Fed sitting pat; stocks edge up
WASHINGTON — The Federal Reserve left its benchmark interest rate alone Wednesday and signaled that it expects to keep low rates unchanged through next year.
U.S. stock indexes closed slightly higher in response
The Fed's decision follows three rate cuts earlier this year. It reflects its view that the U.S. economy has so far withstood the U.S.-China trade war and a global slump and remains generally healthy. Its benchmark rate — which influences many consumer and business loans — will remain in a low range of 1.5 percent to 1.75 percent.
In a sign of the Fed's confidence about the economy, its latest policy statement dropped a phrase it had previously used that referred to "uncertainties" surrounding the economic outlook. That suggests that the Fed may be less worried about the impact of the U.S.-China trade war or overseas developments.
The Fed may prefer to leave rates alone through 2020, an election year. But many analysts note that the economy faces risks from the trade conflicts, a global slowdown and a potentially disruptive Brexit and say the Fed may feel compelled to cut rates at least once next year.
Saudi oil giant dethrones Apple
RIYADH, Saudi Arabia — Saudi Arabia's oil company Aramco gained 10 percent in its first moments on the stock market Wednesday in a dramatic debut that held until closing and pushed its value up to $1.88 trillion, surpassing Apple as the largest listed company in the world.
Trading on the Saudi Tadawul stock exchange came after a mammoth $25.6 billion initial public offering that set the record as the biggest ever in history, overtaking the $25 billion raised by China's Alibaba in 2014.
Demand during the bookbuilding period for Aramco's IPO reached $106 billion with most of that generated by Saudi investment.
Aramco, owned by the state, has sold a 1.5 percent stake in the company, pricing its shares before trading the U.S. equivalent of $8.53.
Energy nudges consumer prices up
WASHINGTON — Higher energy prices lifted U.S. overall consumer prices in November.
The Labor Department said Wednesday that its consumer price index rose 0.3 percent last month after climbing 0.4 percent in October. Energy prices, led by a 1.1 percent uptick in gasoline, rose 0.8 percent in November on top of a 2.7 perecent jump the previous month.
Excluding volatile food and energy prices, so-called core inflation rose 0.2 percent in November, matching October's increase. Despite surging in October and November, gasoline prices are down 1.2 percent over the past year.
Overall consumer prices were up 2.1 percent and core prices were up 2.3 percent from November 2018.
That puts inflation in line with the Federal Reserve's target of 2 percent a year.
Chevron plans $10B asset writedown
SAN RAMON, Calif. — Chevron Corp. said it will book a charge of at least $10 billion because lower long-term prices for oil and natural gas will reduce the value of its assets. More than half the write-down is related to gas drilling operations in Appalachia.
The huge fourth-quarter write-down — between $10 billion and $11 billion — underscores the challenge posed by rising production that has prevented energy prices from increasing sharply during a time of increasing global demand.
Chevron said it will reduce spending on some investments including Appalachian shale, a liquefied gas terminal in British Columbia, and other international projects. The company said it is evaluating options including selling those assets.
The company disclosed the estimated charge as it announced that capital and exploration spending next year will be held flat at $20 billion. Chevron will focus on operations in the Permian Basin of west Texas and New Mexico, a big project in Kazakhstan, and deepwater drilling opportunities in the Gulf of Mexico.
Dominion to turn manure into gas
RICHMOND, Va. — One of the nation's largest energy producers is launching a $200 million effort to convert methane from cow manure into natural gas.
Dominion Energy, which bought South Carolina Elecrtic & Gas earlier this year, said Wednesday that it is partnering with Vanguard Renewables to develop and operate conversion facilities at dairy farms across the U.S.
Projects are under development in Georgia, Nevada, Colorado, New Mexico and Utah. A subsidiary of Vanguard Renewables will design, develop and operate the projects.
Dominion will own the projects and market the gas. Company spokesman Aaron Ruby says the $200 million will be invested over five years, with the potential for the effort to expand.
Toyota North America CEO to retire
DETROIT — He was the face of Toyota in the U.S. unintended acceleration crisis, steered the automaker through the Great Recession, started and closed the youth-oriented Scion brand and reorganized North American operations.
Now, after 38 years in number of leadership roles with the company, Jim Lentz is retiring, effective April 1.
Lentz, 64, will step down in April as CEO of Toyota Motor North America, and will be replaced by Tetsuo "Ted" Ogawa, who is chief operating officer, Toyota said Wednesday.
Lentz is most well known for his February, 2010, testimony before a congressional committee investigating complaints about Toyota vehicles accelerating without warning. Lentz was candid, saying that recalls of some 8.5 million vehicles worldwide and more than 6 million in the United States may not solve the problems.
He said at the time that an electronic cause could not be ruled out, although Toyota and U.S. government agencies did make controversial determinations later that the problem was caused by sticky gas pedals and floor mats pushing on the accelerator, not electronics. Toyota was fined $50 million for being too slow to report safety problems to U.S. regulators.