Page 24 - ATD29NOV2016

Tuesday 29 November 2016 BUSINESS
A24

Stocks pull back from records; banks, retailers fall

KEN SWEET analysts cut their price tar- Asset Management, wrote Trade body claims Boeing was
AP Business Writer get on the stock, citing in a note to investors. offered illegal tax breaks in US
NEW YORK (AP) — Stocks deep discounting by the The Russell 2000, an index
pulled back slightly on retailer to compete dur- of smaller companies lost RAF CASERT
Monday, retreating from ing the holiday shopping 1.3 percent on Monday, JAMEY KEATEN
the records the market set season. Barnes & Noble ending a 15-day winning Associated Press
last week. fell 30 cents, or 2.3 per- streak. That was the longest GENEVA (AP) — U.S. plane maker Boeing received
Consumer companies cent, to $12.50 on reports winning streak for the index major illegal tax breaks from Washington state, a
and banks took some of the bookseller is also doing in 20 years, rising roughly world trade body ruled Monday, adding that the
the largest losses. Small- deep discounting to at- 11.6 percent this month federal government should now take action to end
that support within months.
The Chicago-based company and the European
Union, which backs Boeing’s key European rival Air-
bus, both claimed the ruling by the World Trade Or-
ganization as a victory in a longstanding battle for
contracts between the two aerospace giants.
The WTO found that the support Washington state
promised to give Boeing from 2024 to 2040 amount-
ed to “prohibited” subsidies. The support offered by
Washington came on condition that Boeing keeps
the production of the wings for the wide-bodied
777X plane in the state, effectively excluding for-
eign competition. Boeing has extensive plants
around Seattle.
The 28-member bloc said the WTO had ruled that
$5.7 billion in subsidies were illegal, out of a total $8.7
billion in measures that it reviewed.
But Boeing called that figure excessive and said
only “future incentives” of $50 million a year were
found impermissible in the WTO decision.
Appearing to counter both, a Geneva-based
trade official, speaking on condition of anonymity
because he was not authorized to speak publicly
Traders Michael Smyth, left, and Jonathan Corpina work on the floor of the New York Stock Ex- about the matter, said the ruling addressed only the
change. Stocks pulled back slightly on Monday, retreating from the records the market set last legality of the measures, and not the possible finan-
week. cial benefit that could be drawn from the subsidy.
(AP Photo/Richard Drew)
The ruling is but a part of a wider squabble involv-
ing accusations between the U.S. government and
company stocks, which tract customers. Monday’s alone. Banks also fell more the 28-nation EU over support for Boeing and Airbus
have been outperforming declines follow what has than the rest of the mar- dating back to 2004.
the rest of the market for been a remarkable rally in ket, with the financial sec- “We are really the only party that can credibly
weeks, gave back some of November since the upset tor of the S&P 500 falling come up with a figure,” said Boeing spokesman Tim
their recent gains. victory of Donald Trump in 1.4 percent. Banks have Neale, referring to the value of the tax breaks. He
The Dow Jones industrial the U.S. presidential elec- surged since the election said the $50 million per year was a “conservative
average lost 54.24 points, tion. Investors have made on speculation that the estimate” and even over a 20-year span would only
or 0.3 percent, to 19,097.90. big bets that Trump, with a Trump administration will total $1 billion.
The Standard & Poor’s 500 Republican-led Congress, roll back some regulations He said the EU effort was aimed in part to distract
index lost 11.63 points, or will push to deregulate en- put into place following attention from a far more costly WTO ruling against
0.5 percent, to 2,201.72 ergy and banking and cut the financial crisis. Investors Airbus two months ago.
and the Nasdaq compos- taxes, which could lead to have also pulled out of the EU Trade Commissioner Cecilia Malmstrom called
ite lost 30.11 points, or 0.6 stronger economic growth. bond market, betting that Monday’s ruling “an important victory for the EU
percent, to 5,368.81. “The economic and equity higher economic growth and its aircraft industry.”
Consumer discretionary market backdrop was al- will also lead to higher in- “We expect the U.S. to respect the rules, uphold fair
stocks were among the ready improving before the flation, something the U.S. competition, and withdraw these subsidies without
hardest hit, following the election. Trump’s victory economy has had little of any delay,” Malmstrom said in a statement.
closely watched post- and the Republican sweep since the financial crisis. For its part, Boeing said it expected the European
Thanksgiving sales push. provided a catalyst for in- Bond prices rose. The yield bloc and Airbus to appeal the ruling, saying the
Online retail giant Amazon vestors to ratchet up their on the 10-year Treasury WTO had found that the U.S. company had not re-
fell $13.60, or 1.7 percent, optimism,” Bob Doll, chief note fell to 2.31 percent ceived any benefit yet from the 777X tax rate and
to $766.77 after Citigroup equity strategist at Nuveen from 2.36 percent. q wouldn’t until the plane is first delivered in 2020.
Benetton heir quits clothing brand’s board “Today’s decision is a complete victory for the Unit-
ed States, Washington State and Boeing,” Boeing
general council J. Michael Luttig said in a statement.
MILAN (AP) — Alessandro it “a regular part of the ro- recently has struggled to “In rejecting virtually every claim made by the EU in
Benetton, the son of one of tation within the board.” find its footing and under- this case, the WTO found today that Boeing has not
the Italian fashion brand’s Alessandro Benetton is the gone several creative re- received a penny of impermissible subsidies.”
founders, has quit the Ben- son of Luciano Benetton, launches. The head of the Airbus President Fabrice Bregier argued the state’s
etton Group board in a one of four siblings who Filctem CGIL union in Trevi- support in the United States would allow Boeing to
move that has raised union launched the brand that so tells news agency ANSA develop the 777X for free on taxpayers’ costs. He
concerns about the com- became known for colorful that the move “was a seri- estimated the damage to Airbus and the European
pany’s future. knitwear and provocative ous new reason for con- aerospace industry to be around $50 billion so far,
The fashion company on advertising campaigns in cern on top of many uncer- “and that’s only for the 777X.”q
Monday confirmed the the 1980s and 1990s. tainties growing around the
Benetton heir’s exit, calling The Benetton brand more company.”q