98  +1.09 
NZD/JPY New Zealand      71.16-23       70.98-01  +0.24    71.31    70.97  -3.32 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.     22.358-408      22.408-58  -0.22   22.464   22.348  -0.17 
USD/HUF Hungary         284.08-48      283.71-04  +0.13   285.14   283.31  +1.53 
USD/DKK Denmark         6.5620-30     6.5497-507  +0.19   6.5804   6.5425  +0.78 
USD/NOK Norway         8.5343-403     8.4766-826  +0.68   8.5588   8.4751  -1.21 
USD/PLN Poland          3.7415-20      3.7309-14  +0.28   3.7521   3.7261  +0.03 
USD/RUB Russia          62.926-96      62.519-89  +0.65   63.016   62.499  -9.07 
USD/SEK Sweden         9.2642-732     9.2746-836  -0.11   9.2952   9.2409  +4.70 
USD/ZAR S. Africa     14.3245-545    14.3488-788  -0.17  14.3761  14.2667  -0.15 
 
USD/CNY China          6.8788-808      6.8760-80  +0.04   6.8847   6.8668  +0.02 
USD/HKD Hong Kong      7.8097-102      7.8087-92  +0.01   7.8122   7.8049  -0.28 
USD/MYR Malaysia       4.1265-315      4.1400-50  -0.33   4.1465   4.1283  -0.08 
USD/INR India          69.285-305      69.263-83  +0.03   69.371   69.231  -0.40 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines     51.400-20      51.320-40  +0.16   51.410   51.310  -2.08 
USD/SGD Singapore       1.3532-42      1.3528-38  +0.03   1.3557   1.3520  -0.68 
USD/KRW S. Korea     1154.88-6.88   1153.67-5.67  +0.10  1156.90  1153.12  +3.73 
USD/TWD Taiwan          31.061-91      30.930-60  +0.42   31.129   30.851  +1.62 
USD/THB Thailand        30.730-50      30.660-80  +0.23   30.770   30.610  -4.89 
USD/VND Vietnam         23265-335      23263-333  +0.01    23309    23259  +0.45 
 
USD/BRL Brazil         3.8474-504      3.8232-62  +0.63   3.8573   3.8198  -0.84 
USD/MXN Mexico        19.2146-446   19.1888-2188  +0.13  19.2734  19.1633  -2.13 
USD/ARS Argentina     42.3804-904    42.4062-386  -0.09  42.4779  42.1507 +12.59 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 14:50 ET (18:50 GMT)

(MORE TO FOLLOW) Dow Jones Newswires

June 25, 2019 14:34 ET (18:34 GMT)

By Will Horner

U.S. stocks fell Tuesday, as investors weighed commentary from Federal Reserve officials and shares of technology companies slumped.

The Dow Jones Industrial Average fell 108 points, or 0.4%, to 26620. The S&P 500 declined 0.6% and the Nasdaq Composite lost 1%. Stock declines deepened after comments from Fed officials about the case for lowering short-term interest rates.

Major indexes drifted along in a narrow range to start the trading day, then lost ground after James Bullard, president of the Federal Reserve Bank of St. Louis -- who is known for his vocal opposition to interest-rate increases -- said he believed it was too early for a 50-basis-point rate cut.

Later Tuesday, Fed Chairman Jerome Powell weighed in on the debate, saying that while many Fed officials find the case for somewhat more accommodative policy has strengthened, "we are mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment."

Following Mr. Powell's comments, stocks fell further. The yield on the 10-year Treasury had fallen as low as 1.982% earlier Tuesday, but climbed back above 2% in recent trading.

Hopes that the Fed will lower interest rates to offset a slowdown in economic growth have helped major indexes rally in June. That is even as many investors remain worried about the course of trade talks between the U.S. and China.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Technology shares lagged behind major indexes Tuesday, with Facebook falling 1.6% amid scrutiny over its plan to roll out its own cryptocurrency, Libra. Lawmakers said on Monday they would hold a hearing next month to discuss the cryptocurrency.

Other companies whose privacy practices have lately come under fire among regulators retreated, with Alphabet down 2% and Amazon.com down 1.4%.

Meanwhile, Allergan shares jumped 27% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 16%.

Elsewhere, the Stoxx Europe 600 edged down 0.1%, weighed down by losses among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 8.4% and Altran shares up 22%.

In commodities, gold jumped 0.6%, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global-growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Earlier, Japan's Nikkei Stock Average fell 0.4%, while the Shanghai Composite fell 0.9% and snapped a six-session winning streak.

Akane Otani and Corrie Driebusch contributed to this article.

(END) Dow Jones Newswires

June 25, 2019 14:34 ET (18:34 GMT)

By Michael Dabaie

S&P Global Ratings put AbbVie Inc. (ABBV) ratings on Watch Negative after the company agreed to buy Allergan PLC (AGN) for about $63 billion.

S&P said the CreditWatch placement is based on an increase in leverage for the deal. The ratings agency said it believes the company will reduce debt over the next two years. But, by then, it will be closer to the entry of biosimilars in the U.S., affecting its rheumatoid-arthritis treatment Humira, S&P added.

"Even if the company continues to reduce debt somewhat in 2022 and 2023, we believe the company could also increase its acquisition spending at that point, providing greater uncertainty around prospects for significant leverage improvement," S&P said.

The combination adds immediate cash flow, increases therapeutic and payer diversity and reduces product concentration, S&P said. But the deal doesn't meaningfully improve the company's pipeline nor its competitive position in a therapeutic area, the ratings company said. There is some overlap in some of AbbVie's smaller segments, such as neuroscience and women's health, but the deal does little to augment AbbVie's immunology or hematologic oncology segments, the S&P note said.

Also, the deal would transform AbbVie from a focused biotechnology company with a strong position in immunology and hematologic oncology to a large, diversified pharmaceutical company. "Therefore, we believe there could be integration risk," S&P said.

S&P said when the deal has closed and based on the proposed financing terms, it expects to lower the issuer credit rating to 'BBB+' from 'A-' with a stable outlook.

S&P put Allergan on CreditWatch Positive as it intends to equalize ratings on Allergan with ratings on higher-rated AbbVie.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

June 25, 2019 14:07 ET (18:07 GMT)

By Josh Nathan-Kazis

Shareholders of the biopharmaceutical company AbbVie (ticker: ABBV) won't be allowed to vote on company's proposed $63 billion acquisition of Allergan (AGN), news of which had sent AbbVie stock down 15.3% by midday Tuesday.

AbbVie shareholders will have no say in the deal, which will reshape the company as it integrates the maker of Botox into its operations. AbbVie didn't respond to a request for comment.

Shareholders of Allergan will vote on the sale, but the transaction will likely face little opposition from them. Allergan stock soared 26.7% on Tuesday.

Read more: AbbVie Is Buying Allergan. Wall Street Has Doubts.

The proposed acquisition has been structured in a way that allows the deal to slip under the threshold at which a shareholder vote would have been required. The rules of the New York Stock Exchange, where both companies are listed, say a company needs shareholder approval to increase its number of shares outstanding by 20% or more.

Under the terms of the deal as described in AbbVie's news release, AbbVie will issue roughly 283 million shares to Allergan shareholders, equivalent to 19.2% of AbbVie's current number of shares outstanding. That's less than 1 percentage point shy of the level that would trigger a shareholder vote.

Earlier this year, some investors in the oil company Occidental Petroleum (OXY) complained when the company held no vote over its acquisition of Andarko Petroleum.

Analysts have called the AbbVie deal a major win for Allergan, but an unexpected move for AbbVie.

In a note on Tuesday, Piper Jaffray analyst David Amsellem said the acquisition was a "lifeline to end all lifelines" for Allergan. But, he writes, the AbbVie end of the deal is a "mixed bag."

Allergan's marquee drug, Botox, which accounted for 24.1% of its total net revenues for the first quarter of this year, is facing increased competition. Meanwhile, another Allergan offering, Restasis, is losing its patent protection.

Some analysts said AbbVie was potentially overpaying for Allergan. "An expensive price for a questionable asset," Amsellem wrote.

Still, AbbVie had limited choices, as its own marquee drug, Humira, is approaching the end of its patent protection in the U.S. in 2023.

"The acquisition of Allergan represents a rare and unique opportunity for AbbVie to accelerate the progress of the growth platform by adding highly valuable on-market assets with leadership positions across attractive growth segments," AbbVie chairman and CEO Richard Gonzalez said on a conference call with analysts on Tuesday morning. He said the combination of the two companies would bring value to shareholders.

So far on Tuesday, AbbVie shareholders were voting by exiting their positions. By midday, the selloff had cost the company $6.1 billion in market capitalization.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

(END) Dow Jones Newswires

June 25, 2019 14:05 ET (18:05 GMT)

By Josh Beckerman

Facebook Inc.'s (FB) efforts to improve the transparency of political advertisements are expanding to more countries.

An authorization process involving confirmation of the buyer's identity and "paid for by" disclaimers is available in more than 50 countries.

A shorter list where "proactive enforcement" is planned focuses on "countries where elections or regulations are approaching," starting with Ukraine, Singapore, Canada and Argentina.

The company said on its website that it would "systematically detect and review ads in Ukraine and Canada through a combination of automated and human review" starting Tuesday, while enforcement in Singapore and Argentina will start within a few months.

After Facebook was criticized for Russia-linked content related to the U.S. 2016 presidential election, the company took steps including cracking down on "coordinated inauthentic behavior," launching a searchable public database of ads and ending commissions for employees who sell political ads.

Facebook said "we know we can't do this alone," so it is also rolling out access to its Ad Library API globally to help regulators, journalists, watchdog groups and others analyze ads.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

June 25, 2019 14:00 ET (18:00 GMT)

By Ira Iosebashvili

The yield on the 10-year Treasury note dropped below 2% yet again on Tuesday after weak U.S. economic data bolstered the case for the Federal Reserve to cut interest rates in coming months.

The benchmark 10-year yield, which helps set borrowing costs on everything from mortgages to corporate loans, was recently at 1.996%, according to Tradeweb, from 2.021% on Monday.

Yields, which fall as bond prices rise, declined after Tuesday morning data releases showed U.S. consumer sentiment in June had declined to its lowest in nearly two years, while purchases of newly built single-family homes decreased in May.

The 10-year yield fell as low as 1.982% and was on track for its lowest close in more than 2 1/2 years.

Yields pared declines later in the session after James Bullard, president of the Federal Reserve Bank of St. Louis, told Bloomberg TV he doesn't yet think the economic situation warrants a 50 basis-point rate cut. Yields then notched another leg higher after Fed Chairman Jerome Powell said officials are debating whether uncertainty about trade policy will cause the economy to slow and require rate cuts later in 2019.

Bond yields around the world have fallen in recent days after central banks, including the Fed, signaled they were preparing to ease monetary policy.

Several investors said they would be closely watching the Group of 20 meeting in Japan at the end of the week. Signs that China and the U.S. are closer to reaching a deal on trade would likely weigh on bond prices and send riskier assets higher, some market participants believe.

"Our sense of things at the moment is that if the G-20 meeting at the end of the week...produces even a very modest amount of good news about trade, risk assets will move sharply higher," said Steven Barrow, head of G-10 strategy at Standard Bank, in a note to investors.

Tuesday's weak data also weighed on the dollar, driving the U.S. currency to its weakest level against the Japanese yen since January earlier in the session. The New Zealand dollar was up 0.4%.

In emerging markets, the dollar fell 0.3% against the Turkish lira and gained 0.6% against the Russian ruble.

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.2% at 89.65.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:53 ET (17:53 GMT)

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           107.15-16      107.29-30  -0.13   107.41   106.78  -2.22 
EUR/USD Euro            1.1377-80     1.1397-400  -0.18   1.1415   1.1345  -0.79 
GBP/USD U.K.            1.2708-10      1.2741-43  -0.26   1.2782   1.2671  -0.39 
USD/CHF Switzerland     0.9746-50      0.9719-23  +0.28   0.9777   0.9693  -0.69 
USD/CAD Canada          1.3182-87      1.3178-83  +0.03   1.3209   1.3153  -3.34 
AUD/USD Australia       0.6961-65      0.6960-64  +0.01   0.6979   0.6943  -1.26 
NZD/USD New Zealand     0.6648-54      0.6616-22  +0.48   0.6662   0.6616  -1.03 
 
Euro Rates 
 
EUR/JPY Japan           121.90-94      122.29-33  -0.32   122.48   121.65  -3.01 
EUR/GBP U.K.            0.8953-56      0.8947-50  +0.07   0.8965   0.8917  -0.40 
EUR/CHF Switzerland     1.1090-93      1.1079-82  +0.10   1.1126   1.1063  -1.47 
EUR/CAD Canada        1.4995-5005      1.5019-29  -0.16   1.5050   1.4981  -4.09 
EUR/AUD Australia       1.6335-45      1.6364-74  -0.18   1.6401   1.6315  +0.47 
EUR/DKK Denmark         7.4652-59      7.4661-68  -0.01   7.4674   7.4633  -0.01 
EUR/NOK Norway          9.7044-94      9.6637-87  +0.42   9.7146   9.6643  -2.03 
EUR/SEK Sweden        10.5384-484    10.5722-822  -0.32  10.5919  10.5182  +3.85 
EUR/CZK Czech Rep.      25.443-73      25.550-80  -0.42   25.596   25.438  -0.98 
EUR/HUF Hungary         323.18-58      323.47-87  -0.09   324.60   322.93  +0.73 
EUR/PLN Poland          4.2558-74      4.2525-41  +0.08   4.2587   4.2500  -0.77 
 
Yen Rates 
 
AUD/JPY Australia        74.61-65       74.69-73  -0.11    74.86    74.33  -3.44 
GBP/JPY U.K.            136.16-22      136.67-73  -0.37   136.84   135.80  -2.64 
CAD/JPY Canada           81.27-31       81.39-43  -0.15    81.50    80.98  +1.16 
NZD/JPY New Zealand      71.25-29       70.98-01  +0.35    71.31    70.97  -3.22 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.      22.347-97      22.408-58  -0.27   22.464   22.348  -0.21 
USD/HUF Hungary       283.98-4.38    283.71-4.11  +0.10   285.14   283.31  +1.50 
USD/DKK Denmark        6.5599-609     6.5497-507  +0.16   6.5804   6.5425  +0.75 
USD/NOK Norway         8.5272-332     8.4766-826  +0.60   8.5588   8.4751  -1.29 
USD/PLN Poland          3.7401-06      3.7309-14  +0.25   3.7521   3.7261  -0.01 
USD/RUB Russia         62.899-969      62.519-89  +0.61   63.016   62.499  -9.11 
USD/SEK Sweden          9.2607-97     9.2746-836  -0.15   9.2952   9.2409  +4.66 
USD/ZAR S. Africa     14.3094-394    14.3488-788  -0.27  14.3761  14.2667  -0.26 
 
USD/CNY China          6.8788-808      6.8760-80  +0.04   6.8847   6.8668  +0.02 
USD/HKD Hong Kong      7.8097-102      7.8087-92  +0.01   7.8122   7.8049  -0.28 
USD/MYR Malaysia       4.1265-315      4.1400-50  -0.33   4.1465   4.1283  -0.08 
USD/INR India           69.278-98      69.263-83  +0.02   69.371   69.231  -0.41 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines     51.400-20      51.320-40  +0.16   51.410   51.310  -2.08 
USD/SGD Singapore       1.3535-45      1.3528-38  +0.05   1.3557   1.3520  -0.65 
USD/KRW S. Korea     1154.80-6.80   1153.67-5.67  +0.10  1156.90  1153.12  +3.72 
USD/TWD Taiwan         31.075-105      30.930-60  +0.47   31.129   30.851  +1.66 
USD/THB Thailand        30.700-20      30.660-80  +0.13   30.770   30.610  -4.98 
USD/VND Vietnam         23265-335      23263-333  +0.01    23309    23259  +0.45 
 
USD/BRL Brazil          3.8411-41      3.8232-62  +0.47   3.8543   3.8198  -1.00 
USD/MXN Mexico        19.2175-475   19.1888-2188  +0.15  19.2734  19.1633  -2.12 
USD/ARS Argentina    42.3955-4280    42.4062-386  -0.03  42.4779  42.1507 +12.66 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 13:50 ET (17:50 GMT)

A U.K. jury convicted a former UBS Group AG compliance officer and a wealthy trader of insider trading on Tuesday.

The pair were found guilty of insider trading on three of the charges they faced in the trial, taking place in London’s Southwark Crown Court. The jury was still considering two other charges.

The Financial Conduct Authority, which brought the case, said it was unable to comment on the convictions because of restrictions imposed by the court. UBS declined to comment.

Fabiana Abdel-Malek was a compliance officer for the Swiss bank in London until her arrest in 2015.

The FCA argued in court that she accessed confidential information about pending deals through an internal bank system and passed information on to Walid Choucair, a wealthy friend who traded stocks, allowing him to make more than a million dollars in illicit profits.

The guilty verdicts relate to trading in the shares of Kabel Deutschland Holding, BRE Properties, and Targa Resources.

Mr. Choucair told the jury that he received many of his stock tips from fellow traders and denied Ms. Abdel-Malek provided him inside information.

Write to Bradley Hope at bradley.hope@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:50 ET (17:50 GMT)

By Will Horner

U.S. stocks slipped Tuesday, weighed down by declines in technology shares.

The Dow Jones Industrial Average fell 117 points, or 0.4%, to 26611. The S&P 500 declined 0.7% and the Nasdaq Composite lost 1.1%.

Major indexes drifted along in a narrow range to start the trading day, then lost ground after a Federal Reserve official known for his vocal opposition to interest-rate increases said he believed it was too early for a 50-basis-point rate cut.

Also Tuesday, Fed Chairman Jerome Powell weighed in on the debate, saying while many Fed officials find the case for somewhat more accommodative policy has strengthened, "we are mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment."

Earlier, stock declines deepened while the dollar broke above the flatline after comments from James Bullard, president of the Federal Reserve Bank of St. Louis.

Hopes that the Fed will lower interest rates to offset a slowdown in economic growth have helped major indexes rally in June. That is even as many investors remain worried about the course of trade talks between the U.S. and China.

The yield on the 10-year Treasury had fallen as low as 1.982% earlier Tuesday, but climbed back above 2% in recent trading.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Technology shares lagged behind major indexes Tuesday, with Facebook falling 1.7% amid scrutiny over its plan to roll out its own cryptocurrency, Libra. Lawmakers said on Monday they would hold a hearing next month to discuss the cryptocurrency.

Other companies whose privacy practices have lately come under fire among regulators retreated, with Alphabet down 2% and Amazon.com down 1.1%.

Meanwhile, Allergan shares jumped 27% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 15%.

Elsewhere, the Stoxx Europe 600 edged down 0.1%, weighed down by losses among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 8.4% and Altran shares up 22%.

In commodities, gold jumped 0.7%, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global-growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Earlier, Japan's Nikkei Stock Average fell 0.4%, while the Shanghai Composite fell 0.9% and snapped a six-session winning streak.

Akane Otani contributed to this article.

(END) Dow Jones Newswires

June 25, 2019 13:30 ET (17:30 GMT)

The Trump administration will explore using federal programs to push local governments to soften or eliminate rules that block housing construction, an issue that has stymied officials at all levels of government for years.

President Trump is expected to sign an order Tuesday creating the White House Council on Eliminating Barriers to Affordable Housing Development, which will include members of eight federal agencies.

“These are things that can be solved. A lot of [these rules] have been on the books for excessive amounts of time. They’re not particularly relevant any more,” said Ben Carson, secretary of the U.S. Department of Housing and Urban Development, in an interview Tuesday with The Wall Street Journal.

Home construction per household is near the lowest level in 60 years of record-keeping, creating a shortage of everything from starter homes for young households to rental apartments for retirees on fixed incomes.

A study released Tuesday by Harvard University’s Joint Center for Housing Studies found that the U.S. built about 260,000 fewer homes than it needed in 2018 to keep up with population growth and an aging housing stock.

As a result, homes are getting more expensive relative to incomes. The ratio of the median home price to median household income rose from a low of 3.3 in 2011 to 4.1 in 2018, according to Harvard.

The ratio hit its peak of 4.7 in 2005 when loose lending stoked demand, causing prices to soar. This time the index is rising more due to supply shortages, the Harvard report said.

Local zoning and land-use regulations have swelled since the 1970s and cannot be eliminated in one stroke of a pen by the federal government. Expensive U.S. cities and suburbs in California and the Northeast have long been difficult places to build. But housing shortages have grown widespread in recent years, extending from Grand Rapids, Mich., to Austin, Texas.

The Obama administration produced a tool kit in September 2016 that was designed to help local governments pare back zoning regulations, to little effect.

Local regulations that require developers to address such issues as environmental protection and road, school and sewer capacity often have strong support among residents and politically powerful advocacy groups. Also, many municipalities stepped up land-use regulation following the housing bust in 2008, when developers overbuilt leaving hundreds of unfilled homes that decimated home prices and created blight in many communities.

The new Trump council will produce a study quantifying the effect of regulations on the housing market and the U.S. economy as a whole. Its members will include representatives of the Treasury Department, the Labor Department, the Environmental Protection Agency and the Agriculture Department, which will also examine ways to roll back federal regulations inhibiting housing development.

Mr. Carson has made easing barriers for the private sector to build housing the signature issue of his tenure as HUD secretary. He has toured a factory that uses a 3-D printer to build homes faster and cheaper and most recently hosted an event that showcased affordably priced manufactured homes on the National Mall.

Critics say the HUD secretary is focusing attention on local governments and the private sector while neglecting his agency’s responsibility to enforce the Fair Housing Act, which forbids practices such as concentrating affordable housing in poorer areas.

Mr. Carson said the housing shortage creates de facto segregation.

“The thing that creates segregation is not George Wallace-type people standing at the door saying you can’t come in here,” he said. “It’s cost. People tend to congregate in places that they can afford to live.”

Write to Laura Kusisto at laura.kusisto@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:30 ET (17:30 GMT)

Shares of Sally Beauty Holdings Inc. (SBH) rallied 0.8% in morning trading, to bounce off the previous session's near 9-year low, after Instinet analyst Simeon Siegel said it was uncertain whether Amazon.com Inc.'s (AMZN) launch of its Professional Beauty Store will actually trigger change. The stock had tumbled 16.8% on Monday, the second-biggest one-day drop since it went public in November 2006, to close at the lowest price since November 2010. Siegel said that while Amazon's new beauty store will carry brands including Wella Color, RUSK and OPI Professional, all which are carried on Sally Beauty's website, many of those products are already widely available online, and on Amazon. "That said, beauty has largely been outside of [Amazon's] share grab thus far..., so a decision to make a broader push into the category shouldn't be ignored," Siegel wrote in a note to clients. Meanwhile, Ulta Beauty Inc.'s stock (ULTA) inched up less than 0.1%, after falling 2.6% on Monday after the Amazon news. Sally Beauty's stock has lost 27% year to date and Ulta shares have rallied 42%, while the SPDR S&P Retail ETF (XRT) has gained 1.5% and the S&P 500 has climbed 17%.

-Tomi Kilgore

(END) Dow Jones Newswires

June 25, 2019 13:24 ET (17:24 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

--Porsche has issued a recall for 340,000 Porsche vehicles which may have automatic transmission problems, Reuters reports Tuesday.

--About 100,000 of the recalled Cayennes and Panameras are in the U.S., and about 25,000 in Germany, the report said.

--The car might roll when put into park, a Porsche spokesman said, according to the report.

Full story: https://www.reuters.com/article/us-porsche-recall/porsche-recalls-340000-cars-due-to-parking-problem-idUSKCN1TQ296?il=0

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:22 ET (17:22 GMT)

By Josh Beckerman

Facebook Inc.'s (FB) efforts to improve the transparency of political advertisements are expanding to more countries.

An authorization process involving confirmation of the buyer's identity and "paid for by" disclaimers is available in more than 50 countries.

A shorter list where "proactive enforcement" is planned focuses on "countries where elections or regulations are approaching," starting with Ukraine, Singapore, Canada and Argentina.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:22 ET (17:22 GMT)

BRUSSELS—The European Union is building a free-trade coalition of the willing, one deal at a time.

On Sunday, Vietnam will join countries including Canada, Japan, Mexico and Singapore that in recent years signed trade accords with the EU. The five deals together cover trade of goods and services valued at more than €500 billion ($569 billion) annually, equivalent to almost half the yearly value of EU-U.S. commerce.

The trade partners are slashing almost all tariffs to boost commerce at a time of mounting protectionism world-wide. Brussels redoubled its efforts to build commercial partnerships after negotiations for a wide-ranging pact with the U.S. collapsed in 2016 and President Trump’s “America First” policies started to also punish European allies.

The EU was directly hit last year by U.S. steel and aluminum duties and continues to face the threat of auto tariffs amid a shaky trade truce. Mr. Trump’s ultimatum to Mexico to halt U.S.-bound immigration or face levies risked hitting European manufacturers with operations in Mexico, including car makers. The U.S. trade fight with China is also contributing to a slowdown in European economic growth.

Bringing Vietnam into the EU trade orbit after Singapore helps the bloc expand its footprint in Southeast Asia and will serve as a steppingstone for a regional agreement, European Commission President Jean-Claude Juncker said Tuesday.

“It is also a political statement by two partners and friends standing together for open, fair and rules-based trade,” he said.

In a sign of the EU’s ability to use trade to advance other policy priorities, Brussels pushed Hanoi to ratify International Labor Organization conventions to protect fundamental workers’ rights, such as collective bargaining. The EU also got Vietnam’s commitment to fight climate change under the Paris Agreement.

Europe’s exports to Vietnam, which include cheese, wine, cars and pharmaceuticals, will jump 29% by 2035, and imports from Vietnam will rise 18%, according to the EU. The agreement will eliminate 99% of all bilateral tariffs and open Vietnam’s public tenders to European bidders.

Covering slightly more than €50 billion in annual trade in goods and services, the pact with Vietnam highlights EU efforts to bring down trade barriers in the face of rising global protectionism.

The Group of 20 major economies enacted import restrictions on $336 billion of goods from mid-October to mid-May, the World Trade Organization said Monday. That is down from measures effecting $480 billion of goods in the previous five months, but nearly four times the average in recent years.

The U.S.-China trade fight that resulted in tariffs on $260 billion of goods has been at the center of international trade tensions. G-20 leaders will gather this week in Japan, where Mr. Trump is expected to meet with Chinese President Xi Jinping in an effort to de-escalate their trade spat.

“We urgently need to see leadership from the G-20 to ease trade tensions and follow through on their commitment to trade and to the rules-based international trading system,” WTO Director-General Roberto Azevêdo said.

The EU, meanwhile, is pushing ahead with its bilateral efforts.

The Canada deal that took provisional effect in September 2017 boosted exports by 7% in the first year, the EU said. In April 2018, Brussels clinched an agreement to update its existing pact with Mexico. The EU’s agreement with Japan took effect in February, and the European Parliament approved the Singapore pact two weeks later.

The bloc launched trade talks with Australia and New Zealand last June, right after Mr. Trump slapped European metals exports with tariffs. And on the sidelines of the G-20 summit, European leaders may seek a handshake with Latin American counterparts on an EU-Mercosur trade pact under discussion for 20 years. The three deals together would cover €182 billion of the EU’s annual trade in goods and services.

Negotiations between the EU and Mercosur—which includes Argentina, Brazil, Paraguay and Uruguay—have been intense since Friday. The two blocs’ ministers will try to push forward during a dinner Wednesday in Brussels. If concluded, the accord would be the EU’s biggest trade deal and open up for the first time the tightly protected Latin American market.

Write to Emre Peker at emre.peker@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:20 ET (17:20 GMT)

Lennar Corp. Tuesday said profit rose amid a recovering housing market and deliveries from the previous quarter that had been postponed by weather.

The homebuilder reported profit for the quarter ended May 31 of $421.5 million, or $1.30 a share, up from $310.3 million, or 94 cents a share, the same period last year.

The company beat analysts’ predictions of $1.15 in per-share earnings.

Revenue was $5.56 billion for the quarter, up 2% from last year. Revenue from home sales rose 4% to $5.2 billion.

The Miami company delivered 12,729 homes for the quarter, up 5% from the prior year. It also received new orders for 14,518 homes.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:20 ET (17:20 GMT)

By Teresa Rivas

It's been a good year for many quick-service restaurant stocks. While behemoths like McDonald's (MCD) have just slightly trailed the broader market, double-digit rallies are the norm for the group, with players like Starbucks (SBUX), Chipotle Mexican Grill (CMG), and Shake Shack (SHAK) comfortably ahead of the S&P 500's more than 17% year-to-date gain.

Credit Suisse analyst Lauren Silberman argues that the good times aren't over. She initiated coverage on nearly a dozen restaurant stocks on Tuesday, with Outperform ratings on six: Chipotle, Domino's Pizza (DPZ), McDonald's, Restaurant Brands International (QSR), Shake Shack, and Starbucks. She has just two Underperform ratings -- Dunkin' Brands (DNKN) and Jack in the Box (JACK).

Does this kind of optimism make sense, as worries about the strength of the economy and the age of the bull market persist? The short answer is yes -- especially for big, well-capitalized players that are leading the charge in areas of the industry with the biggest growth, Silberman says.

Of course, this hasn't always been the case: A few years ago, many investors worried that falling mall traffic and trends like meal kits would eat restaurants' lunch. However, larger cultural shifts have been working in the group's favor. Consumer confidence is high, unemployment is low, more adults are living alone, and new online ordering and delivery options have made it more convenient than ever for diners -- especially time-strapped millennials, who are delaying family life longer than past generations -- to get a burrito rather than cook a dinner for one with whatever's in the pantry. The latter may still be the cheaper option, but consumers, especially younger people, don't seem to mind paying the premium to not cook -- yet another worry for supermarkets.

Those factors have helped spur gains for a number of restaurants, yet as Silberman argues, there are still more catalysts for the group, and technology is a big element. The rise of digital and delivery options via companies like GrubHub (GRUB) and Uber Technologies' (UBER) Uber Eats means that a Big Mac doesn't require leaving the house. While these sales might not make up much of restaurants' total revenue now, they're growing rapidly and could get a boost from future technological innovations, like drones and autonomous vehicles, she notes.

Yet that's not the only area of innovation. As Barron's has covered extensively, plant-based proteins are a fast-growing niche that even big meat players are keen to exploit. In addition, technology is a major part of even in-store experiences. McDonald's has been repeatedly praised for its 'Experience of the Future' remodeling campaign, which has shown to increase sales, while the company is also often held up as a success story for menu innovation. And of course Starbucks was one of the first chains to introduce an app and digital ordering, a bet that's paid off. Starbucks stock is up nearly 60% since the system was rolled out in September 2015, while the S&P 500's total return is just over 50%.

That's not to say that Silberman's thesis on the group stems from technology alone. She cites plenty of other issues at play, including M&A, the benefits of nationwide and international exposure, and underpenetration in segments like Mexican cuisine that could have more runway for growth. Still, digital innovation, from investment in artificial intelligence to savvy use of social media, is certainly a part of her bullishness.

Yet in a sense, that's not surprising. Disruption may be an overused word, but there are few consumer-facing companies that haven't seen their industries rocked by technology. While the pace has been staggered -- online travel agencies came on the scene nearly two decades ago, peak Amazon.com (AMZN) fears hit retail in 2016 and 2017, and consumer staples stocks are rushing to evolve -- change is an inevitable part of life as consumers get more comfortable ordering everything from burgers to beds online and demand convenience.

Therefore, it makes sense that Silberman's favorite companies are those that have, by and large, been at the forefront of embracing technological change and are looking to stay ahead of the curve in terms of what diners expect in the digital age. She is also quick to point out that this comes at a cost, so her picks are mostly restaurants with large scale and deep pockets that can afford to continue to keep up with industry trends.

Investors' own preferences may not dovetail completely with Credit Suisse's. However the basic strategy of betting on some big players with the will and the balance sheet to gamble on technology is one that's worked for other consumer companies in the past.

Write to Teresa Rivas at teresa.rivas@barrons.com

(END) Dow Jones Newswires

June 25, 2019 13:15 ET (17:15 GMT)

Federal Reserve officials are debating whether uncertainty over the Trump administration’s trade policy will cause the economy to slow and warrant rate cuts later this year, Fed Chairman Jerome Powell said in remarks set for delivery Tuesday afternoon.

Many Fed officials “judge that the case for somewhat more accommodative policy has strengthened,” Mr. Powell said in opening remarks before the Council on Foreign Relations in New York. “But we are also mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment. Doing so would risk adding even more uncertainty to the outlook.”

Fed officials agreed last week to hold their short-term benchmark rate steady in a range between 2.25% and 2.5%, but more officials projected a weaker economic outlook could warrant lower rates this year. The Fed’s next scheduled meeting is July 30-31.

Mr. Powell said the central bank had a relatively optimistic outlook for the economy until early May. After that, trade negotiations between Washington and Beijing faltered, leading President Trump to increase tariffs on Chinese goods—and data on global growth turned weaker. Mr. Trump also threatened to impose tariffs on Mexico but suspended them before they took effect.

“Limited available evidence we have suggests that investment by businesses has slowed from the pace earlier in the year,” Mr. Powell said. The risks to what had been a favorable outlook earlier this year have increased, he added.

“The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation,” said Mr. Powell.

Stock markets have rallied since the Fed signaled a stronger bias toward cutting rates last week. Nevertheless, Mr. Trump continued to lash out against the central bank, on Monday warning that the economy may not be strong enough to warrant higher borrowing costs.

“Think of what it could have been if the Fed had gotten it right,” Mr. Trump said in a statement on Twitter. “Now they stick, like a stubborn child, when we need rate cuts…. Blew it!”

Mr. Powell has said consistently the central bank won’t set policy based on political demands because this has, in past periods, led to harmful outcomes for the economy, such as runaway inflation. While he has refrained from commenting on Mr. Trump’s specific critiques, Mr. Powell underscored on Tuesday that the Fed wouldn’t yield to such forces.

“The Fed is insulated from short-term political pressures—what is often referred to as our ‘independence,’” he said. “Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests.”

Write to Nick Timiraos at nick.timiraos@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:10 ET (17:10 GMT)

By Stephen Nakrosis

American Dream, a 3 million square foot entertainment and shopping complex in East Rutherford, N.J., said Tuesday it entered a 10-year partnership with the Coca-Cola Co. (KO) "that will fully-integrate Coca-Cola's portfolio through dining, fashion, music, art and entertainment."

The facility, which is slated to open in the fall, will feature over 450 retail, food and specialty shops, as well as a DreamWorks Water Park and Nickelodeon Universe Theme Park, an aquarium and an indoor ski slope.

The facility will also feature Coca-Cola Eats, which will seat about 800 and offer a wide array of local and global cuisine as well as a variety of Coca-Cola products, the companies said.

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

June 25, 2019 13:03 ET (17:03 GMT)

Gold Rally Picks up Steam as Investors Pile In
Sagging Trade Flows Spark Alarm Before G-20 Meeting
Stocks Decline as Tech Stocks Slip, Growth Concerns Swell
Trump Push on Housing Finance Nudges Up Mortgage Costs
Nestlé, Novartis at Risk of London Trading Ban
Is There a Big Short in Bitcoin?
Consumer Confidence Slid in June on Trade Tensions
U.S. New-Home Sales Fell in May
CBO Lowers Long-Term Debt Forecast as Treasury Yields Fall
The Loan That Fueled a Star Investor's Risky 'Illiquid' Bets

The most-active gold futures contract rose more than 1% Tuesday to $1,435 a troy ounce, heading for a fresh six-year high as investors anticipate lower interest rates and seek alternatives to currencies and bonds.

World trade flows have sagged again in 2019, a sign that higher U.S. tariffs and other trade barriers are cooling growth as leaders from the Group of 20 large economies prepare to meet in Japan.

U.S. stocks slipped Tuesday, weighed down by declines in technology shares.

Investor anxiety about a Trump administration push to overhaul housing finance is showing up in prices in the market for mortgage-backed securities.

Switzerland and the EU are at loggerheads over an overhaul of the complex ties that have guided the relationship for decades. The ability of some investors to trade blue-chip Swiss companies could be affected by the spat.

Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.

A gauge of consumer sentiment deteriorated in June to its lowest level in nearly two years.

Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing.

The Congressional Budget Office lowered its forecasts for interest rates over the next three decades, amid a marked decline in U.S. government-bond yields since late last year.

U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case drawing attention to the dangers of hard-to-sell assets in retail investment products.

(END) Dow Jones Newswires

June 25, 2019 13:00 ET (17:00 GMT)

Mitsubishi to Acquire Bombardier's Regional Jet Unit
YouTube Content for Children Should Be Barred, Advocacy Groups Tell FTC
AbbVie Strikes Deal to Acquire Allergan for About $63 Billion
GE Reaches Labor Deal With Union Leaders
U.S. Steel Seeks to Make More With Fewer Furnaces
Deutsche Bank's Equities Chief Expected to Leave
UnitedHealth Buys PatientsLikeMe After Startup Was Forced to Divest Chinese Investment
Global Telecom Carriers Attacked by Suspected Chinese Hackers
American Standard Owner Brings Back Ex-CEO
Ligado's Wireless Plans Caught In 5G Agency Crossfire

Mitsubishi said it would acquire Bombardier's regional-jet business for $550 million in a transaction that puts the companies on different paths in the aviation sector.

Two privacy-advocacy groups are calling on the FTC to remove from YouTube all content aimed at children and to impose tens of billions in fines.

AbbVie agreed to buy the maker of Botox for about $63 billion, betting a combination will deliver new sources of growth they have struggled to find on their own.

General Electric reached a tentative four-year agreement with a group of unions after a few weeks of negotiations, keeping a labor peace as the conglomerate restructures operations.

Falling steel prices are adding pressure to U.S. Steel's plan to get better performance from its mills by making overdue repairs and equipment upgrades.

Deutsche Bank's global head of equities is expected to leave the bank, the latest move in a planned downsizing of the German lender's investment bank.

UnitedHealth Group bought PatientsLikeMe, a company that helps connect people who have similar health conditions, after the startup was forced to divest an investment by a Chinese firm.

Hackers believed to be backed by China's government have infiltrated the cellular networks of at least 10 global carriers, swiping users' whereabouts, text-messaging records and call logs.

In a rare corporate comeback, the ousted chief executive of Lixil Group recovered his job at the Japanese bath and kitchen company with the support of some foreign activist shareholders.

Ligado Networks' plan to develop some of the nation's most valuable airwaves is being undercut by disagreements between U.S. regulators-miring the company in a holding pattern and pressuring its finances.

(END) Dow Jones Newswires

June 25, 2019 13:00 ET (17:00 GMT)

By James T. Areddy

SHANGHAI -- Evidence is piling up that Chinese consumer spending won't be enough to alone power the country's economy past its trade trouble with the U.S.

Demand for apartments, cars and even fruit is slackening. Online sales continue to boom, but buying habits are growing cautious and shifting toward household staples such as milk. Sliding prices for many consumer items and falling imports likewise point to cooling demand.

China's leadership has stressed internal strengths, including the buying power of its 400-million-strong middle-income population, in proclaiming economic invincibility as the Trump administration targets the country's exports with tariffs.

President Xi Jinping pointed to domestic consumption when Russian media asked him recently about economic activity. State-run Xinhua News Agency echoed the message in a commentary: "China is showing the world a resilience in the face of challenges."

But signs consumers may not play along could weaken President Xi's hand as he squares off against President Trump at this week's Group of 20 meeting in Japan. Mr. Trump, too, is counting on support that might not be sustained, such as from American farmers whose exports have suffered.

A recent internet buzzword that translates literally as "cherry freedom" speaks to anxiety among Chinese consumers who feel financial independence might be just out of reach. It refers to the freedom to treat oneself without worry to small luxuries such as imported cherries, whose price is soaring along with other fruit.

Passenger-car sales declined almost 15% in May from the year-earlier month, down further from a slide of about 10% in the first four months of 2019. Imports fell 8.5% in May from the year before -- a big downshift from double-digit growth in 2018 -- while exports edged up 1.1%.

Home-sales momentum has also appeared to falter, rising 8.9% in the January-to-May period after gaining nearly 11% during the first four months of the year. Economists consider real estate China's most important sector, and less buying would affect nearly every industry from steel to appliances.

Growth in domestic infrastructure spending decelerated in the January-May period to 4% from 4.4% in the first four months of the year and double-digit increases in previous years. Still, retail sales this year are ticking up faster than gross domestic product.

Signs of tepid consumerism may become more glaring if the U.S. and Chinese presidents fail to narrow their trade differences soon.

Messrs. Trump and Xi are scheduled to have their first face-to-face encounter since December in Osaka at the G-20 summit of major economies that starts Friday. Ahead of the meeting, Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer agreed in a phone call to maintain communication on trade issues, Xinhua reported Tuesday.

Without a trade truce, tariff programs threaten levies on all goods exchanged between the countries -- $660 billion last year. If the yuan, already off 3.5% in about a year, slips past 7 to the U.S. dollar, it would further dent Chinese household demand for imported items.

China's consumer spending isn't weakening as rapidly as some economic drivers, said Nicholas R. Lardy, a senior fellow at Peterson Institute for International Economics in Washington. "It can't hold up everything, but it's likely private consumption will be higher than GDP."

Still, the trade spat's damage to confidence could limit how effective cuts in the personal-income tax and measures to encourage hiring are at spurring consumption, said Wei Yao, an economist with Société Générale.

Mr. Lardy said a key question is how much April tax cuts, including to businesses' value-added tax, will encourage companies to cut prices and whether lower prices would lift sales of industrial machinery and consumer products.

During an e-commerce promotion in the first 18 days of June, discounts of as much as 50% caught the eye of Beijing resident Wu Liuying. But Ms. Wu said she bought basics, including milk and books for her 2-year-old daughter.

"I am no longer obsessed about dresses, high-heels and makeup that filled my shopping basket a few years ago," she said.

Beijing's economic figures haven't even fully telegraphed the pain of the trade spat, which hit during a cyclical slowdown. Businesses in both countries rushed production and shipments to avoid the four rounds of tariff increases, and those boosts are likely to prove temporary.

Unable to rely on the long-term process of transforming China into a consumer-powered economy, the government has turned back to investment such as bridge building and factory expansions -- drivers it has sought to slow in recent years because they increase debt.

Beijing recently told municipalities they could raise money for infrastructure projects by selling debt, waiving equity requirements.

To spur sales of cars, appliances and consumer electronics, the National Development and Reform Commission eliminated obstacles this month such as limits on the number of auto license plates in some cities. But economists say the measures don't come with the cash subsidies that were part of similar stabilization efforts in the wake of the global financial shock in 2009 and after Chinese stocks crashed in 2015.

Consumer nerves are being felt far up the production chain. The CEOs of chemical giants DowDuPont Inc. and Eastman Chemical Co. told separate analyst briefings in recent weeks that China's consumers grew uneasy, especially late last year.

"You can see that on anything that's a high-ticket item, whether it's a car or house or a dishwasher," said Eastman CEO Mark Costa. "People naturally, even here, when they're worried about their future, sort of cut back on those things."

Internet activity remains a source of comfort, according to Jon Moeller, Procter & Gamble Co.'s chief financial officer. In a recent presentation to analysts, he credited online shopping with helping lift P&G's year-to-date sales of categories such as fabric- and feminine care by 10%, with P&G's e-commerce sales overall ahead more than 20%.

Alibaba Group Holding Ltd. and other online merchants said June's Mid-Year Shopping Festival was most popular in less-developed parts of the country, where consumer choice is limited and people have less money than in major cities.

"The biggest thing about buying online is a higher chance of getting a good deal," said Caroline Bridges, marketing manager at research company China Skinny.

But many consumer prices are lower this year, excluding weather-affected fruit and pork, hit by a disease running through the pig population. Prices associated with mobile phones, appliances and transportation all fell in May from the year before.

One area where Chinese people are powering the domestic economy is tourism. Ye Junqing had planned to fly to Europe for a two-week honeymoon after her June wedding at a vineyard near Beijing. Instead, the pharmacy-business employee and her new husband decided to save up for home decorations and spent four nights in a Beijing hotel.

"We have to tighten the purse strings," Ms. Ye said.

--Liyan Qi and Grace Zhu in Beijing contributed to this article.

Write to James T. Areddy at james.areddy@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:56 ET (16:56 GMT)

By Will Horner

U.S. stocks slipped Tuesday, weighed down by declines in technology shares.

The Dow Jones Industrial Average fell 100 points, or 0.4%, to 26626. The S&P 500 declined 0.5% and the Nasdaq Composite lost 0.9%.

Major indexes drifted along in a narrow range to start the trading day, then lost ground after a Federal Reserve official known for his vocal opposition to interest-rate hikes said he believed it was too early for a 50 basis point rate cut. Stocks slipped to session lows while the dollar broke above the flatline after the comments from James Bullard, president of the Federal Reserve Bank of St. Louis.

Later Tuesday, Fed Chairman Jerome Powell is expected to deliver his own remarks. Hopes that the Fed will lower interest rates to offset a slowdown in economic growth have helped major indexes rally in June. That's even as many investors remain worried about the course of trade talks between the U.S. and China.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Technology shares lagged behind major indexes Tuesday, with Facebook falling 1.7% amid scrutiny over its plan to roll out its own cryptocurrency, Libra. Lawmakers said on Monday they would hold a hearing next month to discuss the cryptocurrency.

Other companies whose privacy practices have lately come under fire among regulators retreated, with Alphabet down 2% and Amazon.com down 1.1%.

Meanwhile, Allergan shares jumped 27% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 15%.

Elsewhere, the Stoxx Europe 600 edged down 0.1%, weighed down by losses among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 8.4% and Altran shares up 22%.

In commodities, gold jumped 0.7%, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global-growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Earlier, Japan's Nikkei Stock Average fell 0.4%, while the Shanghai Composite fell 0.9% and snapped a six-session winning streak.

Akane Otani contributed to this article

(END) Dow Jones Newswires

June 25, 2019 12:55 ET (16:55 GMT)

By David Marino-Nachison

Shares of Grubhub are clawing their way back toward their 2019 highs.

Grubhub stock (ticker: GRUB) was up 4.1% to $75.11 near midday Tuesday as Citi Research analyst Mark May upgraded the meal-delivery company's shares to Buy from Neutral. He raised his price target to $91, a bit below the average of roughly $96 among analysts tracked by FactSet.

Prices back above $90, not seen since November, would represent year-to-date highs for a stock that was around $86 in February. (It was closer to $150 late last year.) After falling toward $60 earlier this month, the stock has rebounded as investors and analysts have grown more optimistic about the company's outlook.

While competitive pressures persist -- the market-research outfit Second Measure this week said DoorDash's share of U.S. meal-delivery sales exceeded GrubHub's for the first time in May -- the retreat of Amazon.com (AMZN) from the business may suggest that the land grab has become less frantic.

There seems to be plenty of growth to go around. "No other meal delivery service comes close to DoorDash's growth, but nearly all of them are growing," Second Measure wrote. Year-over-year growth in the industry was 52% in May.

"Everyone is growing," a Grubhub spokesman said. "We're confident we have the right model for long-term sustainable growth for our industry."

Meanwhile, a partnership with Dunkin Brands (DKN) has investors thinking Grubhub may have more national deals on the way. May hinted at "early tests" with McDonald's (MCD), Starbucks (SBUX), and "other large chains."

May, Grubhub, McDonald's, and Starbucks didn't immediately respond to requests for more information. Bloomberg reported in April that McDonald's may end an exclusive deal with Uber Technologies' (UBER) Uber Eats.

Grubhub stock is up about 15% in June, outpacing the S&P 500.

May says continued growth in gross sales of food, new opportunities for delivery business with restaurant chains, easing competition, and the possibility that shares will trade at a higher multiple of earnings per share can drive the stock higher -- though none of those outcomes are certain.

"While there are still a number of factors that give us pause, we believe the near-term setup could be more favorable for Grubhub shares," May wrote. He gives the stock a "high risk" label.

Restaurant chains, The Wall Street Journal recently noted, are pushing back on delivery companies as the chains seek lower fees.

A campaign advertising Grubhub's Seamless service, currently viewable on New York City's subways, advises consumers that the company has "delivered through it all" over the last 20 years. Grubhub investors have been through plenty over just the past 12 months.

Lately, at least, things have looked bright.

Email David Marino-Nachison at david.marino-nachison@barrons.com. Follow him at @marinonachison and follow Barron's Next at @barronsnext .

(END) Dow Jones Newswires

June 25, 2019 12:54 ET (16:54 GMT)

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           107.25-26      107.29-30  -0.03   107.41   106.78  -2.13 
EUR/USD Euro            1.1363-66     1.1397-400  -0.30   1.1415   1.1361  -0.92 
GBP/USD U.K.            1.2693-95      1.2741-43  -0.38   1.2782   1.2687  -0.51 
USD/CHF Switzerland     0.9754-58      0.9719-23  +0.36   0.9775   0.9693  -0.61 
USD/CAD Canada         1.3196-201      1.3178-83  +0.14   1.3201   1.3153  -3.24 
AUD/USD Australia       0.6952-56      0.6960-64  -0.11   0.6979   0.6951  -1.39 
NZD/USD New Zealand     0.6638-44      0.6616-22  +0.33   0.6662   0.6616  -1.18 
 
Euro Rates 
 
EUR/JPY Japan           121.87-92      122.29-33  -0.34   122.48   121.65  -3.03 
EUR/GBP U.K.            0.8953-56      0.8947-50  +0.07   0.8965   0.8917  -0.40 
EUR/CHF Switzerland     1.1084-87      1.1079-82  +0.05   1.1126   1.1063  -1.52 
EUR/CAD Canada        1.4991-5001      1.5019-29  -0.19   1.5050   1.4982  -4.12 
EUR/AUD Australia       1.6335-45      1.6364-74  -0.18   1.6401   1.6315  +0.47 
EUR/DKK Denmark         7.4652-59      7.4661-68  -0.01   7.4674   7.4638  -0.01 
EUR/NOK Norway          9.7107-57      9.6637-87  +0.49   9.7146   9.6643  -1.97 
EUR/SEK Sweden        10.5453-553    10.5722-822  -0.25  10.5919  10.5182  +3.92 
EUR/CZK Czech Rep.      25.446-76      25.550-80  -0.40   25.596   25.457  -0.97 
EUR/HUF Hungary         323.12-52      323.47-87  -0.11   324.60   322.93  +0.71 
EUR/PLN Poland          4.2552-68      4.2525-41  +0.06   4.2587   4.2500  -0.78 
 
Yen Rates 
 
AUD/JPY Australia        74.59-63       74.69-73  -0.13    74.86    74.33  -3.47 
GBP/JPY U.K.            136.12-18      136.67-73  -0.40   136.84   135.80  -2.67 
CAD/JPY Canada           81.25-29       81.39-43  -0.18    81.50    80.98  +1.13 
NZD/JPY New Zealand      71.20-27       70.98-01  +0.30    71.28    70.97  -3.27 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.     22.382-432      22.408-58  -0.11   22.464   22.357  -0.06 
USD/HUF Hungary         284.35-75      283.71-04  +0.23   285.14   283.31  +1.63 
USD/DKK Denmark        6.5695-705     6.5497-507  +0.30   6.5714   6.5425  +0.90 
USD/NOK Norway         8.5454-514     8.4766-826  +0.81   8.5496   8.4751  -1.08 
USD/PLN Poland          3.7453-58      3.7309-14  +0.39   3.7463   3.7261  +0.13 
USD/RUB Russia         62.899-969      62.519-89  +0.61   62.952   62.499  -9.11 
USD/SEK Sweden          9.2806-96     9.2746-836  +0.06   9.2937   9.2409  +4.88 
USD/ZAR S. Africa     14.3171-471    14.3488-788  -0.22  14.3761  14.2667  -0.20 
 
USD/CNY China          6.8788-808      6.8760-80  +0.04   6.8847   6.8668  +0.02 
USD/HKD Hong Kong       7.8113-18      7.8087-92  +0.03   7.8118   7.8049  -0.26 
USD/MYR Malaysia       4.1265-315      4.1400-50  -0.33   4.1465   4.1283  -0.08 
USD/INR India           69.258-78      69.263-83  -0.01   69.371   69.231  -0.43 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines    51.390-410      51.320-40  +0.14   51.410   51.310  -2.10 
USD/SGD Singapore       1.3539-49      1.3528-38  +0.08   1.3546   1.3520  -0.62 
USD/KRW S. Korea     1154.21-6.21   1153.67-5.67  +0.05  1156.90  1153.12  +3.67 
USD/TWD Taiwan          31.058-88      30.930-60  +0.41   31.129   30.851  +1.61 
USD/THB Thailand        30.710-30      30.660-80  +0.16   30.770   30.610  -4.95 
USD/VND Vietnam         23273-343      23263-333  +0.04    23309    23259  +0.49 
 
USD/BRL Brazil         3.8484-514      3.8232-62  +0.66   3.8543   3.8198  -0.81 
USD/MXN Mexico        19.2370-670   19.1888-2188  +0.25  19.2578  19.1633  -2.02 
USD/ARS Argentina     42.2881-981    42.4062-386  -0.30  42.4779  42.1507 +12.34 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 12:50 ET (16:50 GMT)

Mitsubishi Heavy Industries Ltd. said it would acquire Bombardier Inc.’s regional-jet business for $550 million in a transaction that puts the companies on different paths in the aviation sector.

The deal unveiled Tuesday marks the Canadian company’s exit from the commercial passenger-aircraft business following failed bets that it could compete with Airbus SE and Boeing Co. in the 100-seat single-aisle plane category.

Bombardier has restructured its aviation division over the past two years, highlighted by its joint venture with Airbus that put the European plane maker in charge of the production and sales of the 110- to 130-seat planes that the Montreal company had originally conceived as the CSeries. Those jets are now rebranded as the Airbus A220.

Just a few weeks ago, Bombardier confirmed the closing of another aviation deal in which it unloaded its Q Series turboprop aircraft to an affiliate of Longview Aviation Capital Corp. Bombardier will now focus on its business-aircraft franchise and its rail division.

The deal “represents the completion of Bombardier’s aerospace transformation,” said Chief Executive Officer Alain Bellemare. “We are confident [Mitsubishi Heavy’s] acquisition of the program is the best solution for airline customers, employees and shareholders.”

Shares of Bombardier rose nearly 3% in early Tuesday trading. Bombardier said it would assemble the remaining backlog of roughly 30 regional jets on behalf of Mitsubishi Heavy, with work expected to conclude in late 2020. A Bombardier spokesman said the company hopes the affected 350 workers at its Mirabel, Quebec, plant can be redeployed within the organization to other jobs, including the possibility of a transfer to Airbus.

As part of the deal, Mitsubishi will assume $200 million in Bombardier liabilities and receive $180 million credit from Bombardier related to bank financing.

Meanwhile, Japan’s Mitsubishi said the deal represents the next step to expanding its aerospace and defense business. The unit lost money in its last fiscal year, squeezed by investment in its new SpaceJet regional aircraft and from commercial customers—notably Boeing on the 787—and military partners, with Lockheed Martin Corp. set to take on the rest of the F-35 assembly destined for Japan’s Self-Defense Forces.

The deal underscores Mitsubishi’s interest in the sales and support network linked to Bombardier’s regional-jet program as the Japanese plane maker tries to clear a path to market for its SpaceJet.

The company rebranded the plane at the recent Paris Air Show, with a new model targeted at the U.S. market, where pilot contracts restrict the size of aircraft. The first delivery of the SpaceJet to All Nippon Airways parent ANA Holdings Inc. is set for mid-2020, or some eight years behind schedule, with the new model set to arrive in 2023.

“This transaction represents one of the most important steps in our strategic journey to build a strong, global aviation capability,” Seiji Izumisawa, Mitsubishi Heavy’s CEO, said in a statement issued by Bombardier. He added the deal also augments the company’s efforts to secure aviation-related functions including maintenance and repair support.

Mitsubishi is testing the SpaceJet in the U.S. but hasn’t said where it would assemble the planes. Analysts said the Bombardier deal opened up Bombardier’s Mirabel facility as a potential site, given possible demand from North American carriers, as well as sites in the U.S. including Alabama and Texas.

“Future plans will be announced once the transaction is closed in early 2020,” said a Mitsubishi spokesman, who declined to comment further.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:50 ET (16:50 GMT)

World trade flows have sagged again in 2019, a sign that higher U.S. tariffsand other trade barriers are cooling growth as leaders from the Group of 20 large economies prepare to meet in Japan.

Most of the measures have been introduced or proposed by the U.S. or by countries retaliating against Washington’s tougher approach to tackling its trade deficits. More could come. The U.S. government for instance has detailed nearly $300 billion in new Chinese imports that would face 25% levies as early as this summer.

If those levies go ahead, economists at UBS estimate tariff levels could return to where they were in 2003, with the shipping industry carrying cars, clothing, electronics and other manufactured goods around the world among the businesses bracing for a substantial impact.

Denmark’s A.P. Moller-Maersk, which owns roughly 20% of all container capacity, said the spat between the U.S. and China may cut growth in global container volumes by a third this year. Shipping industry measures show freight prices have already been slipping this spring because of declining volumes.

“The tariffs are the biggest negative risk that can seriously hit volumes and earnings,” said Jonathan Roach, a container shipping analyst at London-based Braemar ACM. “The optimism we had just a few weeks ago when we thought a trade deal would be signed between the U.S. and China has evaporated. There is a lot of uncertainty out there.”

U.S. President Trump and Chinese President Xi Jinping are set to meet on the sidelines of the G-20 gathering. While that meeting isn’t expected to result in a trade agreement, it may help restart talks that broke down in May.

Meanwhile, concern about the impact on global trade flows is deepening.

Figures released Tuesday by the CPB Netherlands Bureau for Economic Policy Analysis indicated that the total volume of goods moving across borders fell 0.7% in April from March, having dropped by 0.2% in the first three months of the year. The Dutch economy has been highly dependent on trade for centuries, and the government’s economic research body pays special attention to changes in trade flows.

The April drop in trade flows was driven by a 2.6% decline in imports to the U.S., and a 5.3% slump in exports from Asia’s developing economies, which includes China. Economists say those declines partly reflect new barriers to trade, chiefly the higher tariffs that have been imposed since early 2018.

In a report prepared for G-20 leaders, who will meet in Osaka on Friday and Saturday, the World Trade Organization said the number of measures restricting trade that were imposed between October 2018 and May 2019 was 3½ times the average since it started to monitor policy in 2012. The measures affected $335.9 billion worth of potential imports, the second-largest total on record after the six months through September 2018.

“This will have consequences in increased uncertainty, lower investment and weaker trade growth,” said Roberto Azevêdo, the WTO’s director-general. “We urgently need to see leadership from the G-20 to ease trade tensions.”

The trade slowdown appears to have weakened factory output around the world. The Dutch research institute said that global industrial production was 0.8% lower in April than in March, having increased by just 0.1% in the first quarter.

June measures of activity in the U.S., eurozone and Japanese manufacturing sectors also pointed to a slowdown. By contrast, activity in the services sector, which isn’t directly affected by higher tariffs, continued to grow at a robust pace. Taken together, Capital Economics calculates that the purchasing managers’ indexes for the three months through June point to the weakest growth across developed economies since 2012.

Chinese shipping executives say they have withdrawn box capacity in the trans-Pacific route since the first round of tariffs were introduced last summer. Cosco Shipping, the world’s third-biggest box-ship operator, has removed 10% of its carrying capacity on the route since the end of last summer after the first U.S. tariffs were introduced.

Container imports into the five biggest U.S. West Coast seaports, the main gateways for U.S.-Asia trade, fell a combined 5.3% in May, according to Beacon Economics, a steep pullback from the surge in inbound business in earlier months as importers sought to rush goods into the country ahead of new tariffs.

Export loads from the ports, which include the agricultural goods targeted by China in retaliatory actions, fell 5.1% from a year earlier.

The upheaval in global trade is weighing on airlines. The International Air Transport Association this month trimmed by 21% its combined profit forecast for airlines to $28 billion from $35.5 billion six months ago, largely reflecting a slump in airfreight demand and cost pressures.

In December, IATA expected cargo shipped by air to grow 3.7% this year. It cut that prediction to zero growth this month. It also cut pricing expectations for those items shipped to no growth from a 2% yield increase expected in December.

“The last six months have been a bit of a disaster for air cargo. We’ve seen a really sharp fall in volumes,” IATA chief economist Brian Pearce said this month. The imposition of tariffs by the U.S. and China on imports have led to sharp drops in May airfreight traffic, measured by tons over distance flown, down 4.7% compared with the year prior figure.

Deutsche Lufthansa AG last month said it would offer fewer cargo flights to adjust to lower demand.

Write to Paul Hannon at paul.hannon@wsj.com and Costas Paris at costas.paris@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:40 ET (16:40 GMT)

1234 ET - Industrial metals enjoyed a strong day on the LME, continuing their partial recent recovery. Three-month copper futures were 1.3% higher at $6,045 a ton in electronic trading shortly after the end of open outcry. Lead and zinc, which have lagged their peers so far in June, jumped 1.4% and 2.1% respectively. Although prices have been boosted by a stalling dollar and the prospect of interest-rate cuts by the Federal Reserve, traders and analysts say the market is now riding on the outcome of the G-20 summit in Osaka on June 28-29. Also in focus are data on durable orders in the US, due tomorrow, and the final reading of US GDP in the first quarter, due Thursday. (joe.wallace@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 12:34 ET (16:34 GMT)

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

June 25, 2019 12:33 ET (16:33 GMT)

1631 GMT - Tullow Oil investors will be looking for news of progress with the oil producer and explorer's east African projects when it reports half-year results on Wednesday June 26. Numis Securities notes that in late April, the expected final investment decision [FID] date for a project in Uganda slipped to H2 2019 from midyear. "We hope this guidance will be retained in the midyear trading update," Numis's Thomas Martin says. "The market rightly remains sceptical of announced timeframes in east Africa, until firm approvals are obtained/FID decisions are made." (philip.waller@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 12:31 ET (16:31 GMT)

By Dan Molinski

Chevron Corp. (CVX) reported a planned shutdown Tuesday of equipment linked to gasoline-making fluid catalytic cracking unit at its refinery in Pasadena, Texas.

In a statement to the Texas Commission on Environmental Quality, the refinery said the "planned maintenance shutdown" began Tuesday morning and would last until Tuesday night, about 12 hours total.

The 110,000-barrel-a-day refinery is located in the Houston area. Chevron earlier this year completed the purchase of the Pasadena refinery from Brazil's Petroleo Brasileiro SA (PBR, PETR3.BR, PETR4.BR ) for $350 million. The 466-acre complex includes a storage tank farm and other assets.

Write to Dan Molinski at dan.molinski@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:31 ET (16:31 GMT)

--BT Group PLC (BT.A.LN) has started talks to sell its Spanish unit in a deal that could be worth around 300 million euros ($341.6 million), the Daily Telegraph reports, citing people familiar with the matter.

--Infrastructure investors could be interested in the Spanish business of the U.K. telecommunications group, which sells connectivity, IT and security services to corporate clients, according to the Telegraph.

--BT didn't immediately respond to a request for comment.

Full story: https://bit.ly/2ZRy9Wh

Write to Barcelona editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 12:30 ET (16:30 GMT)

The price of gold is rising at the quickest pace in years, illustrating the extent to which global investors are anticipating lower interest rates around the world and seeking alternatives to bonds and currencies.

The most-active gold futures contract climbed more than 1% Tuesday to $1,435 a troy ounce, heading for a fresh six-year high and bringing its gains in the past week to 6.2%. As the rally picks up steam, speculators are boosting wagers that prices will continue to climb and billions of dollars are flowing into gold-focused exchange-traded funds. Shares of gold miners are also hitting multiyear highs.

Driving the gains are concerns that global central banks will work to spur growth by lowering interest rates, driving their currencies lower. Those expectations have already led to a global collapse in bond yields—the yield on the benchmark 10-year U.S. Treasury note was on track to close below 2% on Tuesday for the first time since 2016, while those across Europe and in Japan are already negative.

The drop in bond yields has boosted the allure of gold, which has traditionally been a popular destination for investors when yields fall and fears of currency devaluation arise. Similar claims have also been made by proponents of bitcoin, which topped $11,000 on Tuesday, its highest level since early in 2018.

The recent spike in gold prices comes after years of listless trading in bullion, which had generally stayed between $1,100 and $1,350 since June 2013. The momentum in the sector has coincided with a surge in the broader stock market, with major indexes supported by bets that lower interest rates will lower borrowing costs and support corporate profits. Big-name investors such as Paul Tudor Jones and Jeffrey Gundlach have also publicly touted gold’s appeal in recent weeks.

“When the real value of money is being debased, then gold is viewed as the asset to own,” said Hugo Rogers, who oversees $5 billion as chief investment strategist at Deltec International Group. “The environment really plays into the hands of some kind of store of wealth that you cannot debase by printing more.”

Mr. Rogers bought gold for his fund earlier this year, and believes prices are likely to keep climbing.

With Tuesday’s rise, gold was on pace for its best four-day stretch since February 2016. It is now heading for its best month and quarter since that period, when fears about a Chinese economic slump and an oil-price slide roiled markets.

Both the S&P 500 and gold are on track to rise at least 6.5% in the same month for the first time since at least 1984, according to a Dow Jones Market Data analysis.

“Spikes like this are very rare,” said Chris Mancini, an analyst at Gabelli Gold Fund. “A move like this tells you something has changed.”

At its meeting last week, the Federal Reserve hinted that it would lower interest rates in the coming months if the outlook for the economy doesn’t improve.

Meanwhile, hedge funds and other speculative investors pushed net bets on higher gold prices to their highest level since February 2018 during the week ended June 18, Commodity Futures Trading Commission data show. During the most recent week, bullish wagers outnumbered bearish bets by a ratio of 8-to-1, compared with a ratio of 3-to-1 just two weeks prior.

Figures for the week ended Tuesday will be released on Friday.

More than $1.5 billion flowed into the SPDR Gold Trust exchange-traded fund last week, FactSet data show, the largest inflow since August 2011.

The investor interest has been a boon for beaten-down shares of gold miners, pushing up the VanEck Vectors Gold Miners ETF up 27% in the past month. Shares of Barrick Gold Corp. and other mining companies are up 30% or more in that period, compared with a 3.8% gain for the S&P 500.

Bill Garrett, a 58-year old who works for a home-healthcare business in Wilmette, Ill., said he has been buying gold coins recently, citing steady physical buying from countries such as China and a belief that currencies around the world will become less valuable.

“I think gold is really, really going to take off,” Mr. Garrett said.

Still, many analysts remain wary that a U.S.-China trade deal could lift the outlook for the world economy, spurring growth and sending gold prices sharply lower once again. And although the Fed has hinted that it could reduce interest rates, many analysts say it is unlikely the central bank will cut them as quickly as the market currently expects.

That gap in projections is one of the largest threats to both stocks and gold, analysts say.

“If the Fed doesn’t ease, then I think there’s a good chance they both do come back down,” Mr. Mancini said.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:30 ET (16:30 GMT)

By John D. McKinnon

WASHINGTON -- Privacy advocates are calling on the Federal Trade Commission to remove all YouTube content directed at kids and impose tens of billions in fines against the video-streaming service run by Alphabet Inc.'s Google unit for alleged children's privacy violations.

The recommendations were made in a letter sent to the FTC Tuesday by the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy. Those groups filed a complaint last year against Google and YouTube over their privacy practices regarding children, which the FTC is investigating.

The core of the groups' complaint is that Google and YouTube improperly avoid federal requirements for obtaining parental consent before collecting children's personal information.

"Google claims that YouTube is not for children under thirteen, and therefore, no consent is required," the groups wrote on Tuesday. "This defense is outlandish given that YouTube is the number one online destination for kids."

Google didn't immediately provide comment. The FTC declined to comment.

The groups, aided by Georgetown University Law Center's Institute for Public Representation, said the FTC should seek a consent decree that would require Google to destroy all its data collected from children under 13, stop collecting data from any users known or reasonably believed to be under 13 and remove all channels and content on YouTube directed at children.

YouTube could make such content available on a separate platform intended for children, such as the existing stand-alone YouTube Kids, as long as no data would be collected for commercial purposes.

The groups also are recommending civil penalties running into tens of billions of dollars, under the 1998 Children's Online Privacy Protection Act.

YouTube already has been considering some similar far-reaching changes to its platform after being put on the defensive over the issue.

Executives have been debating moving all children's content into the YouTube Kids app, to better protect young viewers from objectionable videos, The Wall Street Journal reported last week citing people briefed on the talks.

That would be a seismic shift, as children's videos are among the most popular on the YouTube platform and carry millions of dollars in advertising.

Some YouTube employees have been pushing for another significant modification. They are encouraging the company to switch off for children's programming a feature that automatically plays a new video after one has been completed, the people briefed said.

While that default setting -- known as YouTube's recommendation system -- has helped boost audience hours, it has also opened the company up to criticism that children and parents who have selected innocuous videos can then be transferred automatically to inappropriate fare.

The proposed changes are motivated in part by the continuing investigation of YouTube by the FTC.

Write to John D. McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:23 ET (16:23 GMT)

--Facebook Inc. (FB) will give judges in France information to identify those suspected of using hate speech on the social media platform, the country's minister for digital affairs said, Reuters reported Tuesday.

--Cedric O, who met with Facebook's head of global affairs last week, said Facebook is "only doing it for France," the report said.

--Facebook declined to comment, according to the report.

Full story: https://www.reuters.com/article/us-france-tech-exclusive/exclusive-facebook-to-give-data-on-hate-speech-suspects-to-french-courts-minister-idUSKCN1TQ1TJ

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:21 ET (16:21 GMT)

The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1158 ET - Should the strike at Codelco's Chuquicamata copper mine continue for an extended period of time, then it will likely cause copper's global supply deficit to widen -- bullish news for traders, says Chris LaFemina from Jefferies. However, a larger deficit depends on demand staying healthy, something that without a trade deal between the US and China may not happen. "We believe progress on the US-China trade negotiations is critical in the case of copper," says LaFemina. "Recent rhetoric from both sides is not encouraging, and copper mining equities are likely to be highly volatile in the near term as a result." Copper futures have broken the $6,000 per metric ton level today on the London Metal Exchange, and are currently trading up 1.4% to $6,045 per ton. (kirk.maltais@wsj.com; @kirkmaltais)

1051 ET - Copper has gained throughout the day on the London Metal Exchange, indicating rising optimism that Presidents Trump and Xi will resolve or at least dial down their trade dispute at the G-20. "The current strength we're seeing in base metals suggests investors are gravitating towards a more positive view," says Edward Meir, a consultant to INTL FCStone. "We very well could see further strengthening in base metals heading into next week, should the two leaders leave Osaka relatively happy." Copper was up 1.3% at $6,040 a ton while zinc popped 2.1% to $2,542 a ton, having lagged most other industrial metals over the past month. (joe.wallace@wsj.com)

0840 ET - Anglo American's majority-owned diamond business De Beers surprised Citi analysts after diamond sales in the fifth sales cycle dropped to a low of $390 million, the bank says. Citi says this is 33% below than the level recorded in the fifth sales cycle of 2018 and 6% less than in the fourth cycle of this year. Citi says it had estimated fifth-cycle sales of around $450 million. (oliver.griffin@dowjones.com; @OliGGriffin)

0825 ET - The intense pressure on profit margins at steel makers should soon abate, says Alain Gabriel, an analyst at Morgan Stanley. "Poor profitability is triggering a supply response with ArcelorMittal and U.S. Steel announcing production cuts equivalent to [around] 3% of EU output," he says. This should stop margin declines and, along with stabilizing demand, boost bruised share prices. Gabriel adds that balance sheets "have materially improved" in recent years--particularly at ArcelorMittal--and that "companies have flexibility to reduce cash needs." His picks for investors: ArcelorMittal, Voestalpine and SSAB. (joe.wallace@wsj.com)

0814 ET - Miners rise as precious- and base-metal prices get a boost from a weaker dollar amid geopolitical tension. Chilean copper miner Antofagasta is the sector's top riser, up 1.45%, while Mexican silver miner Antofagasta gains 1.1%. "The dollar index is down at the lowest level since March this year on the back of strengthening expectations for a rate cut," S.P. Angel analysts say. "Markets are currently pricing in at least a 40% chance of two rate cuts before the end of the year." (philip.waller@wsj.com)

0725 ET - Trade tensions and economic uncertainty will lead to weaker consumption of industrial metals than previously thought, according to Morgan Stanley. Analyst Susan Bates expects global aluminum demand to grow 1.5% this year to 65.8 million tons, well below the average pace of 4.8% seen over the past four years. "Signs are that the weak autos and manufacturing sectors are translating into weaker demand for products," she says, adding that low prices will extend into the early 2020s. Copper demand will rise just 0.7% to 23.7 million tons, Bates forecasts, but a simultaneous 1.4% drop in refined copper output should lead to a small rise in prices. She predicts that New York copper futures will average $2.85/lb in the second half of the year and $3 in 2020, up from $2.73 today. (joe.wallace@wsj.com)

0632 ET - Miners continue to surf the rally in precious-metal prices. Shares in Newmont Goldcorp are in second place on the S&P 500 in pre-market trading, rising 1%. As of yesterday's close, they had gained 20% over the past month. In South Africa, Gold Fields and AngloGold Ashanti have increased 49% and 53% respectively in the same time period. These gains have helped the VanEck Vectors Gold Miners ETF, which tracks New York-listed gold-mining shares, rise 27% over the past month. In contrast, the iShares MSCI Global Metals & Mining Producers ETF, which excludes gold and silver miners, has risen just 4% amid concerns that the U.S.-China trade fight will hit demand for industrial metals. (joe.wallace@wsj.com)

0528 ET - U.S. steel prices continue to plummet, hurting companies such as United States Steel, which last week said it would idle two blast furnaces to cope with falling demand. But David Gagliano of BMO Capital Markets thinks "prices are approaching an inflection point following the year-long deterioration in fundamentals." Output is starting to slow because of actions such as U.S. Steel's, and imports are likely to ease as arbitrage opportunities from varying regional prices disappear. "In summary, it is more likely U.S. prices will be higher than lower over the next 3-6 months," BMO says. (joe.wallace@wsj.com)

0456 ET - The FTSE 100 Index falls 0.2%, or 16.15 points to 7400.54 as U.K. grocery stocks fall after downbeat industry data. Tesco is the top flight's biggest loser, down 2.4% after Kantar retail data showed its market share dropped 0.4 percentage points to 27.3% in the 12 weeks to June 16. William Morrison Supermarkets is the next biggest faller, down 2.3% after its market share dropped 0.5 percentage points to 10.4% in the same period. Still, miners limit the falls as the price of gold hits its highest level since 2013, up 1% at $1.432.2 an ounce, while silver climbs 0.2%. Mexican silver miner Fresnillo advances 1.1%. (philip.waller@wsj.com)

0319 ET - Chinese equities reversed about half of this morning's decline by day's end, with banks getting high by US accusations that some may have abetted the busting of sanctions against North Korea. As large-cap financials lost 1.5%, Chinese stock indexes uniformly fell about 1% today. China Merchants Bank skidded 4.8%, the most in 8 months, while Bocom and PDB fell more than 3%. But gold stocks kept on shining amid the metal's ongoing rally, with 4 company rising the 10% daily limit. And some Shanghai-linked names surged after the city announced plans to further develop its financial district. (john.wu@wsj.com)

0135 ET - Tata Steel's expansion targets don't "gel" with the company's separate deleveraging efforts, says bear ICICI Securities, adding that's a key concern. Tata wants annual production capacity to rise more than 50% to 30 millions tons by 2025, driven by acquisitions. At the same time, there's "no specific future target for deleveraging," the brokerage notes. Tata has merely said it will continue to focus on deleveraging as a primary strategic initiative to rebuild balance-sheet strength. Its net debt rose 6.7% last FY to INR1.01 trillion ($14.6 billion). Shares are down 6.5% this year after skidding 25% in 2018. (saurabh.chaturvedi@wsj.com; @journosaurabh)

2326 ET - RBC fears Sandfire is becoming a riskier proposition for investors. On paper, the miner's planned takeover of MOD provides an additional development project along with Black Butte in Montana, notes the investment bank. But it wonders whether Sandfire will have MOD's T3 project in Botswana up and running before its sole DeGrussa copper-gold mine in Western Australia shuts in 2022. RBC is also wary of Sandfire grappling with 2 new projects in 2 new geographies, which--according to known numbers--will combined only give Sandfire the same output as its existing mine. Meanwhile, "market reaction to development projects recently has been particularly punishing upon any shortcomings." While MOD shares have surged 31% in Sydney to 9-month highs, Sandfire is down 9.2%, on pace for its worst day in 6 years. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(END) Dow Jones Newswires

June 25, 2019 12:20 ET (16:20 GMT)

ZURICH—Trading in Switzerland’s biggest blue chip companies could soon be banned in London and other major financial centers, as a political dispute with the European Union threatens to spill over into markets.

Switzerland and the EU are at loggerheads over an overhaul of the complex ties that have guided the relationship for decades. Switzerland isn’t part of the EU, but has extensive financial, immigration and trade ties with the bloc.

If an EU imposed deadline passes on Sunday without an agreement, venues based in the EU would be limited in trading Swiss stocks. The ability of some investors to trade blue chip Swiss companies including Nestlé SA and Novartis AG could be affected by the spat.

The two sides still have several days to come to an agreement and avert the loss of market access. Or, the EU could grant another extension as it did in late 2018. However, the positions appear hardened, dimming the hopes for a last-minute deal.

If no agreement is reached, investors face the prospect of major upheaval. Swiss companies make up one fifth of the Stoxx 50 index equities benchmark by market capitalization. Around 70% of trading in the 30 largest Swiss blue-chip companies occurs at exchanges in Switzerland, primarily Zurich’s SIX exchange. The other 30% are traded in Europe, mostly London.

As the deadline for Brussels’ decision nears, exchange operators Aquis Exchange, Cboe Global Markets and UBS have announced they could be forced to remove Swiss stocks from U.K. platforms as soon as next week. Cboe has said it won’t be permitted to trade securities with a Swiss registered office and listed on a Swiss exchange from the start of the next trading day if Switzerland isn’t granted equivalence by Sunday.

The EU and Switzerland have been in discussions for years about bundling the roughly 120 bilateral treaties governing Swiss-EU ties into one accord. Brussels wants the framework agreement to ensure that Switzerland can’t renege on certain obligations, like free movement of people from the EU and addressing wage protections in Switzerland, without paying a broader price in terms of EU market access.

The EU gave itself leverage in the talks 18 months ago by changing the way it grants access, known as equivalence, which allows shares in Swiss companies to be traded throughout Europe. It’s a largely technical arrangement that countries around the world have with each other to facilitate the smooth functioning of financial markets.

But in late 2017, the EU only gave the Swiss a one-year extension, and tied its renewal to the broader framework agreement. The two sides pushed up against an end-of-2018 deadline without a deal before the EU gave the Swiss a six-month extension that expires June 30.

“The current equivalence decision will automatically expire on 30 June,” an EU Commission spokeswoman said. “Our door remains open to conclude the agreement before the end of this Commission’s mandate.”

On Monday, the Swiss executive branch said it would launch the protective countermeasures it had unveiled last November in order to maintain trading activity in Swiss exchanges. Under the Swiss plan, which would come into force on July 1, exchanges based in the EU would be prohibited from trading Swiss shares, meaning virtually all of the trading of Swiss stocks would have to be done in Switzerland.

The measure “serves solely to protect the functioning of the Swiss stock exchange infrastructure,” the federal council said. SIX welcomed the decision in a statement Monday.

The issue is unlikely to have major implications on the Swiss and European economies, analysts said. However, if this is the start of a broader fraying of relations in other areas like immigration and trade there could be a bigger economic and financial effect particularly on Switzerland, which depends greatly on the EU as an export market.

“Switzerland has nothing to gain from a battle with the EU,” said ING Bank economist Charlotte de Montpellier.

Write to Brian Blackstone at brian.blackstone@wsj.com and Avantika Chilkoti at Avantika.Chilkoti@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:20 ET (16:20 GMT)

Geopolitical tensions helped nudge investors into gold on Tuesday, with the precious metal poised to mark its highest finish in over six years.

Gold has seen an “extraordinary march higher as global economic worries, political worries and U.S. politics underpin many bids from buyers, in many countries, as opportunity costs for buying gold have also lowered buyers’ resistance,” said George Gero, managing director at RBC Wealth Management.

August gold rose $19.70, or 1.4%, to $1,437.90 an ounce, which could put the precious metal on track for the highest settlement for a most-active contract since May 19, 2013, according to FactSet. Gold rose 1.3% to settle at $1,418.20 on Tuesday, for the strongest settlement for a most-active close since August 28, 2013.

Expectations for lower interest rates among global central banks and geopolitical concerns are making gold a preferred investment these days. The Japanese yen, another perceived haven investment, rose 0.4% against the dollar . The yield on the 10-year note fell .,6 basis points to 1.984%.

That follows declines among equities in Europe and Asia, and U.S. benchmark stock indexes traded lower in Tuesday dealings amid rising tensions between the U.S. and Iran. Investors also awaited a planned meeting between President Donald Trump and Chinese leader Xi Jinping to discuss trade issues at this week’s Group of 20 gathering in Japan.

Iran’s U.N. Ambassador Majid Takht Ravanchi warned of a “very dangerous” situation in the Persian Gulf, ruling out talks with the U.S. after President Donald Trump on Monday signed an executive order imposing financial sanctions on Iranian leaders. The moves comes days after calling a halt to airstrikes on the country, which shot down a U.S. military drone.

“Iran has said the door is shut for any diplomatic path and this means the uncertainty will continue to rise. This is likely to keep pushing the gold price higher and it can easily cross the level of $1,500,” said Naeem Aslam, chief market analyst at TF Global Markets, in a note to clients.

July silver rose 6.3 cents, or 0.4%, to $15.44 an ounce after gaining 3.3% last week.

July copper added 1.4% to $2.742 a pound. July platinum rose 0.7% to $817.10 an ounce, while September palladium climbed 0.2% to $1,532 an ounce.

Write to Barbara Kollmeyer at bkollmeyer@marketwatch.com

(END) Dow Jones Newswires

June 25, 2019 12:10 ET (16:10 GMT)

WASHINGTON—Privacy advocates are calling on the Federal Trade Commission to remove all YouTube content directed at kids and impose tens of billions in fines against the video-streaming service run by Alphabet Inc.’s Google unit for alleged children’s privacy violations.

The recommendations were made in a letter sent to the FTC Tuesday by the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy. Those groups filed a complaint last year against Google and YouTube over their privacy practices regarding children, which the FTC is investigating.

The core of the groups’ complaint is that Google and YouTube improperly avoid federal requirements for obtaining parental consent before collecting children’s personal information.

“Google claims that YouTube is not for children under thirteen, and therefore, no consent is required,” the groups wrote on Tuesday. “This defense is outlandish given that YouTube is the number one online destination for kids.”

Google didn’t immediately provide comment. The FTC didn’t immediately respond to a request for comment.

The groups, aided by Georgetown University Law Center’s Institute for Public Representation, said the FTC should seek a consent decree that would require Google to destroy all its data collected from children under 13, stop collecting data from any users known or reasonably believed to be under 13 and remove all channels and content on YouTube directed at children.

YouTube could make such content available on a separate platform intended for children, such as the existing stand-alone YouTube Kids, as long as no data would be collected for commercial purposes.

The groups also are recommending civil penalties running into tens of billions of dollars, under the 1998 Children’s Online Privacy Protection Act.

YouTube already has been considering some similar far-reaching changes to its platform after being put on the defensive over the issue.

Executives have been debating moving all children’s content into the YouTube Kids app, to better protect young viewers from objectionable videos, The Wall Street Journal reported last week citing people briefed on the talks.

That would be a seismic shift, as children’s videos are among the most popular on the YouTube platform and carry millions of dollars in advertising.

Some YouTube employees have been pushing for another significant modification. They are encouraging the company to switch off for children’s programming a feature that automatically plays a new video after one has been completed, the people briefed said.

While that default setting—known as YouTube’s recommendation system—has helped boost audience hours, it has also opened the company up to criticism that children and parents who have selected innocuous videos can then be transferred automatically to inappropriate fare.

The proposed changes are motivated in part by the continuing investigation by the FTC.

(END) Dow Jones Newswires

June 25, 2019 12:10 ET (16:10 GMT)

By John D. McKinnon

WASHINGTON -- Privacy advocates are calling on the Federal Trade Commission to remove all YouTube content directed at kids and impose tens of billions in fines against the video-streaming service run by Alphabet Inc.'s Google unit for alleged children's privacy violations.

The recommendations were made in a letter sent to the FTC Tuesday by the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy. Those groups filed a complaint last year against Google and YouTube over their privacy practices regarding children, which the FTC is investigating.

The core of the groups' complaint is that Google and YouTube improperly avoid federal requirements for obtaining parental consent before collecting children's personal information.

"Google claims that YouTube is not for children under thirteen, and therefore, no consent is required," the groups wrote on Tuesday. "This defense is outlandish given that YouTube is the number one online destination for kids."

Google didn't immediately provide comment. The FTC didn't immediately respond to a request for comment.

The groups, aided by Georgetown University Law Center's Institute for Public Representation, said the FTC should seek a consent decree that would require Google to destroy all its data collected from children under 13, stop collecting data from any users known or reasonably believed to be under 13 and remove all channels and content on YouTube directed at children.

YouTube could make such content available on a separate platform intended for children, such as the existing stand-alone YouTube Kids, as long as no data would be collected for commercial purposes.

The groups also are recommending civil penalties running into tens of billions of dollars, under the 1998 Children's Online Privacy Protection Act.

YouTube already has been considering some similar far-reaching changes to its platform after being put on the defensive over the issue.

Executives have been debating moving all children's content into the YouTube Kids app, to better protect young viewers from objectionable videos, The Wall Street Journal reported last week citing people briefed on the talks.

That would be a seismic shift, as children's videos are among the most popular on the YouTube platform and carry millions of dollars in advertising.

Some YouTube employees have been pushing for another significant modification. They are encouraging the company to switch off for children's programming a feature that automatically plays a new video after one has been completed, the people briefed said.

While that default setting -- known as YouTube's recommendation system -- has helped boost audience hours, it has also opened the company up to criticism that children and parents who have selected innocuous videos can then be transferred automatically to inappropriate fare.

The proposed changes are motivated in part by the continuing investigation by the FTC.

(END) Dow Jones Newswires

June 25, 2019 12:05 ET (16:05 GMT)

Market News: 
 
FTSE 100            7422.43  +5.74 +0.08% 
FTSE 250           19286.51 -13.17 -0.07% 
FTSE AIM All-Share   924.97  -4.54 -0.49%
Company News:
Other News:
Market Talk:

The FTSE 100 closed higher Tuesday reversing earlier losses as U.K. grocers fell, hit by downbeat industry data. London's blue-chip index ended 0.08% up at 7422.43. Investment manager 3i Group topped the index gainers, rising 3.3%, while British Airways-parent International Consolidated Airlines Group was the biggest faller, down 2.8%. Grocers Tesco and Wm. Morrison Supermarkets were among the biggest lowers.

7Digital Shares Down on Failed Resolution to Disapply Pre-Emption Rights

Shares of 7Digital Group PLC (7DIG.LN) fell in afternoon trading Tuesday after the company said there is a greater execution risk for any subsequent equity raise following a resolution to disapply pre-emption rights not passing at its annual general meeting.

Anglo American Sees Soaring 1H Earnings on Higher Platinum Prices

Anglo American Platinum Ltd. (AMS.JO) on Tuesday reported that its first-half headline earnings and headline earnings a share are expected to rise by 80%, due to a higher rand basket price for platinum group metals.

Anglo American's De Beers Sold Fewer Diamonds in Fifth Cycle

Anglo American PLC (AAL.LN) said Tuesday that its majority-owned De Beers Group experienced a fall in rough diamond sales for the fifth sales cycle of the year, citing a challenging environment in China and a cautious approach from rough-diamond buyers.

Carpetright FY 2019 Pretax Loss Narrowed

Carpetright PLC (CPR.LN) said Tuesday that its pretax loss narrowed in fiscal 2019 as the company restructured its U.K. store estate and addressed its legacy property issues.

Kibo Shares Rise After Subsidiary Finalizes Power Purchase Deal With Statkraft Markets

Shares in Kibo Energy PLC (KIBO.LN) traded higher Tuesday after the company said that its majority-owned subsidiary, MAST Energy Developments Ltd., finalized a power purchase agreement with Statkraft Markets GmbH.

Gear4Music Shares Drop on FY 2019 Loss

Gear4Music (Holdings) PLC (G4M.LN) shares dropped Tuesday after the music-equipment retailer said that it swung to a loss in fiscal 2019 despite revenue growth.

Northgate FY 2019 Pretax Profit Rose; Revenue to Slow in FY 2020

Northgate PLC (NTG.LN) said Tuesday that its profit rose in fiscal 2019 but said revenue growth is likely to slow in the current year.

Petrofac Shares Slip as New Orders Take a Knock

Shares in Petrofac Ltd. (PFC.LN) inched down Tuesday after the company said its new order intake in the year to date was hit by recent challenges in Saudi Arabia and Iraq.

The Loan That Fueled a Star Investor's Risky 'Illiquid' Bets

U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets hiding inside retail investment products.

UK Digital Bank Monzo Valued at About GBP2 Bln in Latest Funding Round

U.K. digital bank Monzo said Tuesday it raised 113 million pounds ($144 million) in a funding round led by Y Combinator's Continuity fund, reportedly valuing the startup at around GBP2 billion.

UK Challenger Banks May Need to Set Aside More Capital: Fitch

1320 GMT - New entry banks into the U.K. banking system may be required to set aside more capital given their fragility to a hard Brexit or a downturn, says Fitch Ratings. Fast-growing lenders with a limited track record may be more vulnerable than the big four--HSBC, Barclays, Lloyds Banking Group and Royal Bank of Scotland Group--to any cyclical downturn or a disruptive no-deal Brexit leading to higher unemployment or falling property prices, it says. Many challenger banks have grown fast in retail mortgage lending, which could inflict significant loses on their mortgage portfolios if interest rates and unemployment rise, given U.K. households' high indebtedness, it says. Falling house prices could exacerbate the impact.

Offshore Wind Hits Double-Digit Growth Globally: RenewableUK

1316 GMT - The global market for offshore wind hit 16% growth over the last 12 months, according to data published by RenewableUK, a trade association, at the Global Offshore Wind conference in London. The U.S. accounts for nearly half of the growth at 48%, but Europe accounts for 66% of demand world-wide, the association says. The U.K., however, was the largest single market for projects, representing a 9% rise from the previous year. "Innovation in offshore wind will help transform the U.K.'s energy system and set global trends in new markets," says Hugh McNeal, chief executive at RenewableUK.

More Bombardier Layoffs Possible as Mitsubishi Buys Canadian Regional Jet Program

1243 GMT - As Mitsubishi confirms that it is buying Bombardier Inc.'s CRJ regional jet program, the Canadian plane maker signals that could mean more layoffs for its operations in Belfast and Morocco--where it makes plane parts. Those businesses also are up for sale. Bombardier in Belfast says "we are reviewing what impact this may have on our sites in Northern Ireland and Morocco as suppliers to the program, and will evaluate opportunities in other programs to mitigate any potential impact on our workforce."

Ocado Outsold Rivals in 12 Weeks to June 16: Kantar

1224 GMT - Online specialist Ocado topped the list of fastest-growing supermarkets in the 12 weeks to June 16 with a sales rise of 11.3%, according to Kantar. Ocado will look to increase the amount of shoppers that buy through its platforms from the 3% of British shoppers it currently claims. Discount grocers are growing at a consistently fast rate in the U.K., with Aldi's sales climbing 9.3% and Lidl's rising 7.5% in the 12-week period, Kantar's report found. Sainsbury's, Asda and Morrisons all had slight sales declines, while Tesco--the largest by market share--remained flat. In total, supermarket sales rose 1.4% in the period.

Carpetright Stock Fair Value After FY: Shore Capital

1216 GMT - Carpetright shares are fully valued, Shore Capital says after the U.K. floor-covering retailer reported a narrower full-year loss, boosting its stock by nearly 12% to 20 pence. Shore says the results matched guidance, though it highlights the company's comments that the retail sector is facing hurdles and uncertainty. "We think the valuation looks up with events for now and continue to re-iterate our hold rating, highlighting that the shares should go better today," Shore's Greg Lawless says.

Brexit, Eurozone Weakness to Drive GBP/USD Down to 1.20 by 2Q 2020: Barclays

1207 GMT - Barclays expects U.K. political events and a worsening European growth outlook to drag GBP/USD sharper down to 1.20 by the second quarter of 2020, which is 8.7% below consensus. This compares with a current level of 1.2729. "Brexit and election risks continue to suppress GBP at historic lows, while European risks drag it down further versus the rest of the world," the bank's forex team says in a note. The U.K.-based bank's base case is that the U.K. will leave the European Union with a transition deal, yet it notes that uncertainty over what a trade deal will ultimately look like, along with weakening growth prospects for Europe, are likely to cause the pound to decline sharply against the U.S. dollar in the first half of 2020, after declining to 1.25 in 4Q 2019.

Petrofac Fraud Probe Likely to Weigh on Shares: Citi

1148 GMT - Shares in Petrofac fall 5.5% to 410 pence after the oil-industry engineer said issues in Saudi Arabia and Iraq hit its order intake in the year to date. Citigroup points out that the company is also facing uncertainty caused by a U.K. fraud investigation, though it hasn't been charged. Previous SFO investigations have taken more than 18 months to complete and there is a risk the probe could take longer given its complexity, Citi says, adding that the shares are trading at a small discount to rivals. "We believe this discount is likely to remain over the medium-term, given the uncertainty regarding the ongoing investigation," it says.

Genel Energy Buy Back Is a Sensible Use of Cash: Numis

1147 GMT - Genel Energy's decision to launch a buy-back program is a sensible decision, according to Numis analysts who say the company is generating cash like it's going out of fashion. The brokerage forecasts that Genel can generate a free cash flow yield of 19% over the next five years if oil prices remain at $60 a barrel. Numis has a buy rating on the stock and a target price of 320 pence a share. Shares are up 5% at 185.80 pence.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-9319

(END) Dow Jones Newswires

June 25, 2019 12:05 ET (16:05 GMT)

By Spencer Jakab

If you can't beat' em, join 'em. And if you can't join 'em?

Pundit Stephen Moore withdrew last month from consideration for a position on the Federal Reserve Board. Now he is joining a group that wants to "perform Fed-like duties," but not for traditional money. He will, according to Fox Business, join Decentral, which aspires to be "the world's decentralized central bank," performing a stabilizing role for cryptocurrency.

This raises a few questions. Bitcoin, the most valuable cryptocurrency, is hugely volatile in dollar terms, but its supply is famously limited by design. Its appeal lies in the lack of a central bank.

But supposing Mr. Moore's outfit were able to stabilize values, would it be hawkish or dovish? Back when Barack Obama sat in the White House, Mr. Moore decried the Fed's " easy money policy" as the recipe for the next crisis and advocated a return to the gold standard. When he was hoping to be nominated by Donald Trump, though, he advocated cutting rates by half.

Crypto investors eager to see their purchasing power maintained would prefer the 2015 version of Stephen Moore.

Write to Spencer Jakab at spencer.jakab@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:03 ET (16:03 GMT)

By Mark Hulbert

Low-volatility stocks are behaving precisely as advertised.

That means they're outperforming the stock market while incurring below-market risk. That's a winning combination -- even if the most hyperactive traders find such stocks exceedingly boring.

The markets aren't supposed to work this way, of course. We're taught in Finance 101 that more conservative strategies exact a price for allowing you to sleep more easily at night, and that price is lower returns.

But thanks to pioneering work by the late Robert Haugen, we've known at least since the early 1970s that low-volatility stocks don't adhere to this standard theoretical model. And despite growing attention given to what academicians call this low-volatility anomaly, it persists. This also is surprising, since the usual pattern is for stock market patterns to disappear as more investors discover it and try to exploit it.

I last wrote about low-volatility stocks for Barron's in February 2018, singling out 10 stocks that at the time were also being recommended highly by at least one of the top-performing newsletters I monitor. Those 10 stocks have indeed been conservative, as measured by their betas. (Beta is a standard risk metric, measuring a stock's sensitivity to changes in the overall market.) The stocks' average beta (based on their returns since February 2018) has been 0.61 -- 39% less than the market's 1.0.

Yet despite being so conservative, those 10 stocks have produced a 21.2% total return, according to FactSet, nearly double the 12.1% of the S&P 500.

Or take the Invesco S&P 500 Low Volatility exchange-traded fund (ticker: SPLV). Its beta over the past five years has been 0.72, according to FactSet. Yet over this period it has produced a 12.0% annualized total return, versus 10.8% for the S&P 500.

These results shouldn't come as a surprise, according to a 2012 study entitled "Low Risk Stocks Outperform Within All Observable Markets of the World," co-written by Haugen and Nardin Baker, chief strategist at South Street Investment Advisors in Needham, Mass. They compared the returns of the lowest-volatility stocks and highest-volatility stocks in 33 countries' stock markets between 1990 and 2011, and found that, on average, you would have made far more money by buying the former than the latter. A portfolio that held the 10% of stocks with lowest historical volatility did 18% per year better, on average, than the decile containing the most-volatile stocks.

Not surprisingly, returns like these have garnered a significant amount of attention over the years, especially since they fly in the face of the standard model for how the markets work. And there have been many attempts to explain the low-volatility anomaly away.

One recent attempt was launched in mid-June by Larry Swedroe, chief research officer at Buckingham Strategic Wealth. He argued that "the performance of the low-volatility factor is actually well explained by exposure to other factors." In layman's terms, he means that the low-volatility anomaly is really other anomalies in disguise.

The other factors to which Swedroe is referring are those made famous by University of Chicago finance professor (and Nobel laureate) Eugene Fama and Dartmouth College professor Ken French: The well-known tendencies for small-cap stocks to outperform large-caps, for value stocks to outperform growth stocks, for more-profitable firms to outperform less-profitable ones, and so forth.

Swedroe's argument is flawed, however, Baker told Barron's. That's because the lowest-volatility stocks do not have constant exposures over time to the Fama/French factors. That is, sometimes a portfolio of the lowest-volatility stocks will be dominated by, say, small-cap value stocks, and at other times by, say, large-cap growth ones. To replace a low-volatility stock strategy with a portfolio of ETFs that are benchmarked to the Fama/French factors, you'd have to know in advance how those exposures will change going forward.

Good luck with that.

By investing directly in low-volatility stocks, you don't need to know in advance which sector of the market will be less volatile. "The ingenuity of low volatility is that it automatically avoids stocks that are exposed to areas of increasing uncertainty," Baker told me. "It is automatically adaptive."

Below is a list of the 10 lowest-volatility stocks, courtesy of the website Haugen created a number of years ago, that are also recommended by at least one of the top-performing advisers monitored by my Hulbert Ratings.

Note carefully that, as Baker mentioned, the low-volatility strategy is dynamic, dominated at different times by different sectors and investment styles. Currently, the list is dominated by energy stocks. More-diversified bets on the strategy are available with two ETFs: The S&P 500 Low Volatility ETF mentioned above, with an expense ratio of 0.25% (or $25 for every $10,000 invested) and the iShares Edge MSCI Minimum Volatility USA ETF (USMV), with an expense ratio of 0.15%.

-- Aflac (AFL)

-- Amdocs (DOX)

-- American States Water (AWR)

-- Atmos Energy (ATO)

-- DTE Energy (DTE)

-- Duke Energy (DUK)

-- McDonald's (MCD)

-- NextEra Energy (NEE)

-- OGE Energy (OGE)

-- WEC Energy Group (WEC)

Mark Hulbert is a regular contributor to Barron's. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

(END) Dow Jones Newswires

June 25, 2019 12:02 ET (16:02 GMT)

11:58 ET - Should the strike at Codelco's Chuquicamata copper mine continue for an extended period of time, then it will likely cause copper's global supply deficit to widen -- bullish news for traders, says Chris LaFemina from Jefferies. However, a larger deficit depends on demand staying healthy, something that without a trade deal between the US and China may not happen. "We believe progress on the US-China trade negotiations is critical in the case of copper," says LaFemina. "Recent rhetoric from both sides is not encouraging, and copper mining equities are likely to be highly volatile in the near term as a result." Copper futures have broken the $6,000 per metric ton level today on the London Metal Exchange, and are currently trading up 1.4% to $6,045 per ton. (kirk.maltais@wsj.com; @kirkmaltais)

(END) Dow Jones Newswires

June 25, 2019 11:58 ET (15:58 GMT)

By Eric Morath and Likhitha Butchireddygari

WASHINGTON -- Americans purchased fewer new homes in May, a sign the housing sector remains on somewhat uneven footing.

Purchases of newly built single-family homes decreased 7.8% to a seasonally adjusted annual rate of 626,000 in May, the Commerce Department said Tuesday. It was the slowest pace of sales since December.

Economists surveyed by The Wall Street Journal had expected a sales pace of 683,000 homes in May.

The monthly decline was driven by an unusually large decrease in sales in the West.

"Any time new home sales are up or down sharply because of one region, there is good reason to suspect that the move is fluky," Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a note to clients. He said strong sales of previously owned homes in May lessens any concern about the broader housing market.

Sales data can be volatile and subject to revisions. The May decrease came with a margin of error of plus or minus 14.7 percentage points. Sales in April were revised up modestly to a 679,000 pace, while March sales were revised down to 705,000.

More broadly, new-homes sales have bounced back from a slump last summer and fall but remain below the postrecession high touched in November 2017. Sales are about half what they were during the peak of the housing bubble in 2005.

New-home sales are a relatively narrow slice of all U.S. home sales -- about 90% of homes purchased in the U.S. are previously owned. Sales of previously owned homes rose in May, increasing 2.5% to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said last week.

The two markets moved in opposite directions last month.

Mounting concerns about the global economy have pushed down borrowing costs, and that appears to be aiding the market for previously owned homes. Mortgage rates are down more than a percentage point from late last year, according to Freddie Mac. That helps make properties more affordable for buyers who finance their purchases.

Low unemployment and rising wages are putting more households in a position to buy, somewhat insulating the broader real-estate sector from a global slowdown.

Tuesday's report showed the number of new homes for sale in May would last 6.4 months at the recent pace. That is up from 5.6 months a year earlier. The median sales price of a new home in May was $308,000, down from $316,700 a year earlier. But lower prices and more supply didn't stoke better demand last month.

While sales fell sharply in the Northeast and West, they rose in the South to the highest level in a decade. That is a positive sign because the South is the largest region for new-home sales.

Write to Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:57 ET (15:57 GMT)

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           106.94-95      107.29-30  -0.32   107.41   106.78  -2.41 
EUR/USD Euro            1.1384-87     1.1397-400  -0.11   1.1415   1.1378  -0.73 
GBP/USD U.K.            1.2720-22      1.2741-43  -0.16   1.2782   1.2710  -0.30 
USD/CHF Switzerland     0.9726-30      0.9719-23  +0.07   0.9775   0.9693  -0.90 
USD/CAD Canada          1.3163-68      1.3178-83  -0.11   1.3198   1.3153  -3.48 
AUD/USD Australia       0.6972-76      0.6960-64  +0.17   0.6975   0.6953  -1.11 
NZD/USD New Zealand     0.6650-56      0.6616-22  +0.51   0.6656   0.6616  -1.00 
 
Euro Rates 
 
EUR/JPY Japan           121.74-79      122.29-33  -0.45   122.48   121.65  -3.13 
EUR/GBP U.K.            0.8949-52      0.8947-50  +0.02   0.8965   0.8917  -0.44 
EUR/CHF Switzerland     1.1073-76      1.1079-82  -0.05   1.1126   1.1063  -1.62 
EUR/CAD Canada          1.4981-91      1.5019-29  -0.25   1.5050   1.4982  -4.18 
EUR/AUD Australia       1.6319-29      1.6364-74  -0.27   1.6401   1.6318  +0.37 
EUR/DKK Denmark         7.4653-60      7.4661-68  -0.01   7.4674   7.4650  -0.01 
EUR/NOK Norway         9.6870-920      9.6637-87  +0.24   9.7027   9.6643  -2.21 
EUR/SEK Sweden        10.5349-449    10.5722-822  -0.35  10.5919  10.5182  +3.81 
EUR/CZK Czech Rep.     25.470-500      25.550-80  -0.31   25.596   25.483  -0.88 
EUR/HUF Hungary       322.89-3.29      323.47-87  -0.18   324.60   322.93  +0.64 
EUR/PLN Poland          4.2542-58      4.2525-41  +0.04   4.2587   4.2500  -0.80 
 
Yen Rates 
 
AUD/JPY Australia        74.57-61       74.69-73  -0.16    74.86    74.33  -3.49 
GBP/JPY U.K.            136.02-08      136.67-73  -0.48   136.84   135.80  -2.75 
CAD/JPY Canada           81.23-27       81.39-43  -0.20    81.50    80.98  +1.11 
NZD/JPY New Zealand      71.14-18       70.98-01  +0.20    71.28    70.97  -3.37 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.     22.362-412      22.408-58  -0.21   22.464   22.381  -0.15 
USD/HUF Hungary         283.51-91      283.71-04  -0.07   285.14   283.31  +1.33 
USD/DKK Denmark         6.5577-87     6.5497-507  +0.12   6.5618   6.5425  +0.72 
USD/NOK Norway         8.5088-148     8.4766-826  +0.38   8.5225   8.4751  -1.50 
USD/PLN Poland          3.7370-75      3.7309-14  +0.16   3.7403   3.7261  -0.09 
USD/RUB Russia         62.791-861      62.519-89  +0.43   62.905   62.499  -9.27 
USD/SEK Sweden         9.2545-635     9.2746-836  -0.22   9.2937   9.2409  +4.59 
USD/ZAR S. Africa    14.2833-3133    14.3488-788  -0.46  14.3761  14.2667  -0.44 
 
USD/CNY China          6.8788-808      6.8760-80  +0.04   6.8847   6.8668  +0.02 
USD/HKD Hong Kong       7.8102-07      7.8087-92  +0.02   7.8111   7.8049  -0.27 
USD/MYR Malaysia       4.1273-323      4.1400-50  -0.31   4.1465   4.1286  -0.07 
USD/INR India           69.240-60      69.263-83  -0.03   69.371   69.231  -0.46 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines    51.390-410      51.320-40  +0.14   51.410   51.310  -2.10 
USD/SGD Singapore       1.3522-32      1.3528-38  -0.04   1.3542   1.3520  -0.75 
USD/KRW S. Korea     1153.43-5.43   1153.67-5.67  -0.02  1156.90  1153.12  +3.60 
USD/TWD Taiwan          31.044-74      30.930-60  +0.37   31.129   30.851  +1.56 
USD/THB Thailand        30.710-30      30.660-80  +0.16   30.760   30.610  -4.95 
USD/VND Vietnam         23273-343      23263-333  +0.04    23309    23259  +0.49 
 
USD/BRL Brazil         3.8294-324      3.8232-62  +0.16   3.8376   3.8198  -1.30 
USD/MXN Mexico        19.2095-395   19.1888-2188  +0.11  19.2461  19.1633  -2.16 
USD/ARS Argentina     42.2033-355    42.4062-386  -0.48  42.4779  42.1507 +12.15 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 11:50 ET (15:50 GMT)

UnitedHealth Group Inc. bought PatientsLikeMe, a company that helps connect people who have similar health conditions, after the startup was forced to divest an investment by a Chinese firm.

The company will become part of UnitedHealth’s research operation, according to an email PatientsLikeMe sent to customers. UnitedHealth Group is the parent of the largest U.S. health insurer, UnitedHealthcare, and a rapidly growing health-services arm called Optum.

The deal reflects the deep appetite for patient data in the health industry, with pharmaceutical and other life-sciences companies as well as insurers, technology companies and health-care providers all eager to tap new sources of information in developing treatments and ways to manage care.

PatientsLikeMe bills itself as the “world’s largest personalized health network,” and it says that more than 650,000 people with 2,900 conditions have helped generate data. The company calls its site “an unprecedented source of real-world evidence.”

The acquisition closed on June 19, according to the PatientsLikeMe email. Terms weren’t disclosed.

The sale to UnitedHealth came after an investment in PatientsLikeMe by Shenzhen-based digital health company iCarbonX, which is backed by Chinese internet giant Tencent Holdings Inc., came under scrutiny by the Committee on Foreign Investment in the U.S. Cfius, an interagency panel that vets foreign investments for security risks, demanded iCarbonX unwind its 2017 investment.

ICarbonX couldn’t immediately be reached for comment.

A Treasury Department spokesman said Cfius doesn’t comment on specific cases.

PatientsLikeMe declined to comment.

In the email to customers, PatientsLikeMe said it is “joining the research and development arm of UnitedHealth Group.” The company told customers that “there will be no transfer of your personal data inconsistent with the original consent, from the PatientsLikeMe’s secure database.”

The company also said it was “committed to using your data for good, protecting your data, and advancing our understanding of diseases through your partnership.”

“We look forward to collaborating on patient-first research and building upon the supportive communities patients have come to rely on,” a UnitedHealth spokesman said in a statement.

The deal was first reported by MobiHealthNews.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:50 ET (15:50 GMT)

--The largest labor group in Zimbabwe has threaten to mobilize members for mass actions and protests in the wake of the government's decision to ban the use of foreign currencies, Reuters reported Tuesday.

--On Monday, Zimbabwe said its interim RTGS dollar was the sole legal currency in the country, the report said.

--Zimbabwe's central bank raised its overnight lending rate from 15% to 50% as it readies for the reintroduction of the Zimbabwe dollar, the report said.

Full story: https://www.reuters.com/article/zimbabwe-economy/update-1-zimbabwe-labour-group-threatens-protests-over-ban-on-foreign-currencies-idUSL8N23W44I

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:49 ET (15:49 GMT)

 
                         GBP    JPY *SN      EUR        USD 
                         ---      ---        ---        --- 
  O/N                0.67388   -0.09050   -0.47229    2.34925 
  1WK                0.69000   -0.14583   -0.44271    2.37600 
  1MO                0.72175   -0.14367   -0.42200    2.40175 
  2MO                0.76100   -0.09650   -0.40214    2.34950 
  3MO                0.77275   -0.06700   -0.37871    2.33288 
  6MO                0.85938   -0.01700   -0.37500    2.20988 
  12MO               0.95538    0.04133   -0.28500    2.17875 
 
*SN=spot next 
 
Rates are effective two days hence. 
Source: ICE via FactSet 
 

(END) Dow Jones Newswires

June 25, 2019 11:45 ET (15:45 GMT)

All rates compared to previous day's fixing: 
 
                                 Current     Previous 
                                 -------     -------- 
  O/N                           -0.47229     -0.47671 
  1WK                           -0.44271     -0.45071 
  1MO                           -0.42200     -0.42357 
  2MO                           -0.40214     -0.40914 
  3MO                           -0.37871     -0.37771 
  6MO                           -0.37500     -0.37800 
  12MO                          -0.28500     -0.28100 
 
Rates are effective two days hence. 
Source: ICE via FactSet 
 

(END) Dow Jones Newswires

June 25, 2019 11:45 ET (15:45 GMT)

All rates compared to previous day's fixing: 
 
                                 Current     Previous 
                                 -------     -------- 
  O/N                            2.34925      2.34750 
  1WK                            2.37600      2.36875 
  1MO                            2.40175      2.40438 
  2MO                            2.34950      2.37663 
  3MO                            2.33288      2.34925 
  6MO                            2.20988      2.22013 
  12MO                           2.17875      2.20213 
 
Rates are effective two days hence. 
Source: ICE via FactSet 
 

(END) Dow Jones Newswires

June 25, 2019 11:45 ET (15:45 GMT)

By Anna Wilde Mathews

UnitedHealth Group Inc. bought PatientsLikeMe, a company that helps connect people who have similar health conditions, after the startup was forced to divest an investment by a Chinese firm.

The company will become part of UnitedHealth's research operation, according to an email PatientsLikeMe sent to customers. UnitedHealth Group is the parent of the largest U.S. health insurer, UnitedHealthcare, and a rapidly growing health-services arm called Optum.

The deal reflects the deep appetite for patient data in the health industry, with pharmaceutical and other life-sciences companies as well as insurers, technology companies and health-care providers all eager to tap new sources of information in developing treatments and ways to manage care.

PatientsLikeMe bills itself as the "world's largest personalized health network," and it says that more than 650,000 people with 2,900 conditions have helped generate data. The company calls its site "an unprecedented source of real-world evidence."

The acquisition closed on June 19, according to the PatientsLikeMe email. Terms weren't disclosed.

The sale to UnitedHealth came after an investment in PatientsLikeMe by Shenzhen-based digital health company iCarbonX, which is backed by Chinese internet giant Tencent Holdings Inc., came under scrutiny by the Committee on Foreign Investment in the U.S. Cfius, an interagency panel that vets foreign investments for security risks, demanded iCarbonX unwind its 2017 investment.

ICarbonX couldn't immediately be reached for comment.

A Treasury Department spokesman said Cfius doesn't comment on specific cases.

PatientsLikeMe declined to comment.

In the email to customers, PatientsLikeMe said it is "joining the research and development arm of UnitedHealth Group." The company told customers that "there will be no transfer of your personal data inconsistent with the original consent, from the PatientsLikeMe's secure database."

The company also said it was "committed to using your data for good, protecting your data, and advancing our understanding of diseases through your partnership."

"We look forward to collaborating on patient-first research and building upon the supportive communities patients have come to rely on," a UnitedHealth spokesman said in a statement.

The deal was first reported by MobiHealthNews.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:40 ET (15:40 GMT)

By Teresa Rivas

The long slide of Kraft Heinz stock has been painful for many investors, and has been fueling reports of a rift between Warren Buffett and 3G Capital. Buffett denies the rumors and said he has faith in new leadership at the troubled packaged-foods company.

The back story. Kraft Heinz (ticker: KHC) hasn't had a great year. The stock, down 29% in 2019 after falling nearly 52% in the trailing 12-month period, was like any other troubled consumer-staple company in 2018. But its problems grew in February on weaker-than-expected fourth-quarter results, which came with news that it was cutting its dividend and taking a $15.4 billion asset write-down, amid an investigation by the Securities and Exchange Commission.

Buffett, who lost about $1 billion on Berkshire Hathaway's (BRK.B) investment in Kraft, was among those who admitted to having overpaid for the company. Berkshire and 3G Capital acquired Kraft in 2013 and oversaw its accumulation of debt, which has been a big overhang for the stock. They also backed the merger of Kraft and Heinz in 2015.

What's new. Buffett denied that the problems at Kraft are causing tension between him and 3G Capital. He said that 3G cofounder Jorge Paulo Lehmann is a "good friend," whom he planned to see later this month at the Allen & Co.'s Sun Valley conference. Last month they met at Berkshire Hathaway's annual meeting.

Buffett also expressed confidence in Kraft's incoming CEO, Miguel Patricio, who takes over on July 1. (While he is no longer on the company's board, Berkshire Hathaway Vice Chairman Greg Abel represents his firm as a director.)

Looking ahead. This isn't the first time that Buffett has faced uncomfortable questions related to Kraft, and while the investment may be the biggest loser in the Berkshire portfolio, that position had to be occupied by something -- although perhaps something less dramatic, investors might have hoped.

Criticism of 3G by Buffett would seem out of context with his involvement in Kraft. Buffett served on its board from 2015 to 2018 -- a period that included the Heinz merger and many now-criticized cost cuts -- and has long defended 3G's management strategy.

Shares of Kraft were up 0.3% to $30.71 Tuesday morning, while the S&P 500 was down 0.4%.

Write to Teresa Rivas at teresa.rivas@barrons.com

(END) Dow Jones Newswires

June 25, 2019 11:34 ET (15:34 GMT)

1532 GMT - A warning received from the German Vehicle Authority to recall over 40,000 vehicles sold in Europe has prompted Daimler to lower its profit outlook for the second quarter and 2019. The warning is negative for perceptions of Daimler's governance in the short term, especially considering the notice is the third in a space of one year. Daimler's governance outlook could improve in the medium to long term, should recently-appointed CEO Ola Källenius act promptly to address the Company's corporate culture and operational challenges in order to avoid future recurring revisions, which are without precedent in the German car industry. (ricardo.aceves@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 11:32 ET (15:32 GMT)

11:29 ET - The dollar weakens to its lowest level against the Japanese yen since January, as weak US consumer confidence and housing data sends yields on 10-year US government bonds below 2%. The dollar was recently down 0.4% to Y106.92, while 10-year yields stood at 1.982%. Recent dovish signals from the Federal Reserve and faltering US data have recently weighed on the dollar, with the WSJ Dollar Index on track for its sixth consecutive day of losses. The measure was recently down 0.1% at 89.43. (ira.iosebashvili@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 11:29 ET (15:29 GMT)

By Ulrike Dauer

FRANKFURT--German shareholder protection associations DSW and SdK are advising their members to turn down EP Global Commerce's takeover offer for Metro AG (B4B.XE), an offer both organizations consider insufficient.

EPGC, an investment vehicle owned by Czech and Slovak partners, offered 16 euros ($18.22) per ordinary share and EUR13.80 per preferred share, valuing the German retailer at EUR5.8 billion. Metro shunned the offer, but said it would comment further once the full offer document was available.

Jella Benner-Heinacher, deputy managing director of DSW, said the offer price was too low.

"Considering that EPGC aims to take full control of Metro, even a premium of 30% over the current share price wouldn't be sufficient," she said.

EPGC's offer represented a premium of about 3% over Friday's closing price of ordinary shares.

"The offer seems too low to be accepted," said SdK spokesperson Daniel Bauer. He noted that Metro is in the midst of a restructuring process, which isn't a good time to sell.

Nevertheless, two large Metro shareholders have decided to sell their shares to EPGC. Investor Haniel will divest its 15.2% share, while Ceconomy SE (CEC.XE) has sold its share of approximately 9% to EPGC, retaining around 1%.

Write to Ulrike Dauer at ulrike.dauer@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:28 ET (15:28 GMT)

By Will Horner

U.S. stocks slipped Tuesday, weighed down by declines in technology shares.

The Dow Jones Industrial Average fell 68 points, or 0.3%, to 266548. The S&P 500 lost 0.4% and the Nasdaq Composite was down 0.8%.

Major indexes have paused their June rally in recent days as investors have awaited further details on the direction of monetary policy and trade. Fed Chairman Jerome Powell is scheduled later Tuesday to deliver remarks that could offer clues on the central bank's thinking about interest rates. At its last meeting, the Fed suggested it could cut rates in the coming months if economic risks like the U.S.-China trade conflict worsen.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Technology shares lagged behind major indexes Tuesday, with Facebook falling 1.9% amid scrutiny over its plan to roll out its own cryptocurrency, Libra. Lawmakers said on Monday they would hold a hearing next month to discuss the cryptocurrency.

Other companies whose privacy practices have lately come under fire among regulators retreated, with Alphabet down 2.2% and Amazon.com down 1.3%.

Meanwhile, Allergan shares jumped 26% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 16%.

Elsewhere, the Stoxx Europe 600 fell 0.1%, weighed down by losses among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 8% and Altran shares up 22%.

In commodities, gold jumped 1% to $1,432.40 a troy ounce, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global-growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Earlier, Japan's Nikkei Stock Average fell 0.4%, while the Shanghai Composite fell 0.9% and snapped a six-session winning streak.

Akane Otani contributed to this article

(END) Dow Jones Newswires

June 25, 2019 11:27 ET (15:27 GMT)

(MORE TO FOLLOW) Dow Jones Newswires

June 25, 2019 11:27 ET (15:27 GMT)

By Alexander Osipovich

Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.

That is the picture that emerges from bitcoin futures listed on CME Group Inc., the biggest U.S. exchange operator. Futures are contracts that let traders bet on whether an asset -- in this case, bitcoin -- will rise or fall.

Hedge funds and other money managers held about 14% more bearish "short" positions in CME bitcoin futures last week than they did bullish "long" positions, according to a recent Commodity Futures Trading Commission report.

Other large traders were even more bearish. "Other reportables" -- a loose category of firms that don't necessarily manage money for outside investors -- held more than three times as many short positions in bitcoin futures as long ones, the CFTC report shows.

So who is the optimist? The report shows it is mostly small investors taking the other side of the trade. Among traders with fewer than 25 bitcoin contracts, a category that likely captures many individuals placing bets in bitcoin, long wagers outnumbered short bets by 4 to 1.

"Traditional market participants may be more skeptical of [bitcoin] than millennial day traders," said George Michalopoulos, a portfolio manager with Chicago fund manager Typhon Capital Management LLC, although he stressed that his views were speculative and that it is hard to know what is driving the CFTC's numbers.

The CFTC report, which came out Friday, reflected the positioning of market players on June 18, when one bitcoin could buy around $9,000. The cryptocurrency was trading at about $10,900 late Monday afternoon.

Though it comes with a lag, the weekly CFTC report offers a glimpse into how various types of traders are positioned in bitcoin futures. Commodity traders closely follow similar CFTC reports on futures like crude oil, wheat and corn for hints of what is driving the market.

The CFTC data shows that hedge funds have been short bitcoin since February, though they recently pared their bearish bets. On June 11, short bets among hedge funds outweighed long bets by 47%, a gap that narrowed to 14% the following week.

Such data don't necessarily mean hedge funds are placing outright bets that bitcoin will drop. The short bets could also be part of hedging strategies: for instance, a fund with a portfolio of bitcoins might go short at CME as insurance against the value of bitcoin dropping.

Trading activity has grown in CME's bitcoin futures in recent months, along with the rebound in bitcoin's price. In May, average daily trading volume in the CME contract hit a record $515 million, the exchange operator says.

L. Asher Corson, a cryptocurrency analyst at Chicago proprietary trading firm Consolidated Trading, said traders who want to short bitcoin don't have many choices besides CME.

One option is for them to borrow bitcoins from another trading firm, sell them and return an equivalent amount of bitcoins to that firm later -- a process similar to how short selling works in stocks. But the difference is that, in the volatile bitcoin market, few firms are willing to offer that service to short sellers because of the risk of their customers defaulting, Mr. Corson said.

"CME right now is providing a unique ability for the larger players to have massive short positions with very low counterparty risk," Mr. Corson said.

Volumes in CME's bitcoin futures contract got a lift when a competing U.S. exchange operator that offered a similar contract, Cboe Global Markets Inc., recently discontinued it. Cboe's last bitcoin futures contract expired last week.

But CME is set to face additional competition soon. Intercontinental Exchange Inc., owner of the New York Stock Exchange, is set to begin testing of a new bitcoin futures contract in July. LedgerX, a startup trading platform for bitcoin options, plans to launch its own futures on the cryptocurrency after the CFTC said Tuesday it had won approval to become a futures exchange. And a group of prominent financial firms, including TD Ameritrade Holding Corp. and Fidelity Investments, are backing a venture called ErisX, which plans to offer both futures and spot trading of cryptocurrencies.

Volumes in CME's contract remain a fraction of the billions of dollars' worth of daily activity in the bitcoin "spot" market, where actual units of the digital currency change hands. But some recent studies suggest that the size of the bitcoin spot market is inflated because of rampant fake trading at cryptocurrency exchanges.

That should prompt traders to take a closer look at CME bitcoin futures, analysts from JPMorgan Chase & Co. said in a June 14 report. As a regulated exchange, CME bars wash trading -- in which traders engage in back-and-forth buying and selling to generate fake volume -- and violators can be subject to both CME and CFTC fines. That makes CME's volumes more trustworthy.

"The importance of the listed futures market has been significantly understated," the JPMorgan analysts wrote.

To receive our Markets newsletter every morning in your inbox, click here.

Write to Alexander Osipovich at alexander.osipovich@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 11:25 ET (15:25 GMT)

11:24 ET - Oil prices reverse modest declines to turn slightly higher after a tweet from President Trump in which he threatens to obliterate Iran if it attacks "anything American." That appears to be a change from earlier statements warning Iran against any attack that would result in the death of an American. Trump adds that an earlier comment from Iran, in which President Rouhani called new US sanctions on Iran "outrageous and stupid" among other things, was "very ignorant and insulting." WTI, which was down 0.4% before the comments, is now trading 0.2% higher at $57.99 as investors await US inventory data from trade group API at 4:30 pm ET. (dan.molinski@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 11:24 ET (15:24 GMT)

Online brokerage stocks fell toward the lowest levels of the year Tuesday, after Raymond James analyst Patrick O'Shaughnessy cut his price targets given the recent sharp drop in Treasury yields. Shares of E-Trade Financial Corp. (ETFC) lost 1.3%, putting them on track for the lowest close since Jan. 2; TD Ameritrade Holding Corp. (AMTD) fell 0.3% toward the lowest close since Dec. 24; and Charles Schwab Corp. (SCHW) edged up 0.1%, but had fallen as much as 2.1% earlier to the lowest intraday price seen since Dec. 26. O'Shaughnessy cut his price target for E-Trade's stock to $57 from $60, for TD Ameritrade to $60 from $62 and for Schwab to $46 from $51. The yield on the 10-year Treasury note fell 3.6 basis points to 1.985%, which would be the first close below the 2.00% mark (http://www.marketwatch.com/story/10-year-treasury-yield-dips-below-2-as-iran-jitters-and-trade-frictions-spur-haven-demand-2019-06-25) since Nov. 8, 2016. O'Shaughnessy said a lower interest rate environment weighs on net interest income. In addition, he said the continued decline in the yield curve, with the 10-year Treasury yield now below overnight rates, is likely weighing on securities re-investment yield for online brokers. Meanwhile, the SPDR Financial Select Sector ETF (XLF) slipped 0.2%, while the Dow Jones Industrial Average lost 31 points, or 0.1%.

-Tomi Kilgore

(END) Dow Jones Newswires

June 25, 2019 11:21 ET (15:21 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

By Cara Lombardo, Jonathan D. Rockoff and Dana Cimilluca

AbbVie Inc. agreed to buy Allergan PLC for about $63 billion, as the two big drugmakers bet a combination will deliver new sources of growth they have struggled to find on their own.

The takeover is worth about $188 a share in cash and stock, the companies said in a statement. The price represents a 45% premium over Allergan's closing share price Monday of $129.57. If not for a surge in the shares in recent days on expectations for a breakup of the company, the premium would be even bigger.

The Wall Street Journal reported earlier Tuesday that the deal was imminent.

Buying Dublin-based Allergan would deliver a dominant position in the $8 billion-plus market for Botox and other beauty drugs, as well as a number of popular eye treatments, as AbbVie braces for the end of patent protection for the world's top-selling drug, Humira.

The companies' portfolios have some overlap in treatments for brain, women's-health, stomach and other disorders, though the combination would take AbbVie into the new realm of frown-line smoothing, eyelash lengthening and double-chin removal.

Allergan's nearly $16 billion in yearly revenue would also give AbbVie another source of cash to hunt for a new generation of products.

Lately, Wall Street has been clamoring for change at Allergan, with its shares trading at a fraction of their peak of more than $330 in the summer of 2015. Analysts have been saying the company could split into two pieces, but few expected CEO Brent Saunders to pull off a sale, especially at such a lofty premium.

AbbVie CEO Richard Gonzalez said the company's board started discussions about a year ago that led to a decision to pursue a large acquisition. AbbVie wanted to boost the size of its non-Humira business, Mr. Gonzalez said Tuesday on a conference call with reporters.

The company zeroed in on Allergan about five to six months ago, Mr. Gonzalez said.

Mr. Gonzalez said he let Mr. Saunders know that AbbVie would be interested if Allergan decided to explore strategic options.

Discussions continued in April, Mr. Gonzalez said, when Mr. Saunders visited Mr. Gonzalez in Chicago. More talks and due diligence followed, leading to Tuesday's announcement.

Mr. Gonzalez will remain chairman and CEO of AbbVie, which will continue to be headquartered in the Chicago area. Two Allergan directors including Mr. Saunders will join AbbVie's board when the deal closes.

About two-thirds of the purchase price is in cash, with Allergan stockholders receiving 0.8660 AbbVie shares and $120.30 in cash for each share they own, for total consideration of $188.24 a share.

Allergan stock jumped 27% to $164.65 in morning trading Tuesday while AbbVie shares fell 14% to $67.20.

The deal, worth about $80 billion including debt, is the second this year that would knit together two of the world's biggest pharmaceutical companies. Earlier this year, Bristol-Myers Squibb Co. agreed to pay $74 billion for rival cancer drugmaker Celgene Corp.

AbbVie has been pursuing deals of various sizes in an effort to diversify beyond Humira ever since the company was split from Abbott Laboratories in 2013.

Humira, a rheumatoid arthritis treatment, rang up $19.1 billion of AbbVie's $32.8 billion of revenues last year. But lower-priced versions, known as biosimilars, are on sale in Europe and are scheduled to go on sale in the U.S. in 2023.

AbbVie had tried to strike a big deal in 2014, when it reached an agreement to buy Irish rare-disease drugmaker Shire for $54 billion. But AbbVie called off the deal later that year amid efforts by the Obama administration to restrict such tax-lowering transactions, known as inversions.

Other attempts to find new big-selling cancer, immune and other drugs have also stumbled, except for a roughly $20 billion deal in 2015 for Pharmacyclics Inc., the maker of the Imbruvica cancer therapy. AbbVie shares the treatment's rights with Johnson & Johnson.

But Imbruvica, which generated $3.6 billion in revenue for AbbVie last year, can't alone make up for the approaching loss of Humira sales.

In Allergan, AbbVie will take on a once-highflying drugmaker that has also struggled to find new sales growth.

Allergan's shares soared to more than twice their current level four years ago as the company and Mr. Saunders became Wall Street darlings following a series of bold acquisitions. But Allergan's luster has faded in the past few years as opportunities for deal making have dwindled along with the stock and only its aesthetic-medicine business grew to investors' satisfaction.

Allergan, which started as a California pharmacy and then carved a niche as an eye-treatment business, rocketed into the ranks of big drugmakers after exploiting Botox's use smoothing frown lines and wrinkles.

A combination with Irish drugmaker Actavis in 2015 transformed the company. Mr. Saunders has been CEO since 2014 and chairman since 2016.

For a time, Pfizer Inc. was going to buy Allergan for about $150 billion, but that transaction, also an inversion, fell through amid pushback from the Obama administration.

Then investors soured on the company, partly due to concerns that it wouldn't be able to replace sales from eye drug Restasis, which was losing its patent protection.

Investors also drove down the stock on a failed plan to bolster Restasis by selling its patent rights to an Indian tribe, as well as mixed messages from management about the company's prospects. Rivals are trying to edge in on Botox, and the company's efforts to develop new drugs, like a depression treatment, faltered.

The concerns triggered pressure from Wall Street. Mr. Saunders said on the company's earnings call last month that there is a sense of urgency within the company and pledged that the board was reviewing all options.

Analysts predicted Allergan could split itself in two, with one business dedicated to fast-growing brands and segments such as aesthetics and eye care, and the other focused on gastrointestinal and women's-health treatments.

Allergan in recent years came in the crosshairs of David Tepper's activist hedge fund Appaloosa LP, which criticized the company's performance and pressured it to separate the roles of chairman and CEO. The company had said it would separate the roles at its next leadership transition. In May, Allergan shareholders voted down a shareholder proposal from Appaloosa to separate the positions.

Also to satisfy investors, Allergan in the past year tried to sell its women's health and anti-infective drug businesses but said in January it would keep the unit.

--Peter Loftus contributed to this article.

Write to Cara Lombardo at cara.lombardo@wsj.com, Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:14 ET (15:14 GMT)

By Lawrence C. Strauss

Ever since it was spun off from Abbott Laboratories (ticker: ABT) at the end of 2012, AbbVie has sported an attractive yield. AbbVie (ABBV) has paid out a big dividend powered by its blockbuster drug Humira, used to treat rheumatoid arthritis and other conditions, and the stock's yield was recently at 5.5%.

In the wake of Tuesday's announcement that the company plans to acquire Allergan (AGN) for about $63 billion, that yield was moving higher in early trading.

Investors' greeted the announcement with skepticism. AbbVie stock was down 15% to trade around $67. That pushed the yield to 5.8% based on what AbbVie paid out in dividends last year.

The skepticism isn't new as Humira will face more competition from new products that competitors roll out.

As of Monday's close, AbbVie had a one-year return of -12%, and the Allergan announcement marks an attempt for Abbvie to find new ways to boost growth.

In a press release on Tuesday, AbbVie said the company "will produce robust cash flow to support continued dividend growth."

AbbVie's trailing dividend yield has steadily moved up since early 2018 as the stock has come under pressure.

Income investors will be watching closely.

Write to Lawrence C. Strauss at lawrence.strauss@barrons.com

(END) Dow Jones Newswires

June 25, 2019 11:12 ET (15:12 GMT)

By Dave Sebastian

Brighthouse Financial Inc. (BHF) shares fell more than 13% to $33.10 Tuesday after two investment banks downgraded their ratings of the life-insurance company.

Credit Suisse Group AG (CSGN) deemed Brighthouse Financial underperforming, downgrading it from a neutral rating. Goldman Sachs Group Inc. (GS) downgraded its ratings to sell from neutral.

Credit Suisse slashed Brighthouse's per-share price target to $22 from $35, while Goldman Sachs cut it to $32 from $39.

Credit Suisse analysts said the stock is expensive given the volatility of its distributable earnings and new accounting pressure. Lower interest rates could reduce the company's distributable earnings from 2019 to 2021 by $1 billion, "though favorable equity markets may have largely offset it," Credit Suisse analysts said in a research note, adding that the condition illustrates Brighthouse's sensitivity to markets compared with its peers.

Changes in accounting standards in 2021 by the Financial Accounting Standards Board, or FASB, could reduce companies' book value, Credit Suisse analysts said.

Goldman tied its downgrade to how weakened distributable earnings present risks to the company's capital plans.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:09 ET (15:09 GMT)

Ligado Networks LLC’s plan to develop some of the nation’s most valuable airwaves is being undercut by disagreements between U.S. regulators over the deployment of 5G technology—miring the company’s business in a holding pattern and pressuring its finances.

Ligado, the wireless venture formerly known as LightSquared Inc., has waited more than 1,200 days for permission to repurpose a swath of wireless spectrum that has emerged as a sticking point as federal agencies debate whether and how to build out proposed 5G networks.

The Federal Communications Commission has the final say on these proposals and has signaled a willingness to proceed. Ligado said in a petition to the agency on Tuesday that other U.S. officials are, “for whatever reason,” fighting 5G deployment.

“The holdup appears to be a debate about politics—one that pits the expert agency designated by Congress to make spectrum decisions against certain parts of the executive branch,” the petition said.

China and the U.S., viewing 5G as a transformational technology, have been scrambling to launch ultrafast 5G networks that could enable new commercial, military and consumer technologies.

Ligado’s position reflects the limited access of U.S. companies to wireless spectrum blocks that are able to travel long distances and penetrate buildings. Several other countries have been more aggressive in auctioning off those airwaves.

With Ligado’s business stuck in limbo, its access to investment capital is limited and further delay in the approval process could imperil the company’s finances, people familiar with the matter said. The company said the FCC should “tune out the political noise” and cut through competing interests to drive the administration’s wireless policy goals.

“It’s one of the pieces that’s on the chessboard right now and it would be a very decided advantage for the U.S. in terms of innovation for 5G,” said Tom Hazlett, a former FCC chief economist. Yet other agencies have their own missions that may not prioritize 5G rollout, he said.

At a congressional hearing earlier this month, FCC Chairman Ajit Pai said the Commerce Department had thwarted efforts to develop 5G in certain spectrum blocks, over concerns it would interfere with other federal uses.

The Commerce Department and other agencies have warned that rising commercial spectrum use threatens to scramble readings from weather satellites and affect storm forecasts. Weather researchers who rely on National Oceanic and Atmospheric Administration data have raised similar interference concerns about Ligado’s proposal.

Mr. Pai said at the hearing that interagency turf battles had intensified since the departure last month of David Redl, a top Commerce Department official on a range of 5G-related issues, who favored speeding up the rollout.

Sen. Ron Johnson (R. Wis.) said in a letter Tuesday to Commerce Secretary Wilbur Ross that “agencies and individuals within your department are undermining the president’s and Congress’ shared goals” on 5G. The Commerce Department had no immediate comment.

Reflecting a desire to preserve airwaves for government use, military service branches, space technology officials and incumbent satellite users also have expressed skepticism about Ligado’s efforts to repurpose spectrum, according to people familiar with the matter and to FCC documents.

“This is one of the systemic infirmities in U.S. spectrum allocation,” Mr. Hazlett said. “Incumbent interests, just by asking questions, can delay entry by years or even decades.”

The FCC has proposed making available for commercial purposes a small block of spectrum that Ligado needs. The company, though, said it can’t bid unless it can also tap adjacent airwaves for satellite-terrestrial use to build 5G service targeted at utilities, railroads and other industrial users with private communications networks.

Ligado once saw itself as a telecommunications wholesaler, raising billions of dollars on the idea of selling the use of its network to wireless companies that provide high-speed internet service to the public. Regulators rejected those plans in 2011, pushing the company into an expensive, contentious bankruptcy that wrested majority control from its top investor, Philip Falcone.

The company dropped the LightSquared moniker in 2016 after leaving bankruptcy-court protection, reoriented its network proposal and made peace with Global Positioning System manufacturers that complained about potential interference with their equipment.

“One way or another they deserve an answer, even if it’s a no,” said Tom Struble, technology policy manager at the R Street Institute. “Being strung along for so many years while their capital runs out is a much crueler fate.”

Write to Andrew Scurria at Andrew.Scurria@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

The Congressional Budget Office on Tuesday lowered its forecasts for interest rates over the next three decades, amid a marked decline in U.S. government-bond yields since late last year.

The agency estimated the cost of servicing the government’s growing debt load will continue to rise between now and 2049, but not as much as previously thought.

In its annual long-term budget report, CBO projected yields on the 10-year U.S. Treasury note would increase from 2.9% at the end of 2018 to 3.8% in 2029 and 4.6% in 2049—a step down from its June 2018 forecast, when it saw rates rising to 4.8% by 2049.

Lower rates in the coming years would mean a smaller share of government spending devoted to servicing the federal debt.

CBO expects debt payments, the fastest-growing portion of the federal budget, will rise from 1.8% of gross domestic product in 2019, to 3% in 2029 and 5.7% in 2049, below last year’s estimate of 6.3% in 2048.

That would boost total federal spending to 28.2% of GDP by 2049, the highest since World War II, when defense spending soared.

Despite lower rates, federal deficits are projected to rise as government outlays continue to outpace federal tax collections. CBO said federal deficits as a share of GDP would rise from 4.2% in 2019, to 4.5% in 2029 and 8.7% in 2049, well above the 2.7% average over the past 50 years.

Those figures would be even higher if Congress votes later this year to boost federal spending above caps enacted in 2011 that are set to take effect in fiscal year 2020, or if lawmakers vote to extend tax cuts under the 2017 tax-law overhaul.

“The prospect of such large deficits over many years and the high and rising debt that would result, poses substantial risks for the nation and presents policymakers with significant challenges,” CBO Director Phillip Swagel said in a statement Tuesday.

Low interest rates in the years since the financial crisis have held down government borrowing costs,even as debt soared. Economists have predicted that rising deficits coupled with an improving economy would push interest rates up again soon, making debt more expensive to service.

Instead, 10-year Treasury yields have fallen to below 2% from more than 5% in 2006.

Even with interest rates below historical norms, federal debt is projected to continue its march upward, driven by higher spending on Social Security, Medicare and Medicaid. Although revenue is projected to rise during that time, it wouldn’t keep pace with growing federal outlays, CBO said.

The report anticipates that overall federal debt would rise from 78% of GDP in 2019, to 92% of GDP in 2029 and 144% in 2049, the highest in the nation’s history by far, CBO said.

That is also slightly below last year’s estimate, reflecting lower projected emergency spending on natural disasters, higher revenues and lower interest rates.

Deficits have climbed in recent years following the 2017 tax cuts, which constrained federal revenue collection last year, and a two-year budget deal that boosted federal spending above earlier budget caps. Congressional leaders are negotiating a new deal to replace the current one, which expires Oct. 1, and are likely to maintain higher spending levels or even increase them.

“These clear projections should motivate our lawmakers to begin managing the debt immediately, and budgeting responsibly to help America meet its most pressing challenges,” said Michael Peterson, chief executive of the Peter G. Peterson Foundation, which advocates for reducing deficits.

Write to Kate Davidson at kate.davidson@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

 
                       Current Bid-Ask             Previous 
                       ---------------             -------- 
 
  U.S.A.                 1.2741-1.2743        1.2742-1.2744 
  Euro                   1.1179-1.1178        1.1209-1.1207 
  Switzerland            1.2383-1.2390        1.2437-1.2445 
  Japan                  136.70-136.73        136.74-136.77 
  Canada                 1.6790-1.6799        1.6844-1.6853 
  Norway               10.8000-10.8094      10.8252-10.8346 
  Sweden               11.8168-11.8301      11.9111-11.9244 
  Denmark                8.3450-8.3476        8.3674-8.3700 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

Trump Push on Housing Finance Nudges Up Mortgage Costs
Consumer Confidence Slid in June on Trade Tensions
Stocks Slip as Gold and Bitcoin Soar
U.S. New-Home Sales Fell in May
CBO Lowers Long-Term Debt Forecast as Treasury Yields Fall
Home Prices Decelerated in April
Is There a Big Short in Bitcoin?
The Loan That Fueled a Star Investor's Risky 'Illiquid' Bets
Iran Says New U.S. Sanctions End Any Chance of Diplomacy
Stock Exchanges Accuse Government of Ethics Lapse in Market-Data Fight

Investor anxiety about a Trump administration push to overhaul housing finance is showing up in prices in the market for mortgage-backed securities.

A gauge of consumer sentiment deteriorated in June to its lowest level in nearly two years.

U.S. stocks paused, extending a stretch of quiet trading ahead of a speech later Tuesday from Federal Reserve Chair Jerome Powell.

Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing.

The Congressional Budget Office lowered its forecasts for interest rates over the next three decades, amid a marked decline in U.S. government-bond yields since late last year.

The growth of U.S. home prices continued to slow in April in another sign of a weaker-than-expected selling season.

Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.

U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets in retail investment products.

Iran said new U.S. sanctions on its supreme leader closed the door on diplomacy and threatened global stability, as American officials renewed efforts to build a global alliance against Tehran.

The New York Stock Exchange and Nasdaq accused a senior regulator who supervises them of having ethical conflicts, raising the ante in a battle with Washington over how the companies sell market data.

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

Oil Prices Pull Back From Multiweek Highs
EPA Rule Would Have Impact Beyond Smokestacks
Petronas Planning 2020 Budget on  Oil Below $66
Energy & Utilities Roundup: Market Talk
PG&E Bond Prices Jump, While Shares Fall
A Leader of America's Fracking Boom Has Second Thoughts
Trump Calls On Countries to Protect Own Ships in Strait of Hormuz
Trump Imposes New Sanctions on Iran
Building the Wind Turbines Was Easy. The Hard Part Was Plugging Them In.
Newsom Proposes Wildfire Fund to Bolster PG&E, Other Utilities

Oil prices, trading at multiweek highs in recent sessions, cooled although heightened tensions between the U.S. and Iran remained front of mind for the energy market.

The Environmental Protection Agency's decision to scrap Obama-era climate rules for coal-power plants will have far-reaching repercussions if the order withstands legal challenges, advocates on both sides of the issue say.

EXCLUSIVE: Malaysia's state-owned Petronas is adopting a conservative view on oil prices given trade and geopolitical uncertainties, planning next year's budget on the assumption that the average global crude price will be below $66 a barrel.

The latest Market Talks covering Energy and Utilities

PG&E bond prices surged in heavy trading even as shares declined, a divergence that some analysts said reflects uncertainty about how much new equity the bankrupt utility needs to raise to address claims tied to past and future wildfires.

Pioneer Natural Resources, which once promised production to rival Libya, was part of a revolution that helped make the U.S. a global oil player. Now after years of overspending, the company is pulling back.

President Trump called upon countries to protect their own ships passing through the Strait of Hormuz and questioned why the U.S. has provided such protection for years "for zero compensation."

The Trump administration ordered new sanctions that aim to freeze the assets of Supreme Leader Ali Khamenei's office and several Iranian military commanders and include plans to target Foreign Minister Javad Zarif later this week.

In the Oklahoma panhandle, one entrepreneur set out to bring cheap wind power to less windy parts of the country. But there was a big snag: the American power grid.

Gov. Gavin Newsom is proposing a multibillion-dollar wildfire fund to help California's utilities cover mounting fire-related liability costs that have threatened their financial health.

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

AbbVie Strikes Deal to Acquire Allergan for About $63 Billion
GE Reaches Labor Deal With Union Leaders
U.S. Steel Seeks to Make More With Fewer Furnaces
Deutsche Bank's Equities Chief Expected to Leave
American Standard Owner Brings Back Ex-CEO
Ligado's Wireless Plans Caught In 5G Agency Crossfire
Lockheed Receives $562 Million Missile Contract
RealReal's Biggest Hurdle Will Be Keeping It Real After IPO
Biggest U.S. Companies' Working-Capital Performance Hits Six-Year High
Nissan Shareholders Accuse Renault Chairman of Betrayal at Fiery Meeting

AbbVie agreed to buy the maker of Botox for about $63 billion, betting a combination will deliver new sources of growth they have struggled to find on their own.

General Electric reached a tentative four-year agreement with a group of unions after a few weeks of negotiations, keeping a labor peace as the conglomerate restructures operations.

Falling steel prices are adding pressure to U.S. Steel's plan to get better performance from its mills by making overdue repairs and equipment upgrades.

Deutsche Bank's global head of equities is expected to leave the bank, the latest move in a planned downsizing of the German lender's investment bank, according to people familiar with the matter.

In a rare corporate comeback, the ousted chief executive of Lixil Group recovered his job at the Japanese bath and kitchen company with the support of some foreign activist shareholders.

Ligado Networks' plan to develop some of the nation's most valuable airwaves is being undercut by disagreements between U.S. regulators-miring the company in a holding pattern and pressuring its finances.

Lockheed Martin has received a new contract to produce missiles for the U.S. Army, as well for certain foreign militaries, the defense contractor said.

As RealReal prepares to go public this week, the online marketplace for used luxury goods faces a big challenge: weeding out the fakes.

U.S. companies' working-capital efficiency reached a six-year high in 2018 as finance chiefs increasingly prioritize managing inventories to more quickly convert the capital into cash, a new study found.

Nissan shareholders voted to overhaul the board at a meeting where they shouted at current board members, management and each other.

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

Investor anxiety about a Trump administration push tooverhaul housing finance is showing up in prices in the market for mortgage-backed securities.

Securities issued by mortgage giants Fannie Mae and Freddie Mac are trading at a growing discount compared with securities sold by Ginnie Mae, another government agency that backs mortgages, bond data show. That has led to higher borrowing costs for plain vanilla mortgages.

The market for Fannie and Freddie’s securities is the world’s second largest behind Treasurys. Investor demand for the securities is strong because the companies are currently backstopped by the U.S. government. The companies are central to the popular 30-year mortgage, which locks in steady payments for buyers.

Yet investors say the gap between Fannie and Ginnie securities has widened as administration officials develop a proposal to overhaulFannie and Freddie and release them from government control more than a decade after Washington seized the firms during the financial crisis.

Mark Calabria, Fannie and Freddie’s new federal regulator, has been vocal about his desire to end the decadelong conservatorship of the companies. The moves have made some investors wary any overhaul could reduce or eliminate the federal backstop.

White House staff are reviewing a draft of the plan, written by the Treasury Department, and it could be completed as early as July, according to people familiar with the matter. Only Congress can create a federal guarantee for the Fannie and Freddie’s securities, but the chances of lawmakers acting are slim. As a result, investors are uncertain how the companies will be backstopped through any move to privatize the companies’ administratively.

Ginnie Mae mortgage-backed securities with a 3.5% coupon traded as much as a penny on the dollar higher in price than comparable securities that include Fannie Mae mortgages last week, the most since October, Tradeweb data show. At the beginning of June, that gap was closer to four-fifths of a penny.

That price spread translates to about 0.05 percentage point higher interest rates for borrowers in loans backed by Fannie and Freddie, people in the industry say. That is about $50 more a year on a $100,000 mortgage.

“This is a rare public policy issue where we can actually observe in the market the very real impact of what our members are worried about,” said Michael Bright, chief executive of the Structured Finance Association. “Ending conservatorship without legislation means fewer investors for GSE mortgages and that means higher interest rates for borrowers,” he added, referring to government-sponsored enterprises Fannie and Freddie.

Where Fannie Mae securities trade relative to Ginnie Mae’s is seen as one barometer of how confident investors are about whether Fannie and Freddie will continue to have explicit government backing. That is because Ginnie Mae has always carried a government guarantee that isn’t at risk of going away, so its bond prices are a benchmark for the status quo.

To be sure, price moves in the securities have been relatively small and influenced by other factors, such as falling interest rates. Yet some analysts and investors see the gap as a sign that policy makers should move cautiously to advance any overhaul the housing market, which touches on some 15% of the economy—or to just keep the status quo intact.

Fannie and Freddie don’t make loans, but instead buy them from banks and other lenders. They package them into securities that are sold to other investors and provide guarantees to make those investors whole when loans default.

At present, the companies have access to a combined $258 billion in Treasury assistance under the terms of their 2008 government-backstop agreements. They are required to send most of their profits to the Treasury in exchange for that support.

Investor uncertainty about what the companies’ support will look like after they are privatized could complicate efforts to end the decadelong government conservatorship of the companies. The changes under consideration likely wouldn’t affect existing mortgages but could make it tougher and more expensive for people to get new ones.

“It seems like they are just trying to rip the Band-Aid off without putting thought into it,” said Paul Norris, head of structured products at Conning, an investment management firm. “You just can’t start to talk about it without having a game plan.”

A spokeswoman for Mr. Calabria, director of the Federal Housing Finance Agency, declined to comment.

Mr. Calabria, in a speech earlier this month, said he could support Congress establishing a federal backstop for securities issued by Fannie and Freddie as long as it is “limited, clearly defined, and paid for.”

Mr. Calabria has separately said he is preparing to end the conservatorship without Congress. “A lot of what you’re going to see out of Treasury and a lot of what you’re going to see here is, how do we continue to make administrative actions that aren’t dependent on Congress,” he said in an interview with The Wall Street Journal earlier this month.

Top congressional leaders of both parties want to end the conservatorship and overhaul housing finance. Still, a deal remains elusive because the issue is politically, legally and technically complex.

Officials from large asset-management firms, including BlackRock Inc. and Pacific Investment Management Co., met privately on June 7 with Mr. Calabria. People familiar with the meeting said attendees left the session concerned about a lack of clarity over how the Fannie and Freddie would be backstopped in any move to privatize the firms.

The meeting was organized by the Securities Industry and Financial Markets Association, a Wall Street industry group. Sifma confirmed the meeting took place but declined to elaborate on what occurred.

Spokeswomen for BlackRock and Pimco declined to comment.

Write to Andrew Ackerman at andrew.ackerman@wsj.com and Ben Eisen at ben.eisen@wsj.com

(END) Dow Jones Newswires

June 25, 2019 11:00 ET (15:00 GMT)

By Charley Grant

AbbVie shareholders have clamored for diversification away from the world's best-selling drug. On Tuesday, they found out that diversification comes with a big cost.

The drug maker announced that it is buying Botox maker Allergan for $63 billion in cash and stock. In response, investors sent AbbVie shares sharply lower in morning trading.

That reaction is understandable. After all, it is paying a 45% premium to Monday's closing price and will take on an additional $38 billion in debt. It already carried nearly $32 billion in net debt on its books at the end of the first quarter, according to FactSet. And Allergan shares haven't exactly been the flavor of the month: The stock has lost half of its value in the past year.

While an argument can be made that AbbVie is overpaying, standing pat wasn't a palatable option. Like many large drug makers, it generates massive cash flows but is struggling to grow sales. Medical advances from the industry have generated treatments for many diseases over the years, benefiting patients and investors alike.

But that progress means the future will be more challenging. Big pharma earned an average return of just 1.8% in 2018 on research-and-development spending, according to Deloitte. At the start of the decade, that return on investment was 10%. That is reflected in slow growth across the industry: There are about a dozen large drug makers with little or no revenue growth expected this year.

For AbbVie specifically, the need to find new growth sources is even more acute: It gets about 60% of its total revenue from the anti-inflammatory drug Humira. That medication faces significant competition from cheaper, similar versions of the drug in Europe today and will likely face that competition in the U.S. by 2023. When the deal closes, Humira will comprise less than 40% of total sales, Chief Executive Officer Rick Gonzalez said on a conference call with analysts.

While stockholders may not like the deal today, it isn't clear that AbbVie has better options available. For instance, raising significant debt to buy biotech startups would bloat its balance sheet with no guarantee that the revenue to service it and diversify its sales will materialize in time.

Buying more certain cash flows all at once is much less risky thanks to easy access to capital today. AbbVie expects buying Allergan will boost adjusted earnings per share by 10% or more in the first full year after it closes and that its return on investment will exceed its cost of capital in that same time frame. It will take time to reduce borrowings, though: AbbVie expects to pay down at least $15 billion in debt by 2021.

Investors resigned to the sector's lousy prospects who like the deal will have to be patient, though -- AbbVie shares won't likely rebound any time soon. The deal won't close until next year and is subject to the approval of Allergan's shareholders.

Tuesday's announcement is the third megamerger in the industry since spring of 2018: Takeda purchased Shire, and Bristol-Myers Squibb has agreed to acquire Celgene.

Pharma investors shouldn't be surprised if similar deals follow: Industry dynamics demand them.

Write to Charley Grant at charles.grant@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:58 ET (14:58 GMT)

Microsoft Corp. shares (MSFT) are down 1.7% in Tuesday morning trading after the only analyst with a bearish rating on the stock, Jefferies' John DiFucci, reiterated his downbeat view. "Microsoft is one of the greatest software success stories in the short history of the sector, but we believe that Microsoft, the stock, is materially overvalued," wrote DiFucci. "Azure will probably never see the margin broadly expected due to cultural and technical factors, and a recent unprecedented boost to cash flow from Windows may not persist." He argued that Microsoft "will likely never see margins similar to AWS at scale" because Amazon.com Inc.'s (AMZN) cloud business is used to being efficient. DiFucci raised his price target to $90 from $80 in his note to clients, while citing a Mark Twain quote to convey his view of his position on Wall Street: "Whenever you find yourself on the side of the majority, it's time to pause and reflect." His new $90 target is still 33% below Microsoft's recent price of about $135. Shares have gained 33% so far this year, as the Dow Jones Industrial Average has risen 14%.

-Emily Bary

(END) Dow Jones Newswires

June 25, 2019 10:55 ET (14:55 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

By Connor Smith

FedEx (ticker: FDX) filed a lawsuit Tuesday against the U.S. Commerce Department, arguing the company shouldn't be held liable if it unknowingly ships items that violate the Trump administration's export restrictions, which were placed on Chinese telecommunications giant Huawei last month as the U.S.-China trade war escalated.

FedEx said export restrictions known as Export Administration Regulations, or EAR, hold carriers responsible for shipments that don't adhere to the restrictions -- whether or not the carrier was aware of those violations. Huawei was added to the EAR's so-called "entity list" last month.

"This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of contents of all the shipments it handles and whether they comply with the EAR," the company said. In the lawsuit, it said the EAR requires "considerably more screening than possible from common carriers like FedEx."

Read more: FedEx Reports Earnings Today. Here's What to Expect.

A Commerce Department spokesperson said, "We have not yet reviewed the complaint, but nevertheless look forward to defending Commerce's role in protecting U.S. national security."

In May, trade tensions between the U.S. and China heightened as President Donald Trump increased tariffs on Chinese goods. Not long after, Huawei was added to the EAR's entity list, and U.S. companies were essentially banned from doing business with the maker of telecommunications equipment.

In early June, the Chinese government said it was investigating FedEx after the company inadvertently diverted Huawei packages destined for China to the U.S. instead. FedEx said at the time that packages were mistakenly rerouted, adding that it would return them to their sender. The Wall Street Journal reported earlier this month that FedEx's internal protocol changes to comply with Trump's Huawei ban led to the mishandling of the packages.

FedEx said it supports the objectives of U.S. export laws and is committed to complying with all regulations in the countries where it operates. It said it has already invested heavily to be able to comply with U.S. export regulations, but that it cannot be expected "to police the millions of shipments that transit our network every day."

"FedEx is a transportation company, not a law enforcement agency," it said in a statement.

FedEx stock dipped 2.4% to $157.07 in recent trading. The company is scheduled to report its earnings for the quarter ended May 31, as well as full fiscal-year earnings after the market's close Tuesday.

(END) Dow Jones Newswires

June 25, 2019 10:51 ET (14:51 GMT)

1451 GMT - Copper has gained throughout the day on the London Metal Exchange, indicating rising optimism that Presidents Trump and Xi will resolve or at least dial down their trade dispute at the G-20. "The current strength we're seeing in base metals suggests investors are gravitating towards a more positive view," says Edward Meir, a consultant to INTL FCStone. "We very well could see further strengthening in base metals heading into next week, should the two leaders leave Osaka relatively happy." Copper was up 1.3% at $6,040 a ton while zinc popped 2.1% to $2,542 a ton, having lagged most other industrial metals over the past month. (joe.wallace@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 10:51 ET (14:51 GMT)

Shares of Sally Beauty Holdings Inc. (SBH) rallied 0.8% in morning trading, to bounce off the previous session's near 9-year low, after Instinet analyst Simeon Siegel said it was uncertain whether Amazon.com Inc.'s (AMZN) launch of its Professional Beauty Store will actually trigger change. The stock had tumbled 16.8% on Monday, the second-biggest one-day drop since it went public in November 2006, to close at the lowest price since November 2010. Siegel said that while Amazon's new beauty store will carry brands including Wella Color, RUSK and OPI Professional, all which are carried on Sally Beauty's website, many of those products are already widely available online, and on Amazon. "That said, beauty has largely been outside of [Amazon's] shares grab thus far..., so a decision to make a broader push into the category shouldn't be ignored," Siegel wrote in a note to clients. Meanwhile, Ulta Beauty Inc.'s stock (ULTA) inched up less than 0.1%, after falling 2.6% on Monday after the Amazon news. Sally Beauty's stock has lost 27% year to date and Ulta shares have rallied 42%, while the SPDR S&P Retail ETF (XRT) has gained 1.5% and the S&P 500 has climbed 17%.

-Tomi Kilgore

(END) Dow Jones Newswires

June 25, 2019 10:50 ET (14:50 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           106.91-92      107.29-30  -0.36   107.41   106.78  -2.44 
EUR/USD Euro            1.1388-91     1.1397-400  -0.08   1.1415   1.1378  -0.70 
GBP/USD U.K.            1.2723-25      1.2741-43  -0.14   1.2782   1.2710  -0.27 
USD/CHF Switzerland     0.9719-23      0.9719-23   0.00   0.9775   0.9693  -0.97 
USD/CAD Canada          1.3170-75      1.3178-83  -0.06   1.3198   1.3153  -3.43 
AUD/USD Australia       0.6966-70      0.6960-64  +0.09   0.6975   0.6953  -1.19 
NZD/USD New Zealand     0.6648-54      0.6616-22  +0.48   0.6655   0.6616  -1.03 
 
Euro Rates 
 
EUR/JPY Japan           121.75-79      122.29-33  -0.44   122.48   121.65  -3.13 
EUR/GBP U.K.            0.8949-52      0.8947-50  +0.02   0.8965   0.8917  -0.44 
EUR/CHF Switzerland     1.1071-74      1.1079-82  -0.07   1.1126   1.1063  -1.63 
EUR/CAD Canada        1.4999-5009      1.5019-29  -0.13   1.5050   1.4986  -4.07 
EUR/AUD Australia       1.6338-48      1.6364-74  -0.16   1.6401   1.6318  +0.49 
EUR/DKK Denmark         7.4651-58      7.4661-68  -0.01   7.4674   7.4650  -0.01 
EUR/NOK Norway        9.6979-7029      9.6637-87  +0.35   9.7027   9.6643  -2.10 
EUR/SEK Sweden        10.5449-549    10.5722-822  -0.26  10.5919  10.5182  +3.91 
EUR/CZK Czech Rep.      25.504-34      25.550-80  -0.18   25.596   25.516  -0.75 
EUR/HUF Hungary         323.08-48      323.47-87  -0.12   324.60   322.95  +0.70 
EUR/PLN Poland          4.2542-58      4.2525-41  +0.04   4.2587   4.2500  -0.80 
 
Yen Rates 
 
AUD/JPY Australia        74.48-52       74.69-73  -0.28    74.86    74.33  -3.61 
GBP/JPY U.K.            136.01-07      136.67-73  -0.48   136.84   135.80  -2.75 
CAD/JPY Canada           81.13-17       81.39-43  -0.32    81.50    80.98  +0.98 
NZD/JPY New Zealand      71.09-13       70.98-01  +0.13    71.28    70.97  -3.44 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.     22.379-429      22.408-58  -0.13   22.464   22.397  -0.07 
USD/HUF Hungary       283.71-4.11    283.71-4.11   0.00   285.14   283.31  +1.40 
USD/DKK Denmark         6.5538-48     6.5497-507  +0.06   6.5618   6.5425  +0.66 
USD/NOK Norway          8.5133-93     8.4766-826  +0.43   8.5219   8.4751  -1.45 
USD/PLN Poland          3.7351-56      3.7309-14  +0.11   3.7403   3.7261  -0.14 
USD/RUB Russia         62.841-911      62.519-89  +0.52   62.905   62.499  -9.19 
USD/SEK Sweden         9.2576-666     9.2746-836  -0.18   9.2937   9.2409  +4.62 
USD/ZAR S. Africa    14.2800-3100    14.3488-788  -0.48  14.3761  14.2667  -0.46 
 
USD/CNY China          6.8782-802      6.8760-80  +0.03   6.8847   6.8668  +0.01 
USD/HKD Hong Kong       7.8106-11      7.8087-92  +0.02   7.8110   7.8049  -0.26 
USD/MYR Malaysia        4.1301-51      4.1400-50  -0.24   4.1465   4.1326  +0.00 
USD/INR India           69.234-54      69.263-83  -0.04   69.371   69.240  -0.47 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines    51.390-410      51.320-40  +0.14   51.410   51.310  -2.10 
USD/SGD Singapore       1.3524-34      1.3528-38  -0.03   1.3542   1.3520  -0.73 
USD/KRW S. Korea     1153.25-5.25   1153.67-5.67  -0.04  1156.90  1153.12  +3.59 
USD/TWD Taiwan          31.062-92      30.930-60  +0.43   31.129   30.851  +1.62 
USD/THB Thailand        30.700-20      30.660-80  +0.13   30.760   30.610  -4.98 
USD/VND Vietnam         23273-343      23263-333  +0.04    23309    23259  +0.49 
 
USD/BRL Brazil          3.8311-41      3.8232-62  +0.21   3.8376   3.8198  -1.26 
USD/MXN Mexico        19.2069-369   19.1888-2188  +0.09  19.2461  19.1633  -2.17 
USD/ARS Argentina    42.2997-3097    42.4062-386  -0.28  42.4779  42.2691 +12.37 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 10:50 ET (14:50 GMT)

AbbVie Inc. (ABBV) is currently at $66.43, down $12.02 or 15.32%

-- Would be lowest close since May 31, 2017, when it closed at $66.02

-- Would be largest percent decrease on record (Based on available data back to Dec. 10, 2012)

-- Earlier Tuesday, AbbVie Inc. agreed to buy Allergan PLC for about $63 billion. The takeover is worth about $188 a share in cash and stock, the companies said in a statement

-- Worst two day stretch on record (Based on available data back to Dec. 10, 2012)

-- Down 13.39% month-to-date; on pace for worst month since October 2018 when it fell 17.69%

-- Down 27.94% year-to-date

-- Down 46.08% from its all-time closing high of $123.21 on Jan. 26, 2018

-- Down 27.88% from 52 weeks ago (June 26, 2018), when it closed at $92.12

-- Down 32.79% from its 52 week closing high of $98.84 on July 10, 2018

-- Would be a new 52 week closing low

-- Traded as low as $66.29; lowest intraday level since June 1, 2017, when it hit $66.12

-- Down 15.5% at today's intraday low; largest intraday percent decrease since Oct. 22, 2015, when it fell as much as 15.57%

-- Worst performer in the S&P 500 today

-- Most active stock in the S&P 500 today

All data as of 10:37:00 AM

Source: Dow Jones Market Data, FactSet

(END) Dow Jones Newswires

June 25, 2019 10:43 ET (14:43 GMT)

A gauge of consumer sentiment deteriorated in June to its lowest level in nearly two years, as consumers’ outlook on the economy worsened due to escalating trade tensions.

The Conference Board, a private research group, said Tuesday its index of consumer confidence fell to 121.5 in June, down from 131.3 in May. The June reading marked the lowest level since September 2017.

The reading for June also fell short of expectations: economists surveyed by The Wall Street Journal had expected a reading of 131.

A gauge of household assessments about the present economic situation decreased to 162.6 from 170.7, while an index tracking expectations for the future decreased to 94.1 from 105.0 last month.

“The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence,” said Lynn Franco, director of economic indicators at the board.

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:40 ET (14:40 GMT)

By Will Horner

U.S. stocks edged lower ahead of a speech later Tuesday from Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average fell 113 points, or 0.4%, to 26614. The S&P 500 lost 0.3% and the Nasdaq Composite declined 0.5%.

Major indexes have drifted in a narrow range as investors have awaited further details on the direction of monetary policy and trade. Mr. Powell is scheduled later Tuesday to deliver remarks that could offer investors further clues on the central bank's thinking on interest rates. At its last meeting, the Fed suggested it could cut rates in the coming months if economic risks like the U.S.-China trade conflict worsen.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Corporate news drove swings among individual stocks.

Allergan shares jumped 26% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 16%.

Shares of home builder Lennar jumped 1.2% after reporting better-than-expected earnings.

Elsewhere, the Stoxx Europe 600 fell 0.2%, weighed down by declines among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 8.1% and Altran shares up 22%.

Meanwhile, gold jumped 1% to $1,432.40 a troy ounce, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Bitcoin extended its gains, reaching a record for the past year as it again crossed the $11,000 threshold. The world's most popular cryptocurrency has soared more than 30% this month, boosted in part by the unveiling of Facebook's Libra digital currency for mainstream users last week.

In Asia, Japan's Nikkei Stock Average fell 0.4%, while Hong Kong's Hang Seng lost 1.2%.

Akane Otani contributed to this article

(END) Dow Jones Newswires

June 25, 2019 10:39 ET (14:39 GMT)

10:37 ET - The Philadelphia Fire Department and city officials plan to give an update at 1 pm ET on Friday's massive explosion and fire at the Philadelphia Energy Solutions refinery that may have destroyed key parts of the facility. The 330k bpd refinery is the largest on the East Coast and a vital supplier of gasoline to the region. PES, an independent merchant refiner that went through bankruptcy last year, said Sunday the fire has been extinguished, but the company's been tight-lipped since then and wouldn't confirm or deny a Reuters report saying a key alkylation unit has been destroyed. Gasoline futures extend gains, up 1.4% at $1.88/gallon, the highest since late May. (dan.molinski@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 10:38 ET (14:38 GMT)

By Adria Calatayud

General Electric Co. (GE) and Vestas Wind Systems AS (VWS.KO) have reached a settlement to a dispute relating to multiple patent-infringement claims in the U.S., the Danish wind-turbine maker said Tuesday.

As part of the agreement, GE will drop a lawsuit against Vestas launched in July 2017 and the Danish company will abandon its two counterclaims against GE, Vestas said. The settlement also includes a confidential payment from Vestas to GE as well as a cross-license to the patents-in-suit and their family members, Vestas said.

Any past infringements of the patents-in-suit are fully released, the Danish company said.

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 10:23 ET (14:23 GMT)

By Tae Kim

Microsoft stock will drop significantly because of its elevated valuation, according to Jefferies.

The back story. Microsoft shares (ticker: MSFT) have risen about 35% this year due to investor enthusiasm over the company's Azure cloud-computing business and its success in selling software subscriptions such as Office 365.

In April, the company reported better-than-expected fiscal third-quarter earnings results.

What's new. Jefferies analyst John DiFucci on Tuesday reiterated his Underperform rating for Microsoft stock, predicting weaker-than-expected profitability for its Azure cloud-computing business -- and comparing it unfavorably to Amazon.com's (AMZN) Amazon Web Services.

"Azure will probably never see the margin broadly expected due to cultural and technical factors," DiFucci wrote. "We believe that Microsoft, the stock, is materially overvalued."

Microsoft stock was down 1.5% to $135.67 on Tuesday. The company did not immediately respond to a request for comment.

Read more: The 60-Second Case for Microsoft as a Strong Dividend Stock

The analyst said about one-third of the company's free-cash-flow growth over the past year was due to Microsoft's Windows operating system, which he predicts isn't likely to continue.

"We believe there is material risk that Azure margins never attain those of AWS [and that] the cash flow benefit from Windows...outperformance isn't sustainable," the analyst added.

Looking ahead. DiFucci lowered his Microsoft stock price target to $80 from $90, representing a 42% downside to the current stock price.

Write to Tae Kim at tae.kim@barrons.com

(END) Dow Jones Newswires

June 25, 2019 10:23 ET (14:23 GMT)

By Cara Lombardo, Jonathan D. Rockoff and Dana Cimilluca

AbbVie Inc. agreed to buy Allergan PLC for about $63 billion, as the two big drugmakers bet a combination will deliver new sources of growth they have struggled to find on their own.

The takeover is worth about $188 a share in cash and stock, the companies said in a statement. The price represents a 45% premium over Allergan's closing share price Monday of $129.57. If not for a surge in the shares in recent days on expectations for a breakup of the company, the premium would be even bigger.

The Wall Street Journal reported earlier Tuesday that the deal was imminent.

Buying Dublin-based Allergan would deliver a dominant position in the $8 billion-plus market for Botox and other beauty drugs, as well as a number of popular eye treatments, as AbbVie braces for the end of patent protection for the world's top-selling drug, Humira.

The companies' portfolios have some overlap in treatments for brain, women's-health, stomach and other disorders, though the combination would take AbbVie into the new realm of frown-line smoothing, eyelash lengthening and double-chin removal.

Allergan's nearly $16 billion in yearly revenue would also give AbbVie another source of cash to hunt for a new generation of products.

Lately, Wall Street has been clamoring for change at Allergan, with its shares trading at a fraction of their peak of more than $330 in the summer of 2015. Analysts have been saying the company could split into two pieces, but few expected CEO Brent Saunders to pull off a sale, especially at such a lofty premium.

Richard Gonzalez will remain chairman and CEO of AbbVie, which will continue to be headquartered in the Chicago area. Two Allergan directors including Mr. Saunders will join AbbVie's board when the deal closes.

About two-thirds of the purchase price is in cash, with Allergan stockholders receiving 0.8660 AbbVie shares and $120.30 in cash for each share they own, for total consideration of $188.24 a share.

Allergan stock jumped 27% to $164.65 in morning trading Tuesday while AbbVie shares fell 14% to $67.20.

The deal, worth about $80 billion including debt, is the second this year that would knit together two of the world's biggest pharmaceutical companies. Earlier this year, Bristol-Myers Squibb Co. agreed to pay $74 billion for rival cancer drugmaker Celgene Corp.

AbbVie has been pursuing deals of various sizes in an effort to diversify beyond Humira ever since the company was split from Abbott Laboratories in 2013.

Humira, a rheumatoid arthritis treatment, rang up $19.1 billion of AbbVie's $32.8 billion of revenues last year. But lower-priced versions, known as biosimilars, are on sale in Europe and are scheduled to go on sale in the U.S. in 2023.

AbbVie had tried to strike a big deal in 2014, when it reached an agreement to buy Irish rare-disease drugmaker Shire for $54 billion. But AbbVie called off the deal later that year amid efforts by the Obama administration to restrict such tax-lowering transactions, known as inversions.

Other attempts to find new big-selling cancer, immune and other drugs have also stumbled, except for a roughly $20 billion deal in 2015 for Pharmacyclics Inc., the maker of the Imbruvica cancer therapy. AbbVie shares the treatment's rights with Johnson & Johnson.

But Imbruvica, which generated $3.6 billion in revenue for AbbVie last year, can't alone make up for the approaching loss of Humira sales.

In Allergan, AbbVie will take on a once-highflying drugmaker that has also struggled to find new sales growth.

Allergan's shares soared to more than twice their current level four years ago as the company and Mr. Saunders became Wall Street darlings following a series of bold acquisitions. But Allergan's luster has faded in the past few years as opportunities for deal making have dwindled along with the stock and only its aesthetic-medicine business grew to investors' satisfaction.

Allergan, which started as a California pharmacy and then carved a niche as an eye-treatment business, rocketed into the ranks of big drugmakers after exploiting Botox's use smoothing frown lines and wrinkles.

A combination with Irish drugmaker Actavis in 2015 transformed the company. Mr. Saunders has been CEO since 2014 and chairman since 2016.

For a time, Pfizer Inc. was going to buy Allergan for about $150 billion, but that transaction, also an inversion, fell through amid pushback from the Obama administration.

Then investors soured on the company, partly due to concerns that it wouldn't be able to replace sales from eye drug Restasis, which was losing its patent protection.

Investors also drove down the stock on a failed plan to bolster Restasis by selling its patent rights to an Indian tribe, as well as mixed messages from management about the company's prospects. Rivals are trying to edge in on Botox, and the company's efforts to develop new drugs, like a depression treatment, faltered.

The concerns triggered pressure from Wall Street. Mr. Saunders said on the company's earnings call last month that there is a sense of urgency within the company and pledged that the board was reviewing all options.

Analysts predicted Allergan could split itself in two, with one business dedicated to fast-growing brands and segments such as aesthetics and eye care, and the other focused on gastrointestinal and women's-health treatments.

Allergan in recent years came in the crosshairs of David Tepper's activist hedge fund Appaloosa LP, which criticized the company's performance and pressured it to separate the roles of chairman and CEO. The company had said it would separate the roles at its next leadership transition. In May, Allergan shareholders voted down a shareholder proposal from Appaloosa to separate the positions.

Also to satisfy investors, Allergan in the past year tried to sell its women's health and anti-infective drug businesses but said in January it would keep the unit.

Write to Cara Lombardo at cara.lombardo@wsj.com, Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:23 ET (14:23 GMT)

By Josh Nathan-Kazis

Specialty-pharma stocks jumped on Tuesday, as AbbVie (ticker: ABBV) announced its proposed $63 billion acquisition of Allergan (AGN).

Teva Pharmaceutical Industries stock (TEVA) and Mylan stock (MYL) were both up about 2.5%.

Other specialty and generic drugmakers did even better. Mallinckrodt (MNK) and Bausch Health (BHC) sported gains of nearly 3% and 6%, respectively.

The deal is reawakening investors to big pharmaceutical company's interest in snapping up smaller players in the industry, according to Cantor Fitzgerald analyst Louise Chen.

"The announcement of this deal is good for the pharma space because it reinforces large-cap pharma's willingness to acquire assets," Chen wrote in a note out Tuesday morning.

The back story. In an announcement that took the markets by surprise on Tuesday morning, AbbVie said it would buy Allergan for $188.24 per share in cash and stock. The announcement comes after a head-fake from Allergan last week, when the company's vice president of investor relations seemed to suggest that the company was planning to announce a stock split.

What's new. Following the announcement of the acquisition, specialty-pharma stocks saw a small bounce.

In her note, Chen wrote that the proposed acquisition raises questions about whether Merck (MRK) may be looking to open its wallet, as AbbVie did.

"The announcement of this deal could drive the Street to question what MRK may acquire, since they have a patent cliff coming with Keytruda in 2028," she wrote.

Other large drug companies are also heavily reliant on a single drug, as AbbVie was, including Regeneron (REGN), which derived 75% of its revenue in the first quarter of this year from its drug Eylea. Merck received 21% of its total net revenue from Keytruda in the first quarter of this year.

Looking forward. Wall Street is greeting AbbVie's bid for Allergan with skepticism. Shares of AbbVie were down 11.5% shortly after the market opened on Tuesday. It's unclear what that skepticism for potential acquisitions of the other specialty drugfmakers.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

(END) Dow Jones Newswires

June 25, 2019 10:20 ET (14:20 GMT)

By Al Root

Boeing made a splash in Paris when it announced a new 200-plane deal with British Airways parent International Consolidated Airlines. It is the first order for Boeing since the second fatal crash of its 737 MAX, which led to the world-wide grounding of the MAX fleet in mid-March.

The agreement, however, isn't a firm order. It was a letter of intent and doesn't go into Boeing's (ticker: BA) backlog of orders or into International Consolidated's fleet plans until terms are finalized. International Consolidated Airlines (IAG), which in addition to British Airways includes Aer Lingus and Iberia among others, flies both Boeing and Airbus (AIR.France) jets. Because IAG flies only narrow-body planes, Boeing's potential 737 MAX contract is direct competition with Airbus for IAG's business.

Airbus, though, hasn't given up. "We would like a chance to compete for that business," Chief Commercial Officer Christian Scherer told reporters in Paris last week, saying Airbus hadn't been given a chance to bid on the contract.

While technically still in play, the new order may be tough to win away from Boeing, which was hungry for good news after regulators, pilots, and Congress questioned its design and manufacturing practices in recent months. IAG told Barron's it is working toward a formal agreement and Boeing called the letter of intent a "typical agreement."

"Since it's IAG, it would be highly unusual if it didn't become a firm order when the MAX situation is sorted out," Teal Group Vice President Richard Aboulafia told Barron's.

Other airlines appear to be sticking by the MAX, too. Low-cost airline Gol Linhas Aéreas Inteligentes (GOL), the Brazilian equivalent of Southwest Airlines (LUV), flies only 737-model jets and told Barron's it is looking forward to having its 7 MAX jets back in service. It said it had no issues with the planes it was flying before the world-wide grounding.

The real Southwest also seems ready to reintegrate the 737 MAX into its all-737 fleet. Before the second accident involving an Ethiopian Airlines flight, CEO Gary Kelly said the airline has "a wonderful modernization opportunity presented by the MAX, 14% more fuel efficient, 40% quieter. It's got more performance and more flexibility."

After the accident in April, on the company's first-quarter conference call, he called the MAX a great airplane. "We're looking forward to obviously working with the FAA to get it ungrounded." Southwest representatives didn't have anything to add beyond Kelly's recent comments.

Airlines that fly a mixed fleet of jets might not be as positive. Akbar Al-Baker, for instance, CEO of Qatar Airways, said in a recent television interview that he wanted compensation from Boeing for the MAX problems. Qatar operates a fleet of 200 Boeing and Airbus planes and has 5 MAX jets on order.

Still, it seems as if the aerospace industry is prepared to stand behind its MAX orders, and investors are coming to a similar realization. Boeing shares have risen 7.8% since June 14, the Friday before the Paris air show began, better than the 2.4% gain of the Dow Jones Industrial Average.

Write to Al Root at allen.root@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 10:14 ET (14:14 GMT)

For previous business day. Open Interest subject to revision. 
Source: CME Group 
NOTE: Total volume includes Globex and RTH. 
 
                 Total             Open 
                Volume         Interest         Change 
EURODOLLAR FUTURES 
JUL19           49,763          254,450          1,233 
AUG19           61,296          170,536         18,634 
SEP19          360,492        1,535,898        -66,261 
OCT19            1,143            1,826            595 
NOV19                0               11              0 
DEC19          219,291        1,589,329        -16,892 
MAR20          193,933        1,175,715         -6,526 
JUN20          192,795        1,125,614        -13,699 
SEP20          160,237        1,112,652         -2,963 
DEC20          182,623        1,076,255         -9,817 
MAR21          156,787          813,314         26,662 
JUN21          115,117          755,467          3,648 
SEP21           73,564          570,888           -416 
DEC21           58,767          566,055         -4,657 
MAR22           50,106          455,406         -2,462 
JUN22           44,957          306,000          4,485 
SEP22           38,213          294,039          6,791 
DEC22           28,623          221,326          1,460 
MAR23           21,665          137,226            289 
JUN23           17,881          100,309            177 
SEP23           15,835          106,807         -1,648 
DEC23           11,169           63,817            493 
MAR24           14,838           52,042            421 
JUN24           13,468           22,673            328 
SEP24              914           11,008             43 
DEC24              871            6,991            502 
MAR25              752            3,458            598 
JUN25            1,586            2,490            948 
SEP25               50              522             15 
DEC25               46              630             14 
MAR26               11              410             -6 
JUN26                3              274              0 
SEP26                0               62              0 
DEC26                0              130              0 
MAR27                0               92              0 
JUN27                0               19              0 
SEP27                0              127              0 
DEC27                0               31              0 
DEC28                0                1              0 
TOTAL        2,086,796       12,533,900        -58,011 
 
Write to Linda Rice at csstat@dowjones.com 
 

(END) Dow Jones Newswires

June 25, 2019 10:12 ET (14:12 GMT)

For the previous business day. Open Interest subject to revision. 
Source: CME Group 
NOTE: The total volume includes Globex and RTH. 
 
           Total       Open 
          Volume   Interest     Change 
AUSTRALIAN DOLLAR FUTURES 
JUL19         89        981         -5 
AUG19         95      1,708        -53 
SEP19     72,851    164,199     -3,970 
OCT19          0        187          0 
DEC19          1        510         -2 
MAR20          0         19          0 
JUN20          0          3          0 
DEC20          0          7          0 
TOTAL     73,036    167,614     -4,030 
 
BRAZILIAN REAL FUTURES 
JUL19      3,985     27,105       -780 
AUG19      2,845     12,948        675 
SEP19          0      3,533          0 
TOTAL      6,830     43,586       -105 
 
BRITISH POUND FUTURES 
JUL19        382      2,780       -216 
AUG19        364        961        -19 
SEP19     65,498    203,459         15 
OCT19        220        265         60 
DEC19        166      1,318        149 
MAR20          0        188          0 
JUN20          0         39          0 
TOTAL     66,630    209,010        -11 
 
CANADIAN DOLLAR FUTURES 
JUL19        142        614         77 
AUG19         85      1,091         13 
SEP19     55,749    125,042     -1,162 
OCT19          0         62          0 
DEC19         21      4,810         15 
MAR20          0        966          0 
JUN20         10        217         10 
DEC20          0          4          0 
TOTAL     56,007    132,806     -1,047 
 
E-MINI EURO FX FUTURES 
SEP19      4,415     13,852        168 
DEC19          6         13          2 
TOTAL      4,421     13,865        170 
 
EURO FX FUTURES 
JUL19      2,077      1,255        -22 
AUG19      2,412      1,109        361 
SEP19    155,150    505,648      6,008 
OCT19        434         90          7 
DEC19        462      3,932       -110 
MAR20        188      7,474        -18 
JUN20         10        883         -1 
SEP20          0        144          0 
DEC20          0        108          0 
TOTAL    160,733    520,643      6,225 
 
JAPANESE YEN FUTURES 
JUL19        527      2,079       -404 
AUG19        606      1,848        105 
SEP19     98,475    134,360      3,031 
OCT19         20         50          0 
DEC19          8        411          1 
MAR20          0         94          0 
JUN20          0          5          0 
SEP20          0          2          0 
TOTAL     99,636    138,849      2,733 
 
MEXICAN PESO FUTURES 
AUG19          0          1          0 
SEP19     28,939    215,027      4,474 
DEC19          2          5          2 
TOTAL     28,941    215,033      4,476 
 
NEW ZEALAND DOLLAR FUTURES 
SEP19     21,363     62,371       -980 
DEC19          3        297          0 
TOTAL     21,366     62,668       -980 
 
RUSSIAN RUBLE FUTURES 
JUL19          0          6          0 
SEP19      2,837     67,003        929 
TOTAL      2,837     67,009        929 
 
SOUTH AFRICAN RAND FUTURES 
JUL19          0          0          0 
SEP19        601     10,586        168 
DEC19          0      1,500          0 
TOTAL        601     12,086        168 
 
SWISS FRANC FUTURES 
SEP19     31,122     57,567     -1,145 
DEC19          2         27         -1 
MAR20          4         27          0 
JUN20          0          5          0 
SEP20          0          2          0 
TOTAL     31,128     57,628     -1,146 
 
Write to Rose Ridinger at csstat@dowjones.com 
 

(END) Dow Jones Newswires

June 25, 2019 10:11 ET (14:11 GMT)

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

1010 ET - German asset manager DWS sticks to its view on the EUR/USD exchange rate over a 12-month horizon, seeing it at 1.15, chief investment officer Stefan Kreuzkamp tells a press event in Frankfurt. "On the currency side, there is no change in our call, 1.15 euro-dollar remains in place for the next 12 months," he says. EUR/USD last trades at 1.1388, down 0.1% on the day. (emese.bartha@wsj.com)

1004 ET - Purchases of new homes fell sharply in May, defying economists' forecast for an increase. However, the 7.8% decline came with margin of error of 14.7 percentage points, meaning it's possible sales posted a solid monthly increase. The decline was in part driven by a 17.6% decrease in the Northeast. That fall came with a margin of error of plus or minus 42.5 percentage points. The lesson: Take monthly new home sales numbers with a grain of salt. The broader trend shows a modest improvement in the market for new homes after a sales slump last summer and fall. (eric.morath@wsj.com; @ericmorath)

0944 ET - Culture matters, and not just rules, said New York Fed President John Williams at a forum in New York on diversity and inclusion. Policies to promote equal treatment of minority groups, including lesbian, gay, bisexual and transgender employees, can only go so far if employers don't create a culture "where people feel comfortable bringing their whole selves to work," Williams says. "This is true of every element of diversity and inclusion," he added. For example, a generous set of parental leave rules won't be as effective "in a culture where taking extended leave damages your career prospects," he says. (nick.timiraos@wsj.com; @NickTimiraos)

0942 ET - Airbnb is responding to Marriott's push into its turf by launching a new tier of more than 2,000 luxury homes around the world. Under Airbnb Luxe, each home has to pass an evaluation of more than 300 criteria and guests will have access to "trip designers," who can arrange services including childcare or a personal chef. The online home-sharing platform's increased interest in the space comes after its acquisition of Luxury Retreats in 2017 and as the $200B high-end travel market is expected to grow. The number of Airbnb bookings for listings worth at least $1,000 a night increased more than 60% in 2018. Last month, Marriott started to offer accommodations in about 2,000 high-end homes in 100 markets. (aisha.al-muslim@wsj.com; @aishaalmuslim)

0940 ET - German asset manager DWS's base case is for a soft Brexit--one with a deal or with some form of customs union, chief investment officer Stefan Kreuzkamp says at a press event in Frankfurt. These scenarios would have a moderate market impact, he says. DWS currently sees a rather low risk of the U.K. leaving the European Union without a deal but Kreuzkamp this scenario "would be very negative for risk premia, it would be very negative in particular for the currency." (emese.bartha@wsj.com)

0937 ET - Mitsubishi Heavy Industries rolling the dice again to bolster its loss-making aerospace and defense business by acquiring Bombardier's regional jet business. MHI is being squeezed by commercial customers -- notably Boeing on the 787 -- and military partners, with Lockheed Martin set to take on the rest of the F-35 production destined for Japan's Self Defense Force. Now, it hopes to leverage Bombardier's expertise to crack the regional jet market for US airlines with the rebranded SpaceJet, which is set for first delivery in mid-2020, some eight years late. (doug.cameron@wsj.com; @dougcameron)

0936 ET - German asset manager DWS expects fewer rate cuts from the U.S. Federal Reserve than the market does, though its forecast for European Central Bank rates is in line with the market's view. DWS expects the Fed to carry out two preemptive rate cuts in the next 12 months, while the market looks for three rate reductions, says Stefan Kreuzkamp, chief investment officer at DWS at a press event in Frankfurt. DWS expects one rate cut by the ECB over the next 12 months, he says, adding that a cut in the ECB's deposit rate may happen before President Mario Draghi's mandate expires at end-October. "Central banks will remain accommodative," Kreuzkamp says.(emese.bartha@wsj.com)

Allergan shares jump 31%, while AbbVie loses 9.6% premarket. The combined company, excluding Humira, will have revenue of more than $30B, and overall the company would be fourth-largest by sales among drugmakers. "AbbVie CEO: Allergan Is 'Incredible Opportunity' -- Market Talk," published at 8:51 a.m. ET incorrectly said Allergan's share price was falling. The story also did not indicate that the $30B revenue estimate excluded Humira.

0913 ET - Lennar expects market trends to improve in the second half of this year, ushering a strong positive wave across the stocks of other homebuilders. The Miami company says affordability has improved for consumers in 2Q, leading it to start lowering incentives to home buyers. It also expects improved margins due to lower lumber and integration costs. "A positive tone on more recent trends will likely to be enough to carry the stock and broader [homebuilder] group higher following the group's recent underperformance," said RBC Analyst Mike Dahl. Shares of Lennar rose 4%, DR Horton rose 2%, NVR rose 4.6% and PulteGroup rose 2.3% premarket. (kimberly.chin@wsj.com; mskimberlychin)

0851 ET- Mitsubishi Heavy Industries and Canadian plane maker Bombardier have reached a deal over the sale of the latter's CRJ regional jet business. The Japanese company is paying $550 million for the program and assuming $200 million in liabilities. Bombardier will keep building the CRJs already ordered until the backlog runs out, which it's set to do by the end of next year. With that, Mitsubishi is making clear that the sales and support network linked to the CRJ are of interest, as the Japanese plane maker tries to clear the path into market for its new SpaceJet regional aircraft. (robert.wall@wsj.com)

0851 ET - AbbVie CEO Richard Gonzalez calls the drugmaker's planned $63B purchase of Botox maker Allergan "an incredible opportunity and one that we did not want to pass up." On conference call to discuss the deal, Gonzalez says the deal will help reduce AbbVie's reliance on its arthritis drug Humira for sales growth. AbbVie will, however, be able to rapidly pay down deal debt using cash flow from Humira sales until it loses US market exclusivity for the drug in 2023. The combined company, excluding Humira, will have revenue of more than $30B in 2020, making it fourth largest among drugmakers, he says. Allergan shares jump 31%, while AbbVie loses 9.6% premarket. (peter.loftus@wsj.com; @Loftus) Corrections & Amplifications

This item was corrected at 9:34 a.m. ET because an earlier version incorrectly said Allergan's share price was falling. The story also did not indicate that the $30B revenue estimate excluded Humira. Allergan shares jump 31%, while AbbVie loses 9.6% premarket. The combined company, excluding Humira, will have revenue of more than $30B, and overall the company would be fourth-largest by sales among drugmakers.

0847 ET - A U.S.-U.A.E. economic policy dialogue touched on the often acrimonious issue of air traffic rights, since American, United, and Delta feel U.A.E carriers Emirates and Etihad are stealing traffic and want their rights curbed. The communique from the meeting argues for "a fair and equal opportunity to compete," in a pleasing phrase for the U.S. carriers, but also a commitment "to fully maintain all aspects of their Open Skies relationship", which will thrill the Middle East airlines. Emirates said it "commends the Trump Administration for reaffirming its full and unqualified commitment to the US-UAE Open Skies agreement." (robert.wall@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 10:10 ET (14:10 GMT)

1410 GMT - German asset manager DWS sticks to its view on the EUR/USD exchange rate over a 12-month horizon, seeing it at 1.15, chief investment officer Stefan Kreuzkamp tells a press event in Frankfurt. "On the currency side, there is no change in our call, 1.15 euro-dollar remains in place for the next 12 months," he says. EUR/USD last trades at 1.1388, down 0.1% on the day. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 10:10 ET (14:10 GMT)

Iran said Tuesday new U.S. sanctions on its supreme leader closed the door on diplomacy and threatened global stability, as American officials renewed efforts to build a global alliance against Tehran.

President Trump on Monday signed an executive order designating Iran’s Supreme Leader Ayatollah Ali Khamenei in a new round of sanctions aimed at top Iranian leaders, including Mr. Khamenei’s office and associates. Treasury Secretary Steven Mnuchin said the U.S. would later this week sanction Iranian Foreign Minister Javad Zarif as well.

Iranian President Hassan Rouhani called the new sanctions “outrageous and stupid.” Mr. Khamenei, while the political leader of Iran, also is one of the world’s leading authorities for Shia Muslims.

“Would any administration with a bit of wisdom [sanction] the highest authority of a country? And not only a political authority, a religious, social, spiritual one, and not the leader of Iran only, the leader of the Islamic revolution all over the world?” Mr. Rouhani said in a speech broadcast on state television.

He said it was “obvious” that the U.S. was lying about wanting to negotiate with Iran: “You want us to negotiate with you again?” Mr. Rouhani said, “and at the same time you seek to sanction the foreign minister too?”

White House national security adviser John Bolton, in Jerusalem for rare gathering of his Israeli and Russian counterparts, called on Iran to negotiate a new, broader agreement to supersede the 2015 nuclear deal, which the Trump administration withdrew from in May 2018 and imposed a crippling round of sanctions on Iranian industries and organizations.

“The president has held the door open to real negotiations that completely and verifiably end Iran’s nuclear weapons program, its pursuit of ballistic missile delivery systems and support for international terrorism and its other malign behavior world-wide. All that Iran needs to do is walk through that open door,” Mr. Bolton said in remarks ahead of Tuesday’s meeting.

Mr. Bolton rejected Iranian demands that sanctions be lifted as a condition of talks, saying Tehran would “either get the point” from current restrictions, or “we will simply enhance the maximum pressure campaign further.”

“It will be I think the combination of sanctions and other pressure that does bring Iran to the table,” Mr. Bolton told reporters after talks designed to get Russia’s help with Iran. “Their say-so that they’ll engage in serious negotiations if we give them relief lacks a certain amount of credibility.”

Mr. Bolton warned Iran against actions like downing an American surveillance drone last week over the Gulf of Oman, or a series of tanker attacks that the U.S. blames Iran for and rockets and missiles fired by Tehran-aligned militias in the region.

“It would be a big mistake for Iran to continue this kind of behavior,” Mr. Bolton said.

The U.S. and Israel see Russia as a key mediator to help rein in Iran. Russia and Iran helped Syrian President Bashar al-Assad remain in power through a brutal civil war, but cracks in their partnership have begun to show, as the two countries vie for power in a postconflict Syria.

Russian national security adviser Nikolai Patrushev said Iran and Russia “can influence each other and listen to each other.” But he stopped short of committing to removing Iran’s presence in Syria, where Tehran has funded and trained militias that Israel sees as an urgent national-security threat.

“We are aware of Israel’s concerns and hope the threats will be removed so that Israel will be safe,” Mr. Patrushev said. “But we also need to remember the interest of other regional powers. Should we ignore them, we won’t achieve concrete results.”

Iran’s foreign ministry echoed Mr. Rouhani, saying Washington signaled it wasn’t genuine about wanting to talk to Tehran because it is sanctioning Iran’s most senior diplomat.

“The useless sanctions against Iran’s leader and the commander of diplomacy means the permanent closure of the channel of diplomacy with the desperate U.S. administration,” foreign ministry spokesman Abbas Mousavi said on Twitter.

“The Trump administration is destroying all the customary, international mechanisms for preserving global peace and security.”

Hesameddin Ashena, a top aide to President Rouhani, said sanctions on Mr. Zarif would turn the foreign minister into “Iran’s Mandela.”

“He fought against domestic apartheid,” Mr. Ashena said on Twitter, likely referring to Mr. Zarif’s diplomatic efforts in bringing together disparate political factions in Iran, “and now he will fight international apartheid.”

Write to Sune Engel Rasmussen at sune.rasmussen@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:10 ET (14:10 GMT)

WASHINGTON—Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing.

Purchases of newly built single-family homes decreased 7.8% to a seasonally adjusted annual rate of 626,000 in May, the Commerce Department said Tuesday. It was the slowest pace of sales since December. Economists surveyed by The Wall Street Journal had expected a sales pace of 683,000 homes in May.

The number of homes for sale in May would last 6.4 months at the recent pace. That’s up from 5.6 months a year earlier. The median sales price of a new home in May was $308,000 down from $316,700 last year. But lower prices and more supply didn’t stoke better demand last month.

Sales data can be volatile and subject to revisions. The May decrease came with a margin of error of plus or minus 14.7 percentage points. Sales in April were revised up modestly to a 679,000 pace, while March sales were revised down to 705,000.

New-home sales are a relatively narrow slice of all U.S. home sales--about 90% of homes purchased in the U.S. were previously owned. Sales of previously owned homes rose in May, increasing 2.5% to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said last week.

The two markets moved in opposite directions last month.

Mounting concerns about the global economy have pushed down borrowing costs, and that appears to be aiding the market for previously owned homes. Mortgage rates are down more than a percentage point from late last year, according to Freddie Mac. That helps make properties more affordable for buyers who finance their purchases.

Low unemployment and rising wages are putting more households in a position to buy, somewhat insulating the broader real-estate sector from a global slowdown.

Tuesday’s report showed home sales fell sharply in the Northeast and West, while rising in the Midwest and South.

Write to Eric Morath at eric.morath@wsj.com and Likhitha Butchireddygari at likhitha.butchireddygari@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:10 ET (14:10 GMT)

Shares of FedEx Corp. (FDX) slumped 2.6% in morning trading Tuesday, enough to pace the Dow Jones Transportation Average's decliners, ahead of the package delivery giant's fiscal fourth-quarter results (http://www.marketwatch.com/story/fedex-earnings-eps-guidance-and-conference-call-to-overshadow-q4-results-2019-06-21) due out after the close. Late Monday, the company filed suit against the U.S. Department of Commerce, saying the Export Administration Regulations (EAR) against FedEx violates common carriers' rights, as it holds FedEx liable for shipments that violate the EAR without requiring evidence that FedEx had any knowledge of violations. FedEx said that while it supports the objective of the EAR, it places an unreasonable burden to police the millions of shipments made every day. "FedEx is a transportation company, not a law enforcement agency," the company said in a statement. FedEx's stock, which has now shed 7.0% amid a 3-session losing streak, has dropped 2.9% year to date, while the Dow transports has gained 10.4% and the Dow Jones Industrial Average has rallied 14.3%.

-Tomi Kilgore

(END) Dow Jones Newswires

June 25, 2019 10:05 ET (14:05 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

By Chris Wack

Visa Inc. (V) said Tuesday that it is buying the token services and ticketing businesses from Rambus Inc. (RMBS) for $75 million in cash.

Visa intends to use the tokenization technology to replace sensitive payment information with a unique identifier, or "token," to make digital payments safer.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

By Eric Morath and Likhitha Butchireddygari

WASHINGTON--Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing.

Purchases of newly built single-family homes decreased 7.8% to a seasonally adjusted annual rate of 626,000 in May, the Commerce Department said Tuesday. It was the slowest pace of sales since December. Economists surveyed by The Wall Street Journal had expected a sales pace of 683,000 homes in May.

The number of homes for sale in May would last 6.4 months at the recent pace. That's up from 5.6 months a year earlier. The median sales price of a new home in May was $308,000 down from $316,700 last year. But lower prices and more supply didn't stoke better demand last month.

Sales data can be volatile and subject to revisions. The May decrease came with a margin of error of plus or minus 14.7 percentage points. Sales in April were revised up modestly to a 679,000 pace, while March sales were revised down to 705,000.

New-home sales are a relatively narrow slice of all U.S. home sales--about 90% of homes purchased in the U.S. were previously owned. Sales of previously owned homes rose in May, increasing 2.5% to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said last week.

The two markets moved in opposite directions last month.

Mounting concerns about the global economy have pushed down borrowing costs, and that appears to be aiding the market for previously owned homes. Mortgage rates are down more than a percentage point from late last year, according to Freddie Mac. That helps make properties more affordable for buyers who finance their purchases.

Low unemployment and rising wages are putting more households in a position to buy, somewhat insulating the broader real-estate sector from a global slowdown.

Tuesday's report showed home sales fell sharply in the Northeast and West, while rising in the Midwest and South.

A copy of the full report is available at: http://www.census.gov/construction/nrs.

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

Lockheed Martin Corp. (LMT) has received a new contract to produce missiles for the U.S. Army, as well for certain foreign militaries, the defense contractor said.

The Bethesda, Md.-based company said Tuesday it will make Army Tactical Missile System missiles under a $561.8 million contract. In a statement, the company didn’t specify which overseas militaries will receive the missiles.

The company will produce the missiles at a facility in Camden, Ark., where it is expanding manufacturing operations.

Shares of Lockheed have risen more than 37% so far this year through Monday, as investors turn to the defense sector to find stocks perceived as safer bets. Investors have also been buying shares of military companies on the expectation that defense spending may rise.

A Senate committee last month approved allocating $750 billion for defense spending as part of a budget bill.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

General Electric Co. reached a tentative four-year agreement with a group of unions late Monday after a few weeks of negotiations, keeping a labor peace as the conglomerate restructures its operations.

The agreement covers about 6,600 workers in 11 unions who work in various GE industrial divisions, including a power turbine factory in Schenectady, N.Y., and an aviation facility in Lynn, Mass.

Union negotiators reached a handshake agreement with the company a day after the previous contract expired. They will now seek the approval of other union leaders and, in the coming weeks, hold a ratification vote by union members.

In a notice to members, the unions said the agreement includes “several general wage increases spread over four years and controls employee health-care costs.” Additional details weren’t immediately available.

The labor deal comes as the sprawling conglomerate is selling off pieces of itself. Four years ago, the same union talks covered about 16,500 workers, but the company has since sold its transportation division and its appliance division. It is in the process of separating its oil and gas business and a major portion of its health-care division. The once-reliable quarterly GE stock dividend is now a penny per share and GE has a new CEO in Larry Culp, the first outsider in the role.

The company incorporated the recent challenges into its labor negotiations by pushing to cut health-care costs and adjust benefits. Labor leaders, who were authorized by members to call a strike, contended that workers had already made sacrifices for the company and weren’t responsible for its decline.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

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The Conference Board Consumer Confidence Index Declined in June

PR Newswire

NEW YORK, June 25, 2019

NEW YORK, June 25, 2019 /PRNewswire/ -- The Conference Board Consumer Confidence Index(R) declined in June, following an increase in May. The Index now stands at 121.5 (1985=100), down from 131.3 in May. The Present Situation Index -- based on consumers' assessment of current business and labor market conditions -- decreased from 170.7 to 162.6. The Expectations Index -- based on consumers' short-term outlook for income, business and labor market conditions -- decreased from 105.0 last month to 94.1 this month.

"After three consecutive months of improvement, Consumer Confidence declined in June to its lowest level since September 2017 (Index, 120.6), " said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers' expectations regarding the short-term outlook also retreated. The escalation in trade and tariff tensions earlier this month appears to have shaken consumers' confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers' confidence in the expansion."

The monthly Consumer Confidence Survey(R) , based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was June 14.

Consumers' appraisal of current-day conditions declined in June. Those claiming business conditions are "good" decreased from 38.4 percent to 36.7 percent, however, those saying business conditions are "bad" also decreased, from 11.7 percent to 10.9 percent. Consumers' assessment of the labor market was also somewhat less upbeat. Those saying jobs are "plentiful" decreased from 45.3 percent to 44.0 percent, while those claiming jobs are "hard to get" rose from 11.8 percent to 16.4 percent.

Consumers were less optimistic about the short-term outlook in June. The percentage of consumers expecting business conditions will be better six months from now decreased from 21.4 percent to 18.1 percent, while those expecting business conditions will worsen rose from 8.8 percent to 13.1 percent.

Consumers' outlook for the labor market was also less favorable. The proportion expecting more jobs in the months ahead decreased from 18.4 percent to 17.3 percent, while those anticipating fewer jobs increased from 13.0 percent to 14.8 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 22.2 percent to 19.1 percent, while the proportion expecting a decrease inched up from 7.8 percent to 8.0 percent.

Source: June 2019 Consumer Confidence Survey(R)

The Conference Board

The Conference Board publishes the Consumer Confidence Index(R) at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.

About The Conference Board

The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.

About NIELSEN

Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen's Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content -- video, audio and text -- is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry's only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90 percent of the world's population. For more information, visit www.nielsen.com.

View original content to download multimedia:http://www.prnewswire.com/news-releases/the-conference-board-consumer-confidence-index-declined-in-june-300874355.html

SOURCE The Conference Board

/CONTACT: Further information: Carol Courter (212) 339-0232 / courter@conference-board.org; Joseph DiBlasi (781) 308-7935 / joseph.diblasi@conference-board.org

/Web site: http://www.conference-board.org

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

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The following are forecasts for this week's remaining U.S. data from a survey compiled by The Wall Street Journal.

Forecasts were last updated on Monday afternoon.

Write to Donna Huneke at dataweekahead@wsj.com

(END) Dow Jones Newswires

June 25, 2019 10:00 ET (14:00 GMT)

DATE      TIME  RELEASE                    PERIOD     CONSENSUS    PREVIOUS 
          (ET) 
Wednesday 0830  Durable Goods Orders        May      -0.3%   (24)  -2.1% 
Thursday  0830  Jobless Claims              Jun 22    219K   (18)   216K 
          0830  Real GDP (3rd Reading)      1Q       +3.1%   (22)  +3.1%* 
          0830  GDP Prices (3rd Reading)    1Q       +0.8%   (9)   +0.8%* 
          1000  Pending Home Sales          May      +1.0%   (11)  -1.5% 
          1100  Kansas City Fed Mfg Svy     Jun       2      (3)    4 
                  Composite Index 
Friday    0830  Personal Income             May      +0.3%   (23)  +0.5% 
          0830  Consumer Spending           May      +0.5%   (23)  +0.3% 
          0830  Core PCE Prices M/M         May      +0.2%   (24)  +0.2% 
          0830  Core PCE Prices Y/Y         May      +1.6%   (15)  +1.6% 
          0945  Chicago PMI                 Jun       52.3   (10)   54.2 
          1000  Consumer Sentiment          Jun       97.9   (16)   97.9** 
                  (Final) 
 
*1Q 2nd Reading 
**June Prelim Reading 
 
(Figures in parentheses refer to number of economists surveyed.)

(MORE TO FOLLOW) Dow Jones Newswires

June 25, 2019 09:59 ET (13:59 GMT)

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June 25, 2019 09:59 ET (13:59 GMT)

By Will Horner

U.S. stocks paused, extending a stretch of quiet trading ahead of a speech later Tuesday from Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average rose 14 points, or 0.1%, to 26742 shortly after the opening bell. The S&P 500 lost less than 0.1% and the Nasdaq Composite declined 0.1%.

Major indexes have hovered in a narrow range the past two days as investors have awaited further details on the direction of monetary policy and trade. Mr. Powell is scheduled later Tuesday to deliver remarks that could offer investors further clues on the central bank's thinking on interest rates. At its last meeting, the Fed suggested it could cut rates in the coming months if economic risks like the U.S.-China trade conflict worsen.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

Corporate news drove swings among individual stocks.

Allergan shares jumped 30% after rival drugmaker AbbVie said it would buy the company for more than $60 billion. AbbVie slipped 11%.

Shares of home builder Lennar jumped 1.2% after reporting better-than-expected earnings.

Elsewhere, the Stoxx Europe 600 fell 0.1%, weighed down by declines among bank stocks.

French consulting firm Capgemini and smaller rival Altran Technologies soared after the two companies agreed to merge, with Capgemini up 7.6% and Altran shares up 22%.

Meanwhile, gold jumped 1% to $1,432.40 a troy ounce, extending a rally that has propelled prices to their highest level since 2013.

Gold prices have been lifted by "a positive cocktail of factors," from lingering global growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Bitcoin extended its gains, reaching a record for the past year as it again crossed the $11,000 threshold. The world's most popular cryptocurrency has soared more than 30% this month, boosted in part by the unveiling of Facebook's Libra digital currency for mainstream users last week.

In Asia, Japan's Nikkei Stock Average fell 0.4%, while Hong Kong's Hang Seng lost 1.2%.

Akane Otani contributed to this article

(END) Dow Jones Newswires

June 25, 2019 09:56 ET (13:56 GMT)

Following are European Central Bank foreign exchange reference rates. All currencies are quoted against the euro.

The reference rates are based on the regular daily procedure between central banks within and outside the European System of Central Banks, which normally takes place at 1415 CET (1215 GMT)

(END) Dow Jones Newswires

June 25, 2019 09:55 ET (13:55 GMT)

 
 
US Dollar               USD       1.1388 
Japanese Yen            JPY       121.97 
Bulgarian Lev           BGN       1.9558 
Czech Koruna            CZK       25.557 
Danish Krone            DKK       7.4654 
British Pound           GBP       0.89485 
Hungarian Forint        HUF       324.49 
Polish Zloty            PLN       4.2563 
Romanian Leu            RON       4.7184 
Swedish Krona           SEK       10.5320 
Swiss Franc             CHF       1.1108 
Norwegian Kroner        NOK       9.6855 
Croatian Kuna           HRK       7.3945 
Russian Rouble          RUB       71.4389 
Turkish Lira            TRY       6.5708 
Australian Dollar       AUD       1.6341 
Brazilian Real          BRL       4.3669 
Canadian Dollar         CAD       1.5001 
Chinese Yuan Renminbi   CNY       7.8347 
Hong Kong Dollar        HKD       8.8915 
Indonesian Rupiah       IDR       16116.30 
Israeli Shekel          ILS       4.1013 
Indian Rupee            INR       78.9725 
Korean Won              KRW       1314.27 
Mexican Peso            MXN       21.9042 
Malaysian Ringgit       MYR       4.7119 
New Zealand Dollar      NZD       1.7140 
Philippine Peso         PHP       58.477 
Singapore Dollar        SGD       1.5411 
Thai Baht               THB       34.973 
South African Rand      ZAR       16.2881 
 

By Thomas Gryta

General Electric Co. reached a tentative four-year agreement with a group of unions late Monday after a few weeks of negotiations, keeping a labor peace as the conglomerate restructures its operations.

The agreement covers about 6,600 workers in 11 unions who work in various GE industrial divisions, including a power turbine factory in Schenectady, N.Y., and an aviation facility in Lynn, Mass.

Union negotiators reached a handshake agreement with the company a day after the previous contract expired. They will now seek the approval of other union leaders and, in the coming weeks, hold a ratification vote by union members.

In a notice to members, the unions said the agreement includes "several general wage increases spread over four years and controls employee health care costs." Additional details weren't immediately available.

The labor deal comes as the sprawling conglomerate is selling off pieces of itself. Four years ago, the same union talks covered about 16,500 workers, but the company has since sold its transportation division and its appliance division. It is in the process of separating its oil and gas business and a major portion of its health-care division. The once-reliable quarterly GE stock dividend is now a penny per share and GE has a new CEO in Larry Culp, the first outsider in the role.

The company incorporated the recent challenges into its negotiations with the union by pushing to cut health-care costs and adjust benefits. The union, which was authorized by members to call a strike, contended that workers had already made sacrifices for the company and weren't responsible for its decline.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:51 ET (13:51 GMT)

 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           107.01-02      107.29-30  -0.26   107.41   106.78  -2.35 
EUR/USD Euro            1.1388-91     1.1397-400  -0.08   1.1415   1.1378  -0.70 
GBP/USD U.K.            1.2719-21      1.2741-43  -0.17   1.2782   1.2712  -0.31 
USD/CHF Switzerland     0.9732-36      0.9719-23  +0.13   0.9775   0.9693  -0.84 
USD/CAD Canada          1.3168-73      1.3178-83  -0.08   1.3198   1.3153  -3.45 
AUD/USD Australia       0.6968-72      0.6960-64  +0.11   0.6975   0.6953  -1.16 
NZD/USD New Zealand     0.6643-49      0.6616-22  +0.41   0.6654   0.6616  -1.10 
 
Euro Rates 
 
EUR/JPY Japan           121.85-89      122.29-33  -0.36   122.48   121.72  -3.05 
EUR/GBP U.K.            0.8954-57      0.8947-50  +0.08   0.8965   0.8917  -0.39 
EUR/CHF Switzerland     1.1085-88      1.1079-82  +0.05   1.1126   1.1063  -1.51 
EUR/CAD Canada        1.4992-5002      1.5019-29  -0.18   1.5050   1.4986  -4.11 
EUR/AUD Australia       1.6335-45      1.6364-74  -0.18   1.6401   1.6318  +0.47 
EUR/DKK Denmark         7.4653-60      7.4661-68  -0.01   7.4674   7.4651  -0.01 
EUR/NOK Norway          9.6937-87      9.6637-87  +0.31   9.7027   9.6643  -2.14 
EUR/SEK Sweden        10.5449-549    10.5722-822  -0.26  10.5919  10.5182  +3.91 
EUR/CZK Czech Rep.      25.526-56      25.550-80  -0.09   25.596   25.536  -0.66 
EUR/HUF Hungary         323.30-70      323.47-87  -0.05   324.60   323.08  +0.77 
EUR/PLN Poland          4.2545-61      4.2525-41  +0.05   4.2587   4.2500  -0.80 
 
Yen Rates 
 
AUD/JPY Australia        74.58-62       74.69-73  -0.15    74.86    74.33  -3.48 
GBP/JPY U.K.            136.09-15      136.67-73  -0.42   136.84   136.07  -2.69 
CAD/JPY Canada           81.23-27       81.39-43  -0.19    81.50    80.98  +1.11 
NZD/JPY New Zealand      71.09-16       70.98-01  +0.14    71.28    70.97  -3.42 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.      22.402-52      22.408-58  -0.02   22.464   22.397  +0.03 
USD/HUF Hungary       283.85-4.25    283.71-4.11  +0.05   285.14   283.51  +1.45 
USD/DKK Denmark         6.5552-62     6.5497-507  +0.08   6.5618   6.5425  +0.68 
USD/NOK Norway          8.5113-73     8.4766-826  +0.41   8.5167   8.4751  -1.47 
USD/PLN Poland          3.7367-72      3.7309-14  +0.16   3.7403   3.7261  -0.10 
USD/RUB Russia          62.817-87      62.519-89  +0.48   62.854   62.499  -9.23 
USD/SEK Sweden         9.2596-686     9.2746-836  -0.16   9.2937   9.2409  +4.65 
USD/ZAR S. Africa     14.3011-311    14.3488-788  -0.33  14.3761  14.2692  -0.31 
 
USD/CNY China          6.8797-817      6.8760-80  +0.05   6.8847   6.8668  +0.03 
USD/HKD Hong Kong      7.8096-101      7.8087-92  +0.01   7.8110   7.8049  -0.28 
USD/MYR Malaysia        4.1345-95      4.1400-50  -0.13   4.1465   4.1370  +0.11 
USD/INR India           69.308-28      69.263-83  +0.07   69.371   69.255  -0.36 
USD/IDR Indonesia        14118-32       14140-54  -0.16    14187    14095  -1.77 
USD/PHP Philippines     51.360-80      51.320-40  +0.08   51.410   51.310  -2.15 
USD/SGD Singapore       1.3532-42      1.3528-38  +0.03   1.3542   1.3520  -0.68 
USD/KRW S. Korea     1153.01-5.01   1153.67-5.67  -0.06  1156.90  1153.12  +3.56 
USD/TWD Taiwan          31.031-61      30.930-60  +0.33   31.129   30.851  +1.52 
USD/THB Thailand       30.690-710      30.660-80  +0.10   30.760   30.610  -5.01 
USD/VND Vietnam         23273-343      23263-333  +0.04    23309    23259  +0.49 
 
USD/BRL Brazil          3.8306-36      3.8232-62  +0.19   3.8364   3.8247  -1.27 
USD/MXN Mexico        19.2029-329   19.1888-2188  +0.07  19.2461  19.1633  -2.19 
USD/ARS Argentina     42.3613-937    42.4062-386  -0.11  42.4779  42.2691 +12.57 
 
Source: Tullett Prebon 
 

(END) Dow Jones Newswires

June 25, 2019 09:50 ET (13:50 GMT)

Falling steel prices are adding pressure to United States Steel Corp.’s plan to get better performance from its mills by making overdue repairs and equipment upgrades.

The Pittsburgh-based company is idling two steelmaking blast furnaces next month in response to lower demand from manufacturers and a year-long slide in prices. U.S. Steel has scaled back its projected steel shipments this year but is still counting on a 5% increase from last year to 11 million tons.

The company said it can offset the capacity lost at the idled furnaces with better performance from other furnaces and equipment in its mills. The company—which restarted two idle furnaces last year at its Granite City, Ill., mill—is in the middle of $1.5 billion program to repair and upgrade its facilities after what some executives said was years of underinvestment.

U.S. Steel has had difficulty sustaining problem-free production in recent years. Its mills have been hobbled by outages from equipment breakdowns and other mishaps, which also have hurt profit by driving up costs and holding down steel output.

“They can’t really afford any more unplanned outages,” said Christopher Plummer, president of Metal Strategies Inc., a consulting firm in West Chester, Pa.

The company said nearly two-thirds of the mill revitalization program is complete. The work should result in higher production volumes and better reliability and performance from its equipment. The company expects to spend more than $300 million this year, including working on one of the furnaces that will be idled.

“We are seeing the volume benefits from our asset revitalization work,” the company said. “The asset revitalization is improving the performance and reliability of our targeted assets.”

U.S. Steel’s century-old coal-coking plant near Pittsburgh caught on fire this past Christmas Eve, knocking out pollution controls and expelling tens of thousands of pounds of acrid sulfur-dioxide gas over several weeks. The company said in May that it was installing new pollution controls at the plant and planned to divert gas from the plant to generate electricity. The plant caught fire again on June 17.

Falling steel prices also are hurting U.S. Steel’s margins. Because U.S. Steel’s costs are among the highest in the industry, it loses money more quickly when prices fall. The benchmark price for hot-rolled coiled steel in the U.S. is about $530 a ton, down more than 40% from its high point last summer after the Trump administration instituted tariffs on foreign steel.

“People are buying less and holding less,” said Todd Leebow, chief executive of Majestic Steel USA, an Ohio-based steel distributor.

The furnaces that will be turned off next month, at U.S. Steel’s flagship Gary Works mill in Indiana and at its Great Lakes Works near Detroit, will cut about 1.1 tons of capacity for the company through the end of this year, analysts said.

U.S. Steel continues to use blast furnaces to produce steel. Those furnaces make it more difficult for the company to lower its production volume than its competitors with more flexible electric furnaces in their mills.

Blast furnaces have to be operated at high volume to keep them sufficiently hot to avoid damage. The newer electric furnaces that Nucor Corp., Steel Dynamics Inc. and others use to melt scrap into new steel can be more easily turned down when demand weakens and quickly accelerated when sales improve.

U.S. Steel is building an electric furnace in Alabama to produce steel for pipe used by fracking companies. But most of its mainline sheet steel products continue to come from aging blast furnaces.

“They’re more at risk for unplanned outages than their competitors,” Mr. Plummer said.

Write to Bob Tita at robert.tita@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:50 ET (13:50 GMT)

TOKYO—In a rare corporate comeback, the ousted chief executive of Lixil Group Corp. recovered his job at the Japanese bath and kitchen company with the support of some foreign activist shareholders.

Kinya Seto returned on Tuesday to Lixil’s helm, eight months after losing his job in a clash with then-Chairman Yoichiro Ushioda, who has now himself lost all his company positions.

“I’m simply overjoyed that I could come back to Lixil,” Mr. Seto said. “We’ll start anew as one team.”

Lixil, whose brands include American Standard toilets, has suffered in the past few years from troubled overseas acquisitions. Lixil logged a nearly $500 million loss in the year ended March 31 due partly to write-downs over Permasteelisa, an Italian contractor it acquired in 2011.

Lixil’s shareholders on Tuesday elected eight board members proposed by Mr. Seto and a fellow director. They also selected six additional directors nominated by the previous management. The balance favored Mr. Seto, and the board chose him as the new chief.

Some foreign shareholdershad questionedthe abrupt way in which Mr. Seto was ousted last year and the role of Mr. Ushioda, who became CEO after the ouster. After a third-party investigation, Lixil said there was nothing wrong with the change but it could have been communicated better.

“It’s a real victory for shareholder rights in Japan,” said Howard Smith, partner at New York-based asset-management firm Indus Capital Partners LLC. He said the outcome sends a message to many Japanese companies that “shareholders have the right and power to correct governance failings.”

Mr. Smith said Indus voted for Mr. Seto and his slate of directors and against candidates proposed by the previous management. He didn’t disclose the firm’s stake in Lixil.

Several foreign investors, including Australia-based Platinum Investment Management Ltd., which owns a 4.4% stake in Lixil, also supported the Seto slate.

Prime Minister Shinzo Abe’s government has sought to encourage greater shareholder oversight at companies. In recent months, U.S.-based activists havetaken a prominent role pushing change at major companiessuch as Toshiba Corp. and Olympus Corp.

Lixil’s shares, which lost more than half their value in 2018, have recovered somewhat this year amid the shareholders’ activism.

Not all the foreign parties were on Mr. Seto’s side. Influential proxy advisories Institutional Shareholder Services Inc. and Glass, Lewis & Co. recommended that shareholders vote against Mr. Seto. Glass, Lewis said it was sympathetic to Mr. Seto but his performance in his first stint as CEO from 2016 to last year didn’t suggest he could be successful.

Mr. Seto said Tuesday that Lixil needed to do a better job concentrating on its most promising businesses.

Mr. Smith of Indus Capital said Mr. Seto had a sensible plan of focusing on bathroom and sanitary businesses outside Japan and selling unwanted subsidiaries such as Permasteelisa, the Italian contractor.

“I think Seto-san has unfinished business at Lixil and I think he deserves a chance to complete…the execution of his business plan,” Mr. Smith said.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:50 ET (13:50 GMT)

By Oliver Griffin

Tullow Oil PLC (TLW.LN) said Tuesday that it and its joint venture partners in Kenya have signed a heads of terms agreement with the country's government for the development of the South Lokichar Basin.

The oil-and-gas company said it signed the agreement alongside Total SA (FP.FR) and Africa Oil Corp. (AOI.T) to capture all the key commercial principles related to implementing their joint oil project in Kenya.

Describing the agreement as a major and important milestone toward reaching a final investment decision, Tullow said the parties have agreed that the Amosing, Ngamia and Twiga fields should form the development's foundation stage, complete with a central processing facility that can process 60,000 to 80,000 barrels of oil a day.

Tullow said the joint venture partners will focus their efforts on securing financing for constructing a pipeline for the project while continuing to progress other works that lead to the selection of contractors ready for a final investment decision.

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

(END) Dow Jones Newswires

June 25, 2019 09:49 ET (13:49 GMT)

Stocks opened little changed Tuesday as investors awaited remarks by Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average rose 13 points, or less than 0.1%, to 26,740, while the S&P 500 was down less than a point at 2,944. The Nasdaq Composite was off 0.1% at 7,997. Investor expectations for the Federal Reserve to deliver a rate cut as early as next month were boosted after last week's policy meeting and Powell's news conference. Powell will have the opportunity to affirm or soften those expectations when he speaks at 1 p.m. Eastern at the Council on Foreign Relations in New York. Shares of Allergan PLC (AGN) jumped nearly 29% after agreeing to be bought by fellow drugmaker AbbVie Inc. (ABBV) in a deal valued at $63 billion. Abbvie shares fell 11.5%.

-William L. Watts

(END) Dow Jones Newswires

June 25, 2019 09:46 ET (13:46 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

By Micah Maidenberg

Lockheed Martin Corp. (LMT) has received a new contract to produce missiles for the U.S. Army, as well for certain foreign militaries, the defense contractor said.

The Bethesda, Md.-based company said Tuesday it will make Army Tactical Missile System missiles under a $561.8 million contract. In a statement, the company didn't specify which overseas militaries will receive the missiles.

The company will produce the missiles at a facility in Camden, Ark., where it is expanding manufacturing operations.

Shares of Lockheed have risen more than 37% so far this year through Monday, as investors turn to the defense sector to find stocks perceived as safer bets. Investors have also been buying shares of military companies on the expectation that defense spending may rise.

A Senate committee last month approved allocating $750 billion for defense spending as part of a budget bill.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:45 ET (13:45 GMT)

(END) Dow Jones Newswires

June 25, 2019 09:45 ET (13:45 GMT)

(END) Dow Jones Newswires

June 25, 2019 09:45 ET (13:45 GMT)

TOKYO—Jean-Dominique Senard showed up at Nissan Motor Co.’s annual shareholder meeting in a Toyota—and the meeting only got rockier from there.

The chairman of top Nissan shareholder Renault SA found a restive crowd of Nissan loyalists who accused him of betraying the Japanese auto maker on behalf of Renault and the French state. He fought back, visibly angry.

“I would like to remind you that since I arrived, I did everything to smoothen the relationship of an alliance that I found in a much worse state than I thought. I’ve done everything I could,” said Mr. Senard, who joined Nissan’s board in April.

The meeting managed to get finished with its main business, electing a Nissan board with more independent directors and new committees to oversee management. And it produced a conciliatory statement from Nissan Chief Executive Hiroto Saikawa about Mr. Senard’s hope for a merger between Renault and Fiat Chrysler Automobiles NV.

But the nearly 3½-hour affair revealed a strained Renault-Nissan alliance with little trust in reserve after the downfall of Carlos Ghosn, the executive who had dominated both companies until his November arrest.

One shareholder said Nissan’s profit was low compared with the synergies of €5.7 billion ($6.5 billion) that the Renault-Nissan alliance cites on its website.

“Are you sure you’re benefiting from the synergies? Isn’t Renault the only one benefiting?” said the shareholder. Mr. Saikawa said Nissan and Renault had rules governing how they split costs. The shareholders couldn’t be seen on the video feed supplied by Nissan.

Relations between Nissan and Renault, which owns 43.4% of the Japanese company, have become fraught in recent months, following two moves by Mr. Senard that would have reshaped their relationship. In April, Mr. Senard approached Mr. Saikawa about a possible merger between the companiesand was swiftly rebuffed. In May, Mr. Senard tried to merge Renault and Fiat Chrysler, an idea that was derailed in part because of Nissan’s unwillingness to go along.

Tensions hit the boiling point earlier this month, after Renault threatened to upend Mr. Saikawa’s board changes unless it got its chief executive on Nissan’s audit committee. Nissan yielded on that point, buying peace with Renault at the meeting—but also criticism from a shareholder who said Mr. Saikawa was giving Japan a reputation for capitulating to foreigners.

Mr. Senard’s use of a Toyota didn’t help matters. While some at Nissan bridled, asking whether the Renault chairman had given thought to appearances, a person close to Renault said a third party chose the vehicle and Mr. Senard had nothing to do with it. “He’s always riding in Nissans,” this person said.

One shareholder, who gave his family name as Yoshida, accused Mr. Senard of attempting a hostile takeover of Nissan, spurred on by the French government, a major Renault shareholder.

“Don’t you want to make an alliance that is more beneficial for Renault with French state at the back? Do you want to merge with FCA as the French state wants? You are increasing Renault nominees in the committees and you want to increase the number of Renault nominees in the board so you can create a merger with Renault? That’s obvious,” Mr. Yoshida said.

Mr. Senard, at times repeating himself over shouts from the crowd, said he wanted the best for Nissan and had no hidden motives. “There was obviously no aggressive intention,” he said of the merger plans. “The last thing that came in my mind was to be aggressive towards a company of which I am a director.”

He added that a merger between Renault and Fiat Chrysler “would have been a wonderful project for Nissan.”

Nissan’s Mr. Saikawa also faced tough questions from some shareholders about his decision to stay on despite the company’s poor financial performance. He was questioned about his inability to detect the alleged wrongdoing by Mr. Ghosn, which led to the former chairman’s expulsion from the company. Mr. Ghosn, who is awaiting trial in Tokyo on financial-misconduct charges, says he is innocent.

Mr. Saikawa said he felt a responsibility to stay on until the new board found a successor but didn’t give a timeline for that process. He said he thought a turnaround of Nissan’s troubled U.S. operations would take two to three years.

In one concession to Renault, Mr. Saikawa said in his clearest language yet that he was ready to hear Mr. Senard’s pitch to reshape the 20-year-old alliance.

Renault executives see the installation of Nissan’s new board, approved by shareholders Tuesday, as a step toward the possible resumption of merger talks with Fiat Chrysler. Mr. Saikawa hinted he would be open to the idea.

Acknowledging that Nissan’s role in blocking merger discussions had created friction between the parties, Mr. Saikawa said, “It is critical to create opportunities with Renault to discuss the future form of our relationship.”

People close to Nissan have said the company would be willing to back a Renault-Fiat Chrysler merger if it involved a significant reduction in Renault’s stake in Nissan.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

1340 GMT - German asset manager DWS's base case is for a soft Brexit--one with a deal or with some form of customs union, chief investment officer Stefan Kreuzkamp says at a press event in Frankfurt. These scenarios would have a moderate market impact, he says. DWS currently sees a rather low risk of the U.K. leaving the European Union without a deal but Kreuzkamp this scenario "would be very negative for risk premia, it would be very negative in particular for the currency." (emese.bartha@wsj.com)

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Federal Reserve Chairman Jerome Powell will deliver his semiannual monetary policy report to the House Financial Services Committee on July 10, the committee announced Monday.

Mr. Powell will testify before the Senate Banking Committee the following day, July 11, a spokeswoman said Monday.

The Fed held steady its benchmark rate last week in a range between 2.25% and 2.5%, and Mr. Powell signaled officials could cut the rate if the economic outlook doesn’t soon improve due to rising concerns about slowing global growth and trade uncertainty.

The hearings would be the first since President Trump in March signaled his desire to remake the nation’s central bank by nominating loyal supporters who have shared his criticism of Fed policy.

Mr. Trump didn’t end up nominating the candidates, former GOP presidential hopeful Herman Cain and campaign adviser Stephen Moore, after Republican senators signaled they didn’t support the candidates.

Write to Nick Timiraos at nick.timiraos@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

French manufacturing sector sentiment soured this month as business leaders became less optimistic about activity in the sector.

Figures from statistic agency Insee’s monthly survey on Tuesday showed that manufacturing sentiment declined to 102 in June from May’s six-month high of 104. Consensus in a Wall Street Journal poll had projected a flat reading. June’s figure was the lowest since November 2016.

The shift in the mood of the manufacturing sector of the eurozone’s second-largest economy comes a day after figures showed deteriorating business sentiment in its largest. The German Ifo business climate index dropped for a third straight month in June to its lowest point since November 2014, data showed Monday.

Investors will now look ahead to Wednesday’s releases to gauge the temperature of consumer sentiment in both France and Germany. The Germany GfK consumer climate survey for July is due at 0600 GMT and will be followed by France’s consumer confidence poll for June. Economists in a WSJ poll expect both measures to have turned more negative.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 02:50 ET (06:50 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

As The RealReal Inc. prepares to go public this week, the online marketplace for used luxury goods faces a big challenge: weeding out the fakes.

The startup sells preowned Louis Vuitton handbags, Gucci dresses and other designer items that people list on consignment. The San Francisco company, which was started in 2011, is expected to price its shares on Thursday in an offering that will value it at roughly $1.5 billion.

Key to its success is battling a booming trade in counterfeit goods and getting shoppers to trust it enough to pay $4,700 for a used Chanel jacket or $7,500 for a Rolex watch. Like other sellers of secondhand merchandise, RealReal gets almost no help from brands in identifying genuine products from copycats.

That makes the authentication process time-consuming and filled with educated guesswork. It is also hard to scale as the company grows. It took 20 hours to measure every diamond in a Graff necklace the company vetted for sale this year, said Julie Wainwright, RealReal’s founder and chief executive, in an interview in January.

“It’s like reverse engineering the Coke recipe,” said Pano Anthos, managing director of XRC Labs, which provides seed capital to retail and consumer brands, but has no investment in RealReal. “You might think you have it, but it’s not exact.”

Despite uncertainty over provenance, demand for previously owned luxury goods is on the rise, particularly among millennials who don’t attach a stigma to used products the way previous generations did. They see the secondary market as a way for fashion to be more sustainable by giving products a longer life. Designer brands have come under fire in recent months for burning unsold goods. In September, Burberry Group PLC said it would discontinue the practice.

“The drumbeat on the bad effect of fashion on the environment is getting louder,” Ms. Wainwright said in January.

Bain & Co. estimates that the U.S. luxury resale market totaled $6 billion in 2018. The overall U.S. resale market for clothing, accessories and footwear is far larger and growing fast. It is expected to reach $51 billion by 2023, up from $24 billion last year, according to GlobalData PLC, which prepared the research for a report published by online reseller ThredUP.

In April, Neiman Marcus Group Ltd. bought Fashionphile, an online seller of what some call preloved designer handbags and accessories. Other secondhand marketplaces are gaining traction, including Vestiaire Collective and Poshmark.

Sanaa Himani said she regularly scours consignment websites, but feels most comfortable buying from RealReal. “They make a big effort to verify everything, and they also have a money-back guarantee,” said the 29-year-old Manhattan resident. RealReal will refund the purchase price if a buyer questions an item’s authenticity.

Ms. Himani recently bought a secondhand sweatshirt from the streetwear brand Off-White on Poshmark for $225 only to discover it wasn’t genuine. The fit was too snug and the brand’s name was misspelled on the label.

A spokeswoman for Poshmark said the company is working to resolve the issue with Ms. Himani. She added that shoppers who believe they have purchased counterfeit goods from the site can seek a refund by emailing images of the item in question. Poshmark automatically authenticates items priced at or above $500.

RealReal, which in addition to its website operates three retail stores, owns little inventory. Instead, it acts as a clearinghouse for buyers and sellers. Consignors keep 55% to 70% of the sale price, though for some products they can earn as much as 85%.

The company incurred a loss of $75.8 million for the year ended Dec. 31, on revenue of $207 million, up 55% from the prior year. Returns or order cancellations accounted for 29% of the total amount customers paid for goods in 2018. Last year alone, the company added 2.6 million items to its stable.

RealReal employs more than 100 gemologists, watch and brand experts and art curators, who inspect items for “attributes such as appropriate brand markings, date codes, serial tags and hologram stickers,” according to documents it filed in connection with its stock offering. It also uses algorithms and data analytics and is working with the University of Arizona to develop technology to speed the inspection of gemstones, the documents say.

Graham Wetzbarger, RealReal’s chief authenticator, shared some clues his team uses to spot fakes in an October 2018 post on the company’s website. The heat stamp on an Hermès Kelly bag is located below the front strap and will be either silver or gold to match the hardware. The Balenciaga Triple S sneaker will always have four lines at the heel, according to Mr. Wetzbarger.

“All of the signature elements of the Kelly bag are copyable—that’s the whole problem with the counterfeit industry,” said Mr. Anthos, the seed investor.

Ryan Yagura, an intellectual-property lawyer, who polices websites for counterfeit goods but doesn’t work with RealReal, said: “The more expensive the item, the more money the counterfeiters spend to make it look real.”

The global trade in fake goods jumped 10% to $509 billion in 2016, the latest year for which figures are available, from $461 billion three years earlier, according to the Organization for Economic Cooperation and Development.

The brands are best-positioned to ferret out copycats. But so far they are unwilling to work with sellers of preowned goods. They worry that a booming secondary market will depress prices of first-run goods, industry executives said.

The only designer working with RealReal is Stella McCartney. Consignors who sell preowned Stella McCartney products with the startup get a $100 credit to buy new Stella McCartney goods from the brand, which adopted recycled materials early and doesn’t sell real fur.

Other brands have taken a harsher stance. Chanel is suing RealReal, alleging the marketplace sells counterfeit products and that only Chanel can authenticate its goods. RealReal said in its offering documents that an unfavorable outcome to the litigation could cause Chanel and other brands to bring additional claims against the company.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Federal Reserve Bank of Dallas President Robert Kaplan said it is too soon to say whether the Fed will need to reduce interest rates in coming months due to rising uncertainty over trade tensions and weaker global growth.

“The question is whether trade and global growth uncertainties are likely to persist in a manner that leads to a material deterioration in the outlook for U.S. economic growth,” said Mr. Kaplan in an essay published Monday afternoon. “At this stage, I believe it is too early to make a judgment on this question.”

Mr. Kaplan’s essay indicates he supported last week’s decision by the Fed’s rate-setting committee to hold its benchmark rate steady in a range between 2.25% and 2.5%. Nearly half of officials indicated they thought lower rates would be needed by year’s end, in projections released after the meeting.

Nine of 10 voting members of the Federal Open Market Committee approved the rate decision last week, with St. Louis Fed President James Bullarddissenting in favor of lower rates. On Friday, Minneapolis Fed President Neel Kashkari said he would have voted to cut the benchmark rate last week by 0.5 percentage point.

Mr. Kashkari and Mr. Kaplan aren’t voting members this year.

Trade tensions between the U.S. and China and the U.S. and Mexico escalated in May. While the U.S. suspended potential tariffs on Mexico, the prospect for any resolution with China hangs for now on the outcome of a meeting later this week between President Trump and Chinese President Xi Jinping.

Because the trade-policy outlook has darkened suddenly, Mr. Kaplan said, “it would be wise to allow events to unfold a bit more before making judgments regarding the stance of monetary policy.”

The Dallas Fed leader suggested that any move toward lower interest rates would require the central bank to lean more heavily on stronger regulation to guard against potential excesses from building in the economy, particularly with respect to fueling more leverage in the corporate sector. With businesses less able to pass higher prices on to their customers, “debt-financed activity becomes harder to resist,” he wrote.

Business debt that is used to buy back shares or finance corporate acquisitions can help boost earnings during good times, but could hurt balance sheets during downturns. “This is just one example of the type of excess that may seem innocuous when times are good, but can become more troublesome in a downturn,” he said.

As a result, Mr. Kaplan said it was important for the central bank to maintain stronger capital requirements and stress testing for banks, and for regulators to watch nonbank financial companies carefully. Tougher oversight “should provide more flexibility for monetary policy to deal primarily with economic conditions,” he wrote.

Write to Nick Timiraos at nick.timiraos@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

U.S. and U.K. regulators said they would jointly work to address financial engineering in the derivatives market that may push healthy companies to default on debt, echoing worries about potential gamesmanship involving credit-default swaps.

Leaders of the Securities and Exchange Commission, Commodity Futures Trading Commission and U.K. Financial Conduct Authority warned against the type of credit-derivative trade attempted last year by Blackstone Group LP.

In that case, Blackstone’s GSO Capital Partners LP arm positioned itself to profit on bearish derivative bets when Hovnanian Enterprises Inc. missed bond payments. Hovnanian, in exchange, received a sweetened financing package from Blackstone.

Because Hovnanian had the money to pay its debts, investors on the other side of Blackstone pilloried the trade as underhanded while complaining it would tempt other healthy companies to default for an investor’s profit.

Manufactured defaults “may adversely affect the integrity, confidence and reputation of the of the credit derivatives markets, as well as markets more generally,” the agency heads said in a joint statement Monday.

The regulators said they would take steps including talking with industry players about “transparency, accountability, integrity, good conduct and investor protection in these markets.”

Credit derivatives provide insurance on corporate debt and pay out when companies default on their debts, usually because they are in financial distress. On some occasions, though, companies have agreed to miss payments, triggering credit-default swaps on their debt by choice.

Investors and regulators became wary last year that manufactured defaults could become more popular after Blackstone’s lending arm persuaded home builder Hovnanian to ignore a bond payment owed to one of its subsidiaries. The nonpayment was designed to trigger credit-default swaps on Hovnanian debt, sending insurance payouts to Blackstone without exposing the company to a broader default and potential bankruptcy.

Insurance payments would have come from Goldman Sachs Group Inc. and Solus Alternative Asset Management LP, who were Blackstone’s trading counterparties on the contracts.

The worry was that other companies and market participants would engineer defaults for profit, ruining default insurance as a useful source of lender protection. While GSO maintained it did nothing wrong and made an attractive loan offer to Hovnanian, the CFTC led an unusual crusade to scuttle the trade. At the CFTC’s urging, Blackstone struck deals with Goldman and Solus to close out the wager.

Yet credit-default swaps have continued to drive lending strategies for hedge funds. Last year, the Sears Holdings Corp. bankruptcy pitted buyers and sellers of default insurance against each other as they competed for company assets to influence where the trades settled.

In January, United Natural Foods Inc. sued Goldman alleging the investment bank manipulated a financing package to benefit credit derivative positions held by its hedge-fund clients. In court filings, Goldman has denied the allegations.

Windstream Holdings Inc. also filed for bankruptcy protection this year after losing a legal battle with hedge fund Aurelius Capital Management LP that the company said was motivated by a credit-default swap position.

Windstream claimed that Aurelius had bought credit insurance on its bondholdings that put it in line for a big payout if Windstream filed for bankruptcy. Aurelius walked away with a profit when the derivatives settled, according to people familiar with the matter.

Henry Hu, a law professor at the University of Texas and expert on swaps, said regulators could require disclosure of situations in which creditors stand to gain more if a borrower defaults than if it pays its debt. These “empty creditors” own some of a company’s bonds, granting them certain rights to enforce legal obligations, but they have even more exposure through bearish bets on credit-default swaps.

“If you develop a reputation as an empty creditor with negative economic exposures, that would undermine your reputation and undermine the willingness of companies to deal with you,” Mr. Hu said. “So it imposes reputational costs on these kinds of abusers.”

Steps by regulators to require greater disclosure would raise awareness among judges and borrowers, he added. That could give “moral support” to judges who wish to consider a creditor’s economic motives when deciding standoffs between opportunistic investors and borrowers, he said.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

President Trump on Monday pushed for greater price disclosure in health care, signing an executive order that could make thousands of hospitals expose more pricing information and require doctors, health clinics and others to tell patients about out-of-pocket costs upfront.

While President Trump has pledged repeatedly to take on health costs, the signing of the executive order unleashes coordinated efforts from multiple agencies to pursue the goal. It calls for the Department of Health and Human Services to issue a rule within two months that could require hospitals to publicize information on their negotiated rates with insurers for common procedures.

In comments Monday at the White House, Mr. Trump said the order would fundamentally change the health-care marketplace. “There’s frankly no rhyme or reason for what’s been happening for so many years,” he said, adding that the “lack of price transparency has enriched industry giants greatly.”

Industry groups are mobilizing to fight back, saying any requirement that hospitals and insurers disclose negotiated rates would go too far. Lawsuits could be likely, meaning any action could be delayed until after the presidential election. They also said the order lacks many specifics, raising questions about how aggressive the administration will actually be in exposing the murky realm of health-care pricing.

“This effort is all about 2020,” said Tom Nickels, executive vice president of the American Hospital Association, which opposes the plan. “This is their effort to come up with a health-care agenda for 2020.”

President Trump’s order reflects a deeper worry over the escalating cost of health care animating voters and shaping the presidential election. More than two-thirds of people say that reducing health-care costs should be a top priority for the president and Congress this year, according to a January survey by the Pew Research Center.

Democrats and Republicans are clashing over solutions. Democratic presidential candidates want to expand the federal government’s role in health care as a way to keep a thumb on prices. President Trump’s executive order stems from the belief that exposing rates will turbocharge a free market, enabling competition to drive down costs.

Some action could come soon because the administration is already working on two unrelated rules that deal with pricing. HHS is expected in July to release a hospital payment rule that may include price-disclosure requirements, and a separate health-information rule could also require rates to be publicly shared. Either regulation could become a tool for delivering on the order.

The administration has said patients should know how much they are going to pay and how much hospitals get for providing care. Its goal is to enable consumers to make health-care decisions with clear pricing and information on the quality of services.

Seema Verma, administrator at the Centers for Medicare and Medicaid Services, said Mr. Trump wanted to go beyond just having hospitals post their list prices. That requirement went into effect this year and doesn’t force the disclosure of discounted rates paid by insurers.

“We really want to make sure it’s meaningful,” she said Monday in an interview.

The proposed rule to force hospital-rate disclosures with insurers would target hospitals and doctors employed by them. The order says the coming regulation would require hospitals to publicly post “information based on negotiated rates” for common services.

But the order doesn’t say if hospitals would have to disclose the average of all rates they get from insurers or the specific rate they get from an individual’s insurer. That detail matters: The average rates would have a milder effect on local markets as insurers and hospitals still wouldn’t get clarity on rivals’ specific secret rates.

Some health analysts said exposing rates could reveal more information about costs and actually fuel support for Medicare for All, a goal backed by some Democratic presidential candidates that would set upper limits on hospital reimbursements.

Another possible consequence is that hospitals might ask for more from an insurer to match what rivals are getting, which could ultimately drive up health costs.

“Requiring price disclosure for thousands of hospital items, services and procedures perpetuates the old days of the American health-care system paying for volume over value,” Matt Eyles, chief executive of America’s Health Insurance Plans, a trade group for the industry. “We know that is a formula for higher costs and worse care for everyone.”

But the order could provide more clarity for millions of consumers. In addition to a rule on hospital prices, the order requires federal agencies in 90 days to pursue a plan for requiring providers and insurers to give patients upfront, out-of-pocket cost information. It is possible any rule would permit providers to provide estimates, and many insurers already offer this information through various health-cost calculators.

Write to Stephanie Armour at stephanie.armour@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

The growth of U.S. home prices continued to slow in April in another sign of a weaker-than-expected selling season.

Average home prices in major metropolitan areas rose 3.5% in the year ended in April, decelerating from 3.7% the prior month and 3.9% in February, according to the S&P CoreLogic Case-Shiller National Home Price Index.

“Home price gains continued in a trend of broad-based moderation,” said Philip Murphy, managing director of S&P Dow Jones Indices, who cited decreased demand in light of upward trending housing supply.

Though the pace of home prices growth has been slowing for a year now, average prices still continue to increase in most major U.S. cities and to outpace inflation, with the exception of Seattle, where prices were flat in April, according to the report.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.

That is the picture that emerges from bitcoin futures listed on CME Group Inc., the biggest U.S. exchange operator. Futures are contracts that let traders bet on whether an asset—in this case, bitcoin—will rise or fall.

Hedge funds and other money managers held about 14% more bearish “short” positions in CME bitcoin futures last week than they did bullish “long” positions, according to a recent Commodity Futures Trading Commission report.

Other large traders were even more bearish. So-called “other reportables”—a loose category of firms that don’t necessarily manage money for outside investors—held more than three times as many short positions in bitcoin futures as long ones, the CFTC report shows.

So who is the optimist? The report shows it is mostly small investors taking the other side of the trade. Among traders with fewer than 25 bitcoin contracts—a category that likely captures many individuals placing bets in bitcoin—long wagers outnumbered short bets by 4 to 1.

“Traditional market participants may be more skeptical of [bitcoin] than millennial day traders,” said George Michalopoulos, a portfolio manager with Chicago fund manager Typhon Capital Management LLC, although he stressed that his views were speculative and that it is hard to know what is driving the CFTC’s numbers.

The CFTC report, which came out Friday, reflected the positioning of market players on June 18, when one bitcoin could buy around $9,000. The cryptocurrency was trading at about $10,900 late Monday afternoon.

Though it comes with a lag, the weekly CFTC report offers a glimpse into how various types of traders are positioned in bitcoin futures. Commodity traders closely follow similar CFTC reports on futures like crude oil, wheat and corn for hints of what is driving the market.

The CFTC data shows that hedge funds have been short bitcoin since February, though they recently pared their bearish bets. On June 11, short bets among hedge funds outweighed long bets by 47%, a gap that narrowed to 14% the following week.

Such data don’t necessarily mean hedge funds are placing outright bets that bitcoin will drop. The short bets could also be part of hedging strategies: for instance, a fund with a portfolio of bitcoins might go short at CME as insurance against the value of bitcoin dropping.

Trading activity has grown in CME’s bitcoin futures in recent months, along with the rebound in bitcoin’s price. In May, average daily trading volume in the CME contract hit a record $515 million, the exchange operator says.

L. Asher Corson, a cryptocurrency analyst at Chicago proprietary trading firm Consolidated Trading, said traders who want to short bitcoin don’t have many choices besides CME.

One option is to borrow bitcoins from another trading firm, while agreeing to sell the bitcoins back to that firm later—a process similar to how short selling works in stocks. But the difference is that, in the volatile bitcoin market, few firms are willing to offer that service to short sellers because of the risk of their customers defaulting, Mr. Corson said.

“CME right now is providing a unique ability for the larger players to have massive short positions with very low counterparty risk,” Mr. Corson said.

Volumes in CME’s bitcoin futures contract got a lift when a competing U.S. exchange operator that offered a similar contract, Cboe Global Markets Inc., recently discontinued it. Cboe’s last bitcoin futures contract expired last week.

But CME is set to face additional competition soon. Intercontinental Exchange Inc., owner of the New York Stock Exchange, is set to begin testing of a new bitcoin futures contract in July. And a group of prominent financial firms, including TD Ameritrade Holding Corp. and Fidelity Investments, are backing a venture called ErisX, which plans to offer both futures and spot trading of cryptocurrencies.

Volumes in CME’s contract remain a fraction of the billions of dollars’ worth of daily activity in the bitcoin “spot” market, where actual units of the digital currency change hands. But some recent studies suggest that the size of the bitcoin spot market is inflated because of rampant fake trading at cryptocurrency exchanges.

That should prompt traders to take a closer look at CME bitcoin futures, analysts from JPMorgan Chase & Co. said in a June 14 report. As a regulated exchange, CME bars wash trading—in which traders engage in back-and-forth buying and selling to generate fake volume—and violators can be subject to both CME and CFTC fines. That makes CME’s volumes more trustworthy.

“The importance of the listed futures market has been significantly understated,” the JPMorgan analysts wrote.

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Write to Alexander Osipovich at alexander.osipovich@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

WASHINGTON—The Trump administration ordered new sanctions that aim to freeze the assets of Supreme Leader Ali Khamenei’s office and several Iranian military commanders and include plans to target Foreign Minister Javad Zarif later this week.

President Trump signed an order on Monday authorizing the new sanctions as a message to Iran that Washington won’t ease up on its economic-pressure campaign against the country, even though Mr. Trump canceled a planned military strike last week with minutes to spare.

“We will continue to increase pressure on Tehran,” the president said in the Oval Office, selecting sanction targets U.S. officials said bear responsibility for recent oil-tanker attacks, rocket launches and the downing of a $130 million U.S. military drone.

Mr. Trump said the action would deny access to global financial resources for Mr. Khamenei and the others. U.S. Treasury Secretary Steven Mnuchin said later the supreme leader’s office and top officers in the Islamic Revolutionary Guard Corps, Iran’s elite militia designated by the U.S. as a terror group, were chosen because they were responsible for the recent events.

The expanded powers, which give Treasury the authority to level sanctions at any state official in Iran and any entity owned or controlled by the supreme leader, “will lock up literally billions of dollars in assets,” Mr. Mnuchin said.

In a statement at the United Nations, Iranian Ambassador Majid Ravanchi called the sanctions “yet another indication that the U.S. has no respect for international law and order as well as the views of the overwhelming majority of the international community.” Iran’s U.N. mission didn’t respond to requests for further comment.

Some former Treasury officials and Iran analysts said because existing sanctions already cover the most important parts of the economy, the newest round represents more in the way of symbolic messaging than a new major blow to the economy.

Few if any of the targeted assets are thought to be in U.S. jurisdictions. But because the action bans anyone doing business with them, it could effectively freeze up the business operations of the supreme leader’s office, which controls a global network of private companies that some experts estimate is worth between $100 billion and $200 billion.

The sanctions came on the same day Mr. Trump’s administration said it would seek to assemble an international coalition to safeguard shipping in the Persian Gulf. Senior State Department officials who described the efforts said allied nations would send vessels to the region that would serve as observers to deter Iran from mounting attacks. The U.S. would participate in the mission, though officials didn’t say how.

“This is having eyes on,” said one State Department official, adding the U.S. would participate in the effort. “So it’s not about shooting at people. It’s about shooting pictures of Iranians.”

In a pair of tweets Monday, Mr. Trump questioned why the U.S. should play any role in protecting ships transiting the region, particularly the Strait of Hormuz, saying the U.S. has provided such protection for years “for zero compensation.”

As part of a flurry of diplomatic action on Iran, White House national security adviser John Bolton planned to meet in Jerusalem Tuesday with his Israeli and Russian counterparts to discuss Middle East security, including Iran, according to U.S. and Israeli officials. They expressed hope that they could widen cracks that have opened between Iran and Russia in Syria, where they are competing for sway in Damascus when the country’s war ends.

Mr. Mnuchin said he hadn’t consulted on the latest sanctions with European allies, who are scheduled to meet with U.S. officials at a summit of world leaders this week in Japan and who have been urging restraint by both the U.S. and Iran.

In the action Monday, the Treasury blacklisted Ali Reza Tangsiri, the commander of the IRGC’s navy, which Mr. Mnuchin accused of attacks on oil tankers; Amirali Hajizadeh, commander of the IRGC aerospace force, for downing a U.S. unmanned aircraft last week; and Mohammad Pakpour, commander of the IRGC’s ground forces, for leading a deployment of forces to Syria to back Syrian President Bashar al-Assad.

The Treasury also sanctioned the commanders of five naval districts.

If the administration delivers on its promise to blacklist Iran’s foreign minister, Mr. Zarif, Washington would be targeting the man responsible for representing Iran’s position to the world, potentially complicating his travel and, therefore, his ability to conduct diplomacy.

The sanctions block any U.S. assets the targets might have and ban travel into U.S. territory. The Treasury also warned anyone doing business with them is at risk of sanctions.

Some former Treasury officials and Iran analysts questioned the impact of the sanctions. “The sanctions appear more of a messaging gesture and sideshow to the real threat of all-out conflict,” said Elizabeth Rosenberg, a former senior Treasury official in the Obama administration who is now a senior fellow at the Center for a New American Security.

The additional sanctions will deliver marginal additional economic pressure, but “they will be felt in Iran as a further indignity and can provoke escalation by the Iranian side, likely in the military or cyber domain,” Ms. Rosenberg said.

Jason Brodsky, policy director for the advocacy group United Against Nuclear Iran, said that by hitting Mr. Khamenei’s office, the U.S. “is focusing on the real power centers.”

The supreme leader’s office is a large bureaucracy and Mr. Khamenei has representatives in many of the state institutions, creating a “deep state” that runs a parallel government.

Because much of the global economy wants to maintain access to the U.S. as the world’s biggest market for goods and financial services, the power of such sanctions often is enforced by other countries and followed by their companies and banks.

The action represents another escalation in tensions between the two nations, though a step removed from the military engagement Mr. Trump called off at the last moment last week.

By stepping up its full-bore financial-sanctions campaign, the White House is pushing back against what former U.S. officials and Iran analysts say is a markedly more aggressive turn in Tehran’s own political strategy. Iran’s new tack, they say, is designed to spook Washington into easing its pressure campaign to avoid a war, a gamble some analysts said appeared substantiated by the president’s decision to call off the strike.

To pressure Tehran, the U.S. said it plans to cut the petroleum-reliant nation’s exports to zero. By sanctioning many of the country’s largest banks, including its central bank, it has severed most of Iran’s financial ties to the world. Other major non-oil sources of revenue have also been targeted—including the auto, aluminum, and petrochemical sectors—and insurers are prohibited from covering Iranian shipments.

But even as sanctions have pushed Iran’s economy into a nose dive, its leaders have shown little willingness to negotiate on a new nuclear and security deal the Trump administration is seeking.

With Treasury’s new authority to sanction any official appointed by the Supreme Leader’s office or entity it owns or controls, that network of companies and any company or person doing business with them is at risk of being sanctioned by the U.S., including being cut off from the American financial system.

Mr. Brodsky said the new authority also means that officials sanctions could target former Foreign Minister Ali Akbar Velayati, who conducts diplomacy in Russia on Mr. Khamenei’s behalf, and Kemal Kharazi, the head of the strategic council on foreign relations for the supreme leader who met with a U.K. delegation over the weekend.

Write to Ian Talley at ian.talley@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

AbbVie Inc. agreed to buy Allergan PLC for about $63 billion, as the two big drugmakers bet a combination will deliver new sources of growth they have struggled to find on their own.

The takeover is worth about $188 a share in cash and stock, the companies said in a statement. The price represents a 45% premium over Allergan’s closing share price Monday of $129.57. If not for a surge in the shares in recent days on expectations for a breakup of the company, the premium would be even bigger.

The Wall Street Journal reported earlier Tuesday that the deal was imminent.

Buying Dublin-based Allergan would deliver a dominant position in the $8 billion-plus market for Botox and other beauty drugs, as well as a number of popular eye treatments, as AbbVie braces for the end of patent protection for the world’s top-selling drug, Humira.

The companies’ portfolios have some overlap in treatments for brain, women’s-health, stomach and other disorders, though the combination would take AbbVie into the new realm of frown-line smoothing, eyelash lengthening and double-chin removal.

Allergan’s nearly $16 billion in yearly revenue would also give AbbVie another source of cash to hunt for a new generation of products.

Lately, Wall Street has been clamoring for change at Allergan, with its shares trading at a fraction of their peak of more than $330 in the summer of 2015. Analysts have been saying the company could split into two pieces, but few expected CEO Brent Saunders to pull off a sale, especially at such a lofty premium.

Richard Gonzalez will remain chairman and CEO of AbbVie. Two Allergan directors including Mr. Saunders will join AbbVie’s board when the deal closes.

About two-thirds of the purchase price is in cash, with Allergan stockholders receiving 0.8660 AbbVie shares and $120.30 in cash for each share they own, for total consideration of $188.24 a share.

Allergan stock jumped 29% to $167 in morning trading Tuesday, while AbbVie shares fell 12% to $69.

The deal, worth about $80 billion including debt, is the second this year that would knit together two of the world’s biggest pharmaceutical companies. Earlier this year, Bristol-Myers Squibb Co. agreed to pay $74 billion for rival cancer drugmaker Celgene Corp.

AbbVie, based in the Chicago suburbs, has been pursuing deals of various sizes in an effort to diversify beyond Humira ever since the company was split from Abbott Laboratories in 2013.

Humira, a rheumatoid arthritis treatment, rang up $19.1 billion of AbbVie’s $32.8 billion of revenues last year. But lower-priced versions, known as biosimilars, are on sale in Europe and are scheduled to go on sale in the U.S. in 2023.

AbbVie had tried to strike a big deal in 2014, when it reached an agreement to buy Irish rare-disease drugmaker Shire for $54 billion. But AbbVie called off the deal later that year amid efforts by the Obama administration to restrict such tax-lowering transactions, known as inversions.

Other attempts to find new big-selling cancer, immune and other drugs have also stumbled, except for a roughly $20 billion deal in 2015 for PharmacyclicsInc., the maker of the Imbruvica cancer therapy. AbbVie shares the treatment’s rights with Johnson & Johnson.

But Imbruvica, which generated $3.6 billion in revenue for AbbVie last year, can’t alone make up for the approaching loss of Humira sales.

In Allergan, AbbVie will take on a once-highflying drugmaker that has also struggled to find new sales growth.

Allergan’s shares soared to more than twice their current level four years ago as the company and Mr. Saunders became Wall Street darlings following a series of bold acquisitions. But Allergan’s luster has faded in the past few years as opportunities for deal making have dwindled along with the stock and only its aesthetic-medicine business grew to investors’ satisfaction.

Allergan, which started as a California pharmacy and then carved a niche as an eye-treatment business, rocketed into the ranks of big drugmakers after exploiting Botox’s use smoothing frown lines and wrinkles.

A combination with Irish drugmaker Actavis in 2015 transformed the company. Mr. Saunders has been CEO since 2014 and chairman since 2016.

For a time, Pfizer Inc. was going to buy Allergan for about $150 billion, but that transaction, also an inversion, fell through amid pushback from the Obama administration.

Then investors soured on the company, partly due to concerns that it wouldn’t be able to replace sales from eye drug Restasis, which was losing its patent protection.

Investors also drove down the stock on a failed plan to bolster Restasis by selling its patent rights to an Indian tribe, as well as mixed messages from management about the company’s prospects. Rivals are trying to edge in on Botox, and the company’s efforts to develop new drugs, like a depression treatment, faltered.

The concerns triggered pressure from Wall Street. Mr. Saunders said on the company’s earnings call last month that there is a sense of urgency within the company and pledged that the board was reviewing all options.

Analysts predicted Allergan could split itself in two, with one business dedicated to fast-growing brands and segments such as aesthetics and eye care, and the other focused on gastrointestinal and women’s-health treatments.

Allergan in recent years came in the crosshairs of David Tepper’s activist hedge fund Appaloosa LP, which criticized the company’s performance and pressured it to separate the roles of chairman and CEO. The company had said it would separate the roles at its next leadership transition. In May, Allergan shareholders voted down a shareholder proposal from Appaloosa to separate the positions.

Also to satisfy investors, Allergan in the past year tried to sell its women’s health and anti-infective drug businesses but said in January it would keep the unit.

Write to Cara Lombardo at cara.lombardo@wsj.com, Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Hackers believed to be backed by China’s government have infiltrated the cellular networks of at least 10 global carriers, swiping users’ whereabouts, text-messaging records and call logs, according to a new report, amid growing scrutiny of Beijing’s cyberoffensives.

The multiyear campaign, which is continuing, targeted 20 military officials, dissidents, spies and law enforcement—all believed to be tied to China—and spanned Asia, Europe, Africa and the Middle East, says Cybereason Inc., a Boston-based cybersecurity firm that first identified the attacks. The tracked activity in the report occurred in 2018.

The cyberoffensive casts a spotlight back on a Chinese group called APT 10; two of its alleged members were indicted by the U.S. Department of Justice in December for broad-ranging hacks against Western businesses and government agencies. Cybereason said the digital fingerprints left in the telecom hacks pointed to APT 10, or a threat actor sharing its methods.

Cybereason Chief Executive Lior Div gave a weekend, in-person briefing about the hack to more than two dozen other global carriers. For the firms already affected, the response has been disbelief and anger, Mr. Div said.

“We never heard of this kind of mass-scale espionage ability to track any person across different countries,” Mr. Div said.

The Wall Street Journal was unable to independently confirm the report. Cybereason, which is run by former Israeli counterintelligence members, declined to name the individuals or the telecom firms, citing privacy concerns.

China has consistently denied perpetrating cyberattacks, calling itself a victim of hacks by the U.S. and other countries. China’s Foreign Ministry didn’t immediately respond to a faxed request for comment. The Ministry of State Security wasn’t reachable for comment.

The identities of the 20 individuals allegedly targeted by China couldn’t be learned. The country often tracks overseas political dissidents and other persons of interest digitally and in person, according to cybersecurity experts and human-right activists.

The hacking campaign—which Cybereason calls “Operation Soft Cell”—represents one of the most far-reaching recent offenses against a telecom industry under pressure, Mr. Div said. Some three of every 10 global carriers have had sensitive information stolen from hacking attacks, according to a 2018 report by EfficientIP, a Philadelphia-based cybersecurity firm.

Operation Soft Cell gave hackers access to the carriers’ entire active directory, an exposure of hundreds of millions of users, Cybereason said. The hackers created high-privileged accounts that allowed them to roam through the telecoms’ systems, appearing as if they were legitimate employees.

The work of nation-state groups like APT 10 tend to be covert and focus on gathering intelligence—a contrast with organized crime rings that shut down websites or pilfer networks seeking monetizable assets, such as bank accounts or credit-card data.

“Nation-state groups are no doubt the top of the food chain,” said Larry Lunetta, a vice president of security solutions marketing at Aruba, a part of Hewlett Packard Enterprise Co. “The behaviors they exhibit generally would never have been seen before or may not look different to normal activity.”

The rollout of next-generation 5G networks globally has stoked national-security fears that the new technology could be vulnerable to hacking. Operation Soft Cell largely unfolded on existing 4G LTE networks, though the incident reveals fresh vulnerabilities.

The campaign used APT 10-linked procedures and techniques, including a web shell used to steal credentials and a remote-access tool, said Amit Serper, Cybereason’s head of security research.

Cybereason said it couldn't be ruled out that a non-Chinese actor mirrored the attacks to appear as if it were APT 10, as part of a misdirection. But the servers, domains and internet-protocol addresses came from China, Hong Kong or Taiwan, Mr. Div said. “All the indications are directed to China,” he said.

The APT 10 group, also known as cloudhopper, is believed by cybersecurity experts to be backed by China’s government based on its history of going after data that is strategic and not immediately monetizable. The group has been less visibly active this year following the Justice Department indictments, though is likely still around, said Ben Read, senior manager of cyber espionage analysis at FireEye Intelligence.

“They’re one of the most active China groups we track,” Mr. Read said.

China-based hackers have consistently targeted U.S. businesses over the years, although the frequency of attacks declined after a 2015 cease-fire on economic espionage signed by President Obama and President Xi Jinping.

Other countries, including Australia, Japan and the United Kingdom, have accused China of attempting to hack their government agencies and local companies.

Cybereason says Operation Soft Cell didn’t involve real-time snooping, meaning hackers weren’t listening in on calls or reading text messages.

Instead, the hackers obtained all-data records that reveal where individuals go and whom they contact—invaluable information for foreign intelligence agencies eager to learn a person’s daily commute or their confidantes.

“They owned the entire network,” Mr. Serper said.

With precise movements, the hackers breached telecom companies’ networks through traditional spear phishing emails and other tactics, Cybreason says.

Once inside, the hackers stole login credentials, identifying computers or accounts with access to the servers containing the call-data records. They cloaked themselves even more by creating admin accounts and covering their digital tracks with virtual private networks, or VPNs, which made the behavior appear as if it had come from legitimate employees.

Cybereason discovered the hacks by sniffing out unusual network traffic between a computer and the call-data record databases. The researchers detected activity dating as far back as 2012.

Some telecom firms have alerted users of the breach, per local regulations, though it is unclear if all of them have, Mr. Div said.

Write to Timothy W. Martin at timothy.martin@wsj.com and Eva Dou at eva.dou@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

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Have questions, feedback or comments? Contact author Lev.Borodovsky@DowJones.com.

Twitter: @SoberLook

The Daily Shot: 25-Jun-19 • The United States • Canada • The Eurozone • Europe • Asia - Pacific • Emerging Markets • Commodities • Equities • Credit • Rates • Global Developments • Food for Thought

1. The latest manufacturing survey from the Dallas Fed points to deteriorating Texas-area factory sentiment in June. It was the third regional index this month that came in well below economists' forecasts.

Forward-looking indicators saw the largest declines.

• Current vs. future new orders:

• Current vs. future production:

Here are a couple of other subindices.

• The growth rate in factory orders:

• Employee workweek and compensation:

--------------------

2. The June regional indices as well as the IHS Markit PMI (see chart) point to a further weakening in the ISM Manufacturing PMI (at the national level). Here is Goldman's manufacturing activity tracker.

Source: Goldman Sachs

3. The World Economics SMI indicator, which also measures business activity at the national level, hit a 28-month low. The charts below show the components of the index.

Source: World Economics

4. Nonetheless, Google search activity suggests that business confidence should rebound next year.

Source: Arbor Research & Trading

5. As manufacturers are forced to cut inventories, will they also slow the rate of hiring (see the Dallas Fed's employee workweek index above)?

Source: The Daily Feather

6. Economists are concerned about rising delinquencies in consumer loans.

Source: Deutsche Bank Research

7. It's unusual for the Fed to cut rates when financial conditions are this loose.

Source: Credit Suisse, @tracyalloway

8. Household formation remains robust, which should be a tailwind for housing.

Source: Hoya Capital

9. Finally, here are a couple of charts on vehicle sales.

• Medium and heavy trucks:

Source: @wesbury

• Used cars:

Source: Cox Automotive, Seth Levine; Read full article

1. Consumer confidence continues to rebound.

2. As discussed previously, inventories remain elevated. This chart shows Canada's inventory-to-shipments ratio.

Source: Economics and Strategy Group, National Bank of Canada

3. Where are the newcomers to Canada headed?

Source: Desjardins

1. The euro continues to grind higher.

2. Next, we have some updates on Germany.

• The latest Ifo report shows Germany's business expectations deteriorating further (second chart below).

This trend doesn't bode well for the nation's GDP growth (black line = Ifo expectations, yellow line = GDP growth).

Source: Cantor Fitzgerald Market Strategy Team

• The nation's construction spending is expected to slow sharply.

Source: Pantheon Macroeconomics

• The yield on some German mortgage-backed securities is now negative.

Source: @Schuldensuehner, @welt; Read full article

--------------------

3. The weakness in the Eurozone's manufacturing sector is showing up in the labor markets.

Source: @WSJ; Read full article

4. Belgian business confidence is rolling over.

5. Greek sovereign credit default spreads are tightening to fresh multi-year lows.

Source: @TheTerminal

6. From Barclays Research: "We expect the ECB to bring the deposit rate to -70bp by Q2 20 and introduce mitigating measures to reduce the effect of negative rates on banks."

Source: Barclays Research

1. Elsewhere in Europe, the weakness in Germany's manufacturing sector is showing up in the Czech Republic's business confidence.

2. The Swiss franc is rising against the euro in response to the expectations of rate cuts in the Eurozone.

The Swiss yield curve is now in negative territory for all maturities below 30 years.

1. The yen continues to grind higher.

2. Japan's service-sector PPI is rolling over.

3. Taiwan's industrial production slowed more than expected.

4. New Zealand's exports accelerate.

5. The Hong Kong dollar is grinding higher.

1. Indonesia's May exports were higher than expected. In general, Asian exports appear to be stabilizing.

However, imports are tumbling.

This chart shows capital goods imports in select Asian economies (which doesn't bode well for future manufacturing growth).

Source: IIF

--------------------

2. Mexico's economy has slowed markedly.

3. Venezuela's troubles are showing up in Cuba's economy.

Source: @WSJ; Read full article

4. Is the EM equities' underperformance bottoming?

Source: Alpine Macro

1. Gold continues to hit multi-year highs.

Gold implied volatility is soaring as well.

The gold miners stock index is up 28% over the past month.

--------------------

2. Lean hog futures in Chicago are plunging.

Source: Reuters; Read full article

1. Is the recent stock market rally too reliant on rate cut expectations?

Source: Demetri Nikolias, h/t Anastasios Avgeriou; Read full article

Is the market too optimistic about a potential US-China trade deal at the G20?

Source: @bpolitics; Read full article

--------------------

2. This chart shows the net speculative S&P 500 futures position less single stock and ETF shorts.

Source: Deutsche Bank Research

3. Forward P/E ratios remain well below the 2017 highs.

Where would the S&P 500 be under different P/E-multiple scenarios?

Source: Yardeni Research

--------------------

4. Next, we have some sector updates.

• Retail:

• Tech:

• Banks:

• Transportation:

• Month-to-date performance:

Source: Yardeni Research

--------------------

5. Here are a couple of factor updates.

• Dividend dogs:

• Small caps:

--------------------

6. Are transportation stocks and small caps telling us something about the economy?

Source: @BloombergQuint; Read full article

1. The rating agencies haven't been too kind to leveraged loans this year.

Source: LCD, @DriehausCapital

2. Leveraged loan investors are getting paid less for the amount of risk they take.

Source: Credit Suisse

3. The BB-BBB bond spread is the tightest in over a decade. Are credit investors too complacent?

Source: @lisaabramowicz1; Read full article

4. Corporate credit is increasingly correlated with the oil market.

Source: Arbor Research & Trading

5. The investment-grade (IG) CDX spread appears to be too tight relative to cash bonds and the high-yield CDX. Perhaps this presents an opportunity to put on a cheap macro hedge (buying protection on the IG CDX).

Source: Credit Suisse

Source: Credit Suisse

--------------------

6. The yield on high-yield muni bonds continues to hit multi-year lows.

1. This year, the dollar didn't follow Treasury yields down as it did in 1998.

Source: Alpine Macro

2. The Treasury curve isn't close to being inverted when term premium is excluded.

Source: BCA Research

3. The Fed rarely surprises the markets when it changes rates.

Source: @LizAnnSonders, @biancoresearch

4. The Fed's official communications continue to show high levels of uncertainty.

Source: Arbor Research & Trading

1. Let's start with this breakdown of negative-yielding bonds.

Source: @WSJ; Read full article

And here is the yield distribution over time across advanced economies.

Source: BlackRock

--------------------

2. F/X volatility remains low relative to global uncertainty.

Source: TD Securities

3. Growth rates in home prices and housing investment have been slowing.

Source: Oxford Economics

--------------------

1. CEOs misbehaving:

Source: Market Ethos, Richardson GMP

2. The metric vs. the imperial system of measurements:

Source: Statista

3. Retirement savings:

Source: @WSJ; Read full article

4. Single-person households in the US:

Source: @WSJ; Read full article

5. MBA programs:

Source: @WSJ; Read full article

6. Chinese visitors to the US:

Source: @WSJ; Read full article

7. The death penalty map:

Source: @johngramlich; Read full article

8. Reactions to President Trump's comments:

Source: @pewresearch; Read full article

9. Phones vs. TV:

Source: @technology; Read full article

10. Speeding:

Source: Statista

--------------------

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

PG&E Corp. bond prices surged in heavy trading even as shares slipped, a divergence that some analysts said reflects uncertainty about how much new equity the bankrupt California utility needs to raise in order to address claims tied to past and future wildfires.

About $290 million of the bonds changed hands Monday, making PG&E the most actively traded high-yield corporate bond, according to MarketAxess. Its bond due 2034 hit 109.25 cents on the dollar, up from 107.5 Friday and 101.38 at the start of last week. The company’s stock fell 5.6% to $21.67.

The company’s shares and bonds both rallied last week after the company reached its first major settlement with wildfire victims and California Gov. Gavin Newsom proposed a plan for a multibillion-dollar fund to cover fire-related liabilities.

Ultimate recoveries on PG&E shares and bonds will depend on how the company raises capital to offset wildfire liabilities. Some of the funding could come from increasing charges to electricity ratepayers and from issuance of new bonds backed by the utility’s future revenues. But the larger the size of the state wildfire fund—options floated by Mr. Newsom range from $10.5 billion to $21 billion—the more shareholders or bondholders will have to contribute themselves.

If the fund is on the higher end, “we assume $9 billion of traditional equity would need to be raised to fund PG&E’s contribution,” Morgan Stanley & Co. analyst Stephen Byrd wrote in a report published Monday.

Bondholders could pay such a sum through a rights offering, but that would dilute existing shareholders, hedge-fund analysts said. If the shareholders foot the bill themselves, the cash they spend would eat into potential profits on the company stock postbankruptcy, they said.

In the Treasury market, the yield on the 10-year note fell to 2.021% from 2.066% after the Federal Reserve Bank of Dallas released a lukewarm reading of manufacturing activity. The WSJ Dollar index lost 0.2%.

Write to Matt Wirz at matthieu.wirz@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

• S&P 500, Dow industrials open near yesterday’s closing price

• Allergan jumped almost 30% in early trading on AbbVie takeover

• Gold rallied, bitcoin advanced and government bond yields slipped

U.S. stocks wavered in early trading Tuesday as investors turned to haven assets such as Treasurys and gold.

The Dow Jones Industrial Average and S&P 500 were around flat in the opening minutes of trading in New York. Shares of Allergan rose nearly 30% after AbbVie reached a deal to buy the company for more than $60 billion. The news prompted a 10% slide in AbbVie’s stock.

In Europe, the Stoxx Europe 600 index fell 0.1%, with French and German equities dragging down the benchmark. One of the few bright spots for investors was in Capgemini and smaller rival Altran Technologies: the stocks soared after the French companies agreed to merge, sending Altran shares up almost 22% while Capgemini advanced 7.4%.

Meanwhile, gold prices jumped to their highest level this year before paring back slightly to $1,426.10 a troy ounce. The precious metal has gained 13% so far in 2019.

Gold prices were rising because of “a positive cocktail of factors” from lingering global growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

“If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that’s why we’ve had such a sharp rally,” he said.

Bitcoin extended its gains, reaching a record for the past year as it again crossed the $11,000 threshold. The world’s most popular cryptocurrency has soared 35% this month, boosted in part by the unveiling of Facebook’s Libra digital currency for mainstream users last week.

In Asia, Japan’s Nikkei was down 0.4%, the Hang Seng in Hong Kong slipped 1.2% and China’s benchmark Shanghai composite fell 0.9%.

The yield on the 10-year U.S. Treasury note, which falls as the price rises, dropped to 2.013%, from 2.021% on Monday.

U.S. markets are gearing up for a busy day of speeches from Federal Reserve policy makers Tuesday as they look for clues on the course of U.S. monetary policy.

Investors this week have also largely held back from making big moves as their focus has shifted to the G-20 summit in Japan due to begin on Friday. A planned meeting between President Trump and Chinese President Xi Jinping at the summit is seen as a potentially crucial moment in the trade dispute between the two nations. The skirmish has roiled markets this year and threatened to further weaken the global economy, which has already shown signs of flagging after a long period of expansion.

“Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week’s G-20,” said Kenneth Broux, a senior strategist at Société Générale. “The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods].”

The WSJ Dollar Index, which tracks the dollar against a basket of its peers, was broadly flat.

Elsewhere in commodities, oil prices were mixed with global benchmark Brent crude shedding 0.2% to $64.02 a barrel, while U.S. benchmark West Texas Intermediate was down 0.1% at $57.82.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

The New York Stock Exchange and Nasdaq Inc. on Monday accused a senior regulator who supervises them of having ethical conflicts, raising the ante in a battle with Washington over how the companies sell market data.

The feud stems from a regulatory decision last year on data fees that could crimp exchanges’ profits from selling products that display current market prices and trading interest. The exchanges have appealed the Securities and Exchange Commission’s move to the U.S. Court of Appeals for the District of Columbia Circuit, a group of judges who often referee legal fights between companies and the federal government.

The SEC official involved in the debate, Brett Redfearn, has overseen efforts to scrutinize whether fee increases imposed by exchanges for the data are justified. In a Monday court filing, the exchanges said “the SEC’s misconduct here so infected its process” by allowing Mr. Redfearn to work on the matter.

An SEC spokeswoman declined to comment. Mr. Redfearn declined to comment.

Mr. Redfearn, director of the SEC’s division of trading and markets, criticized exchanges for ratcheting up market-data fees before he joined the SEC in 2017. His employer at the time, JPMorgan Chase & Co., bought the data as part of its business handling and executing customer orders.

JPMorgan also was a member of the brokerage-industry trade group Securities Industry and Financial Markets Association, or Sifma, which originally challenged the fees before the SEC in 2013, triggering the litigation now at the appeals court. Opponents must sue to appeal regulatory decisions by agencies including the SEC.

The exchanges have sought to find information about Mr. Redfearn’s work on the Sifma challenge once he landed at the SEC, according to the filing. NYSE filed a Freedom of Information Act request seeking records on his involvement.

Spokesmen for NYSE and Nasdaq declined to comment.

Monday’s court filing includes an SEC memo, obtained by NYSE through its FOIA, that says the SEC’s chief ethics lawyer in December 2017 approved Mr. Redfearn’s work on market-data issues. But the memo, which is partly redacted, doesn’t appear to address the Sifma dispute specifically. The memo mentions that Mr. Redfearn “would occasionally participate on Sifma’s market data committee, which would get updates on the Sifma market data challenges.”

In his prior role at JPMorgan as global head of market structure, Mr. Redfearn communicated with the brokerage trade group Sifma in its challenge to the NYSE and Nasdaq fee increases, according to SEC records. Sifma argues that the exchanges have a monopoly over market data, allowing them to crank prices higher on brokers and traders who need the information to compete.

The extent of Mr. Redfearn’s involvement in Sifma’s lawsuit when he worked for JPMorgan isn’t clear from records disclosed by the SEC. Some court records show he emailed with a Sifma lawyer in 2014 about his firm’s interest in the case.

In 2016, while still at JPMorgan, Mr. Redfearn told an SEC advisory committee that the richest market-data products are “characterized by unconstrained and increasing fees,” according to a written statement he submitted for the meeting.

Mr. Redfearn joined the SEC the following year to manage the division that regulates brokers, exchanges and clearinghouses. The exchanges say records they obtained under FOIA show he sent or received 32 emails that contained drafts of the decision that overturned the fee increases. He also briefed one SEC commissioner, Elad Roisman, on the matter, according to the filing. Mr. Roisman declined to comment.

The SEC has kept up the pressure on stock exchanges since ruling against NYSE and Nasdaq in October. In March, the regulator said it wanted exchanges to improve the most basic data feeds that are often used by smaller investors. In May, it issued guidelines that make it tougher for exchanges to boost fees for data services by requiring them to include detailed disclosures each time they seek to raise fees.

Some money managers, smaller brokers and proprietary traders have applauded the SEC’s questioning of fee increases, saying it shows the agency is acting on long-held concerns about fairness and competition.

The exchanges cited other arguments to the D.C. Circuit Monday in their effort to reverse the SEC’s rejection of their fee hikes. Among other factors, the exchanges wrote that the SEC relied on faulty legal reasoning to support its ability to shoot down their price hikes.

The SEC said when it rejected the fee increases that it can review exchange fees that could limit access to a stock exchange’s services.

Write to Dave Michaels at dave.michaels@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets hiding inside retail investment products.

The Chicago-based bank lent £150 million ($190 million) to a fund managed by Neil Woodford, whose investment empire is in serious trouble as clients have fled and U.K. regulators have launched an investigation. The Northern Trust loan is backed mainly by private shares in risky young companies. The loans were disclosed in fund documents.

Northern Trust, Woodford Investment Management and the board of the Woodford Patient Capital Trust, the fund in question, declined to comment. Shares in Woodford Patient Capital Trust, which manages close to £1 billion in assets, have plunged by more than a quarter since early June.

Woodford’s problems come as several European fund managers have tripped up after straying too far into assets that are illiquid, or hard to buy and sell. Shares in French bank Natixis SA dropped sharply last week after a Financial Times report highlighted illiquid assets in a fund run by the bank’s H2O Asset Management arm. Switzerland’s GAM Holding AG is still recovering from a scandal at one of its credit funds that took concentrated bets in illiquid bonds, many of which were linked to a single group of companies.

Investors have taken more risks as a consequence of the low-yield environment, said Ryan Hughes, head of active portfolios at AJ Bell, a U.K.-based retail-focused fund distributor. “It becomes bad when managers get into things that they, or more likely their investors, don’t fully understand,” he said. He predicts similar incidents could arise in the future.

Mr. Woodford built a reputation for making winning, contrarian bets on large, unloved stocks over 25 years at U.S. company Invesco Perpetual. While there, he managed at his peak more than £30 billion. He avoided internet companies in the dot-com bust and steered clear of banks ahead of the 2008 financial crisis.

He struck out on his own in 2013. Since then, Mr. Woodford’s investment focus shifted toward unlisted stocks in companies with unproven technologies or pharmaceutical products.

Now his company, Woodford Investment Management, faces a battle to survive. In early June, it suspended withdrawals from its flagship £3.7 billion Woodford Equity Income Fund.

That mutual fund breached its own limits on unlisted stockholdings during 2018, according to the Financial Conduct Authority, the U.K. regulator. It is now investigating the events that prompted the fund to suspend withdrawals.

Northern Trust’s loan to the Woodford Patient Capital Trust is unusual. No other fund in the U.K. that invests in risky, early-stage companies uses any leverage at all, according to Britain’s Association of Investment Companies. Two similar U.K. trusts run by Baillie Gifford and Merian Global Investors said they expected their investments to generate high returns without leverage.

The U.K. trust sector in general has average leverage of 9% of net asset value. The Woodford Patient Capital Trust runs with leverage close to its limit of 20% net asset value.

Share-backed loans are normally low risk because listed equities can be sold swiftly to repay the debt. And the Northern Trust loan is backed more than six times by the fund’s assets. But more than three-quarters of those are either unlisted equities or listed stocks that don’t trade at all.

There are other risks. Many of the assets supporting Northern Trust’s loan are also held by Mr. Woodford’s bigger, suspended fund. That fund has promised to exit all its illiquid and unlisted holdings. As it sells, the value of companies in which the Patient Capital Trust also invests are likely to get hit.

Some of the biggest unlisted shares that both held in early 2019 included early-stage medical technology companies Oxford Nanopore, Proton Partners and Kymab.

The most recent published list of holdings from March and April 2019 showed that the Patient Capital Trust owned securities in 35 companies that the bigger suspended mutual fund also owned. They accounted for nearly 77% of the trust’s portfolio.

Both funds also each hold or have held stakes in a series of other investment companies that in turn hold stakes in some of the same unlisted stocks that the Woodford funds own. These investment companies include Dublin-listed Malin Corp., Guernsey-listed Ombu Group, and London-listed companies IP Group PLC and Allied Minds PLC.

Further connecting the two funds: Earlier this year, the now-suspended Equity Income Fund received a 9% stake in Patient Capital Trust. In exchange, Patient Capital took on some of the mutual fund’s unlisted stockholdings.

Patient Capital Trust’s original rules called for no long-term borrowing and a limit of 60% of net asset value in unquoted stocks. That changed progressively, mainly during 2017, when the constraints were changed or ditched. The limit on unlisted shares was first lifted to 80% of net asset value, then again to 80% of gross asset value, the value of all assets before debt is subtracted.

That same year, Northern Trust doubled the size of the credit facility from £75 million to £150 million. It increased the interest rate on the loan slightly and doubled the fees it charged for separate administrative services, according to the trust’s annual reports.

Write to Paul J. Davies at paul.davies@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

U.S. companies’ working-capital efficiency reached a six-year high in 2018 as finance chiefs increasingly prioritize managing inventories to more quickly convert the capital into cash, a new study found.

The 1,000 largest U.S. public companies collected cash from their customers quicker than they had since 2012, according to a study to be released Wednesday by Hackett Group Inc., a consulting firm.

Hackett said it sees more than $1.28 trillion that U.S. companies can trim from their working capital. That figure translates to about 6% of U.S. gross domestic product and marks an approximately 15% year-over-year increase from $1.1 trillion, the study showed.

That money could be deployed to give companies a competitive edge. Companies that wring money from working capital can funnel those funds toward ramping up acquisitions and initiatives that propel growth. A company’s working-capital performance can be tied to the performance of its CFO. Finance chiefs are increasingly standardizing processes to track working-capital performance across an organization, to make the most of that funding source.

The top-performing companies paid suppliers almost three weeks slower in 2018 than typical companies and collected cash from customers almost three weeks quicker—while holding less than half the inventory, data showed. The amount of funds trapped in inventory fell for the first time since 2012 last year. Despite the improvements in the receivable and inventory categories, payables performance deteriorated. Companies have begun to scale back on extending payment terms, thus cutting suppliers some slack.

“Inventories are an untapped area of working capital and they’re more difficult to go after than payables,” Craig Bailey, associate principal at Hackett, said in an interview. “Companies found there’s just not much to be gained going after payment terms.”

Of the 1,000 companies surveyed, nine improved their cash-conversion cycle—a measure of operational efficiency that tracks the speed of converting a transaction into cash—every year from 2011 to 2018. The companies included PepsiCo Inc., HP Inc., and Lennar Corp, the report showed.

Hackett’s survey found that the aerospace, oil-and-gas, and energy services industries struggled the most when it came to working-capital performance last year.

National Oilwell Varco Inc., a Houston-based manufacturer of oil-and-gas production equipment, was among the companies with the largest working-capital opportunity, at $4.5 billion, according to Hackett data provided to The Wall Street Journal.

“When an oil rig gets built, capital sometimes gets stranded,” said Marshall Adkins, an analyst at Raymond James & Associates Inc., who follows National Oilwell. “Many of the offshore drilling rigs ordered five or six years ago were stymied in a shipyard.”

National Oilwell recognizes the need to improve its management of working capital, CFO and Senior Vice President Jose Bayardo has said on earnings calls, most recently in February. The company is trying to decrease the number of days to convert transactions to cash, Mr. Bayardo said on the call. The company’s cash-conversion cycle was 246 days last year, down from 285 the year earlier, Hackett data showed.

Mr. Bayardo couldn’t be reached for comment Monday. A National Oilwell spokesman declined to comment.

Write to Mark Maurer at mark.maurer@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Shares of Capgemini SE (CAP.FR) and Altran Technologies SA (ALT.FR) both rose sharply Tuesday after the Paris-based IT consultancy made an offer to buy Altran in a deal valued at around 3.6 billion euros ($4.1 billion) excluding debt.

Capgemini said late Monday that it offered to acquire Altran for EUR14 a share through a friendly takeover bid. The company had already agreed to acquire an 11% stake in Altran from shareholders led by Apax Partners, it said.

The deal has received approval from the boards of both companies and would create a global IT consulting firm with annual revenue of EUR17 billion and 250,000 employees, according to Capgemini. The transaction is expected to close by the end of 2019.

At 0843 GMT, shares of Capgemini traded up 7.2% at EUR111.20, while shares of Altran were up 21% at EUR13.88.

Analysts said the deal makes strategic sense for the two French consultancies.

“Altran should enable Capgemini to accelerate its development in high-tech industries, by obtaining critical mass in software engineering,” Bryan Garnier said, adding that the deal would give Capgemini a “huge lead” over rival Accenture in engineering and R&D services.

Because Capgemini’s offer already represents roughly a 30% premium on Altran’s share price, it’s unlikely another bid at a higher price will emerge, Bryan Garnier said.

Berenberg said it likewise supports the deal’s rationale.

“Altran’s offering should complement Capgemini’s existing services and support cross-selling, in our view,” the brokerage said, noting that antitrust issues were unlikely given the limited overlap between the two companies.

Write to Patrick Costello at patrick.costello@dowjones.com.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Resort fees are becoming so ubiquitous that some online travel sites are looking to cash in on them.

Hotel owners of secluded resort destinations for years have charged guests fees of about $20 to $60 a night to cover amenities such as spas, swimming pools and towels. More recently, city hotels have included an urban fee, which can run as high as $40 a night and covers amenities such as Wi-Fi, gym access and a continental breakfast.

Hoteliers find resort fees particularly appealing because online travel agents typically collect a 12% to 15% commission on room rates but don’t touch the resort fee, said Thomas McConnell, head of the global hospitality group at Cushman & Wakefield.

Now, some online travel agents want a share of these fees, too. Booking.com, which is owned by Booking Holdings Inc., earlier this month told its hotel partners in the U.S. that it would begin collecting a 15% commission on resort fees in addition to the 15% it currently collects on the room rate.

The online travel site said it hopes the resort fee commission will encourage hotels to eliminate the fees altogether.

“At the end of the day, resort fees are a bad consumer experience across the board,” said Leslie Cafferty, head of global communication for Booking Holdings. “It’s definitely been their intent to raise additional revenue by charging additional fees.”

Ms. Cafferty said Booking.com notified European hotels of the new policy earlier this year, and that it is currently rolling out the commission in countries across the globe, including the U.S.

Booking Holdings’ other sites, Kayak and Priceline, don’t have any immediate plans to charge commission on resort fees, Ms. Cafferty said.

A spokesperson for Expedia Group Inc., which owns travel booking sites Expedia.com, Hotwire, Hotels.com, Trivago and Travelocity, said the company has no plans to take commission on resort fees, though it plans to give hotels without mandatory fees “higher visibility to travelers on our sites.”

While some hotel owners say urban fees and resort fees are a good deal for guests because their value exceeds what the customer actually pays, analysts say they amount to a discreet way to boost room rates.

“It’s pure profit for these companies,” said C. Patrick Scholes, a lodging analyst with SunTrust Robinson Humphrey.

The hotel industry is vowing to fight back against the new commission charges. Vijay Dandapani, chief executive of the Hotel Association of New York City, said large hotel brands are negotiating with Booking, and that they are “likely to minimize their exposure” to online travel sites if a compromise can’t be reached.

Still, Mr. Dandapani said, hotels are the underdog against Booking and Expedia, which he said have a “duopoly.”

“Their response is ludicrous, really. It doesn’t pass the laugh test,” Mr. Dandapani said of Booking.com’s reasoning for charging additional commission. He added that resort fees provide a value far above what the guest actually pays. “It’s not just something we’re pulling out of our hat,” he said.

Resort and urban fees matter more than ever to hotel owners. About 70 percent of full-service hotels in New York City aren’t generating sufficient cash flow to fund reserves for capital replacement, debt service and return on investment, according to Bjorn Hanson, an adjunct professor at New York University’s Jonathan M. Tisch Center of Hospitality.

“This resort fee looks like the only way hotels can deal with this challenge,” Mr. Hanson said.

From 2017 to 2018, miscellaneous income in hotels—which includes resort fees and cancellation fees—rose 11.3% nationwide and 29.9% in New York City, according to hotel-data firm STR Inc. This income generated $6 billion in revenue in 2018 and led all other categories in growth for the fifth year in a row, STR said.

The growth of resort fees has been fueled in part by guests’ increasing expectations, said Emily Wilson, vice president of asset management at CHMWarnick.

“Guests are expecting a hotel experience to be at or better than their residential home experience,” she said.

But some guests say they should have a choice in whether or not they are charged for amenities they don’t use.

Kayla Jarrett, 25, visited Manhattan from Salt Lake City in June and stayed at the Paramount Hotel in Times Square. She said she was charged a nightly $25 fee through an online deal, although the hotel typically charges a $40 nightly facility fee, according to its website.

A Paramount Hotel spokesperson referred to the hotel’s website, which discloses the facility fee. The fee covers services such as Wi-Fi, gym access, unlimited calls, streaming service and discounts at the hotel’s in-house cafe, the website says.

Ms. Jarrett said she doesn’t agree with the mandatory charge. “I didn’t use the gym or the things that would count for the resort fee,” she said. “I don’t come to New York to work out.”

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

FedEx Corp., after botching some deliveries for Huawei Technologies Co., filed a lawsuit Monday to stop the U.S. government from requiring the package giant to enforce a crackdown on the Chinese telecommunications-gear maker.

The lawsuit, filed in a federal court in Washington, D.C., claims the U.S. Commerce Department’s latest restrictions are essentially forcing FedEx to police millions of packages it ships daily to ensure prohibited items aren’t being exported to Huawei. It is a task, FedEx claims, that is legally and logistically impossible.

“FedEx is a transportation company, not a law-enforcement agency,” the company said in a statement.

A spokesman for the Commerce Department said it hadn’t yet reviewed FedEx’s complaint but the agency intended to defend its role in U.S. national security.

The Commerce Department, citing national-security concerns, said in May it was adding Huawei and its affiliates to its “entity list,” preventing companies from supplying U.S.-origin technology to Huawei without U.S. government approval.

Huawei has warned the U.S. restrictions could knock as much as $30 billion from its revenue this year and next. Several U.S. suppliers, including chip maker Broadcom Inc., have warned of a hit to their own sales from the escalating trade dispute.

Monday’s 19-page complaint doesn’t name Huawei, but FedEx has been caught up in the larger dispute between the U.S. and China. Last month, FedEx apologized after it misrouted some of Huawei’s packages, including two that were sent to its global hub in Memphis, Tenn., instead of China.

Huawei publicly complained and Chinese officials said they were opening an investigation into FedEx.

The Wall Street Journal reported the parcels were misrouted after FedEx changed its internal systems to comply with the Commerce Department’s new restrictions.

FedEx apologized again last week after a Huawei smartphone being shipped by a journalist in the U.K. to the U.S. was returned to its sender.

In its lawsuit, FedEx claims that as a common carrier—much like the U.S. Postal Service or a telecommunications company—it is generally not liable for the contents of messages or shipments.

The suit says FedEx screens the names of shippers and recipients to ensure they aren’t on the entity list. Even if it opened each package, FedEx argues in its suit, it wouldn’t be able to make technical determinations about whether contents violated the U.S. restrictions.

Steve Gaut, a spokesman for United Parcel Service Inc., said UPS hasn’t experienced any extraordinary circumstances regarding its operations.

“We have not had any particular issues with shipping for Huawei or any of our other customers, and we would not be supportive of joining such a lawsuit or making such claims,” Mr. Gaut said.

The Trump administration, amid a broader trade dispute with China, has mounted a global campaign against Huawei, the world’s biggest telecom-gear supplier, which some U.S. officials believe is beholden to the Chinese government. Huawei says its gear isn’t a security risk and it operates independently of the Beijing government.

China’s Commerce Ministry said in response that it was setting up an “unreliable entity list”—a blacklist of foreign companies, organizations and individuals that break contracts, harm Chinese companies for noncommercial reasons or damage national security interests.

China has been a key market for both FedEx and UPS, which carry components and finished goods into and out of the country’s manufacturing hubs. FedEx will likely face questions about the standoff when it reports quarterly results Tuesday evening.

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

Deutsche Bank AG’s global head of equities is expected to leave, the latest move in a planned downsizing of the German lender’s investment bank, according to people familiar with the matter.

Recently, Deutsche Bank executives had discussed a possible senior role for Peter Selman in a planned noncore unit, also known as a bad bank, expected to house long-dated derivatives and other positions earmarked for sale or wind-down, some of the people said. But they said Mr. Selman instead indicated in recent days that he plans to leave.

Executives, faced with increasing pressure from investors, are drafting plans for shrinking trading businesses and other portions of the investment bank after years of revenue declines.

Deutsche Bank earlier this year contemplated a merger with another bank, but didn’t go forward with it, and has tried other ways to shore up its profits. Its shares are hovering near all-time lows, and high-profile departures are picking up.

Last week, two senior investment bankers in New York left Deutsche Bank for Citigroup Inc., in the most prominent departures for Deutsche Bank’s U.S. operations this year, The Wall Street Journal reported.

The timing of Mr. Selman’s departure wasn’t immediately clear. People close to the matter said any planned exit could change pending a final termination agreement. Mr. Selman didn’t respond to requests for comment.

He joined Deutsche Bank in late 2017 and has been based in New York. He was previously a partner at Goldman Sachs Group Inc. where he oversaw global equities trading and equity derivatives in London and New York.

Deutsche Bank executives are planning an overhaul of the investment bank to include closing large portions of its money-losing equities business, according to people familiar with the plans.

Chief Executive Christian Sewing told investors in May that he is prepared to make “tough cutbacks” to the investment bank, which has struggled to compete with stronger rivals in the U.S. and Europe. He is expected to outline details of the cutbacks by late July.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

BMW AG (BMW.XE) is speeding up plans to roll out some electric and semi-electric vehicles, the German premium auto maker said Tuesday, as competition heats up in the rapidly growing market.

The company said it expects to have 25 electrified models on the market by 2023, compared with a previous target of 2025. More than half of the vehicles will be fully electric, while the remainder will be hybrid models with a separate combustion engine, the company said.

“We expect to see a steep growth curve towards 2025: Sales of our electrified vehicles should increase by an average of 30 percent every year,” BMW Chairman Harald Krueger said.

Auto makers have been investing heavily in electric models in recent years amid a regulatory clampdown on carbon-dioxide emissions and a shift away from private car ownership in favor of shared services, which rely more on electric vehicles.

Volkswagen AG (VOW.XE) has pledged to invest around 44 billion euros ($50.02 billion) between 2018 and 2023 on electric-vehicle technology, while rival Daimler AG (DAI.XE) committed to spending EUR20 billion on battery cells through to 2030.

In 2018, BMW sold 142,617 electrified vehicles, an increase of 38% on the prior year, though still a relatively small portion of the nearly 2.5 million vehicles it sold in total.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

June 25, 2019 09:40 ET (13:40 GMT)

By Cara Lombardo, Jonathan D. Rockoff and Dana Cimilluca

AbbVie Inc. agreed to buy Allergan PLC for about $63 billion, as the two big drugmakers bet a combination will deliver new sources of growth they have struggled to find on their own.

The takeover is worth about $188 a share in cash and stock, the companies said in a statement. The price represents a 45% premium over Allergan's closing share price Monday of $129.57. If not for a surge in the shares in recent days on expectations for a breakup of the company, the premium would be even bigger.

The Wall Street Journal reported earlier Tuesday that the deal was imminent.

Buying Dublin-based Allergan would deliver a dominant position in the $8 billion-plus market for Botox and other beauty drugs, as well as a number of popular eye treatments, as AbbVie braces for the end of patent protection for the world's top-selling drug, Humira.

The companies' portfolios have some overlap in treatments for brain, women's-health, stomach and other disorders, though the combination would take AbbVie into the new realm of frown-line smoothing, eyelash lengthening and double-chin removal.

Allergan's nearly $16 billion in yearly revenue would also give AbbVie another source of cash to hunt for a new generation of products.

Lately, Wall Street has been clamoring for change at Allergan, with its shares trading at a fraction of their peak of more than $330 in the summer of 2015. Analysts have been saying the company could split into two pieces, but few expected CEO Brent Saunders to pull off a sale, especially at such a lofty premium.

Richard Gonzalez will remain chairman and CEO of AbbVie. Two Allergan directors including Mr. Saunders will join AbbVie's board when the deal closes.

About two-thirds of the purchase price is in cash, with Allergan stockholders receiving 0.8660 AbbVie shares and $120.30 in cash for each share they own, for total consideration of $188.24 a share.

Allergan stock jumped 29% to $167 in morning trading Tuesday, while AbbVie shares fell 12% to $69.

The deal, worth about $80 billion including debt, is the second this year that would knit together two of the world's biggest pharmaceutical companies. Earlier this year, Bristol-Myers Squibb Co. agreed to pay $74 billion for rival cancer drugmaker Celgene Corp.

AbbVie, based in the Chicago suburbs, has been pursuing deals of various sizes in an effort to diversify beyond Humira ever since the company was split from Abbott Laboratories in 2013.

Humira, a rheumatoid arthritis treatment, rang up $19.1 billion of AbbVie's $32.8 billion of revenues last year. But lower-priced versions, known as biosimilars, are on sale in Europe and are scheduled to go on sale in the U.S. in 2023.

AbbVie had tried to strike a big deal in 2014, when it reached an agreement to buy Irish rare-disease drugmaker Shire for $54 billion. But AbbVie called off the deal later that year amid efforts by the Obama administration to restrict such tax-lowering transactions, known as inversions.

Other attempts to find new big-selling cancer, immune and other drugs have also stumbled, except for a roughly $20 billion deal in 2015 for Pharmacyclics Inc., the maker of the Imbruvica cancer therapy. AbbVie shares the treatment's rights with Johnson & Johnson.

But Imbruvica, which generated $3.6 billion in revenue for AbbVie last year, can't alone make up for the approaching loss of Humira sales.

In Allergan, AbbVie will take on a once-highflying drugmaker that has also struggled to find new sales growth.

Allergan's shares soared to more than twice their current level four years ago as the company and Mr. Saunders became Wall Street darlings following a series of bold acquisitions. But Allergan's luster has faded in the past few years as opportunities for deal making have dwindled along with the stock and only its aesthetic-medicine business grew to investors' satisfaction.

Allergan, which started as a California pharmacy and then carved a niche as an eye-treatment business, rocketed into the ranks of big drugmakers after exploiting Botox's use smoothing frown lines and wrinkles.

A combination with Irish drugmaker Actavis in 2015 transformed the company. Mr. Saunders has been CEO since 2014 and chairman since 2016.

For a time, Pfizer Inc. was going to buy Allergan for about $150 billion, but that transaction, also an inversion, fell through amid pushback from the Obama administration.

Then investors soured on the company, partly due to concerns that it wouldn't be able to replace sales from eye drug Restasis, which was losing its patent protection.

Investors also drove down the stock on a failed plan to bolster Restasis by selling its patent rights to an Indian tribe, as well as mixed messages from management about the company's prospects. Rivals are trying to edge in on Botox, and the company's efforts to develop new drugs, like a depression treatment, faltered.

The concerns triggered pressure from Wall Street. Mr. Saunders said on the company's earnings call last month that there is a sense of urgency within the company and pledged that the board was reviewing all options.

Analysts predicted Allergan could split itself in two, with one business dedicated to fast-growing brands and segments such as aesthetics and eye care, and the other focused on gastrointestinal and women's-health treatments.

Allergan in recent years came in the crosshairs of David Tepper's activist hedge fund Appaloosa LP, which criticized the company's performance and pressured it to separate the roles of chairman and CEO. The company had said it would separate the roles at its next leadership transition. In May, Allergan shareholders voted down a shareholder proposal from Appaloosa to separate the positions.

Also to satisfy investors, Allergan in the past year tried to sell its women's health and anti-infective drug businesses but said in January it would keep the unit.

Write to Cara Lombardo at cara.lombardo@wsj.com, Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

June 25, 2019 09:36 ET (13:36 GMT)

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

June 25, 2019 09:36 ET (13:36 GMT)

By Will Horner

-- S&P 500, Dow industrials open near yesterday's closing price

-- Allergan jumped almost 30% in early trading on AbbVie takeover

-- Gold rallied, bitcoin advanced and government bond yields slipped

U.S. stocks wavered in early trading Tuesday as investors turned to haven assets such as Treasurys and gold.

The Dow Jones Industrial Average and S&P 500 were around flat in the opening minutes of trading in New York. Shares of Allergan rose nearly 30% after AbbVie reached a deal to buy the company for more than $60 billion. The news prompted a 10% slide in AbbVie's stock.

In Europe, the Stoxx Europe 600 index fell 0.1%, with French and German equities dragging down the benchmark. One of the few bright spots for investors was in Capgemini and smaller rival Altran Technologies: the stocks soared after the French companies agreed to merge, sending Altran shares up almost 22% while Capgemini advanced 7.4%.

Meanwhile, gold prices jumped to their highest level this year before paring back slightly to $1,426.10 a troy ounce. The precious metal has gained 13% so far in 2019.

Gold prices were rising because of "a positive cocktail of factors" from lingering global growth worries and U.S.-China trade tensions to escalating fears of a conflict between the U.S. and Iran, said Carsten Menke, a commodities analyst at Julius Baer.

"If you take everything together you have quite a bullish environment for gold. Then you have technical levels which have been broken like $1,380 or $1,400 and that's why we've had such a sharp rally," he said.

Bitcoin extended its gains, reaching a record for the past year as it again crossed the $11,000 threshold. The world's most popular cryptocurrency has soared 35% this month, boosted in part by the unveiling of Facebook's Libra digital currency for mainstream users last week.

In Asia, Japan's Nikkei was down 0.4%, the Hang Seng in Hong Kong slipped 1.2% and China's benchmark Shanghai composite fell 0.9%.

The yield on the 10-year U.S. Treasury note, which falls as the price rises, dropped to 2.013%, from 2.021% on Monday.

U.S. markets are gearing up for a busy day of speeches from Federal Reserve policy makers Tuesday as they look for clues on the course of U.S. monetary policy.

Investors this week have also largely held back from making big moves as their focus has shifted to the G-20 summit in Japan due to begin on Friday. A planned meeting between President Trump and Chinese President Xi Jinping at the summit is seen as a potentially crucial moment in the trade dispute between the two nations. The skirmish has roiled markets this year and threatened to further weaken the global economy, which has already shown signs of flagging after a long period of expansion.

"Prudence is still justified because obviously the bar is quite high for a truce between the U.S. and China on tariffs at this week's G-20," said Kenneth Broux, a senior strategist at Société Générale. "The danger is of course that everything ends in acrimony and the whole moves of the past week or so reverse if the U.S. decides to raise tariffs to 25% on the remaining $300 billion [of Chinese goods]."

The WSJ Dollar Index, which tracks the dollar against a basket of its peers, was broadly flat.

Elsewhere in commodities, oil prices were mixed with global benchmark Brent crude shedding 0.2% to $64.02 a barrel, while U.S. benchmark West Texas Intermediate was down 0.1% at $57.82.

(END) Dow Jones Newswires

June 25, 2019 09:35 ET (13:35 GMT)

Market News: 
 
FTSE 100            7426.56  +9.87 +0.13% 
FTSE 250           19252.38 -47.30 -0.24% 
FTSE AIM All-Share   926.55  -2.96 -0.32%
Company News:
Other News:
Market Talk:

Miners Rise as Dollar Weakness Boosts Metal Prices

1214 GMT - Miners rise as precious- and base-metal prices get a boost from a weaker dollar amid geopolitical tension. Chilean copper miner Antofagasta is the sector's top riser, up 1.45%, while Mexican silver miner Antofagasta gains 1.1%. "The dollar index is down at the lowest level since March this year on the back of strengthening expectations for a rate cut," S.P. Angel analysts say. "Markets are currently pricing in at least a 40% chance of two rate cuts before the end of the year."

7Digital Shares Down on Failed Resolution to Disapply Pre-Emption Rights

Shares of 7Digital Group PLC (7DIG.LN) fell in afternoon trading Tuesday after the company said there is a greater execution risk for any subsequent equity raise following a resolution to disapply pre-emption rights not passing at its annual general meeting.

Anglo American Sees Soaring 1H Earnings on Higher Platinum Prices

Anglo American Platinum Ltd. (AMS.JO) on Tuesday reported that its first-half headline earnings and headline earnings a share are expected to rise by 80%, due to a higher rand basket price for platinum group metals.

Anglo American's De Beers Sold Fewer Diamonds in Fifth Cycle

Anglo American PLC (AAL.LN) said Tuesday that its majority-owned De Beers Group experienced a fall in rough diamond sales for the fifth sales cycle of the year, citing a challenging environment in China and a cautious approach from rough-diamond buyers.

Carpetright FY 2019 Pretax Loss Narrowed

Carpetright PLC (CPR.LN) said Tuesday that its pretax loss narrowed in fiscal 2019 as the company restructured its U.K. store estate and addressed its legacy property issues.

Kibo Shares Rise After Subsidiary Finalizes Power Purchase Deal With Statkraft Markets

Shares in Kibo Energy PLC (KIBO.LN) traded higher Tuesday after the company said that its majority-owned subsidiary, MAST Energy Developments Ltd., finalized a power purchase agreement with Statkraft Markets GmbH.

Gear4Music Shares Drop on FY 2019 Loss

Gear4Music (Holdings) PLC (G4M.LN) shares dropped Tuesday after the music-equipment retailer said that it swung to a loss in fiscal 2019 despite revenue growth.

Northgate FY 2019 Pretax Profit Rose; Revenue to Slow in FY 2020

Northgate PLC (NTG.LN) said Tuesday that its profit rose in fiscal 2019 but said revenue growth is likely to slow in the current year.

Petrofac Shares Slip as New Orders Take a Knock

Shares in Petrofac Ltd. (PFC.LN) inched down Tuesday after the company said its new order intake in the year to date was hit by recent challenges in Saudi Arabia and Iraq.

The Loan That Fueled a Star Investor's Risky 'Illiquid' Bets

U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets hiding inside retail investment products.

UK Digital Bank Monzo Valued at About GBP2 Bln in Latest Funding Round

U.K. digital bank Monzo said Tuesday it raised 113 million pounds ($144 million) in a funding round led by Y Combinator's Continuity fund, reportedly valuing the startup at around GBP2 billion.

UK Challenger Banks May Need to Set Aside More Capital: Fitch

1320 GMT - New entry banks into the U.K. banking system may be required to set aside more capital given their fragility to a hard Brexit or a downturn, says Fitch Ratings. Fast-growing lenders with a limited track record may be more vulnerable than the big four--HSBC, Barclays, Lloyds Banking Group and Royal Bank of Scotland Group--to any cyclical downturn or a disruptive no-deal Brexit leading to higher unemployment or falling property prices, it says. Many challenger banks have grown fast in retail mortgage lending, which could inflict significant loses on their mortgage portfolios if interest rates and unemployment rise, given U.K. households' high indebtedness, it says. Falling house prices could exacerbate the impact.

Offshore Wind Hits Double-Digit Growth Globally: RenewableUK

1316 GMT - The global market for offshore wind hit 16% growth over the last 12 months, according to data published by RenewableUK, a trade association, at the Global Offshore Wind conference in London. The U.S. accounts for nearly half of the growth at 48%, but Europe accounts for 66% of demand world-wide, the association says. The U.K., however, was the largest single market for projects, representing a 9% rise from the previous year. "Innovation in offshore wind will help transform the U.K.'s energy system and set global trends in new markets," says Hugh McNeal, chief executive at RenewableUK.

More Bombardier Layoffs Possible as Mitsubishi Buys Canadian Regional Jet Program

1243 GMT - As Mitsubishi confirms that it is buying Bombardier Inc.'s CRJ regional jet program, the Canadian plane maker signals that could mean more layoffs for its operations in Belfast and Morocco--where it makes plane parts. Those businesses also are up for sale. Bombardier in Belfast says "we are reviewing what impact this may have on our sites in Northern Ireland and Morocco as suppliers to the program, and will evaluate opportunities in other programs to mitigate any potential impact on our workforce."

Ocado Outsold Rivals in 12 Weeks to June 16: Kantar

1224 GMT - Online specialist Ocado topped the list of fastest-growing supermarkets in the 12 weeks to June 16 with a sales rise of 11.3%, according to Kantar. Ocado will look to increase the amount of shoppers that buy through its platforms from the 3% of British shoppers it currently claims. Discount grocers are growing at a consistently fast rate in the U.K., with Aldi's sales climbing 9.3% and Lidl's rising 7.5% in the 12-week period, Kantar's report found. Sainsbury's, Asda and Morrisons all had slight sales declines, while Tesco--the largest by market share--remained flat. In total, supermarket sales rose 1.4% in the period.

Carpetright Stock Fair Value After FY: Shore Capital

1216 GMT - Carpetright shares are fully valued, Shore Capital says after the U.K. floor-covering retailer reported a narrower full-year loss, boosting its stock by nearly 12% to 20 pence. Shore says the results matched guidance, though it highlights the company's comments that the retail sector is facing hurdles and uncertainty. "We think the valuation looks up with events for now and continue to re-iterate our hold rating, highlighting that the shares should go better today," Shore's Greg Lawless says.

Brexit, Eurozone Weakness to Drive GBP/USD Down to 1.20 by 2Q 2020: Barclays

1207 GMT - Barclays expects U.K. political events and a worsening European growth outlook to drag GBP/USD sharper down to 1.20 by the second quarter of 2020, which is 8.7% below consensus. This compares with a current level of 1.2729. "Brexit and election risks continue to suppress GBP at historic lows, while European risks drag it down further versus the rest of the world," the bank's forex team says in a note. The U.K.-based bank's base case is that the U.K. will leave the European Union with a transition deal, yet it notes that uncertainty over what a trade deal will ultimately look like, along with weakening growth prospects for Europe, are likely to cause the pound to decline sharply against the U.S. dollar in the first half of 2020, after declining to 1.25 in 4Q 2019.

Petrofac Fraud Probe Likely to Weigh on Shares: Citi

1148 GMT - Shares in Petrofac fall 5.5% to 410 pence after the oil-industry engineer said issues in Saudi Arabia and Iraq hit its order intake in the year to date. Citigroup points out that the company is also facing uncertainty caused by a U.K. fraud investigation, though it hasn't been charged. Previous SFO investigations have taken more than 18 months to complete and there is a risk the probe could take longer given its complexity, Citi says, adding that the shares are trading at a small discount to rivals. "We believe this discount is likely to remain over the medium-term, given the uncertainty regarding the ongoing investigation," it says.

Genel Energy Buy Back Is a Sensible Use of Cash: Numis

1147 GMT - Genel Energy's decision to launch a buy-back program is a sensible decision, according to Numis analysts who say the company is generating cash like it's going out of fashion. The brokerage forecasts that Genel can generate a free cash flow yield of 19% over the next five years if oil prices remain at $60 a barrel. Numis has a buy rating on the stock and a target price of 320 pence a share. Shares are up 5% at 185.80 pence.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-9319

(END) Dow Jones Newswires

June 25, 2019 09:33 ET (13:33 GMT)

Stocks opened little changed Tuesday as investors awaited remarks by Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average rose 13 points, or less than 0.1%, to 26,740, while the S&P 500 was down less than a point at 2,944. The Nasdaq Composite was off 0.1% at 7,997. Investor expectations for the Federal Reserve to deliver a rate cut as early as next month were boosted after last week's policy meeting and Powell's news conference. Powell will have the opportunity to affirm or soften those expectations when he speaks at 1 p.m. Eastern at the Council on Foreign Relations in New York. Shares of Allergan PLC (AGN) jumped nearly 29% after agreeing to be bought by fellow drugmaker AbbVie Inc. (ABBV) in a deal valued at $63 billion. Abbvie shares fell 11.5%.

-William L. Watts

(END) Dow Jones Newswires

June 25, 2019 09:33 ET (13:33 GMT)

 For more from MarketWatch: http://www.marketwatch.com/newsviewer 

Allergan shares jump 31%, while AbbVie loses 9.6% premarket. The combined company, excluding Humira, will have revenue of more than $30B, and overall the company would be fourth-largest by sales among drugmakers. "AbbVie CEO: Allergan Is 'Incredible Opportunity' -- Market Talk," published at 8:51 a.m. ET incorrectly said Allergan's share price was falling. The story also did not indicate that the $30B revenue estimate excluded Humira.

(END) Dow Jones Newswires

June 25, 2019 09:32 ET (13:32 GMT)