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BUSINESS
East Oregonian
Stocks keep pushing higher in 2018
NEW YORK (AP) —
Rising retailers pushed U.S.
stock indexes further into
record territory on Friday, as
the market’s fabulous start
to 2018 carried through its
second week.
Interest rates also climbed
after a report showed that a
key component of inflation
accelerated last month. But
stocks absorbed the gains
without a hiccup, unlike
earlier in the week when
rate worries helped send the
Standard & Poor’s 500 lower
for its lone blemish this year.
The S&P 500 rose 18.68
points, or 0.7 percent, to
2,786.24 on Friday to close
out its seventh week of gains
in the last eight. The index
is already up more than 4
percent for 2018.
The Dow Jones industrial
average climbed 228.46, or
0.9 percent, to 25,803.19, the
Nasdaq composite rose 49.28,
or 0.7 percent, to 7,261.06
and the Russell 2000 index of
small-cap stocks gained 5.18,
or 0.3 percent, to 1,591.97.
Retailers led the way after a
government report confirmed
that the holiday shopping
season was a strong one, with
retail sales rising 0.4 percent
last month following a 0.9
percent surge in November.
The numbers fit with what
individual retailers have said
recently, and several have
raised their profit forecasts as
a result.
Shares of Kohl’s, Target,
Nordstrom and Dollar Tree all
jumped more than 3 percent.
Treasury yields, mean-
while, rose after a key
measure of inflation rose more
last month than economists
expected.
Overall inflation slowed in
AP Photo/Mark Lennihan, File
Stocks are opening higher on Wall Street, Friday led by gains in banks and retailers.
Banks were benefiting from higher bond yields.
December, but that was mostly
due to gasoline and other items
that are prone to quick changes
in price. “Core” inflation,
which looks at the steadier
components of the consumer
price index, accelerated more
than expected last month.
That pushed the yield on
the two-year Treasury to 2.00
percent from 1.98 percent
late Thursday. The yield on
the 10-year Treasury note
held steady at 2.54 percent
after climbing as high as 2.59
percent in the morning.
Investors
have
been
preparing for a gradual
rise in rates, as the Federal
Reserve slowly removes the
aid it provided the economy
following the Great Recession.
The worry is that a surprise
spike in inflation would force
central banks to move more
quickly on rates than investors
expect and upset markets.
Stocks have been remark-
ably calm and strong for more
than a year. Sandy Villere, a
partner and portfolio manager
at Villere & Co., said he’s
optimistic stocks can rise even
further because the economy
is strengthening and Washing-
ton’s move to cut tax rates last
month will boost corporate
profits, among other reasons.
But some caution is starting
to creep in as prices keep
climbing. Villere said he’s
holding more cash than prior
years as the types of stocks he
prefers become more difficult
to find: companies with strong
growth but low prices relative
to their earnings and growth.
“We’re not fully invested
at this point, but we haven’t
switched to pure defense yet
either,” Villere said. “Things
are good enough to keep
things going solidly, at least
for the first half of 2018. We
try not to be greedy about it.”
The next tests for compa-
nies will arrive in coming
weeks, as they report their
results for the last three months
of 2017. Expectations are
Lawmakers demand probe into Intel CEO’s stock sales
SAN FRANCISCO (AP)
— Two U.S. lawmakers are
asking federal regulators to
open an investigation into
stock sales that reaped a $25
million profit for Intel’s CEO
several weeks before the
company disclosed a serious
security flaw threatening
millions
of
computers,
phones and other devices.
Sen. Jack Reed, a Rhode
Island Democrat, and Sen.
John Kennedy, a Louisiana
Republican,
made
the
demand in a letter sent
Tuesday to the Securities and
Exchange Commission and
the Justice Department.
They told the agencies
that they were troubled by
a series of stock sales that
Intel CEO Brian Krzanich
completed Nov. 29. The
trades were made at a time
that Intel knew about security
bugs that weren’t disclosed
until last week.
“We
request
that you conduct a
thorough examina-
tion of whether any
insider trading laws
were
violated,”
Reed and Kennedy
wrote.
Intel said it will
cooperate with any Krzanich
investigation. The
SEC declined to comment
on the letter and the Justice
Department did not immedi-
ately respond to a request for
comment.
Krzanich’s stock sales
were made as part of an
automated trading program
designed to eliminate any
questions about the timing
of transactions made by top
corporate executives. But
Krzanich’s program wasn’t
adopted until Oct. 30, about
four months after Intel was
first informed of
the security bugs
affecting its prod-
ucts.
Any investiga-
tion into Krzanich’s
sales
would
likely
examine
the motives for
adopting a trading
program at the time.
Despite
the
concerns raised by last
week’s disclosure about the
security risks. Intel’s stock
isn’t worth that much less
than when Krzanich sold his
stock. The company’s shares
closed at $43.62 Tuesday;
Krzanich sold his stock at
prices ranging from $44.05
and $44.56.
Krzanich held on to
250,000 shares of Intel
stock, the minimum that the
company requires its CEO to
own.
generally high, and analysts
are forecasting growth of
nearly 11 percent for S&P 500
earnings per share, according
to S&P Global Market Intelli-
gence.
Financial companies are
some of the earliest to report,
and BlackRock jumped
$17.61, or 3.3 percent, to
$555.53 after it reported
stronger earnings than analysts
expected.
On the losing end was
Facebook, which fell after
the social-media giant said
it will show users fewer
posts from brands and fewer
videos in favor of more posts
from friends and family. The
changes may mean people
spend less time on Facebook,
and less advertising revenue
for the company.
Facebook dropped $8.40,
or 4.5 percent, to $179.37.
Saturday, January 13, 2018
Supreme Court to hear
sales tax collection case
WASHINGTON (AP)
— The Supreme Court
agreed Friday to wade into
the issue of sales tax collec-
tion on internet purchases
in a case that could force
consumers to pay more for
certain purchases and allow
states to recoup what they
say is billions in lost revenue
annually.
Under previous Supreme
Court rulings, when internet
retailers don’t have a physical
presence in a state, they can’t
be forced to collect sales
tax on sales into that state.
Consumers who purchase
from out-of-state retailers are
generally supposed to pay
the state taxes themselves,
but few do. A total of 36
states and the District of
Columbia had asked the high
court to revisit the issue.
Large brick-and-mortar
retailers like Walmart and
Target have long bemoaned
the fact that they have to
collect sales tax on online
purchases because they have
physical stores nationwide.
Meanwhile, smaller online
retailers, who don’t have
vast networks of stores,
don’t have to collect the
tax where they don’t have a
physical presence.
Internet giant Amazon.
com fought for years against
collecting sales tax but now
does so nationwide, though
third-party sellers on its site
make their own decisions.
But the case before the
Supreme Court does directly
affect other online retailers,
including Overstock.com,
home goods company
Wayfair and electronics
retailer Newegg, who are
part of the case the court
accepted.
States say the court’s
previous rulings have also
hurt them. According to one
estimate cited by the states
in a brief they filed with
the high court, they’ll lose
out on nearly $34 billion in
2018 if the Supreme Court’s
previous rulings stand. The
Government Accountability
Office, which provides
nonpartisan reports to
Congress, wrote in a report
last year that state and local
governments would have
been able to gain between
$8.5 billion and $13 billion
in 2017 if they could require
out-of-state sellers to collect
tax on sales into the state.
All but five states charge a
sales tax.
The Supreme Court first
adopted its physical pres-
ence rule on sales tax collec-
tion in a case dealing with
catalog retailers in 1967, a
year that states pointed out
in their brief was “two years
before the moon landing
and decades before” the first
online retail transaction. The
high court last considered
the issue in 1992.
The National Retail
Federation, which represents
both internet and brick-and-
mortar sellers, said Friday
it welcomed the Supreme
Court’s decision to take the
case.