Author: Reuters

By Shivansh Tiwary and Tim Hepher

(Reuters) -At least 50 people were hurt when a Boeing 787 operated by LATAM Airlines dropped abruptly mid-flight from Sydney to Auckland on Monday, according to the airline and a New Zealand health service organisation that treated the injured.

The aircraft experienced a strong shake and as a result 10 passengers and three cabin crew members were taken to a hospital, the South American carrier said as it investigates the cause.

The flight with 263 passengers and nine cabin crew members landed at Auckland airport as scheduled on Monday afternoon.

One person is in a serious condition while the rest suffered mild-to-moderate injuries, a spokesperson for Hato Hone St John, which treated roughly 50 people at the airport, said.

“The plane, unannounced, just dropped. I mean it dropped unlike anything I’ve ever experienced on any kind of minor turbulence, and people were thrown out of their seats, hit the top of the roof of the plane, throwing down the aisles,” passenger Brian Jokat told the BBC.

The cause of the apparent sudden change in trajectory of flight LA800 could not be ascertained immediately. Safety experts say most airplane accidents are caused by a cocktail of factors that need to be thoroughly investigated.

“Some of the roof panels were broken from people being thrown up and knocking through the plastic roof panels in the aisle ways. And there was blood coming from several people’s heads.” Jokat, who was not injured in the incident, said.

He said passengers who were doctors on the plane provided bandages and neck braces for people who were severely injured.

The eight-year-old Boeing 787-9 Dreamliner, according to flight tracking website FlightRadar24, was on its way to Santiago via Auckland.

LATAM Airlines said a new flight to Chile will depart from Auckland on Tuesday.

In 2008, dozens of people were injured when another wide-body jet, an Airbus 330 operated by Qantas Airways, dropped sharply because of faulty readings from a flight data computer while heading for Perth in Australia.

Boeing said it was working to gather more information and will provide any support to the airline. The U.S. Federal Aviation Administration and the National Safety Board did not immediately respond to requests for comments.

Separately, the Wall Street Journal reported on Saturday the U.S. Department of Justice has opened a criminal investigation into 737 MAX mid-air cabin-panel blowout on an Alaska Airlines flight in January.

Boeing shares were down about 4% in U.S. morning trading.

(Reporting by Tim Hepher in Paris, Lewis Jackson in Sydney and Shivansh Tiwary, Abhijith Ganapavaram, Urvi Dugar and Gursimran Kaur in Bengaluru; Editing by Jamie Freed and Arun Koyyur)

By Akash Sriram

(Reuters) -Rivian’s shares rose more than 3% on Friday as its cheaper R2 SUV racked up tens of thousands of reservations within hours of its launch, fueling optimism that the electric vehicle maker could expand in the mass-market segment.

Unveiled on Thursday, the smaller R2 SUV, which will start at $45,000, has attracted more than 68,000 reservations, CEO RJ Scaringe said in a post on X.

Analysts also said that the Amazon-backed EV maker’s plan to produce the R2 at its existing U.S. factory and pause the construction of its second factory in Georgia may result in cost savings that will delay further fundraise.

The pause in its Georgia plant is expected to drive additional savings of more than $2.25 billion for Rivian compared to its prior forecast. It will also hasten R2 deliveries to the first half of 2026.

Cost savings will leave the company with enough cash on hand through R2’s start of production, “relieving considerable pressure to raise capital in the near term,” Deutsche Bank analyst Emmanuel Rosner said.

The Illinois plant, where Rivian also makes its electric delivery vans, can produce 215,000 vehicles year after production of the R2 starts, the company said on Thursday.

“With this new product, Rivian can potentially break more into the mass market segment, which represents about half of total U.S. auto sales,” said analysts at Bank of America.

In a surprise move, the company also introduced the R3 and a more powerful R3X variant on Thursday. The R3 will be cheaper than the R2 and will be launched after it.

The reveals come when EV demand is rising at a slower pace than automakers had expected, weighing on shares of the companies this year. Rivian’s stock had halved in value this year, before the launch on Thursday.

Including Friday’s gains, Rivian’s shares are up 14% since Monday and set for their best week since Dec. 15.

At current levels, about $400 million was set to be added to the company’s market value of $12.23 billion. Since the launch, Rivian’s market value has increased by more than $1.8 billion.

Meanwhile, market leader Tesla has slashed prices to spur sales and is also pursuing a cheaper model.

“Given Tesla has shown little ambition to move into the SUV space, Rivian could be one of the few EV SUVs on the market that most investors will likely want to buy over the next 3-4 years,” Evercore ISI analyst Chris McNally said in a note.

(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)

JOHANNESBURG (Reuters) – U.S. prosecutors have charged a prominent South Sudanese economist and Harvard fellow with conspiring to export Stinger missile systems, grenade launchers and automatic rifles to armed groups in South Sudan, the Justice Department said.

In a complaint unsealed this week and dated Feb. 29, the prosecutors alleged that Peter Ajak, a former economist with the World Bank, and an associate, Abraham Chol Keech, intended to send the weapons to “opposition groups seeking to effect a non-democratic regime change in South Sudan”.

Ajak, 40, has been a fierce critic of South Sudanese President Salva Kiir’s government. He was jailed in 2018 and charged with treason.

Those charges were dropped, but he was convicted of disturbing the peace over interviews he gave to foreign media. Kiir later pardoned him.

The Justice Department alleged in the complaint that the defendants violated U.S. law making it illegal to export weapons to South Sudan, which is subject to a U.N. arms embargo.

The country has endured years of civil war and fighting between armed groups since winning independence from Sudan in 2011.

It was not immediately clear if Ajak and Keech were represented by counsel. Ajak did not immediately respond to an emailed request for comment. Keech did not immediately respond to requests for comment sent to his social media accounts.

Between February 2023 and February 2024, Ajak and Keech tried to buy weapons from undercover law enforcement agents and smuggle them to South Sudan through a third country, according to the complaint.

As part of the alleged scheme, they agreed to an arms contract worth nearly $4 million and requested a “fake contract” that said the funds were for things like equipment related to “human rights, humanitarian, and civil engagement inside South Sudan refugee camps”, the complaint said.

Ajak fled to the United States as a child during South Sudan’s independence war. He is currently a non-resident fellow at the Harvard Kennedy School’s Belfer Center for Science and International Affairs.

(Reporting by Bhargav Acharya; Editing by Aaron Ross and Nick Macfie)

(Reuters) – High levels of cancer-causing chemical benzene were detected in some acne treatments of brands including Estee Lauder’s Clinique and Target’s Up & Up, independent U.S. laboratory Valisure said on Wednesday.

The New Haven, Connecticut-based lab has also filed a petition with the U.S. Food and Drug Administration, calling on the regulator to recall the products, conduct an investigation and revise industry guidance.

Benzene, which has already been found in certain sunscreens and dry shampoo, could form at “unacceptably high levels” in both prescription and over-the-counter benzoyl peroxide acne treatment products, said Valisure.

Estee Lauder shares dropped 3% following the report.

Target and Estee Lauder did not respond to Reuters requests for comment.

High levels of benzene were not only found in the acne products tested, but also in the air around incubated products, indicating that the carcinogen could leak out of some of the packages, posing a potential inhalation risk, Valisure said.

Bloomberg News had reported the development earlier in the day.

(Reporting by Deborah Sophia in Bengaluru; Editing by Devika Syamnath)

A look at the day ahead in U.S. and global markets from Mike Dolan

Wall St stocks’ worst day in almost three weeks sets the backdrop for Wednesday’s congressional testimony from Federal Reserve chair Jerome Powell, with markets starting to get antsy about everything from Trump to Taiwan.

In a packed day for major macro events – including a Bank of Canada policy decision, Britain’s annual budget, key U.S. labor market updates and Super Tuesday primary results – the main market focus was likely to be on Powell’s appearance.

In many respects, Powell and his team have interest rate markets where they want them – and should be comfortable now that the Fed’s December message on modest rate cuts later this year has been heeded at last ahead of its March 20 policymaking meeting.

Tuesday’s soft service sector survey for February did nudge up the amount of easing futures markets are pricing for 2024. But at 88 basis points they remain close to the most recent Fed projections for some 75bps of cuts this year and the first move is still not fully priced until July.

Given that, Powell may not want to rock the boat too much – although he could nod to the risks associated with a re-acceleration of the economy or even warn on recent stock market “exuberance” in the long question-and-answer session that follows his speech on Capitol Hill.

A possible rise in long run “neutral” interest rate assumptions, the pace of the Fed’s balance sheet rundown and election year policy questions may also come in the exchanges.

But, almost as if they were expecting a slap on the wrist, pricey U.S. megacap stocks tumbled on Tuesday ahead of the event – with a variety of reasons cited, from economic and political risks in China to antitrust moves in Europe and the Super Tuesday klaxon on the White House race.

Of the so-called Magnificent Seven of leading stocks, only artificial intelligence poster child Nvidia managed to gain on the day. The S&P500 lost 1% and the Nasdaq 1.7%, although futures clawed back about a third of that ahead of Wednesday’s bell.

In China and Taiwan, where the “Mag 7” revenue exposure is estimated to be close to 20%, the mood remained edgy after annual government plans were outlined by the National People’s Congress on Tuesday. The CSI300 edged lower again overnight, even though Hong Kong recovered some losses.

Strategists puzzled over how a modest 3% budget deficit target would contain enough of a fiscal boost to meet the government’s ambitious 5% economic growth target for the year.

And yet surging defence spending plans and the NPC report’s removal of language about Taiwan that included the phrase “peaceful reunification” were most jarring to those worried about worsening geopolitics.

The prospect of Donald Trump’s possible return to the White House, with promises of 60% tariffs on Chinese imports, will not have eased those concerns much as he dominated this week’s slew of Republican primaries.

On Tuesday, Trump won the Republican votes in a dozen states and brushed aside rival Nikki Haley to all but clinch his third consecutive presidential nomination even in the face of a litany of criminal charges. Again casting Trump as a threat to American democracy, Biden took the equivalent Democratic party nods and set up what looks to be a re-run of the 2020 election race.

Elsewhere, and possibly partly related to the political uncertainties, gold and bitcoin remained well bid.

Bitcoin suffered vertigo on Tuesday after briefly hitting record highs above $69,000 and retreated sharply in a wild 14% intraday swing. But it was back higher about $66,500 on Wednesday, even if still shy of the new peak.

Gold prices also breached December’s record peak briefly on Tuesday and held most of those gains today.

The dollar index were lower more generally.

With the Bank of Canada expected to leave its policy rate unchanged at 5% later on Wednesday, the focus will be on the accompanying statement as well as Governor Tiff Macklem’s post-decision interview to see if an all-clear on inflation is forthcoming. Canada’s dollar was steady overnight.

Britain’s pound and government bond yields pushed up ahead of finance minister Jeremy Hunt’s annual budget speech. Despite the fragile state of the public finances, Hunt is expected to offer tax cuts to voters ahead of this year’s election – including a reported 2 percentage point cut in social security contributions.

Key diary items that may provide direction to U.S. markets later on Wednesday:

* Federal Reserve Chair Jerome Powell delivers semiannual monetary policy testimony before the House Financial Services Committee; Fed issues Beige Book on economic conditions; San Francisco Fed President Mary Daly and Minneapolis Fed chief Neel Kashkari speak

* U.S. Feb ADP private sector jobs report, Jan JOLTS job openings data, Jan wholesale sales/inventories

* Bank of Canada policy decision

* British finance minister Jeremy Hunt delivers annual budget to parliament

* U.S. corp earnings: Campbell Soup, Brown-Forman, JD.com etc

(By Mike Dolan, Editing by Alison [email protected])

(Reuters) -Campbell Soup edged past market estimates for quarterly sales and profit on Wednesday and stuck to its annual forecasts, helped by steady demand for branded, ready-to-eat meals and strength in its food service business.

Prices across Campbell’s products rose 1%, while overall volumes dipped 2% during the reported quarter, as holiday promotions encouraged shoppers to indulge in its Goldfish crackers and Pepperidge Farm cookies.

The pace of price increases has slowed from last year’s mid-double-digit rise, as most food companies try to limit pricing to cope with subdued demand.

Packaged foods peers Kraft Heinz, Mondelez, McCormick, Hershey and PepsiCo have all flagged softer volume growth in their latest quarterly results.

Still, benefits from prior price hikes and easing supply chains helped Campbell’s gross profit margin climb 31.6%, from last year’s 30.5%.

Net sales in its Meals & Beverages segment – Campbell’s biggest revenue churner – declined 2%, owing to weaker demand for retail products in the U.S., including ready-to-serve and condensed soups as well as Pace Mexican sauces. Sales in the Snacks division were flat in the quarter.

The company, which is set to close its buyout of Rao’s sauce maker Sovos Brands next week, posted second-quarter net sales of $2.46 billion, slightly above analysts’ average estimate of $2.44 billion, according to LSEG data.

It logged adjusted earnings of 80 cents per share, better than the 77 cents analysts were expecting.

The New Jersey-based firm reaffirmed its fiscal-year 2024 target for net sales and earnings for the second time in a row.

Shares of the company were down marginally in trading before the bell.

(Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)

(Reuters) – Pipeline operator Enbridge said on Wednesday it will invest about $500 million in expanding its pipeline and storage assets to improve its U.S. Gulf Coast presence.

(Reporting by Tanay Dhumal in Bengaluru; Editing by Tasim Zahid)

By Bansari Mayur Kamdar and Amruta Khandekar

(Reuters) -U.S. stock index futures rose on Wednesday as investors awaited testimony by Federal Reserve Chair Jerome Powell before Congress that could help determine the central bank’s monetary policy path.

Powell kicks off two days of testimony with a hearing at 10 a.m. ET (1500 GMT) before the House Financial Services Committee, explaining to lawmakers why he is confident price pressures will keep easing without upending the job market or conversely why the window for a “soft landing” may be narrowing.

“Powell is likely to stick to the narrative of patience and data dependency this week, but given the intense market focus on Fed timing, there is potential for a market reaction, particularly in the Q&A,” said Seema Shah, chief global strategist at Principal Asset Management.

Wall Street indexes closed more than 1% lower on Tuesday amid weakness in market leaders Tesla and Apple and as investor focus shifted to Powell and the Fed after signs of sticky inflation in February dampened hopes of early interest rate cuts.

Traders see a 69.1% chance of the first rate cut this year in June, as per CME Group’s FedWatch tool. At the start of 2024, they were betting on March as the starting point for the Fed’s easing cycle.

Investors will also be tracking private payrolls and job openings data, due later in day, ahead of the crucial nonfarm payrolls report on Friday.

At 6:55 a.m. ET, Dow e-minis were up 73 points, or 0.19%, S&P 500 e-minis were up 14.75 points, or 0.29%, and Nasdaq 100 e-minis were up 105.75 points, or 0.59%.

Megacap growth and technology stocks rose in premarket trading, with Tesla recovering 0.9% after a 3.9% slide in the previous session, while AI darling Nvidia rose 1.1%.

U.S.-listed shares of China’s JD.com advanced 11.9% after the e-commerce group reported fourth-quarter revenue above estimates and upsized its share repurchase program.

Shares of cryptocurrency-linked companies such as Coinbase Global and MicroStrategy gained 5.8% and 11.3%, respectively, as bitcoin rebounded.

CrowdStrike Holdings soared 24.3% after the company forecast annual results above Wall Street estimates, lifted by strong enterprise spending on cybersecurity to counter rising online threats.

Other cybersecurity stocks Palo Alto Networks, Fortinet and Zscaler rose between 4% and 4.6%.

(Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Maju Samuel)

By Stephen Nellis and Max A. Cherney

SAN FRANCISCO (Reuters) – U.S. officials have earmarked close to $30 billion in subsidies for advanced semiconductor manufacturing, aiming to bring cutting-edge artificial-intelligence chip development and manufacturing to American soil.

But with money set to start flowing in the next few weeks, accomplishing that goal is far from certain, industry experts say. The Biden administration must weigh how much taxpayer money to allocate among Taiwan Semiconductor Manufacturing, a powerful foreign leader, and Intel, a beleaguered homegrown company whose turnaround efforts remain promising but untested.

Betting on AI chips is also challenging in the rapidly evolving industry. Handing out subsidies today to the likes of Intel, TSMC or Samsung Electronics, which is also vying for federal dollars and is the only other firm in the world that can make advanced chips, does not guarantee security in the AI landscape of the future.

“AI itself is moving so quickly, if you focus on today’s AI chips, maybe two years from now it’s a whole different thing,” said Jay Goldberg, chief executive of D2D Advisory, a finance and strategy consulting firm. “As opposed to the (general) road map of advanced chipmaking which we know pretty clearly for the next decade.”

The money will come from the U.S. CHIPS Act, which passed in 2022. Intel, TSMC and Samsung are all building factories in the U.S. and are all likely to receive some degree of U.S. subsidies. The main question is how U.S. officials allocate the money to meet the goal of bolstering AI chip production.

“We don’t manufacture or package any of the leading-edge AI chips needed to fuel the innovation ecosystem and power our most critical defense systems,” U.S. Commerce Secretary Gina Raimondo said in a speech last month. “We cannot build the next generation of technological leadership on such a shaky foundation.”

The Commerce Department declined to comment.

MADE IN TAIWAN

TSMC, the global leader in making AI chips, has yet to commit to bringing its most advanced technology to the United States.

At the moment, TSMC manufactures chips for Nvidia, Advanced Micro Devices, Microsoft and Alphabet’s Google in Taiwan. The company is not expected to bring its advanced 3-nanometer manufacturing, which is already used to make iPhone 15 Pro chips, to Arizona until at 2027 or 2028, despite starting mass production in Taiwan last year. It has not disclosed any plans to bring 2-nanometer technology, which will start production next year in Taiwan, to the U.S.

A TSMC spokesperson said the company has made “steady progress in productive ongoing discussions with the U.S. government on inventive funding” and its first factory in the U.S. “will enable the leadership in the 5G and artificial intelligence era for decades.”

TSMC rival Samsung has a factory in Taylor, Texas, under construction that is expected to deploy the company’s most advanced manufacturing technology. But according to analysts and industry sources, Samsung has long struggled to manufacture enough functional chips on each silicon wafer to make high- volume manufacturing profitable.

In an emailed statement, Samsung referred Reuters to its fourth-quarter earnings call, where executives said its advanced manufacturing processes are mass-producing chips, and that orders for its AI accelerator chips are increasing.

That leaves Intel, which has said it will carry out its most cutting-edge manufacturing processes – called “18A” and “14A” – in the U.S. But it has not publicly disclosed any major customers who plan to use the technology to make AI chips.

Allocating a large chunk of CHIPS Act funding to Intel, which many analysts expect the U.S. government to do, is essentially a bet on Intel’s turnaround plan that CEO Pat Gelsinger announced in early 2021 after taking over.

Intel offers some advantages. AI chips are increasingly made up of smaller “chiplets” that must be packaged together, and Intel says it can combine chips made in its own factories with others fabricated by rivals such as TSMC.

“Their bias is that they’re going to be the (manufacturer) of choice for these crazy complex systems of chips. And they’re going to do that in the United States,” said Ben Bajarin, chief executive of analyst firm Creative Strategies.

But to become an AI chip powerhouse, Intel has the difficult task of retaking the manufacturing lead from TSMC. Then it must transform its business to a service-oriented contract manufacturer for outside customers.

While recently unveiled Intel manufacturing technology looks promising on paper, the reality is that almost every advanced AI chip currently on the market is made by TSMC.

“The biggest issue they have is to execute,” Dan Hutcheson, vice chair at analyst firm TechInsights, said of Intel. “The whole foundry business is a good year or two away before they either make it or break it.”

An Intel spokesperson said in a statement that the company is on track with its “18A” process, which it expects to be “manufacturing-ready” in the second half of the year.

(Reporting by Max Cherney and Stephen Nellis in San Francisco; Additional reporting by Joyce Lee in Seoul and Yi-Mou Lee in Taipei; Editing by Matthew Lewis)

By Hari Kishan and Sarupya Ganguly

BENGALURU (Reuters) – A strong U.S. dollar will maintain the status quo in the near term, as markets brace for a risk the Federal Reserve’s first interest rate cut gets delayed to the second half of this year, according to a Reuters poll of foreign exchange strategists.

Shrugging off a weakening trend late last year, the dollar has gained against nearly every currency tracked by traders and investors, and is up nearly 2.5% for the year.

Much of the greenback’s recent strength is based on stronger-than-expected U.S. economic performance and receding calls for early Fed rate cuts. The timing of the latter is likely to have a bigger say on the currency’s moves in the near-term.

“Over the next three months, I think we’re probably going to see the dollar hold in the ranges we’ve been seeing since the start of the year,” said Shaun Osborne, chief currency strategist at Scotiabank.

“If we’re in a situation where instead of the soft landing, it’s a no-landing scenario, that potentially reduces rate cut opportunities for the Fed quite significantly over the balance of this year, in which case the dollar probably stays relatively strong.”

Despite trader positioning data showing speculators increasing their net long dollar bets to the highest since last November, analysts in a Reuters March 1-6 poll were somewhat divided on how positioning will look over the next three months.

Among 66 analysts who answered an additional question, a slim majority of 35 expected not much change, while 17 predicted a decrease in net longs. Eleven said an increase in net longs and only three said a reversal to net shorts.

“One thing that’s happened this year is investors have had a hard time playing with the dollar and they’re looking for trades that…take the dollar out of it. I think that’s the way it will continue to lean,” said Dan Tobon, head of G10 FX strategy at Citi.

“Over the coming three months, we’ll have a marginally weaker dollar, but not get the type of flows that really create stretched positioning situations off the back of that.”

While currency strategists still expected the greenback to weaken against most major currencies over a 12-month period, median forecasts showed no big change to analysts’ predictions from a February poll.

The euro, down around 1.5% for the year, was forecast to gain 3.0% to trade around $1.12 in a year. The common currency was last changing hands around $1.09 on Wednesday.

Even the battered Japanese yen, which has lost nearly a third of its value since 2021, was expected to gain over 9.0% in 12 months to trade at 137.00/dollar.

After failing to make any headway against the greenback in 2023, the Aussie and Kiwi dollars were predicted to gain around 7.3% and 5.0% respectively, recouping their 2024 losses and trading higher against the U.S. dollar in coming months.

The Australian dollar and the New Zealand dollars – last trading around $0.65 and $0.61, respectively, on Wednesday – were forecast to rise to $0.70 and $0.64 by end-Feb.

(For other stories from the March Reuters foreign exchange poll:)

(Reporting by Hari Kishan; Polling by Sujith Pai, Pranoy Krishna and Veronica Khongwir; Editing by Ross Finley and Sharon Singleton)