JASON GAYINSPORTS Nadal Reigns Ononline.wsj.com/public/resources/documents/PageOne060914.pdf ·...
1
YELLOW ***** MONDAY, JUNE 9, 2014 ~ VOL. CCLXIII NO. 133 WSJ.com HHHH $2.00 Last week: DJIA 16924.28 À 207.11 1.2% NASDAQ 4321.40 À 1.9% NIKKEI 15077.24 À 3.0% STOXX 600 347.30 À 0.9% 10-YR. TREASURY g 1 7/32 , yield 2.597% OIL $102.66 g $0.05 EURO $1.3643 YEN 102.49 CONTENTS Abreast of the Market C1 Corporate News.... B2,3 Global Finance............ C3 Heard on the Street C6 Law Journal ................ B6 Markets Dashboard C4 Media & Marketing B4 Moving the Market C2 Opinion.................. A13-15 Sports.......................... B7,8 U.S. News................. A2-6 Weather Watch ........ B7 World News.... A7-11,16 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n Bergdahl has so far de- clined to speak to his family as a debate rages over his capture and release. The sol- dier said he was tortured dur- ing his five-year captivity. A4 n Militants stormed Karachi’s airport, leaving at least 23 people dead. Separately, an at- tack on pilgrims in the west of Pakistan killed at least 23. A7 n Ukraine’s new president accused separatist rebels of dealing a blow to the econ- omy of the industrial east. A7 n The U.S. and Iran will hold bilateral nuclear talks on June 9-10 in Geneva, the State Department said. A8 n Egypt’s Sisi was sworn in as president less than a year after the military, under his command, ousted Morsi. A8 n Israeli President Peres met with Palestinian leader Abbas for a prayer ceremony with Pope Francis. A9 n The Cleveland Clinic’s CEO withdrew his name from consideration to be the next secretary of the VA. A4 n Obama is set to announce the expansion of a federal program designed to reduce student-loan payments. A6 n Investigators looking for Malaysia Airlines Flight 370 are poised to shift search ar- eas for a third time. A10 n Patients who state their end-of-life medical wishes on a special form get the care they want, a study found. A3 n “A Gentlemen’s Guide to Love & Murder” took the Tony for best musical. “All the Way” won for best play. A17 i i i T yson emerged as the winner in a deal to buy Hillshire, valuing the maker of Jimmy Dean sausages at around $7.7 billion. B1 n China’s economic agencies are battling over how to fuel growth without piling on ex- cessive debt as GDP growth lags behind its target. A1 n GM faces lawsuits from veterans of some of the big- gest verdicts and settlements ever over its handling of de- fective ignition switches. A1 n The auto maker announced four new recalls as part of an initiative to review all models for potential problems. B3 n Stock-market bulls see few reasons for pessimism, citing share prices in pace with earnings and slow-but- steady economic growth. C1 n Treasury prices are climbing as investors world- wide buy U.S. debt even as the supply is shrinking. C1 n Credit Suisse is consider- ing splitting off a piece of its fixed-income trading business into a separate company. C1 n Microsoft’s Xbox is losing players to Sony’s PlayStation, eight months after the launch of new videogame consoles. B1 n United is still struggling to integrate operations nearly four years after the airline’s merger with Continental. B1 n “The Fault in Our Stars,” a teen love story, collected an estimated $48.2 million in its opening weekend. B4 n Japan raised its first- quarter growth reading to 6.7% from an initial 5.9%. A16 Business & Finance Of all the problems haunting General Motors Co. over its han- dling of defective ignition switches, the one with plaintiffs’ lawyers is just beginning. The company’s size and self- confessed failures in an internal report released last week are at- tracting lawyers who forged some of the biggest civil settle- ments ever, from the landmark tobacco litigation to the Exxon Valdez disaster to Toyota Motor Corp.’s unintended-acceleration problems. More than 80 ignition-switch- related civil lawsuits have been filed against GM, most seeking alleged economic damages, such as repair costs and declines in resale value on about 2.6 million cars recalled since February. The average depreciation claim alone might total $500 to $1,000 per car, according to lawyers who have filed suits against GM. The company also will have to fight suits claiming the defective ignition switches caused serious injuries and deaths. While just a handful of cases are under way, plaintiffs’ lawyer Bob Hilliard of Corpus Christi, Texas, said he has signed up several hundred such clients. GM has attributed at least 54 crashes and 13 deaths to switch-related air bag fail- ures, and said last week that it can’t rule out the possibility that the death toll could climb. Chief Executive Mary Barra said Thursday that she wouldn’t “speculate on anything involving litigation.” She said the company would “do the right thing by vic- Please turn to the next page BY ASHBY JONES Plaintiff Lawyers Take Aim At GM The nation’s top energy regu- lator may soon get two new lead- ers who share at least one thing in common: the unrelenting at- tention of Sen. Harry Reid. As majority leader of the Sen- ate, the Nevada Democrat is one of the most powerful people in Washington. Over the past year, he has on two occasions scotched the White House’s pick of leader for the Federal Energy Regulatory Commission, a low- profile agency that oversees the nation’s electric grid, and he has successfully pushed for other preferred candidates. His efforts will be tested as soon as this week when the Sen- ate’s energy committee votes on whether to confirm Norman Bay as FERC chairman and Cheryl LaFleur as a commissioner. Mr. Bay is a Reid-backed candidate. The senator blocked Ms. LaFleur from getting the top job, and he is blunt about his interest in shaping FERC. “Oh really? No kidding,” Mr. Reid said. “Wow, that is amaz- ing—that a majority leader who has a responsibility of selecting people would have some opinion as to who he suggests to the White House.” Mr. Reid’s interest stems from his expressed intent to develop his state’s renewable-energy in- dustry. In 2013, Nevada ranked second in the nation for geother- mal energy production and third for solar production, and 18% of its total electricity generation came from renewable, above the national average of 13%. Nevada and the West in gen- eral, however, need more power lines to deliver renewable energy to customers. While FERC, which Please turn to page A4 BY AMY HARDER Reid Shapes Regulator With an Eye To His State MORANBAH, Queensland—Two years ago, real- estate agent Bella Exposito said she was selling as many as 25 houses a day as soaring coal prices lured workers and investors to this flyspeck Out- back town. As of May this year, she has sold three. A cream-and-brown weatherboard house near her office rented for nearly US$7,000 a month when the region’s coal industry was booming; now it has been empty for 12 months. Downtown shops have gone vacant. At Café 17, a local diner serving eggs and baked beans in the morning, visitors could fire a cannon and not hit a soul some days. “There is a lot of hurt in the town,” says one mine worker employed at the Goonyella Riverside coal mine run by BHP Billiton Ltd. and Mitsubishi Corp., which is among the many operations to pare workers over the past year. “It feels like it is dying a slow death.” After a decade of soaring commodity prices, this is what it looks like when the party starts to end. For years, the global grab for coal, iron ore, cop- per and other commodities brought riches to small mining communities across the globe. It also helped lift the broader economies of resource-rich nations from Peru to Mongolia to Indonesia. In Australia, a heavyweight in the industry, the boom helped the country sidestep recession when other developed economies hit the wall in recent years. But more recently, commodity prices have fallen, in some cases dramatically, because of jitters over Please turn to page A12 BY RHIANNON HOYLE COMMODITY HANGOVER A Boom Town Feels Chill BEIJING—China’s central bank is turning into a policy heavyweight in a battle among the country’s top economic au- thorities over how to fuel growth without piling on exces- sive debt. The government has sought to portray a united front on its “mini-stimulus” measures, or small adjustments to monetary policy to bolster growth. Behind the scenes, however, China’s biggest economic agen- cies—the People’s Bank of China, the Ministry of Finance, the state planning commission and other financial regulators—have fought over whether more should be done to bolster growth, such as cutting interest rates for the first time in two years, according to officials familiar with the gov- ernment’s deliberations. China’s gross domestic prod- uct growth has fallen below its target of 7.5% for the year, deep- ening concerns about the strength of the world’s No. 2 economy. In the latest battle, the coun- try’s top banking regulator on Friday said it would ease rules to make it easier for banks to lend only to small companies. That followed a decision a week ear- lier by the State Council, the government’s top decision-mak- ing body, to target more bank funding for small businesses and farms. The central bank fended off calls to cut interest rates, at least for now, the people familiar with the situation said, by argu- ing that a rush of new credit could add to already ballooning debt and funnel money to the real-estate sector, which is struggling with a housing glut that is dragging down growth and threatening to trigger loan defaults. “Theoretically, conditions are ripe for a rate cut as inflation is not a concern right now,” a cen- tral bank official said. “But it wouldn’t be as effective as we would want it to be” because it could worsen other problems in the economy. How China negotiates the slowdown matters to the Chinese leadership’s goal of restructuring Please turn to page A10 BY LINGLING WEI AND BOB DAVIS China’s Central Bank Flexes Muscle on Economic Policy Former Military Chief Becomes Egypt’s Latest President NEW REGIME: Egypt inaugurated Abdel Fattah Al Sisi, front, as its president Sunday. Islamists and liberals, who represent the broadened spectrum of political factions that have arisen in the revolutions of the past few years, weren’t seen in state media broadcasts of the ceremony. A8 MENA/Associated Press DURHAM, N.C.—It took Chuck Pell less than a minute to build his drone. He folded a piece of paper 11 times, clipped on a battery-pow- ered plastic propeller and rud- der, then opened an app on his iPhone. Next he flung the aircraft sky- ward, steering it above the trees with turns of his phone. The plane soared out of sight. It’s a good technology, according to Mr. Pell, who has suffered plenty of nose dives. It just “needs more pilot training.” Aerial drones have fought in wars, filmed movies and fac- tored into the ambitious plans of high-tech executives who want to supply Internet service from the air. Now there is a new but famil- iar shape to the fast-growing world of unmanned aircraft: the paper airplane. The PowerUp 3.0, brainchild of former Israeli Air Force pilot Shai Goitein, is a lightweight guid- ance-and-propul- sion system pow- ered by a dime- size battery. It clips onto ori- gami aircraft and connects to iPhones using Bluetooth, trans- forming them into remote-control drones. Pocket-size drones like the PowerUp aren’t as sophisticated as the devices Jeff Bezos says could one day deliver packages for Amazon.com, or the big solar- powered models being engi- Please turn to page A10 BY JACK NICAS Is It a Toy Plane? Or a Drone? Rulings Land as New Craft Take Off i i i Technology Transforms Paper Projects, Fueling Issues About Air Space; FAA’s View PowerUp plane JASON GAY IN SPORTS Nadal Reigns On MARKETPLACE The Battle for Gamers Reuters (2) New set of GM recalls involves pickups, SUVs ................................. B3 Released Soldier Hasn’t Spoken With His Family ARDUOUS RETURN: Sgt. Bowe Bergdahl has declined to speak with his family since his release by captors in Afghanistan. A4 U.S. Army/Associated Press You never know when an opportunity might strike. With the TD Ameritrade Mobile app, you can monitor the market with synchronized watch lists, and research investment ideas, wherever you are. SucceSSful inveStorS aren’t juSt right. they’re right at the right time. System response and account access may vary. All investments involve risk. TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2014 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. tdameritrade.com/600offer C M Y K Composite Composite MAGENTA CYAN BLACK P2JW160000-5-A00100-1--------NS NY BP,CK P2JW160000-5-A00100-1--------NS
Transcript of JASON GAYINSPORTS Nadal Reigns Ononline.wsj.com/public/resources/documents/PageOne060914.pdf ·...
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* * * * * MONDAY, JUNE 9, 2014 ~ VOL. CCLXIII NO. 133 WSJ.com HHHH $2 .00
Lastweek: DJIA 16924.28 À 207.11 1.2% NASDAQ 4321.40 À 1.9% NIKKEI 15077.24 À 3.0% STOXX600 347.30 À 0.9% 10-YR. TREASURY g 1 7/32 , yield 2.597% OIL $102.66 g $0.05 EURO $1.3643 YEN 102.49
CONTENTSAbreast of the Market C1Corporate News.... B2,3Global Finance............ C3Heard on the Street C6Law Journal ................ B6Markets Dashboard C4
Media & Marketing B4Moving the Market C2Opinion.................. A13-15Sports.......................... B7,8U.S. News................. A2-6Weather Watch........ B7World News.... A7-11,16
s Copyright 2014 Dow Jones & Company.All Rights Reserved
>
What’sNews
i i i
World-Widen Bergdahl has so far de-clined to speak to his familyas a debate rages over hiscapture and release. The sol-dier said he was tortured dur-ing his five-year captivity. A4nMilitants stormed Karachi’sairport, leaving at least 23people dead. Separately, an at-tack on pilgrims in the west ofPakistan killed at least 23. A7n Ukraine’s new presidentaccused separatist rebels ofdealing a blow to the econ-omy of the industrial east. A7n The U.S. and Iran willhold bilateral nuclear talkson June 9-10 in Geneva, theState Department said. A8n Egypt’s Sisi was sworn inas president less than a yearafter the military, under hiscommand, ousted Morsi. A8n Israeli President Peresmet with Palestinian leaderAbbas for a prayer ceremonywith Pope Francis. A9n The Cleveland Clinic’s CEOwithdrew his name fromconsideration to be the nextsecretary of the VA. A4n Obama is set to announcethe expansion of a federalprogram designed to reducestudent-loan payments. A6n Investigators looking forMalaysia Airlines Flight 370are poised to shift search ar-eas for a third time. A10n Patients who state theirend-of-life medical wishes ona special form get the carethey want, a study found. A3n “A Gentlemen’s Guide toLove & Murder” took theTony for best musical. “All theWay” won for best play. A17
i i i
Tyson emerged as thewinner in a deal to buy
Hillshire, valuing the makerof Jimmy Dean sausages ataround $7.7 billion. B1n China’s economic agenciesare battling over how to fuelgrowth without piling on ex-cessive debt as GDP growthlags behind its target. A1n GM faces lawsuits fromveterans of some of the big-gest verdicts and settlementsever over its handling of de-fective ignition switches. A1n The auto maker announcedfour new recalls as part of aninitiative to review all modelsfor potential problems. B3n Stock-market bulls seefew reasons for pessimism,citing share prices in pacewith earnings and slow-but-steady economic growth. C1n Treasury prices areclimbing as investors world-wide buy U.S. debt even as thesupply is shrinking. C1n Credit Suisse is consider-ing splitting off a piece of itsfixed-income trading businessinto a separate company. C1nMicrosoft’s Xbox is losingplayers to Sony’s PlayStation,eight months after the launchof new videogame consoles. B1nUnited is still struggling tointegrate operations nearlyfour years after the airline’smerger with Continental. B1n “The Fault in Our Stars,” ateen love story, collected anestimated $48.2 million in itsopening weekend. B4n Japan raised its first-quarter growth reading to6.7% from an initial 5.9%. A16
Business&Finance
Of all the problems hauntingGeneral Motors Co. over its han-dling of defective ignitionswitches, the one with plaintiffs’lawyers is just beginning.
The company’s size and self-confessed failures in an internalreport released last week are at-tracting lawyers who forgedsome of the biggest civil settle-ments ever, from the landmarktobacco litigation to the ExxonValdez disaster to Toyota MotorCorp.’s unintended-accelerationproblems.
More than 80 ignition-switch-related civil lawsuits have beenfiled against GM, most seekingalleged economic damages, suchas repair costs and declines inresale value on about 2.6 millioncars recalled since February. Theaverage depreciation claim alonemight total $500 to $1,000 percar, according to lawyers whohave filed suits against GM.
The company also will have tofight suits claiming the defectiveignition switches caused seriousinjuries and deaths. While just ahandful of cases are under way,plaintiffs’ lawyer Bob Hilliard ofCorpus Christi, Texas, said hehas signed up several hundredsuch clients. GM has attributedat least 54 crashes and 13 deathsto switch-related air bag fail-ures, and said last week that itcan’t rule out the possibility thatthe death toll could climb.
Chief Executive Mary Barrasaid Thursday that she wouldn’t“speculate on anything involvinglitigation.” She said the companywould “do the right thing by vic-
Pleaseturntothenextpage
BY ASHBY JONES
PlaintiffLawyersTakeAimAt GM
The nation’s top energy regu-lator may soon get two new lead-ers who share at least one thingin common: the unrelenting at-tention of Sen. Harry Reid.
As majority leader of the Sen-ate, the Nevada Democrat is oneof the most powerful people inWashington. Over the past year,he has on two occasionsscotched the White House’s pickof leader for the Federal EnergyRegulatory Commission, a low-profile agency that oversees thenation’s electric grid, and he hassuccessfully pushed for otherpreferred candidates.
His efforts will be tested assoon as this week when the Sen-ate’s energy committee votes onwhether to confirm Norman Bayas FERC chairman and CherylLaFleur as a commissioner. Mr.Bay is a Reid-backed candidate.The senator blocked Ms. LaFleurfrom getting the top job, and heis blunt about his interest inshaping FERC.
“Oh really? No kidding,” Mr.Reid said. “Wow, that is amaz-ing—that a majority leader whohas a responsibility of selectingpeople would have some opinionas to who he suggests to theWhite House.”
Mr. Reid’s interest stems fromhis expressed intent to develophis state’s renewable-energy in-dustry. In 2013, Nevada rankedsecond in the nation for geother-mal energy production and thirdfor solar production, and 18% ofits total electricity generationcame from renewable, above thenational average of 13%.
Nevada and the West in gen-eral, however, need more powerlines to deliver renewable energyto customers. While FERC, which
PleaseturntopageA4
BY AMY HARDER
Reid ShapesRegulatorWith anEyeToHis State
MORANBAH, Queensland—Two years ago, real-estate agent Bella Exposito said she was selling asmany as 25 houses a day as soaring coal priceslured workers and investors to this flyspeck Out-back town.
As of May this year, she has sold three.A cream-and-brown weatherboard house near
her office rented for nearly US$7,000 a monthwhen the region’s coal industry was booming; nowit has been empty for 12 months. Downtown shopshave gone vacant. At Café 17, a local diner servingeggs and baked beans in the morning, visitorscould fire a cannon and not hit a soul some days.
“There is a lot of hurt in the town,” says onemine worker employed at the Goonyella Riverside
coal mine run by BHP Billiton Ltd. and MitsubishiCorp., which is among the many operations to pareworkers over the past year. “It feels like it is dyinga slow death.”
After a decade of soaring commodity prices, thisis what it looks like when the party starts to end.
For years, the global grab for coal, iron ore, cop-per and other commodities brought riches to smallmining communities across the globe. It alsohelped lift the broader economies of resource-richnations from Peru to Mongolia to Indonesia. InAustralia, a heavyweight in the industry, the boomhelped the country sidestep recession when otherdeveloped economies hit the wall in recent years.
But more recently, commodity prices have fallen,in some cases dramatically, because of jitters over
PleaseturntopageA12
BY RHIANNON HOYLE
COMMODITY HANGOVER
A Boom Town Feels Chill
BEIJING—China’s centralbank is turning into a policyheavyweight in a battle amongthe country’s top economic au-thorities over how to fuelgrowth without piling on exces-sive debt.
The government has sought toportray a united front on its“mini-stimulus” measures, orsmall adjustments to monetarypolicy to bolster growth.
Behind the scenes, however,China’s biggest economic agen-
cies—the People’s Bank of China,the Ministry of Finance, the stateplanning commission and otherfinancial regulators—have foughtover whether more should bedone to bolster growth, such ascutting interest rates for thefirst time in two years, accordingto officials familiar with the gov-ernment’s deliberations.
China’s gross domestic prod-uct growth has fallen below itstarget of 7.5% for the year, deep-ening concerns about thestrength of the world’s No. 2economy.
In the latest battle, the coun-
try’s top banking regulator onFriday said it would ease rules tomake it easier for banks to lendonly to small companies. Thatfollowed a decision a week ear-lier by the State Council, thegovernment’s top decision-mak-ing body, to target more bankfunding for small businesses andfarms.
The central bank fended offcalls to cut interest rates, atleast for now, the people familiarwith the situation said, by argu-ing that a rush of new creditcould add to already ballooningdebt and funnel money to the
real-estate sector, which isstruggling with a housing glutthat is dragging down growthand threatening to trigger loandefaults.
“Theoretically, conditions areripe for a rate cut as inflation isnot a concern right now,” a cen-tral bank official said. “But itwouldn’t be as effective as wewould want it to be” because itcould worsen other problems inthe economy.
How China negotiates theslowdown matters to the Chineseleadership’s goal of restructuring
PleaseturntopageA10
BY LINGLING WEIAND BOB DAVIS
China’s Central Bank FlexesMuscle on Economic Policy
Former Military Chief Becomes Egypt’s Latest President
NEW REGIME: Egypt inaugurated Abdel Fattah Al Sisi, front, as its president Sunday. Islamists and liberals, who represent the broadenedspectrum of political factions that have arisen in the revolutions of the past few years, weren’t seen in state media broadcasts of the ceremony. A8
MEN
A/A
ssociatedPress
DURHAM, N.C.—It took ChuckPell less than a minute to buildhis drone.
He folded a piece of paper 11times, clipped on a battery-pow-ered plastic propeller and rud-der, then openedan app on hisiPhone.
Next he flungthe aircraft sky-ward, steering itabove the treeswith turns of hisphone. The planesoared out ofsight.
It’s a goodtechnology, according to Mr.Pell, who has suffered plenty ofnose dives. It just “needs morepilot training.”
Aerial drones have fought inwars, filmed movies and fac-tored into the ambitious plans ofhigh-tech executives who want
to supply Internet service fromthe air.
Now there is a new but famil-iar shape to the fast-growingworld of unmanned aircraft: thepaper airplane.
The PowerUp 3.0, brainchildof former Israeli Air Force pilot
Shai Goitein, is alightweight guid-ance-and-propul-sion system pow-ered by a dime-size battery. Itclips onto ori-gami aircraft andconnects toiPhones usingBluetooth, trans-forming them
into remote-control drones.Pocket-size drones like the
PowerUp aren’t as sophisticatedas the devices Jeff Bezos sayscould one day deliver packagesfor Amazon.com, or the big solar-powered models being engi-
PleaseturntopageA10
BY JACK NICAS
Is It a Toy Plane? Or a Drone?Rulings Land as New Craft Take Off
i i i
Technology Transforms Paper Projects,Fueling Issues About Air Space; FAA’s View
PowerUp plane
JASON GAY IN SPORTS
Nadal Reigns OnMARKETPLACE The Battle for Gamers
Reuters(2)
New set of GM recalls involvespickups, SUVs................................. B3
Released Soldier Hasn’tSpoken With His Family
ARDUOUS RETURN: Sgt. BoweBergdahl has declined to speakwith his family since his releaseby captors in Afghanistan. A4
U.S.A
rmy/AssociatedPress
You never know when anopportunity might strike. With the
TD Ameritrade Mobile app, you can monitorthe market with synchronized watch lists,
and research investment ideas,wherever you are.
SucceSSful inveStorSaren’t juSt right.they’re right
at the right time.
System response and account access may vary. All investments involve risk.TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademarkjointlyownedbyTDAmeritradeIPCompany,Inc.andTheToronto-DominionBank.©2014TDAmeritrade IPCompany, Inc.All rights reserved.Usedwithpermission.
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P2JW160000-5-A00100-1--------NS NYBP,CK
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