US Warns Airliners Flying in Persian Gulf Amid Iran Tensions

U.S. diplomats warned Saturday that commercial airliners flying over the wider Persian Gulf faced a risk of being “misidentified” amid heightened tensions between the U.S. and Iran.

The warning relayed by U.S. diplomatic posts from the Federal Aviation Administration underlined the risks the current tensions pose to a region crucial to global air travel. It also came as Lloyd’s of London warned of increasing risks to maritime shipping in the region.

 

Concerns about a possible conflict have flared since the White House ordered warships and bombers to the region to counter an alleged, unexplained threat from Iran that has seen America order nonessential diplomatic staff out of Iraq. President Donald Trump since has sought to soften his tone.

 

Meanwhile, authorities allege that a sabotage operation targeted four oil tankers off the coast of the United Arab Emirates, and Iran-aligned rebels in Yemen claimed responsibility for a drone attack on a crucial Saudi oil pipeline. Saudi Arabia directly blamed Iran for the drone assault, and a local newspaper linked to the al-Saud royal family called on Thursday for America to launch “surgical strikes” on Tehran.

 

This all takes root in Trump’s decision last year to withdraw the U.S. from the 2015 nuclear accord between Iran and world powers and impose wide-reaching sanctions. Iran just announced it would begin backing away from terms of the deal, setting a 60-day deadline for Europe to come up with new terms or it would begin enriching uranium closer to weapons-grade levels. Tehran long has insisted it does not seek nuclear weapons, though the West fears its program could allow it to build atomic bombs.

 

The order relayed Saturday by U.S. diplomats in Kuwait and the UAE came from an FAA Notice to Airmen published late Thursday in the U.S. It said that all commercial aircraft flying over the waters of Persian Gulf and the Gulf of Oman needed to be aware of “heightened military activities and increased political tension.”

 

This presents “an increasing inadvertent risk to U.S. civil aviation operations due to the potential for miscalculation or misidentification,” the warning said. It also said aircraft could experience interference with its navigation instruments and communications jamming “with little to no warning.”

 

The Persian Gulf has become a major gateway for East-West travel in the aviation industry. Dubai International Airport in the United Arab Emirates, home to Emirates, is the world’s busiest for international travel, while long-haul carriers Etihad and Qatar Airways also operate here.

 

In a statement, Emirates said it was aware of the notice and in touch with authorities worldwide, but “at this time there are no changes to our flight operations.”

 

Qatar Airways similarly said it was aware of the notice and its operations were unaffected.

 

Etihad, as well as Oman Air, did not respond to a request for comment Saturday about the warning.

 

The warning appeared rooted in what happened 30 years ago after Operation Praying Mantis, a daylong naval battle in the Persian Gulf between American forces and Iran during the country’s long 1980s war with Iraq. On July 3, 1988, the USS Vincennes chased Iranian speedboats that allegedly opened fire on a helicopter into Iranian territorial waters, then mistook an Iran Air heading to Dubai for an Iranian F-14. The Vincennes fired two missiles at the airplane, killing all aboard the flight.

 

Meanwhile, Lloyd’s Market Association Joint War Committee added the Persian Gulf, the Gulf of Oman and the United Arab Emirates on Friday to its list of areas posing higher risk to insurers. It also expanded its list to include the Saudi coast as a risk area.

 

The USS Abraham Lincoln and its carrier strike group have yet to reach the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a third of all oil traded at sea passes. A Revolutionary Guard deputy has warned that any armed conflict would affect the global energy market. Iran long has threatened to be able to shut off the strait.

 

Benchmark Brent crude now stands around $72 a barrel.

 

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US Says It May Scale Back Some Huawei Trade Restrictions

The U.S. Commerce Department may soon scale back restrictions on Huawei Technologies after this week’s blacklisting made it nearly impossible for the Chinese company to purchase goods made in the United States, a 

department spokeswoman said Friday. 

The Commerce Department may issue a temporary general license to allow time for companies and people who have Huawei equipment to maintain reliability of their communications networks and equipment, the spokeswoman said. 

The possible general license would not apply to new transactions, according to the spokeswoman, and would last for 90 days. 

A spokesman for Huawei did not immediately respond to a request for comment. 

The Commerce Department on Thursday added Huawei to a list of entities that are banned from doing business with U.S. companies without licenses. 

The entities list identifies companies believed to be involved in activities contrary to the national security or foreign policy interests of the United States. 

Potential beneficiaries of the temporary license could include internet access and mobile phone service providers in thinly populated places such as Wyoming and eastern Oregon that purchased network equipment from Huawei in recent years. 

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Trump Lifts Tariffs on Mexico, Canada, Delays Auto Tariffs 

Bogged down in a sprawling trade dispute with U.S. rival China, President Donald Trump took steps Friday to ease tensions with America’s allies: lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe. 

 

By removing the metals tariffs on Canada and Mexico, Trump cleared a key roadblock to a North American trade pact his team negotiated last year. As part of Friday’s arrangement, the Canadians and Mexicans agreed to scrap retaliatory tariffs they had imposed on U.S. goods, according to four sources in the U.S. and Canada who spoke on condition of anonymity ahead of an announcement. 

 

In a joint statement, the U.S. and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. China has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting U.S. producers. 

Some in Washington were urging Trump to take advantage of the truce with U.S. allies to get even tougher with China.

China is our adversary,'' said Sen. Ben Sasse, R-Neb.Canada and Mexico are our friends. The president is right to increase pressure on China for their espionage, their theft of intellectual property and their hostility toward the rule of law. The president is also right to be deescalating tension with our North American allies.”

 

Earlier Friday, the White House said Trump was delaying for six months any decision to slap tariffs on foreign cars, a move that would have hit Japan and Europe especially hard.

Trump still is hoping to use the threat of auto tariffs to pressure Japan and the European Union into making concessions in trade talks. “If agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken,” White House press secretary Sarah Sanders said in a statement. 

Trade weapon

 

In imposing the metals tariffs and threatening the ones on autos, the president was relying on a rarely used weapon in the U.S. trade war arsenal — Section 232 of the Trade Expansion Act of 1962 — which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security. 

 

But the steel and aluminum tariffs were also designed to coerce Canada and Mexico into agreeing to a rewrite of North American free trade pact. In fact, the Canadians and Mexicans did go along last year with a revamped regional trade deal that was to Trump’s liking. But the administration had refused to lift the taxes on their metals to the United States until Friday. 

 

The new trade deal — the U.S.-Mexico-Canada Agreement — needs approval of the legislatures in the U.S., Canada and Mexico. Several key U.S. lawmakers were threatening to reject the pact unless the tariffs were removed. And Canada had suggested it wouldn’t ratify any deal while the tariffs were still in place. 

Trump had faced a Saturday deadline to decide what to do about the auto tariffs. 

 

Taxing auto tariffs would mark a major escalation in Trump’s aggressive trade policies and likely would meet resistance in Congress. The United States last year imported $192 billion worth of passenger vehicles and $159 billion in auto parts. 

Legitimate use?

 

“I have serious questions about the legitimacy of using national security as a basis to impose tariffs on cars and car parts,” Iowa Republican Sen. Chuck Grassley, chair of the Senate Finance Committee, said in a statement Friday. He’s working on legislation to scale back the president’s authority to impose national security tariffs under Section 232.

In a statement, the White House said that Commerce Secretary Wilbur Ross has determined that imported vehicles and parts are a threat to national security. Trump deferred action on tariffs for 180 days to give negotiators time to work out deals but threatened them if talks break down. 

 

In justifying tariffs for national security reasons, Commerce found that the U.S. industrial base depends on technology developed by American-owned auto companies to maintain U.S. military superiority. Because of rising imports of autos and parts over the past 30 years, the market share of U.S.-owned automakers has fallen. That has caused a lag in research and development spending that is “weakening innovation and, accordingly, threatening to impair our national security,” the statement said. 

 

The market share of vehicles produced and sold in the U.S. by American-owned automakers, the statement said, has declined from 67% in 1985 to 22% in 2017.

But the statistics don’t match market share figures from the industry. A message was left Friday seeking an explanation of how Commerce calculated the 22%.  

In 2017, General Motors, Ford, Fiat Chrysler and Tesla combined had a 44.5% share of U.S. auto sales, according to Autodata Corp. Those figures include vehicles produced in other countries. 

 

It’s possible that the Commerce Department didn’t include Fiat Chrysler, which is now legally headquartered in the Netherlands but has a huge research and development operation near Detroit. It had 12% of U.S. auto sales in 2017. 

 

The Commerce figures also do not account for research by foreign automakers. Toyota, Hyundai-Kia, Subaru, Honda and others have significant research centers in the U.S. 

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After Huawei Blow, China Says US Must Show Sincerity for Talks

The United States must show sincerity if it is to hold meaningful trade talks, China said on Friday, after U.S. President Donald Trump dramatically raised

the stakes with a potentially devastating blow to Chinese tech giant Huawei.

China has yet to say whether or how it will retaliate against the latest escalation in trade tension, although state media has taken an increasingly strident tone, with the ruling Communist Party’s People’s Daily publishing a front-page commentary that evoked the patriotic spirit of past wars.

China’s currency slid to its weakest in almost five months, although losses were capped after sources told Reuters that the central bank would ensure the yuan did not weaken past the key 7-per-dollar level in the immediate term.

The world’s two largest economies are locked in an increasingly acrimonious trade dispute that has seen them level escalating tariffs on each other’s imports in the midst of negotiations, adding to fears about risks to global growth and knocking financial markets.

Foreign ministry spokesman Lu Kang, asked about state media reports suggesting there would be no more U.S.-China trade talks, said China always encouraged resolving disputes between the two countries with dialog and consultations.

“But because of certain things the U.S. side has done during the previous China-U.S. trade consultations, we believe if there is meaning for these talks, there must be a show of sincerity,” he told a daily news briefing.

The United States should observe the principles of mutual respect, equality and mutual benefit, and they must also keep their word, Lu said, without elaborating.

On Thursday, Washington put telecoms equipment maker Huawei Technologies Co Ltd, one of China’s biggest and most successful companies, on a blacklist that could make it extremely difficult for the telecom giant to do business with U.S. companies.

That followed Trump’s decision on May 5 to increase tariffs on $200 billion worth of Chinese imports, a major escalation after the two sides appeared to have been close to reaching a deal in negotiations to end their trade battle.

‘Wheel of destiny’

China can be expected to make preparations for a longer-term trade war with the United States, said a Chinese government official with knowledge of the situation.

“Indeed, this is an important moment, but not an existential, live-or-die moment,” the official said.

“In the short term, the trade situation between China and the United States will be severe, and there will be challenges. Neither will it be smooth in the long run. This will spur China to make adequate preparations in the long term.”

The impact of trade friction on China’s economy is “controllable,” the state planner said on Friday, pledging to take countermeasures as needed, Meng Wei, a spokeswoman for the National Development and Reform Committee (NDRC), told a media briefing.

The South China Morning Post, citing an unidentified source, reported that a senior member of China’s ruling Communist Party said the trade war with the United States could reduce China’s 2019 growth by 1 percentage point in the worst-case scenario.

Wang Yang, the fourth-most senior member of the Communist Party’s seven-member Standing Committee, the top decision-making body, told a delegation of Taiwan businessmen on Thursday that the trade war would have an impact but would not lead to any structural changes, the paper said, citing an unidentified source who was at the meeting.

One company that says it has been making preparations is Huawei’s Hisilicon unit, which purchases U.S. semiconductors for its parent.

Its president told staff in a letter on Friday that the company had been secretly developing back-up products for years in case Huawei was one day unable to obtain the advanced chips and technology it buys from the United States.

“Today, the wheel of destiny has turned and we have arrived at this extreme and dark moment, as a super-nation ruthlessly disrupts the world’s technology and industry system,” the company president said in the letter.

The letter was widely shared on Chinese social media, gaining 180 million impressions in the few hours after it was published on the Weibo microblogging site.

“Go Huawei! Our country’s people will always support you,” wrote one Weibo user after reading the letter.

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Consumers Start to Feel Pinch From US, China Trade Standoff

As the U.S. and China escalate their trade standoff, consumers in both countries are starting to see the impact. VOA’s Mykhailo Komadovsky reports from Washington.

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Acting FAA Chief Defends Agency’s Safety Certification Process     

The acting head of the Federal Aviation Administration defended the way his agency certifies airline safety after two deadly crashes of the now-grounded Boeing 737 Max jet.

Daniel Elwell called the system in which FAA-approved employees at plane manufacturers inspect the aircraft they built themselves “a good system.”

But skeptical Democrats on the House Transportation Committee questioned the agency’s credibility.

They told Elwell that the closeness between Boeing and the FAA may be one of the reasons it took the agency a relatively long time to ground the Boeing jets.

“The public perception is you were in bed with those you were supposed to be regulating,” Nevada’s Dina Titus said, while committee chairman Peter DeFazio wanted to know “How can we have a single point of failure on a modern aircraft?”

A Boeing 737 Max crashed off the coast of Indonesia in October and another 737 Max crashed in Ethiopia in March, killing a total of 346 people.

Both planes were equipped with a system designed to push the nose downward to prevent a midair stall.

Faulty sensor readings kept pushing the planes down while the pilots struggled to regain control.

The pilots did not know the planes were equipped with the anti-stall system and their manuals had no explicit information.

Elwell defended the FAA’s approval of the system on the Boeing jets, but admitted the system should have been better explained in the pilots’ operational and flight manuals.

He also faulted Boeing for failing to inform airlines and the FAA that a light that is supposed to flash when there is a faulty reading from the sensors did not work.

But Elwell said pilot error may have also contributed to the Indonesian and Ethiopian disasters.

The Justice Department has opened a criminal investigation of Boeing, and Congress is looking into the relationship between Boeing and federal regulators.

Boeing plans to submit changes to the 737 Max software to the FAA, which will study the new software and carry out tests flights. Boeing will train pilots before allowing the planes to fly again.

 

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Costs Mounting in US From Trump’s Tariff Fight With China   

The costs seem to be mounting in the U.S. from President Donald Trump’s tit-for-tat trade tariff war with China, both for farmers whose sales of crops to China have been cut and U.S. consumers paying higher prices for imported Chinese products.

The government said Wednesday that to date it has paid out more than $8.5 billion to American farmers to offset their loss of sales to China and other trading partners because of foreign tariffs imposed by Beijing and other governments.​

​WATCH: Consumers Start to Feel Pinch From US, China Trade Standoff

Trump last year pledged up to $12 billion in aid to farmers — chiefly soybean, wheat and corn growers, and those who raise pigs. Trump says he could ask Congress for another $15 billion if U.S. farmers continue to be hurt by China’s tariffs of as much as 25%  on U.S. agricultural imports.

The U.S. had been shipping $12 billion worth of soybeans a year to China, but Beijing’s imposition of the tariff severely cut down on the U.S. exports as China bought the beans from other countries.

Trump said Tuesday on Twitter, “Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy. This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been ‘forgotten’ for many years. Their time is now!”

White House economic adviser Larry Kudlow acknowledged to a television interviewer last weekend that “to some extent” U.S. consumers will bear the brunt of higher costs on Chinese goods after Trump’s tariffs have been levied on the imported goods.

Trade Partnership Worldwide, a Washington economic consulting firm, estimates in a new study the typical American family of four people would pay $2,300 more annually for goods and services if Trump imposes a 25% tariff on all Chinese imports, as he says he is considering.

Such higher tariffs would hit an array of Chinese-produced consumer goods — clothing, children’s toys, sports equipment, shoes and consumer electronics — that are widely bought by Americans.

If that does not happen, but the existing U.S. tariffs remain in place, the research group says the average U.S. family would pay $770 in higher costs each year.

The U.S. imported almost $540 billion in Chinese goods in 2018, while the U.S. exported $120 billion, a trade imbalance that Trump is seeking to even out with imposition of the tariffs. The U.S. exported almost $59 billion in services to China, while importing only $18 billion, but services are not directly affected by tariffs.

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Ford: More Lincolns to Be Built for Chinese Market Locally

Ford Motor Co plans to start production of new luxury Lincoln models in China for that market as they are launched, starting with the new Corsair later this year, to benefit from lower costs and avoid the risk of tariffs, a top executive said Monday.

“It’s a huge, huge opportunity for Lincoln because we see China as ground zero for Lincoln given the size of the market and how well the brand has been received,” Chief Financial Officer Bob Shanks said at a Goldman Sachs conference in New York.

Ford has lower levels of localized production than rivals General Motors Co or Volkswagen AG, who make more vehicles in China for Chinese consumers, benefiting from lower labor and material costs, and avoiding tariffs in the burgeoning trade war between the United States and China.

Shanks said all new Lincoln models, with the exception of the Navigator assembled in Louisville, Kentucky, will also be produced in China.

He declined to say how much Ford will save through localized production.

Ford has been struggling to revive sales in China, the automaker’s second-biggest market. Ford sales slumped 37 percent in 2018, after a 6 percent decline in 2017.

Shanks said that all of the problems the automaker experienced in China last year were related to the Ford brand, not Lincoln, which is popular with Chinese customers.

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Trade War Sowing Seeds of Doubt With US Farmers

The typical routines of life on a family farm carry a heavier burden these days for Pam Johnson.

“First thing I do is make a pot of coffee,” she told VOA in an interview in one of the cavernous sheds that contain her green and yellow John Deere farming equipment. Once she has that coffee, she “(goes) to the computer and look at what grain prices have done overnight and usually do a gut clutch, because they’ve been going down. They’re at five-month lows.”

Driven there in part by retaliatory tariffs imposed by one of the largest importers of U.S. soybeans – China.

Johnson and her husband are proud sixth-generation farmers but say they are dealing with some of the harshest economic conditions of their lives.

“We’re all tightening our belts,” she says.

The ongoing trade dispute between the United States and China, initially sparked by U.S. tariffs on imported aluminum and steel, is now impacting most farms across the country. 

As U.S. farmers head to the fields to plant this spring, they are facing a potential sixth consecutive year of declining farm income, because of international tariffs that have depressed prices for their grain products as well as increased costs for the materials to produce and store them.

​Short-term concern over U.S. trade policy is turning into long-term fear for farmers, who face uncertainty over congressional support for a new trade agreement with Canada and Mexico, and the impact of China’s retaliatory tariffs on U.S. grain exports. 

“We hear it may be out to 2025 before we see some of those markets come back to us, if they ever do,” Johnson said. “I think that’s the thing that hurts the most is, what is the damage being done that is irreparable?”

It is damage her son Ben Johnson, the seventh generation in the family business, may eventually have to deal with.

“All farms are going to suffer because of this,” he explained. “There’s a difference between ‘making it’ and flourishing.”

The Johnsons feel there is a growing disconnect between farmers and the rest of the American workforce, fueled by politicians increasingly hostile to trade policies the agricultural industry depends on.

“We need as much trade as we can and to be openly trading with as many places as we can,” Ben Johnson says. “It’s no different to any business – you want as many customers as you can. And to intentionally discourage them is frustrating.”

Neither Johnson nor his mother voted for President Donald Trump in the 2016 presidential election, largely because if his trade positions, they say. 

​Nothing that has happened since the election has eased Pam Johnson’s concerns.

“Saying that ‘I’m a tariff man’ and that ‘trade wars are easy to win’ concerns me,” she says, quoting comments the president has made. “There are still a lot of farmers who still support President Trump. I think there are more seeds of doubt being planted as we look forward into 2019 and no resolution and the light at the end of the tunnel seems to be getting dimmer about getting these things done.”

Politics aside, Pam Johnson admits success for her family business is closely tied to U.S. trade policy.

“I don’t want to see President Trump fail in these trade endeavors. We all need him to make this work so that all of us win,” she says.

A win her son Ben says can’t come soon enough.

“We’ve already missed the peak soybean export season, so in a way, it’s already too late… I guess it’s never too late, but before now would have been great,” he says.

While negotiations continue, the Trump administration says it is actively working on a new financial assistance program to help farmers weather the continuing trade storm.

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Trade War Sowing Seeds of Doubt in US Farmers

The ongoing trade dispute between the United States and China is having an impact on most farmers across the country. Their corn and soybean crops are subject to tariffs and increasing competition from other suppliers. As VOA’s Kane Farabaugh reports, U.S. farmers aren’t just concerned about their bottom lines this year. They’re also worried about the long term consequences of a trade war on the only business many have ever known.

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Stocks Rise, Claw Back Chunk of Monday’s Trade-War Plunge

Stocks climbed on Tuesday and clawed back a chunk of their losses from Monday’s rout, the latest whipsaw move as investors weigh just how badly the escalating U.S.-China trade war will hurt the economy. 

The day’s rally was nearly a mirror image of Monday’s plunge, when the S&P 500 had its worst day since early January, just not as severe: Technology companies led the way higher after bearing the brunt of the selling on Monday, Treasury yields rose modestly and gold gave back a bit of its gains. 

The S&P 500 rose 22.54 points, or 0.8%, to 2,834.41. It recovered nearly a third of its loss from Monday, and would now need to rise 3.9% to regain the record it set a couple weeks ago. The Dow Jones Industrial Average rose 207.06, or 0.8%, to 25,532.05, and the Nasdaq composite index jumped 87.47, or 1.1%, to 7,734.49. 

Of course, stocks are still lower than they were last week, following China’s pledge to raise tariffs on U.S. goods. Stocks also remain lower than they were on May 5, when President Donald Trump ignited this latest round of fear for markets by announcing on Twitter that the U.S. would raise tariffs on Chinese goods. 

Tuesday’s rally came after another round of morning Trump tweets on trade. He said, “When the time is right we will make a deal with China,” and he cited his “unlimited” respect for and friendship with China’s leader.

Investors are looking for a “place of equilibrium,” said Mark Hackett, chief of investment research for Nationwide Investment Management.

“My skepticism is that there’s really not a lot of news driving the rally,” he said. “It feels like an attempted recovery that may not have legs.”

‘Looking for path to progress’

In the meantime, any further hints of resolution on the trade dispute — or Twitter storms — could drive markets into their next swing. 

“We’re not counting on a full resolution,” said John Lynch, chief investment strategist at LPL Financial. “But, we’re looking for a path to progress.”

The worries about trade have shattered what had been a remarkably steady rise for stocks at the start of this year. As 2019 began, investors increasingly bet that a trade deal would happen, and the Federal Reserve said it would take a pause in raising interest rates, which helped the S&P 500 rocket to its best start to a year in decades. 

If the trade dispute gets worse, or lasts longer than many expect, it could hurt confidence among businesses and households. If that in turn drives spending lower, it would lead to lower economic growth and corporate profits. 

On Tuesday, at least, such worries eased. An index known as Wall Street’s “fear gauge,” which measures how much traders are paying to protect themselves from upcoming price swings for stocks, dropped 12.1%. A day earlier, it had spiked 28.1%. 

The VIX index remains higher than it’s been for much of the past five years, but fear is considerably lower than it was during the market sell-off late last year sparked by worries about a possible recession. 

Tech companies post gains

Investors also returned to stocks of tech companies, which may have the most to lose from a protracted U.S.-China trade battle because many of their customers and suppliers are abroad. Tech stocks in the S&P 500 jumped 1.6%, with semiconductor companies making particularly big gains. 

A day earlier, tech stocks had taken the market’s heaviest losses. 

On the flip side were utility stocks, which were the only one of the 11 sectors that make up the S&P 500 to fall. A day earlier, when all the fear in the market put an alluring spotlight on the utility sector’s steady profits and dividends, they had been the only S&P 500 sector to manage a gain. 

Other investments seen as safe harbors also dropped, such as U.S. government bonds. When a bond’s price falls, its yield rises, and the yield on the 10-year Treasury rose to 2.41% from 2.40% late Monday. It was at 2.45% at the end of last week. 

Gold is another investment that tends to do fade when investors are feeling more optimistic, and it fell $5.50 to settle at $1,296.30 per ounce. 

In overseas stock markets, European indexes gained. The French CAC 40 jumped 1.5%, the German Dax rose 1% and the FTSE 100 in London climbed 1.1%. Asian markets were mixed. The Hang Seng in Hong Kong dropped 1.5%, Japan’s Nikkei 225 fell 0.6% and South Korea’s Kospi ticked up 0.1%.

Silver jumps 4 cents

In the commodities markets, silver rose 4 cents to $14.81 per ounce, and copper gained a penny to $2.73 per pound.

Benchmark U.S. oil rose 74 cents to settle at $61.78 per barrel. Brent crude, the international standard, gained $1.01 to $71.24 a barrel. 

Natural gas rose 4 cents to $2.66 per 1,000 cubic feet, heating oil rose 2 cents to $2.06 per gallon and wholesale gasoline rose a penny to $1.98 per gallon. 

The dollar rose to 109.64 Japanese yen from 109.34 yen late Monday. The euro slipped to $1.1207 from $1.1231, and the British pound fell to $1.2905 from $1.2965. 

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Uber Drivers Are Contractors, Not Employees, US Labor Agency Says

A U.S. labor agency has concluded that ride-hailing company Uber Technologies Inc’s drivers are independent contractors and not its employees, which could prevent them from joining unions.

The National Labor Relations Board’s general counsel, in a memo released on Tuesday, said Uber drivers set their hours, own their cars and are free to work for the company’s competitors, so they cannot be considered employees under federal labor law.

San Francisco-based Uber in a statement said it is “focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value.”

Uber shares were up 6.4 percent at $39.46 in late trading on the New York Stock Exchange.

The memo dated April 16 came in an NLRB case against Uber that has yet to reach the five-member board, which is independent of the general counsel.

Under the National Labor Relations Act, independent contractors cannot join unions and do not have legal protection when they complain about working conditions.

In January, President Donald Trump’s appointees to the NLRB adopted a new test making it more difficult for workers to prove they are a company’s employees.

Uber, its top rival Lyft Inc, and many other “gig economy” companies have faced scores of lawsuits accusing them of misclassifying workers as independent contractors under federal and state wage laws.

Employees are significantly more costly because they are entitled to the minimum wage, overtime pay and reimbursements for work-related expenses under those laws.

Uber, in a filing with the U.S. Securities and Exchange Commission last week, said it would pay up to $170 million to settle tens of thousands of arbitration cases with drivers who claim they were misclassified. Uber denied any wrongdoing, but said settling the cases was preferable to drawn-out litigation.

The company has agreed to pay an additional $20 million to end long-running lawsuits by thousands of drivers in California and Massachusetts.

The U.S. Department of Labor in a memo released last month said an unidentified “gig economy” company’s workers were not its employees under federal wage law because it did not control their work.

The company, which appeared from the memo to provide house-cleaning services, had a similar relationship with its workers as Uber does with drivers. The memo signaled a shift from the Obama administration, which maintained that most workers should be considered companies’ employees.

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