Hong Kong Grapples With Security Law 07/07 06:16
Hong Kong Grapples With Security Law 07/07 06:16 HONG KONG (AP) -- Hong Kong's leader Carrie Lam offered scant reassurance Tuesday over a new national security law that critics say undermines liberties and legal protections promised when China took control of the former British colony. A year ago, Hong Kong residents felt secure enough in their freedoms under the territory's "one-country, two-systems" regime to bring their children to mass protests. Now, after the June 30 implementation of the security law, some are worrying they might be punished for what they post on Facebook Twitter or even TikTok. Short-form video app TikTok, which has sought to distance itself from its Chinese roots -- it is owned by Chinese internet giant ByteDance -- said Tuesday it will stop operations in the city "in light of recent events." Hong Kong was promised 50 years of semi-autonomy after the July 1, 1997, handover. That allowed the city's 7 million residents to keep a free press and other freedoms forbidden in the communist-ruled mainland. Many of Hong Kong's older generations fled political upheaval on the Chinese mainland. Younger Hong Kongers grew up expecting to achieve more democracy in their lifetimes. All are struggling to understand the implications of the new law, which prohibits what Beijing views as secessionist, subversive or terrorist activities or as foreign intervention in the city's internal affairs. "I didn't have a strong view against formalizing a national security law but the way it was implemented is intrusive and disrespectful," said Jen Au, who works in the banking industry. "It's basically just bullying. Hong Kong has come a long way in the last 20 years to warm up to China and this really just backfired." Lam, the city's Beijing-backed chief executive, said Tuesday the work of the Committee for Safeguarding National Security she chairs, which oversees enforcement of the law, will not be made public. So implementation rules giving police sweeping powers to enforce the law won't be subject to judicial review. Asked if she could guarantee that media can still report freely in Hong Kong without facing censorship, Lam said, "If the Foreign Correspondents Club or all reporters in Hong Kong can give me a 100% guarantee that they will not commit any offences under this national legislation, then I can do the same." Hong Kong was convulsed with massive, sometimes violent anti-government demonstrations for much of last year. Initially, the protests were against extradition legislation, since withdrawn, that might have led to some suspects facing trial in mainland Chinese courts. But the protests expanded to encompass calls for greater democracy and more police accountability. Critics see the security law as Beijing's boldest move yet to erase the divide between Hong Kong's Western-style system and the mainland's authoritarian way of governing. The new law criminalizes some pro-democracy slogans like the widely used "Liberate Hong Kong, revolution of our time," which the Hong Kong government says has separatist connotations. Under the new law police can order social media platforms, publishers and internet service providers to remove any electronic message published that is "likely to constitute an offence endangering national security or is likely to cause the occurrence of an offence endangering national security." Service providers failing to comply could face fines of up to 100,000 Hong Kong dollars ($12,903) and jail terms of up to six months. Individuals who post such messages may also be asked to remove the message, or face similar fines and a jail term of one year. Carine Lo said such rules scare her. "From now on, whatever public events you take part in, or whatever you say online, you could end up doing something against this law," the 21-year-old said. "So for us, I feel scared. Probably I'll have to be more careful about what I say online, and I will watch out if people around me may snitch on me." Under the new law, the Hong Kong chief executive can authorize police to intercept communications and conduct surveillance to "prevent and detect offences endangering national security." Police can conduct searches for evidence without a warrant in "exceptional circumstances" and seek warrants requiring people suspected of violating the national security law to surrender their travel documents, preventing them from leaving Hong Kong. Such vague provisions are worrisome, said Alex Tsui, a woman in her 20s. "They should tell us Hong Kong citizens exactly in what kind of situations, they have what kind of rights or powers," Tsui said. "They can't just choose any time to say, you look suspicious, or accuse you of anything, and then come in to search for evidence, I think it's completely unfair. It definitely is not going to help uphold justice." U.S. Secretary of State Mike Pompeo described as "Orwellian" changes such as the removal of books critical of the Chinese Communist Party from library shelves, a ban on political slogans deemed to be subversive and a requirement that schools enforce censorship. "Until now, Hong Kong flourished because it allowed free thinking and free speech, under an independent rule of law. No more," Pompeo said in a statement. Hong Kong authorities moved quickly to implement the law after it took effect on June 30, with police arresting about 370 people. Social media platforms, shut out of the mainland by China's "Great Firewall," have yet to be blocked in Hong Kong. But users have begun scrubbing their accounts and deleting pro-democracy posts out of fear of retribution. Many shops and stores that publicly stood in solidarity with protesters have removed the pro-democracy sticky notes and artwork that had adorned their walls. Many experts say they doubt the new law will have a big effect on companies that already operate in both Hong Kong and the mainland. But big social media companies have announced they are assessing the law. Apart from TikTok, Facebook and its messaging app WhatsApp, Google and Twitter announced they are freezing reviews of government requests for user data in Hong Kong. Telegram, whose platform has been used widely to spread pro-democracy messages and information about the protests, said it has not shared data with the Hong Kong authorities.
EU Predicts Deeper Economic Hit 07/07 06:19
EU Predicts Deeper Economic Hit 07/07 06:19 The European Union's executive arm forecasts that the bloc's economy will contract more than previously expected because of the coronavirus pandemic. BRUSSELS (AP) -- The European Union's executive arm forecasts that the bloc's economy will contract more than previously expected because of the coronavirus pandemic, which has caused lockdowns on business and public life that are only slowly being eased. The 27-nation EU economy will contract by 8.3% this year, before growing 5.8% in 2021, according to the latest predictions released Tuesday by the European Commission. "The road to recovery is still paved with uncertainty," EU Economy Commissioner Paolo Gentiloni told reporters in Brussels. "This is mostly linked to the epidemiological uncertainty." In the previous forecasts released in May, when most of the continent was still under lockdown, GDP was forecast to contract by about 7.5% this year and to bounce back by 6% next year. The European Commission said the impact on economic activity in 2020 will be worse than expected because "the lifting of lockdown measures is proceeding at a more gradual pace than assumed in our Spring forecast." That was illustrated in separate data from Germany on Tuesday that showed industrial production rebounded in May but was far from making up for the collapse of the preceding months. Gentiloni said that the EU's biggest challenge in the months to come will be to find the right balance between the necessity to reopen EU economies and the protection of citizens' health. More than 178,000 deaths related to COVID-19 have been recorded across the continent according to the latest numbers from the European Centre for Disease Prevention and Control. "We have to live with the danger of local outbreaks" that could lead to plans to re-enter local lockdowns slowing down the economic recovery, Gentiloni said. The group of 19 EU nations that use the euro as their currency will see a record economic decline of 8.7% this year, and grow by 6.1% in 2021. In May it had forecast a 7.8% decline this year, and growth of 6.3% in 2021. Although the EU as a whole has been hard-hit by the downturn, Gentiloni said the drop and the rebound will differ widely from one member country to another. For instance, while Poland's economy is set to shrink by 4.6% this year, France, Italy and Spain are expected to experience double-digit drops. To ensure a quick bounce back, Gentiloni urged member states to adopt as soon as possible a recovery fund aimed at pulling the EU out of the recession. EU governments leaders and heads of state will meet next week in Brussels to try to reach a compromise on the 750 billion-euro package proposed by the commission. Backed by Germany and France, the money in the fund would be incorporated in the 2021-2027 EU budget. Two-thirds of the fund would take the form of grants to be made available to EU countries, while the rest would be made up of conditions-based loans for that governments can apply for. Gentiloni said the expected effects of the recovery plan have not been taken into account in the growth forecast, and that its quick implementation could help brighten the outlook. "It's important that an agreement is reached swiftly," he said. "To inject new confidence and new financing into our economy in critical times."
Surprising Recipients of PPP Loans 07/07 06:28
Surprising Recipients of PPP Loans 07/07 06:28 The government's small business lending program has benefited millions of companies, including many you probably wouldn't have expected. WASHINGTON (AP) -- The government's small business lending program has benefited millions of companies, with the goal of minimizing the number of layoffs Americans have suffered in the face of the coronavirus pandemic. Yet the recipients include many you probably wouldn't have expected. Kanye West's clothing line. The sculptor Jeff Koons. Law firms and high-dollar hedge funds. The Girl Scouts. Political groups on both the left and right. All told, the Treasury Department's Paycheck Protection Program authorized $520 billion for nearly 5 million mostly small businesses and nonprofits. On Monday, the government released the names and some other details of recipients who were approved for $150,000 or more. That amounted to fewer than 15% of all borrowers. The Associated Press and other news organizations are suing the government to obtain the names of the remaining recipients. Economists generally credit the program with preventing the job market meltdown this spring from becoming even worse. More than 22 million jobs were lost in March and April. But roughly one-third of them were regained in May and June -- a faster rebound than many analysts had expected. The government acted quickly in early April, with Treasury lending the first $349 billion in just two weeks. The program got off to a rocky start, one marked by confusion and difficulty for many companies that sought loans. "The process was messy, and they couldn't target it as much," Diane Swonk, chief economist at accounting firm Grant Thornton, said of Treasury. Here are seven unlikely recipients of the PPP loans: JEFF KOONS Koons, a modernist sculptor, is known best for his work with large, metallic balloon-like animals. His "Rabbit" sculpture fetched $91 million at auction last year. Koons' studio was approved for $1 million to $2 million, the government's data shows. (The data shows only ranges for the amounts of approved loans.) His studio said it employed 53 people before the pandemic. The PPP loans can be forgiven if employers use most of the money to keep their workers on the payroll. WALL STREET AND PRIVATE EQUITY Nearly 600 asset management companies and private equity firms were approved for money from the PPP, according to government data. Financial firms were generally not badly hurt by the coronavirus pandemic. Their employees were largely able to keep working, and they weren't among the industries that had to be shut down by government orders. In addition, of course, investment managers and private equity employees tend to be exceedingly well-paid occupations. According to the data, those 583 companies reported supporting roughly 14,800 jobs collectively with the money from the program. That's an average of 25 employees per company. One other notable financial company that borrowed from the program: Rosenblatt Securities, which commands one of the largest physical presences on the floor of the New York Stock Exchange. Rosenblatt borrowed between $1 million and $2 million. KANYE WEST'S CLOTHING LINE Kanye West's clothing-and-sneaker brand Yeezy received a loan of between $2 million and $5 million, according to the data released by Treasury. The company employed 106 people in mid-February before the pandemic struck. Yeezy, best known for its $250 sneakers, just announced a major deal with Gap that will have the rap superstar designing hoodies and T-shirts to be sold in the chain's 1,100 stores around the world. (A representative for Yeezy didn't immediately respond to a request for comment.) Last weekend, West, a notable fan of President Donald Trump, tweeted that he was running for president. Some other well-known fashion and retail names whose businesses were pummeled by store shutdowns were also approved for loans. The list included high-end designers Oscar de la Renta and Vera Wang and suit maker Hickey Freeman. All their loans were in the $2-million-to-$5 million range. POLITICAL GROUPS The Americans for Tax Reform Foundation, the nonprofit arm of the anti-tax lobbying group Americans for Tax Reform, was approved for a loan of up to $350,000. ATR, led by the anti-tax activist Grover Norquist, who has long supported a smaller federal government, said it didn't oppose the PPP. It described the program "as compensation for a government taking during the shutdown." The Center for Law and Social Policy, a research and advocacy group focused on policies supporting low-income Americans, was authorized for a loan of up to $1 million, according to government data. THE GIRL SCOUTS More than 30 Girl Scout chapters across the country received PPP loans, the Treasury said. The Girl Scouts of Montana and Wyoming were approved for between $350,000 and $1 million. JIM JUSTICE, BILLIONAIRE GOVERNOR West Virginia Gov. Jim Justice's family companies received at least $6.3 million from the program. Justice, a Republican, is considered to be West Virginia's richest person through his ownership of dozens of coal and agricultural businesses, many of which have been sued for unpaid debts. At least six Justice family businesses were approved for loans, including The Greenbrier Sporting Club, an exclusive club attached to a lavish resort that Justice owns called The Greenbrier. Justice, a billionaire, acknowledged last week that his private companies received money from the program but said he didn't know the dollar amounts. A representative for the governor's family companies didn't immediately return emails seeking comment. RESTAURANT CHAINS TGI Fridays and P.F. Chang's China Bistro were among the major restaurant chains that were approved for loans. Dallas-based TGI Fridays, which has around 500 restaurants nationwide, obtained between $5 million and $10 million in loans from the program. In 2014, TGI Fridays was bought by the the New York private equity firm TriArtisan Capital Advisors. That firm also owns P.F. Chang's China Bistro, which was also approved for a loan. Though the PPP program was designed to help small businesses, big hotel and restaurant chains were also allowed to apply. A message seeking comment was left with TGI Fridays. P.F. Chang's China Bistro says a PPP loan helped it keep 12,000 workers employed and transition its restaurants to carry-out-only during the coronavirus pandemic. Scottsdale, Arizona-based P.F. Chang's, which has more than 210 restaurants around the country, was approved for between $5 million and $10 million from the PPP program, according to the government data.
SCOTUS Helps Pipelines, Except Keystone07/07 06:34
SCOTUS Helps Pipelines, Except Keystone07/07 06:34 The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project. Monday's Supreme Court order also put on hold an earlier court ruling out of Montana as it pertains to other oil and gas pipelines across the nation. BILLINGS, Mont. (AP) -- The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project. Canadian company TC Energy needs the permit to continue building the long-disputed pipeline across U.S. rivers and streams. Without it, the project that has been heavily promoted by President Donald Trump faces more delay just as work on it had finally begun this year following years of courtroom battles. Monday's Supreme Court order also put on hold an earlier court ruling out of Montana as it pertains to other oil and gas pipelines across the nation. That's a sliver of good news for an industry that just suffered two other blows -- Sunday's cancellation of the $8 billion Atlantic Coast gas pipeline in the Southeast and a Monday ruling that shut down the Dakota Access oil pipeline in North Dakota. In the Keystone case, an April ruling from U.S. District Judge Brian Morris in Montana had threatened to delay not just Keystone but more than 70 pipeline projects across the U.S., and add as much as $2 billion in costs, according to industry representatives. Morris agreed with environmentalists who contended a U.S. Army Corps of Engineers construction permit program was allowing companies to skirt responsibility for damage done to water bodies. But the Trump administration and industry attorneys argued the permit, in place since the 1970s, was functioning properly when it was cancelled by Morris over concerns about endangered species being harmed during pipeline construction. Monday's one-paragraph order did not provide any rationale for the high court's decision. The corps suspended the program following Morris' April ruling. Agency officials could not be immediately reached for comment. TC Energy spokesman Terry Cunha said the company is not giving up on Keystone, but it will have to delay large portions of the 1,200-mile (1,900-kilometer) oil sands pipeline. The company started construction last week on a 329-mile (530-kilometer) section of the line in Alberta. That work will continue while the company wages its court fight in the U.S., Cunha said. An attorney for one of the environmental groups involved in the case called Monday's order a major victory in the fight against Keystone. But he acknowledged the plaintiffs had hoped to hamper oil and gas projects nationwide. "Our focus was originally on Keystone, so we're very happy the court order ensures it can't move forward under this unlawful permit," said Jared Margolis, an attorney with the Center for Biological Diversity. Pipeline industry representatives said the order means thousands of workers whose jobs were threatened can continue working. A coalition of 18 states had backed the Trump administration in the case. West Virginia Attorney General Patrick Morrisey said the Supreme Court's action "ensures that one Montana district court judge doesn't possess the power to drive national policy on such a critical issue." The order returns the case to the U.S. 9th Circuit Court of Appeals for further consideration. Keystone was proposed in 2008 and would carry up to 830,000 barrels (35 million gallons) of crude daily to Nebraska, where it would be transferred to another TC Energy pipeline for shipment to refineries and export terminals on the Gulf of Mexico. It was rejected twice under the Obama administration because of concerns that it could worsen climate change. Trump revived it and has been an outspoken proponent of the $8 billion project. TC Energy's surprise March 31 announcement that it intended to start construction amid a global economic crisis caused by the coronavirus pandemic came after the provincial government in Alberta invested $1.1 billion to jump-start the work. The company finished building the first piece of Keystone XL across the U.S. border in late May and started work on labor camps in Montana and South Dakota.
North Korea Rejects Talks 07/07 06:46
North Korea Rejects Talks 07/07 06:46 SEOUL, South Korea (AP) -- North Korea on Tuesday said it has no immediate intent to resume a dialogue with the United States as U.S. Deputy Secretary of State Stephen Biegun arrived in South Korea for discussions on stalled nuclear diplomacy. In a statement released through the North's official Korean Central News Agency, senior North Korean foreign ministry official Kwon Jong Gun also ridiculed "nonsensical" calls by South Korea for revived negotiations between the U.S. and North Korea, saying it has lost its relevance as a mediator. The State Department said Biegun, who is also President Donald Trump's special representative for North Korea, will discuss cooperation on a range of issues in meetings this week with officials in South Korea and Japan, including the "final, fully verified denuclearization" of North Korea. Kwon's statement came hours before Biegun arrived at a U.S. air base near Seoul. The U.S. Embassy said Biegun, members of his delegation and the military air crew were being tested for COVID-19 at the base and would proceed to Seoul after confirmation that all had negative test results. Trump and North Korean leader Kim Jong Un have met three times since embarking on high-stakes nuclear diplomacy in 2018. But negotiations have faltered since their second summit in February last year in Vietnam, where the Americans rejected North Korean demands for major sanctions relief in exchange for a partial surrender of its nuclear capability. Amid the stalemate in talks, North Korea has repeatedly said in recent months that it would no longer give Trump the gift of high-profile meetings he could boast of as foreign policy achievements unless it gets something substantial in return. North Korea has also been dialing up pressure on the South, cutting off virtually all cooperation and blowing up an inter-Korean liaison office in its territory last month, following months of frustration over Seoul's unwillingness to defy U.S.-led sanctions and restart joint economic projects that would help the North's broken economy. "Explicitly speaking once again, we have no intention to sit face-to-face with U.S.," Kwon said in the statement. Some analysts believe North Korea will avoid serious talks with the Americans for now and instead focus on pressuring the South in a bid to increase its bargaining power before an eventual return to negotiations after the U.S. presidential election in November. They say North Korea likely doesn't want to make any major commitments or concessions when there is a chance U.S. leadership could change. But Leif-Eric Easley, a professor at Ewha University in Seoul, said the prospects of a fourth Trump-Kim meeting shouldn't be ruled out. "Normally a U.S. president wouldn't take such a gambit ahead of an election, but down in the polls, Trump has incentive to go ever further off script," he said. Kim may also see a closing window of opportunity if Trump is expected to leave office and could possibly attempt to exchange reversible denuclearization steps for sanctions relief and South Korean investment, Easley said. Kwon's statement came days after North Korean First Vice Foreign Minister Choe Sun Hui, whom Biegun has described as his potential counterpart when talks resume, insisted the North won't resume negotiations unless Washington discards what it describes as "hostile" policies. She criticized the Trump administration for considering diplomacy with the North as "nothing more than a tool for grappling its political crisis." Without naming him outright, Kwon also took a jab at Moon, who in a video conference with European leaders last week expressed hope that Trump and Kim would meet again before the U.S. elections. "(Choe's) statement also mentioned the meddlesome man who had again indicated his intention to arbitrate between the DPRK and the U.S.," Kwon said, referring to North Korea by its formal name, the Democratic People's Republic of Korea. "We feel sorry to see (the South) trying so hard to become the ?mediator' but it may try as much as it wants if it cherishes so strong wish to try it to the end. Time will show whether its efforts will succeed or it will only suffer a loss and ridicule." Biegun is to meet with South Korean Foreign Minister Kang Kyung-wha and other South Korean officials on Wednesday before leaving for Japan on Thursday, Kang's ministry said.
Bail Set for Driver Who Hit Protesters 07/07 06:51
Bail Set for Driver Who Hit Protesters 07/07 06:51 SEATTLE (AP) -- A judge on Monday set a $1.2 million bail for the man accused of driving a Jaguar on to a closed Seattle freeway and hitting two protesters, killing one and seriously injuring the other. Dawit Kelete, who is Black, drove the car around vehicles that were parked on Interstate 5 to protect a group of Black Femme March demonstrators, part of the Black Lives Matter movement protesting racial inequality and police violence. The car hit two people and sped away about 1:40 a.m. Saturday, police said. Over the weekend, a judge found probable cause to hold Kelete on an investigation of vehicular assault. But the King County Prosecuting Attorney's Office has yet to file charges against Kelete. It says it's waiting for additional required information from the State Patrol. "A charging decision is expected by Wednesday afternoon," spokesman Casey McNerthney said. Kelete's lawyer, John Henry Browne, said the crash was a "horrible, horrible accident" and was not intentional. "There's absolutely nothing political about this case whatsoever," Browne told The Associated Press. "My client is in tears. He's very remorseful. He feels tremendous guilt." Kelete is originally from Eritrea and is a U.S. citizen, Browne said. He lives with his family in Seattle, and they're very religious, he said. Kelete was the owner of the Jaguar XJL and was alone in the car, according to a Washington State Patrol report submitted to the court late Saturday. The protesters screamed and scattered as the car approached. A graphic video shows the vehicle approaching at a high rate of speed. It appeared to swerve slightly as it came toward two people still in the road. The car slid sideways as it hit the two protesters, sending them into the air. The driver turned on his flashers just after impact, and drove away. Summer Taylor, a 24-year-old veterinary clinic worker, suffered critical injuries and died Saturday night. Diaz Love, 32, from Portland, Oregon, was in serious condition. "I'm alive and stable," Love posted on Facebook late Sunday. "In a lot of pain. I cannot believe Summer was murdered. If they thought this murder would make us back down, they are very wrong. Very wrong. Love also said: "My FB is filled with death threats, that and only being able to use one hand has me going slow. I deeply appreciate and feel all the love y'all are sending me." After Kelete was stopped by state troopers, he agreed to take a field sobriety test for drugs and alcohol. The tests showed he was not impaired, the state patrol said. "The driver was reserved and appeared sullen throughout his time in custody," Trooper James McGuire wrote in the arrest report. "At one point he asked if the injured pedestrians were okay." Kelete, 27, was booked into the King County Correctional Facility on Saturday morning on two counts of vehicular assault. Seattle has been the site of prolonged unrest following the May police killing of George Floyd in Minneapolis, which sparked nationwide protests. Dozens of people were arrested last week in connection with protests as demonstrations continued after authorities cleared the "Capitol Hill Occupied Protest" zone in downtown Seattle. The state patrol had closed a section of I-5 for 19 days in a row because of the protesters, troopers said. It had been closed to traffic for more than an hour before the crash. The state patrol said going forward it won't allow protesters to enter I-5 and would arrest pedestrians on the freeway.
Puerto Rico Braces for Political Strife07/07 06:56
Puerto Rico Braces for Political Strife07/07 06:56 SAN JUAN, Puerto Rico (AP) -- Puerto Rico's governor denied allegations of obstruction of justice late Monday as the main opposition party demanded she be investigated and hinted at a possible impeachment process in what could be the latest round of political upheaval for the U.S. territory. In a brief statement, Gov. Wanda Vzquez for the first time acknowledged an alleged investigation that the island's Department of Justice is supposedly conducting against her, saying she was never told about it. She also denied recently firing the former justice secretary in alleged retribution for leading the investigation. The details of the alleged investigation were not immediately clear. Vzquez declined further comment, saying only that she would speak further on the issue on Tuesday. "I will share all details up front as I've done my whole career. With the truth," she said. Vzquez's statement comes after she announced late Friday that she had accepted the resignation of former justice secretary Dennise Longo. No further details were given at the time. The governor released the statement hours after an incident at the Puerto Rico Office of the Special Independent Prosecutor's Panel. Nydia Cotto, a former judge who serves as the panel's presdient, told The Associated Press that someone from the Department of Justice was about to drop off files on Monday related to six cases slated for investigation but abruptly left after receiving a call from an unidentified person at the Department of Justice. "That has never happened before," she said. Cotto declined to identify the people named in those cases or share any other details, saying they were confidential. Puerto Rico's newest justice secretary, Wandymar Burgos, said in a statement that she requested the documents on the six cases because she had just found out about them on Monday and needed to know what they were about. "Let it be abundantly clear to all the people of Puerto Rico that all investigations of merit will be carried out to the last consequence, regardless of the person involved," she said. Before the governor released her statement, the opposition Popular Democratic Party held a press conference in which leaders announced they had requested a legislative investigation into the allegations of obstruction of justice. It was not immediately clear if the leader of Puerto Rico's House of Representatives, who is a member of Vzquez's party, would grant permission for such an investigation. "The people need to hear from the governor herself," said Anbal Torres, president of the main opposition party. Vzque served as Puerto Rico's justice secretary before the island's Supreme Court ruled that she should be sworn in as governor after former Gov. Ricardo Rossell stepped down nearly a year ago following massive protests.
Wall Street Retreats on Tuesday 07/07 16:06
Wall Street Retreats on Tuesday 07/07 16:06 (AP) -- Wall Street's recent string of big gains came to an abrupt stop Tuesday as stocks closed broadly lower following a pullback in markets overseas. The S&P 500 fell 1.1% after spending most of the day in the red. The sell-off snapped the index's five-day winning streak. Technology stocks, banks and companies that rely on consumer spending accounted for a big slice of the slide, which accelerated toward the end of the day. Bond yields fell and the price of gold rose, another sign of caution in the market. Optimism that the economy is on the mend as businesses reopen has helped drive stocks higher. But the recent surge in confirmed new coronavirus cases has clouded hopes for a relatively quick economic turnaround. Investors are also girding for what the next few weeks will reveal about the health of corporate America as companies begin reporting their second-quarter results. "It's not unusual for these five-day runs to be met with a bout of profit-taking, especially given the headlines on the virus," said Quincy Krosby, chief market strategist at Prudential Financial. "When you move toward overbought conditions it doesn't take much for the market to burn off some of the froth." The selling followed a deeper pullback in France, Germany and elsewhere after the European Union's executive arm said this year's recession caused by the coronavirus pandemic will be deeper than forecast. It also said next year's expected rebound could be weaker than expected. The S&P 500 dropped 34.40 points to 3,145.32. The Dow Jones Industrial Average fell 396.85 points, or 1.5%, to 25,890.18. Big technology stocks helped drive early gains for the Nasdaq, but they faded by afternoon. The index came off an all-time high, losing 89.76 points, or 0.9%, to 10,343.89. Small company stocks took the heaviest losses. The Russell 2000 index slid 26.89 points, or 1.9%, to 1,416. The U.S. stock market has been churning over the last month, with big daily moves up and down keeping it roughly in place. It's been a small-scale version of the market's movements since the start of the year, when a nearly 34% plunge on worries about the pandemic-caused recession quickly gave way to a tremendous rally that brought the S&P 500 nearly back to its record level. Lifting markets higher on one end are reports showing budding improvements in the economy. The job market, retail sales and other economic indicators are all still well below where they were before the pandemic struck. But they've stopped plummeting and have begun to grow again as governments relax restrictions meant to slow the spread of the coronavirus. That's combined with unprecedented amounts of aid from central banks and governments around the world to prop up markets. It also helped send the S&P 500 up 1.6% on Monday, following up on a 4% rise the prior week, which itself helped cap the best quarter for the index since 1998. "The economic data that has come out over the past couple of months has actually beaten even the most optimistic economists, so in that scenario it's not surprising to see a euphoria-driven rally in the market," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. But pulling markets lower on the other end are worries that the optimism is overdone. The pandemic isn't going away, with infection levels worsening across wide swaths of the U.S. South and West, among other global hotspots. The concern is that spreading infections could keep households and businesses nervous and scare them away from spending. In the worst-case scenario, it could force governments to bring back some of the restrictions that sent the economy into its sudden recession. Such worries spilled through markets Tuesday after the European Commission unveiled its more dour economic forecasts for 2020 and 2021. The commission said the joint economy of the 27 nations in the European Union will shrink 8.3% this year, before growing 5.8% in 2021. In the previous forecasts released in May, it had forecast the economy would contract about 7.5% this year and bounce back 6% next year. Underscoring the fragility, a separate report showed that industrial production in Germany rebounded by less than economists expected in May, and remains far below levels from before the pandemic caused factories to close. Germany's DAX lost 0.9%, while France's CAC 40 fell 0.7%. The FTSE 100 in London dropped 1.5%. Markets in Asia also fell. In the U.S. market, airlines and stocks of other companies that most need the economy to get closer to normal had the sharpest losses. United Airlines slid 7.6%, American Airlines dropped 7% and mall-owner Simon Property Group dropped 4.4%. Energy stocks fell 3.2% for the largest loss among the 11 sectors that make up the S&P 500. They've swung sharply with expectations for the economy's health and demand for oil and gasoline. Devon Energy lost 7.3%, while Valero Energy fell 5.9%. Benchmark U.S. crude slipped a penny to settle at $40.62 per barrel after earlier flipping between losses and gains. Brent crude, the international standard, fell 2 cents to close at $43.08 per barrel. The yield on the 10-year Treasury slipped to 0.64% from 0.68% late Monday. It tends to move with investors' expectations for the economy and inflation.
