Page 25 - ARUBA TODAY

BUSINESS Thursday 21 sepTember
A25

Toshiba selling Stocks wobble on Fed announcement, but close up

chip business By ALEX VEIGA

to Bain Capital AP Business Writer
U.S. stock indexes over-
came an afternoon
By YURI KAGEYAMA wobble to close mostly
AP Business Writer higher Wednesday after
TOKYO (AP) — Toshiba’s the Federal Reserve said
board signed off Wednes- it would start reducing its
day on selling its computer huge bond portfolio next
chip business to a group month and was still on
led by Bain Capital Private track to raise interest rates
Equity, but the deal’s fu- later this year.The central
ture remains unclear as bank’s announcement
Toshiba’s U.S. joint venture drove bond yields higher,
partner Western Digital op- lifting shares in banks and
poses it. other financial companies.
Japanese electronics and Banks benefit from higher
nuclear company Toshiba bond yields because it
Corp., which needs the means they can charge
sale to survive, said it hopes higher interest rates on
the deal, estimated at 2 loans.High-dividend stocks
trillion yen ($18 billion), will like utilities and household
close by the end of next goods makers fell. Income-
March. seeking investors find those The rate decision of the Federal Reserve appears on a television screen, on the floor of the New
Toshiba announced last stocks less appealing when York Stack Exchange, Wednesday, Sept. 20, 2017. The Federal Reserve says it will start in October
week that it has entered bond yields move higher. to gradually unwind its $4.5 trillion balance sheet, which expanded to unprecedented levels in
into an agreement with “The announcement was efforts to spur economic growth after the 2008 financial crisis.
the Bain Capital group. But pretty much in line with (AP Photo/Richard Drew)
Western Digital immediate- what was expected,” said industrial average rose stocks added 5.02 points, said they still expect to in-
ly said it opposed the sale David Chalupnik, head of 41.79 points, or 0.2 percent, or 0.4 percent, to 1,445.42. crease the rate one more
of the NAND flash-memory equities at Nuveen Asset to 22,412.59. The modest Trading on Wall Street had time this year and three
SanDisk joint venture, stress- Management. “So far, the gains nudged both indexes been mostly subdued this times in 2018, if persistently
ing it will continue with le- market is taking it in stride, to record highs, extend- week ahead of the Fed’s low inflation rebounds.The
gal action. but I don’t know if it should. ing a run of milestones that announcement.Fed policy- Fed has modestly raised
Toshiba has been battered This will slowly impact stretches back to last week. makers decided to leave the rate four times since De-
by massive losses related to growth.”The Standard & The Nasdaq composite lost the central bank’s short- cember 2015 after keeping
its U.S. nuclear operations Poor’s 500 index inched up 5.28 points, or 0.1 percent, term benchmark interest it at a record low for seven
at Westinghouse Electric 1.59 points, or 0.1 percent, to 6,456.04. The Russell 2000 rate between 1 percent years after the 2008 finan-
Co., which filed for bank- to 2,508.24. The Dow Jones index of smaller-company and 1.25 percent, but also cial crisis.q
ruptcy earlier this year.
Its decline, including ear-
lier scandals centered on Fed to start modestly reducing its bond holdings
inflated bookkeeping, is
one of the most dramatic By MARTIN CRUTSINGER nomic forecasts show an omy had rebounded from believes that persistently
downfalls of a major Japa- AP Economics Writer expectation for three more the storms. low inflation — below the
nese company long known WASHINGTON (AP) — The rate increases in 2018. “A lot of people were think- Fed’s 2 percent target rate
for quality. Federal Reserve will begin The Fed’s policymaking ing (the Fed) would pass in for four years — is tempo-
The chosen consortium also shrinking the enormous committee approved its December,” Silvia said. rary. She said several factors
includes South Korea’s SK portfolio of bonds that it action on a 9-0 vote after At a news conference, have held inflation down: A
Hynix and other Japanese amassed after the 2008 ending its latest meeting. Chair Janet Yellen said the job market still healing from
and foreign companies, financial crisis to try to sus- Stocks turned lower after Fed’s two rate hikes this the Great Recession, lower
and 350.5 billion yen ($3.2 tain a frail economy. the announcement before year and its decision to be- energy prices and a strong
billion) will be invested to The move reflects a finishing mixed. Bond yields gin reducing its bond hold- dollar, which has reduced
stabilize the chip business strengthened economy rose, reflecting expecta- ings were signs of a solid the costs of imports.
operations, Toshiba said in and could mean higher tions of higher rates. economy and job market. She said the Fed would
a statement. rates on mortgages and John Silvia, chief econo- “The basic message here adjust its policymaking if it
The deal will go through re- other loans over time. mist at Wells Fargo, said is U.S. economic perfor- thought the causes of low
gardless of the legal wran- The Fed announced some investors appeared mance has been good,” inflation had become per-
gling with Western Digital, it Wednesday that it will let a surprised that the Fed still Yellen told reporters. manent.
said, without elaborating. small portion of its $4.5 tril- expects to raise rates by Yellen also said the Fed still to this report. q
Toshiba’s massive red ink lion balance sheet mature December.
began with reactors it has without being replaced, With Hurricanes Harvey
been building in the U.S. starting in October with and Irma clouding some
which are still unfinished, reductions of $10 billion a economic data — tem-
partly because of beefed- month and gradually rising porarily raising gas prices,
up safety regulations fol- over the next year to $50 likely restraining hiring and
lowing the 2011 Fukushima billion a month. potentially depressing
nuclear disaster. The central bank left its key growth in the July-Sep-
Toshiba’s earnings reports short-term rate unchanged tember quarter — some
initially failed to get en- but hinted at one more analysts assumed the Fed
dorsements from its audi- hike this year — most likely wouldn’t have enough in-
tors, meaning that it could in December. The Fed poli- formation by December to
have been delisted.q cymakers’ updated eco- assess whether the econ-