g U.S. EconomyGains Momentumonline.wsj.com/public/resources/documents/pageone122414.pdf · 2018. 8....
1
YELLOW ***** WEDNESDAY, DECEMBER 24, 2014 ~ VOL. CCLXIV NO. 149 WSJ.com HHHH $3.00 DJIA 18024.17 À 64.73 0.4% NASDAQ 4765.42 g 0.3% NIKKEI (17635.14) Closed STOXX 600 344.06 À 0.6% 10-YR. TREAS. g 27/32 , yield 2.257% OIL $57.12 À $1.86 GOLD $1,177.90 g $1.80 EURO $1.2173 YEN 120.69 Getty Images TODAY IN PERSONAL JOURNAL The Day You Look Up to Your Child PLUS PLUS The Year’s Most Interesting Cars (and Their Drivers) CONTENTS Arts in Review.......... D4 Careers............................ B6 Corporate News B2-4,7 Global Finance............ C3 Heard on Street ..... C10 Home & Digital ..... D1,2 In the Markets.......... C4 Opinion.................. A13-15 Property Report.... C6,7 Sports.............................. D5 U.S. News................. A2-6 Weather Watch........ B8 World News.......... A7-11 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n Sony reversed course and will release “The Interview,” though only a small number of theaters will show the contro- versial farce about the killing of North Korea’s leader. A1 n Almost 6.4 million people selected a health plan on the federal marketplace or were re-enrolled in the first month of open-enrollment season. A4 n The FDA is easing a dec- ades-old ban on gay and bisex- ual men donating blood, citing modern blood screening. A3 n House GOP leaders directed congressional budget analysts to estimate the economic growth created by tax cuts. A2 n Ukraine rekindled aspira- tions to join NATO, ending its nonaligned status and draw- ing a rebuke from Moscow. A7 n The ruble extended its re- bound as Russian authorities ordered major state compa- nies to sell foreign currency. A7 n The Keystone pipeline’s prospects are dimming amid lower gasoline prices and skepticism from Obama. A4 n French leaders appealed for calm after three attacks, one of which is being probed by antiterrorism prosecutors. A10 n Algeria’s army killed the leader of an Islamic State splin- ter group blamed for the be- heading of a French hiker. A10 n Australian police arrested two men in connection with an alleged plot to attack a government target. A10 i i i T he Dow closed above 18000 for the first time af- ter gaining nearly 1,000 points in five trading days, finishing up 64.73 at 18024.17. A1, C4 The market was boosted by reports that the U.S. econ- omy expanded at a 5% annual rate last quarter and con- sumer spending accelerated. A1 U.S. Treasurys had their worst day in over a year, but for many investors the move was just noise amid a long rally. C1 New-home sales fell for a second straight month in No- vember despite economic growth and ultralow rates. A2 n Coca-Cola plans to ax at least 1,000 to 2,000 jobs in coming weeks and introduce stricter budgeting as part of a $3 billion cost-cutting drive. B1 n A tech group that includes Apple and Microsoft is selling most of its telecom patents for $900 million, less than a quar- ter of the purchase price. B1 n UPS and FedEx started cap- ping air express deliveries af- ter an 11th-hour increase in packages caused some retail- ers to exceed volume limits. B1 n Hedge funds are using credit-default swaps to fortify bets on troubled companies. C1 n China’s shadow-banking industry is experiencing a sharp slowdown after Beijing tight- ened its grip on the sector. C1 n Walgreen said strong phar- macy sales and cost cuts helped boost quarterly profit 16%. B3 Business & Finance The U.S. economy is rounding out 2014 in a sweet spot of ro- bust growth, sustained hiring and falling unemployment, stirring optimism that a postrecession breakout has arrived. A fuller picture of the year- end trends emerged Tuesday when the Commerce Department, in separate reports, said the U.S. economy expanded at a 5% sea- sonally adjusted annual rate in the third quarter, its strongest pace in 11 years, and reported that consumer spending acceler- ated last month amid rising in- comes and falling gasoline prices. “It appears we’ve reached an inflection point,” said John Canally, economist at LPL Finan- cial. But while investors cheered the sense that the economy could shift to a higher rate of growth, driving the Dow Jones Industrial Average above 18000 for the first time, a big question remains: Can consumers sustain the momen- tum into 2015? There still are signs the econ- omy is far from full health. Infla- tion remains low and has sagged lower in recent months, largely because of falling oil prices. Low inflation and sagging commodi- ties prices are a possible signal of weak underlying demand, par- ticularly overseas. Wage growth remains sluggish, though there have been glimpses in recent data of a potential pickup. Gains in labor productivity have been slow. These realities present some- thing of a quandary to the Fed- eral Reserve as policy makers try to judge how soon a healthier economy can handle rising inter- Please turn to the next page BY ERIC MORATH AND BEN LEUBSDORF U.S. Economy Gains Momentum Fresh Optimism as Growth Hits 5%, Powered by Rising Consumer Spending In a stunning turnaround, the Dow Jones Industrial Average finished above 18000 on Tuesday for the first time ever, after gain- ing nearly 1,000 points in five trading days. The immediate catalyst Tues- day was a bundle of positive eco- nomic news. It showed that con- sumer spending finally has begun to strengthen, and that re- silient consumers pushed the economy ahead at a 5% annual rate in the third quarter, the fastest pace in 11 years. The market’s 1,000-point run impressed and pleased traders, but it also raised some concerns. The surprisingly strong economy could induce the Federal Reserve to raise its target interest rates sooner than many investors ex- pected next year. And surging stock prices left shares expen- sive compared with historical av- erages, leading some experts to worry that stocks could give back some of the gains in the first part of 2015. “There’s a lot of good news out there” that explains the gains, said Jim Dunigan, chief in- vestment officer at PNC Wealth Management, which oversees Please turn to the next page BY E.S. BROWNING Dow Clears 18000 After Five-Day Tear The first emails from Iraq landed in John Kael Weston’s in- box while he was eating break- fast at a Utah ski resort. Islamic State fighters had just seized Fallujah, and the former State Department diplomat fired off a worried message to the Iraqi po- liceman who helped him over and over again during the war’s darkest days. “Are you and your father and family ok?” Mr. Weston asked Saad Abu Fahad. The American and Iraqi were neighbors in Fal- lujah, taught each other about their country’s politics and al- ways stayed in touch by email. “If you can, please send me a message—does not need to be long,” Mr. Weston wrote. Two days came and went. No reply. He tried again: “Are you and family ok? Stay safe, my friend.” After again getting no answer, he assumed Capt. Saad was on the run or dead. War forces people to make choices, and many of them don’t work out. With large swaths of Iraq under control of Islamic State, many of the Iraqis who put their lives on the line to aid the U.S. during the nearly nine- year war are being marked for death by militants as collabora- tors. The Americans who counted on them and are now safe at home can only wait, won- der and worry. One Iraqi begged a retired Please turn to page A12 BY ADAM ENTOUS ‘COME QUICKLY OR WE’RE ALL DEAD’ For America’s Allies In Iraq, a Grim Race Sony Pictures reversed course Tuesday and said it would re- lease “The Interview” on Christ- mas Day, though only a small number of theaters signed on to show the controversial farce amid fears of reprisals from a group of hackers and frustration with the studio’s quick-changing distribution strategy. The studio’s decision to re- lease the film—and to try to dis- tribute it via video-on-demand— came just six days after the Sony Corp. unit said it was canceling the film’s release, following a devastating cyberattack that the U.S. blames on North Korea. President Barack Obama, who had criticized the studio for pulling the film, welcomed Tues- day’s move. The biggest U.S. movie chains weren’t expected to show the movie, which features a pair of television journalists asked by the Central Intelligence Agency to assassinate North Korean leader Kim Jong Un. The studio was also scrambling Tuesday to secure a video-on-demand part- ner that would simultaneously make the film available. Now, a $44 million movie originally set for nationwide re- lease will play on approximately 200 screens in smaller theaters that typically show niche art- house fare. The studio called the limited opening “only the first step” in the movie’s release plans, and has indicated to theaters it plans Please turn to page A8 BY ERICH SCHWARTZEL Sony Will Release Movie, But Few Theaters Sign On July 19, 2007 May 7, 2013 Nov. 21, 2013 July 3, 2014 Tuesday: 18024.17 April 25, 2007 Oct. 19, 2006 Date of milestone 16000 17000 18000 5000 6000 7000 8000 9000 10000 11000 12000 13000 14000 15000 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 Number of trading days to next 1,000-point milestone Tu Tues esda day: y: 1 1 18 8 80 0 02 2 24 4 4.1 1 17 7 7 RECESSION Third quarter, revised: 5.0% Previous estimate: 3.9% 6 –6 –4 –2 0 2 4 % 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 Q3 ’03: 6.9% Sources: Commerce Department (GDP); WSJ Market Data Group (Dow) The Wall Street Journal Change in inflation-adjusted U.S. gross domestic product at a seasonally adjusted, annualized rate After the strongest GDP report in more than a decade... ...the Dow Jones Industrial Average rose above 18000 for the first time. 127 59 139 153 120 1,460 1,879 May 3, 1999 SALEM, Ore.—’Twas the night before Christmas, when all through the house, not a creature was stirring—well, except for the needle midges, root weevils and aphids. Those Christmas trees we so carefully pick out on the lot or farm and lovingly trim? They can be crawling with bugs and other pests, most microscopic, but also such hefty specimens as slugs and yellow jacket queens. The latter “are flying to find a nice place to spend the winter, and a baled-up tree is the perfect place,” said Helmuth Rogg, director of the Ore- gon Department of Agriculture’s plant program, which oversees the nation’s top Christmas tree-pro- ducing state. Maura Coulter and her hus- band, Brian, learned about this yuletide phenomenon a few years back, when they brought a Noble fir tree home from a lot near their San Francisco home. They deco- rated it—then watched “some- thing fly out of it and nosedive be- hind the piano,” said Ms. Coulter, 51 years old, a registered nurse and mother of two. “The next morning the living room was swarming with little annoying bugs. So gross!” Ms. Coulter used a vacuum to clear the insects from her walls, furniture and carpet, while the lot replaced the tree with one less buggy. The Christmas tree business is a big one, especially in Oregon. In all, 33 million real Christmas trees were sold in 2013, with an esti- mated retail value of $1.16 billion, up from $1.01 billion in 2012, ac- cording to the National Christmas Tree Association. Officials of the trade group in Chesterfield, Mo., say the public shouldn’t be overly concerned about bugs. “Out of 33 million trees, the number of noticeable bugs is ex- tremely small,” said Rick Dungey, Please turn to page A12 BY JIM CARLTON Humbugs: Your Tree May Be Trimmed With ‘Hitchhikers’ i i i Shake to Avoid Christmas Surprise; A Hot Bath to Get Rid of Slugs Douglas-fir twig weevil Worshipers Prepare for Christmas in Bethlehem ANNUAL RITE: Christians light candles on Tuesday inside the Church of the Nativity on the West Bank. Musa Al-Shaer/Agence France-Presse/Getty Images Notice to Readers WSJ.com will publish throughout Christmas Day. The Wall Street Journal print edition won’t be published. Treasury prices retrench ........... C1 Dollar strengthens........................ C4 Sony mulled music-unit sale... B5 C M Y K Composite Composite MAGENTA CYAN BLACK P2JW358000-5-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO P2JW358000-5-A00100-1--------XA
Transcript of g U.S. EconomyGains Momentumonline.wsj.com/public/resources/documents/pageone122414.pdf · 2018. 8....
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YELLOW
* * * * * WEDNESDAY, DECEMBER 24, 2014 ~ VOL. CCLXIV NO. 149 WSJ.com HHHH $3 .00
DJIA 18024.17 À 64.73 0.4% NASDAQ 4765.42 g 0.3% NIKKEI (17635.14) Closed STOXX600 344.06 À 0.6% 10-YR. TREAS. g 27/32 , yield 2.257% OIL $57.12 À $1.86 GOLD $1,177.90 g $1.80 EURO $1.2173 YEN 120.69
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TODAY IN PERSONAL JOURNAL
The Day You Look Up to Your ChildPLUSPLUS The Year’s Most Interesting Cars (and Their Drivers)
CONTENTSArts in Review.......... D4Careers............................ B6Corporate News B2-4,7Global Finance............ C3Heard on Street..... C10Home & Digital..... D1,2
In the Markets.......... C4Opinion.................. A13-15Property Report.... C6,7Sports.............................. D5U.S. News................. A2-6Weather Watch........ B8World News.......... A7-11
s Copyright 2014 Dow Jones & Company.All Rights Reserved
>
What’sNews
i i i
World-Widen Sony reversed course andwill release “The Interview,”though only a small number oftheaters will show the contro-versial farce about the killingof North Korea’s leader. A1nAlmost 6.4 million peopleselected a health plan on thefederal marketplace or werere-enrolled in the first monthof open-enrollment season. A4n The FDA is easing a dec-ades-old ban on gay and bisex-ual men donating blood, citingmodern blood screening. A3nHouse GOP leaders directedcongressional budget analyststo estimate the economicgrowth created by tax cuts. A2n Ukraine rekindled aspira-tions to join NATO, ending itsnonaligned status and draw-ing a rebuke from Moscow. A7nThe ruble extended its re-bound as Russian authoritiesordered major state compa-nies to sell foreign currency. A7nThe Keystone pipeline’sprospects are dimming amidlower gasoline prices andskepticism from Obama. A4nFrench leaders appealed forcalm after three attacks, oneof which is being probed byantiterrorism prosecutors. A10nAlgeria’s army killed theleader of an Islamic State splin-ter group blamed for the be-heading of a French hiker. A10n Australian police arrestedtwo men in connection withan alleged plot to attack agovernment target. A10
i i i
The Dow closed above18000 for the first time af-ter gaining nearly 1,000 pointsin five trading days, finishingup 64.73 at 18024.17. A1, C4 The market was boostedby reports that the U.S. econ-omy expanded at a 5% annualrate last quarter and con-sumer spending accelerated. A1U.S. Treasurys had theirworst day in over a year, but formany investors the move wasjust noise amid a long rally. C1 New-home sales fell for asecond straight month in No-vember despite economicgrowth and ultralow rates. A2n Coca-Cola plans to ax atleast 1,000 to 2,000 jobs incoming weeks and introducestricter budgeting as part of a$3 billion cost-cutting drive. B1nA tech group that includesApple and Microsoft is sellingmost of its telecom patents for$900 million, less than a quar-ter of the purchase price. B1nUPS and FedEx started cap-ping air express deliveries af-ter an 11th-hour increase inpackages caused some retail-ers to exceed volume limits. B1nHedge funds are usingcredit-default swaps to fortifybets on troubled companies. C1n China’s shadow-bankingindustry is experiencing a sharpslowdown after Beijing tight-ened its grip on the sector. C1nWalgreen said strong phar-macy sales and cost cuts helpedboost quarterly profit 16%. B3
Business&Finance
The U.S. economy is roundingout 2014 in a sweet spot of ro-bust growth, sustained hiring andfalling unemployment, stirringoptimism that a postrecessionbreakout has arrived.
A fuller picture of the year-end trends emerged Tuesdaywhen the Commerce Department,in separate reports, said the U.S.economy expanded at a 5% sea-sonally adjusted annual rate inthe third quarter, its strongestpace in 11 years, and reportedthat consumer spending acceler-ated last month amid rising in-comes and falling gasoline prices.
“It appears we’ve reached aninflection point,” said JohnCanally, economist at LPL Finan-cial.
But while investors cheeredthe sense that the economy could
shift to a higher rate of growth,driving the Dow Jones IndustrialAverage above 18000 for the firsttime, a big question remains: Canconsumers sustain the momen-tum into 2015?
There still are signs the econ-omy is far from full health. Infla-tion remains low and has saggedlower in recent months, largelybecause of falling oil prices. Lowinflation and sagging commodi-ties prices are a possible signalof weak underlying demand, par-ticularly overseas. Wage growthremains sluggish, though therehave been glimpses in recentdata of a potential pickup. Gainsin labor productivity have beenslow.
These realities present some-thing of a quandary to the Fed-eral Reserve as policy makers tryto judge how soon a healthiereconomy can handle rising inter-
Pleaseturntothenextpage
BY ERIC MORATHAND BEN LEUBSDORF
U.S. Economy Gains MomentumFresh Optimism as Growth Hits 5%,Powered by Rising Consumer Spending
In a stunning turnaround, theDow Jones Industrial Averagefinished above 18000 on Tuesdayfor the first time ever, after gain-ing nearly 1,000 points in fivetrading days.
The immediate catalyst Tues-day was a bundle of positive eco-nomic news. It showed that con-sumer spending finally hasbegun to strengthen, and that re-silient consumers pushed theeconomy ahead at a 5% annualrate in the third quarter, thefastest pace in 11 years.
The market’s 1,000-point runimpressed and pleased traders,but it also raised some concerns.
The surprisingly strong economycould induce the Federal Reserveto raise its target interest ratessooner than many investors ex-pected next year. And surgingstock prices left shares expen-sive compared with historical av-erages, leading some experts toworry that stocks could giveback some of the gains in thefirst part of 2015.
“There’s a lot of good newsout there” that explains thegains, said Jim Dunigan, chief in-vestment officer at PNC WealthManagement, which oversees
Pleaseturntothenextpage
BY E.S. BROWNING
Dow Clears 18000After Five-Day Tear
The first emails from Iraqlanded in John Kael Weston’s in-box while he was eating break-fast at a Utah ski resort. IslamicState fighters had just seizedFallujah, and the former StateDepartment diplomat fired off aworried message to the Iraqi po-liceman who helped him overand over again during the war’sdarkest days.
“Are you and your father andfamily ok?” Mr. Weston askedSaad Abu Fahad. The Americanand Iraqi were neighbors in Fal-lujah, taught each other abouttheir country’s politics and al-ways stayed in touch by email.“If you can, please send me amessage—does not need to be
long,” Mr. Weston wrote.Two days came and went. No
reply. He tried again: “Are youand family ok? Stay safe, myfriend.” After again getting noanswer, he assumed Capt. Saadwas on the run or dead.
War forces people to makechoices, and many of them don’twork out. With large swaths ofIraq under control of IslamicState, many of the Iraqis whoput their lives on the line to aidthe U.S. during the nearly nine-year war are being marked fordeath by militants as collabora-tors. The Americans whocounted on them and are nowsafe at home can only wait, won-der and worry.
One Iraqi begged a retiredPleaseturntopageA12
BY ADAM ENTOUS
‘COME QUICKLY OR WE’RE ALL DEAD’
For America’s AlliesIn Iraq, a Grim Race
Sony Pictures reversed courseTuesday and said it would re-lease “The Interview” on Christ-mas Day, though only a smallnumber of theaters signed on toshow the controversial farceamid fears of reprisals from agroup of hackers and frustrationwith the studio’s quick-changingdistribution strategy.
The studio’s decision to re-lease the film—and to try to dis-tribute it via video-on-demand—came just six days after the SonyCorp. unit said it was cancelingthe film’s release, following adevastating cyberattack that theU.S. blames on North Korea.President Barack Obama, whohad criticized the studio forpulling the film, welcomed Tues-day’s move.
The biggest U.S. movie chainsweren’t expected to show themovie, which features a pair oftelevision journalists asked bythe Central Intelligence Agencyto assassinate North Koreanleader Kim Jong Un. The studiowas also scrambling Tuesday tosecure a video-on-demand part-ner that would simultaneouslymake the film available.
Now, a $44 million movieoriginally set for nationwide re-lease will play on approximately200 screens in smaller theatersthat typically show niche art-house fare.
The studio called the limitedopening “only the first step” inthe movie’s release plans, andhas indicated to theaters it plans
PleaseturntopageA8
BY ERICH SCHWARTZEL
SonyWill ReleaseMovie,ButFewTheatersSignOn
July 19, 2007
May 7, 2013
Nov. 21, 2013
July 3, 2014
Tuesday: 18024.17
April 25, 2007
Oct. 19, 2006Date ofmilestone
16000
17000
18000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000
2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
Number of trading days to next1,000-point milestone
TuTuesesdaday:y:y: 111888000222444.111777
RECESSION
Third quarter, revised: 5.0%
Previous estimate: 3.9%
6
–6
–4
–2
0
2
4
%
2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
Q3 ’03: 6.9%
Sources: Commerce Department (GDP); WSJ Market Data Group (Dow) The Wall Street Journal
Change in inflation-adjusted U.S. gross domestic product at a seasonally adjusted, annualized rate
After the strongest GDP report in more than a decade...
...the Dow Jones IndustrialAverage rose above 18000for the first time.
12759 139
153120
1,4601,879May 3, 1999
SALEM, Ore.—’Twas the nightbefore Christmas, when allthrough the house, not a creaturewas stirring—well, except for theneedle midges, root weevils andaphids.
Those Christmas trees we socarefully pick out on the lot orfarm and lovingly trim? They canbe crawling with bugs and otherpests, most microscopic, but alsosuch hefty specimens as slugs andyellow jacket queens. The latter“are flying to find a nice place tospend the winter, and a baled-uptree is the perfect place,” saidHelmuth Rogg, director of the Ore-gon Department of Agriculture’splant program, which oversees thenation’s top Christmas tree-pro-ducing state.
Maura Coulter and her hus-band, Brian, learned about thisyuletide phenomenon a few yearsback, when they brought a Noblefir tree home from a lot near theirSan Francisco home. They deco-rated it—then watched “some-thing fly out of it and nosedive be-hind the piano,” said Ms. Coulter,51 years old, a registered nurseand mother of two. “The nextmorning the living room was
swarming with little annoyingbugs. So gross!”
Ms. Coulter used a vacuum toclear the insects from her walls,furniture and carpet, while the lotreplaced the tree with one lessbuggy.
The Christmas tree business isa big one, especially in Oregon. Inall, 33 million real Christmas treeswere sold in 2013, with an esti-mated retail value of $1.16 billion,up from $1.01 billion in 2012, ac-cording to the National ChristmasTree Association.
Officials of the trade group inChesterfield, Mo., say the publicshouldn’t be overly concernedabout bugs.
“Out of 33 million trees, thenumber of noticeable bugs is ex-tremely small,” said Rick Dungey,
PleaseturntopageA12
BY JIM CARLTON
Humbugs: Your Tree May Be Trimmed With ‘Hitchhikers’i i i
Shake to Avoid Christmas Surprise; A Hot Bath to Get Rid of Slugs
Douglas-fir twig weevil
Worshipers Prepare for Christmas in Bethlehem
ANNUAL RITE: Christians light candles on Tuesday inside the Church of the Nativity on the West Bank.
MusaAl-S
haer/A
genceFrance-Presse/Getty
Images
Notice to ReadersWSJ.com will publishthroughout Christmas Day.The Wall Street Journal printedition won’t be published.
Treasury prices retrench........... C1 Dollar strengthens........................ C4
Sony mulled music-unit sale... B5
CM Y K CompositeCompositeMAGENTA CYAN BLACK
P2JW358000-5-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WEBG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO
P2JW358000-5-A00100-1--------XA
