By Brendan O’Brien

(Reuters) -A man was arrested on Tuesday after he broke into the Colorado Supreme Court building in Denver with a handgun and lit a fire in a stairwell, police said.

Police arrested Brandon Olsen, 44, on charges of arson, robbery and burglary, saying he fled the scene of a car crash shortly after 1 a.m., broke into the Ralph L. Carr Colorado Judicial Center in downtown Denver and shot out a window.

Police said Olsen took keys from an unarmed security guard whom he held at gunpoint and made his way up the building’s seventh floor, where he fired shots and lit a fire in a stairwell that was soon extinguished by the sprinkler system.

Olsen surrendered to police without incident at about 3 a.m., the Denver Police Department said in a statement.

Although the suspect was taken to hospital and cleared by medical personnel, nobody was injured, the Colorado State Patrol said in a statement.

It was unclear whether Olsen was represented by a lawyer who could make a statement in his defense.

The motive for the break-in was unclear, but the Colorado State Patrol all but ruled out any connection to the Colorado Supreme Court’s recent decision over Donald Trump’s presidential candidacy.

The Colorado Supreme Court disqualified the former president from the state’s Republican primary ballot for his role in the Jan. 6, 2021, attack on the U.S. Capitol by his supporters.

The court ruled that Trump was barred by a U.S. constitutional provision that prohibits anyone who “engaged in insurrection or rebellion” from holding public office.

Justices then became the target of harassment and possible threats.

A preliminary investigation showed a “high probability” the break-in was unrelated to recent threats against the justices, the state patrol said in the statement.

(Reporting by Brendan O’Brien in Chicago; Additional reporting by Keith Coffman in Denver; Editing by Nick Zieminski and Muralikumar Anantharaman)

By David Shepardson

WASHINGTON (Reuters) -Many electric vehicles lost eligibility for tax credits of up to $7,500 after new battery sourcing rules took effect on Monday, including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, some Tesla Model 3s and Chevrolet Blazer EV, the U.S. Treasury said.

The Treasury issued guidelines in December detailing new battery sourcing requirements aimed at weaning the U.S. electric vehicle supply chain away from China. They took effect on Monday.

The number of EV models qualifying for U.S. EV tax credits fell from 43 to 19. Those figures include different versions of the same vehicle type. Treasury said some manufacturers have yet to submit information on eligible vehicles, which could lead to changes in the list.

Tesla did not immediately comment Monday but said on its website “Cybertruck is likely to qualify for the federal tax credit later in 2024.”

The new rules allow buyers to claim the tax credit of up to $7,500 at a participating dealership at the point of sale. The tax credit sets limits on vehicle price and buyer income to qualify.

The Volkswagen ID.4, Tesla Model 3 Rear Wheel Drive, BMW X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq and Ford E-Transit are among the vehicles that fell off the list of vehicles eligible for tax credits.

Volkswagen said on Monday it “is in the process of confirming eligibility for a federal EV tax credit for vehicles” after Jan. 1.

“We are optimistic that MY2023 ID.4s and all MY2024 ID.4s will be eligible under the new rules,” VW added.

BMW did not immediately comment.

Nissan said is working with suppliers in an effort to meet changing requirements “and regain tax credit eligibility for the Nissan Leaf in the future.”

The Treasury said “automakers are adjusting their supply chains to ensure buyers continue to be eligible for the new clean vehicle credit, partnering with allies and bringing jobs and investment back to the United States.”

Ford Motor said last month its E-Transit would lose the $3,750 tax credit, as would the Mach-E and Lincoln Aviator Grand Touring plug-in hybrid, but its F-150 EV Lighting and the Lincoln Corsair Grand Touring retained credits.

General Motors noted all of its EVs would temporarily lose eligibility except the Chevrolet Bolt, adding the Lyriq and Blazer EV are losing the credit because of two minor components.

GM expects after a sourcing change the Lyriq and Blazer EV will regain eligibility in early 2024 and said its Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac OPTIQ produced “after the sourcing change will be eligible for the full incentive.”

The 2022 Inflation Reduction Act law reformed the EV tax credit, requiring vehicles to be assembled in North America to qualify for any tax credits, eliminating nearly 70% of eligible models at the time.

Tesla disclosed in December its Model 3 Rear-Wheel Drive and Long Range vehicles would lose federal tax credits starting Jan. 1. The Model 3 Performance retains the $7,500 credit.

(Reporting by David ShepardsonEditing by Marguerita Choy and Lisa Shumaker)

By Akash Sriram

(Reuters) -Tesla delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target, but lost its spot as the top EV maker to China’s BYD.

Tesla delivered 494,989 EVs in the October-to-December period, falling short of the 526,409 vehicles that Warren Buffett-backed BYD handed over – mostly in China – suggesting that car buyers were looking for cheaper models in a high-interest-rate economy.

While the U.S. automaker’s year-end sales push mostly paid off, helping it deliver 1.8 million vehicles this year, it fell short of CEO Elon Musk’s ambitious 2 million annual internal target.

However, it is still ahead of BYD for the whole year. The Chinese firm delivered a total of 3.02 million vehicles, including about 1.4 million plug-in hybrid EVs.

Tesla stock, which doubled last year, was nearly flat on Tuesday in a broadly weaker market.

BYD’s deliveries show price cuts are working for the Chinese company, said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“The fight will hurt margins for both companies, but BYD clearly believes it’s a price worth paying to increase market share and recognition,” she added.

Tesla increased discounts and offered incentives like six months of free fast charging if customers took deliveries by December-end, in a bid to boost sales before some variants of its compact Model 3 sedan lose U.S. federal tax credits in 2024.

That helped it post a growth of 11% over the immediately previous quarter and higher than estimates of 473,253, according to 14 analysts polled by LSEG.

It made a record 494,989 vehicles in the quarter after a production halt in the third quarter to upgrade assembly lines, taking total production in 2023 to 1.85 million units.

Tesla’s delivery numbers are “much, much, much better than domestic U.S. car companies,” said Gary Bradshaw, portfolio manager at Tesla shareholder Hodges Capital.

Smaller rival Rivian also reported deliveries on Tuesday, with the company missing market estimates amid a broader pullback in EV demand.

The weakness has led U.S. automakers including Ford and General Motors to become more cautious about their EV production capacity plans.

Tesla is also facing scrutiny from regulators over its self-driving technology with the company recalling more than 2 million vehicles last month to install new safeguards in its Autopilot advanced driver-assistance system, after a federal safety regulator cited safety concerns.

Consumer Reports — an influential U.S. non-profit group that conducts extensive reviews of cars, kitchen appliances and other goods — said its preliminary evaluation suggests the software update to fix issues were not sufficient and did not go far enough to prevent misuse and driver inattention.

TAX CREDITS

Some analysts said Tesla could have to continue the price cuts it started in January last year to maintain demand, after the end of the tax incentives under the Inflation Reduction Act (IRA) brought forward sales into the fourth quarter.

“Tesla may have to cut prices further, especially for a vehicle like the versions of the Model 3 that lost their tax credit,” said Seth Goldstein, equity strategist at Morningstar.

The rear-wheel drive and long-range variants of Tesla’s Model 3 no longer have federal tax credits of $7,500 this year as updated requirements on battery material sourcing kick in, under the IRA.

Goldstein, however, said that most of the price cuts were in response to higher interest rates by the U.S. Federal Reserve so Tesla may maintain prices if borrowing costs start coming down.

Model 3 cars and Model Y sports utility vehicles accounted for 461,538 deliveries in the quarter, while Tesla handed over about 23,000 units of its other models.

Tesla did not disclose if the deliveries included the newly launched Cybertruck.

(Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta, Krishna Chandra Eluri and Pooja Desai)

By Akash Sriram

(Reuters) – Tesla delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target of 1.8 million vehicles as a year-end sales push paid off.

The automaker delivered 494,989 vehicles in the quarter, but it fell short of the 526,409 fully electric vehicles China’s BYD, which many analysts say is Tesla’s main rival, handed over.

Warren Buffett-backed BYD’s annual deliveries were 3.02 million, though that included about 1.4 million plug-in hybrid EVs, meaning Tesla was still ahead in fully EV deliveries for the year.

BYD’s deliveries show price cuts are working for the Chinese company, said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“The fight will hurt margins for both companies, but BYD clearly believes it’s a price worth paying to increase market share and recognition,” she added.

Tesla increased discounts and offered incentives like six months of free fast charging if customers took deliveries by December-end, in a bid to boost sales before some variants of its compact Model 3 sedan lose U.S. federal tax credits in 2024.

That helped it post a growth of 11% over the immediately previous quarter and higher than estimates of 473,253, according to 14 analysts polled by LSEG.

It made a record 494,989 vehicles in the quarter after the third quarter was beset by a production halt to upgrade assembly lines, taking total production in 2023 to 1.85 million units.

Tesla shares were flat in a broadly weaker market.

“Tesla is sticking to their guns and delivery numbers being up 38%, that’s not the 40% that CEO Elon Musk liked to see but it’s much, much, much better than domestic U.S. car companies,” said Gary Bradshaw, portfolio manager at Tesla shareholder Hodges Capital.

Smaller rival Rivian also reported deliveries on Tuesday, with the company missing market estimates amid a broader pullback in EV demand.

The weakness has led U.S. automakers including Ford and General Motors to become more cautious about their EV production capacity plans.

Tesla is facing scrutiny from regulators over its self-driving technology with the company recalling more than 2 million vehicles last month to install new safeguards in its Autopilot advanced driver-assistance system, after a federal safety regulator cited safety concerns.

Consumer Reports — an influential U.S. non-profit group that conducts extensive reviews of cars, kitchen appliances and other goods — said its preliminary evaluation suggests the software update to fix issues were not sufficient and did not go far enough to prevent misuse and driver inattention.

TAX CREDITS

Some analysts said Tesla could have to continue the price cuts it started in January last year to maintain demand, after the end of the tax incentives under the Inflation Reduction Act (IRA) brought forward sales into the fourth quarter.

“Tesla may have to cut prices further, especially for a vehicle like the versions of the Model 3 that lost their tax credit,” said Seth Goldstein, equity strategist at Morningstar.

The rear-wheel drive and long-range variants of Tesla’s Model 3 no longer have federal tax credits of $7,500 this year as updated requirements on battery material sourcing kick in, under the IRA.

Goldstein, however, said that most of the price cuts were in response to higher interest rates by the U.S. Federal Reserve so Tesla may maintain prices if borrowing costs start coming down.

Model 3 cars and Model Y sports utility vehicles accounted for 461,538 deliveries in the quarter, while Tesla handed over about 23,000 units of its other models.

Tesla did not disclose if the deliveries included the newly launched Cybertruck.

(Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)

WASHINGTON (Reuters) -Harvard President Claudine Gay has resigned, the Harvard Crimson student newspaper reported on Tuesday, after she and other presidents of Ivy League schools were widely criticized for their congressional testimony about antisemitism on campus.

Gay’s tenure was the shortest in Harvard’s history, the newspaper said, and followed increasing pressure for her resignation last month, after University of Pennsylvania President Liz Magill stepped down.

Gay, Magill and Massachusetts Institute of Technology President Sally Kornbluth testified before a U.S. House of Representatives committee on Dec. 5 about a rise in antisemitism on college campuses following the outbreak of the Israel-Hamas war in October.

The trio declined to give a definitive “yes” or “no” answer to Republican Representative Elise Stefanik’s question as to whether calling for the genocide of Jews would violate their schools’ codes of conduct regarding bullying and harassment, saying they had to balance it against free speech protections.

More than 70 U.S. lawmakers signed onto a letter demanding that the governing boards of the three universities remove the presidents, citing dissatisfaction with their testimony.

However, Gay received support from some of her colleagues at Harvard. Several hundred faculty members last month signed a petition asking school administrators to not bend to political pressure to fire the school’s president over her testimony.

Gay has also been hit with accusations of plagiarism. She planned to submit three corrections to her 1997 dissertation after a committee investigating plagiarism allegations against her found that she had made citation errors, a university spokesperson said.

(Reporting by Doina Chiacu; editing by Susan Heavey and Jonathan Oatis)

By Laila Bassam, Nidal al-Mughrabi and Arafat Barbakh

BEIRUT/CAIRO/GAZA (Reuters) – Israel killed Hamas deputy leader Saleh al-Arouri in a drone strike in Lebanon’s capital Beirut on Tuesday, Lebanese and Palestinian security sources said, as its forces kept pummelling parts of Gaza, vowing further “high-intensity” warfare against the Islamist militant group in the enclave.

Hamas’ Al Aqsa Radio and Lebanon’s pro-Iranian Mayadeen TV confirmed word from security sources that Arouri, a member of the Palestinian Islamist movement’s politburo based abroad and a co-founder of Hamas’ military wing, the Qassam Brigades, had been killed when a drone struck a Hamas office in south Beirut.

In all, the drone attack killed six people in the city’s southern suburb of Daliyeh, the Lebanese state news agency reported earlier, underlining the risk of the Israel-Hamas war spreading well beyond the Gaza Strip.

Lebanon’s heavily armed Hezbollah group, a Hamas ally, has been exchanging near-daily fire with Israel across Lebanon’s southern border since the Gaza war erupted in early October.

Lebanon’s caretaker prime minister Najib Mikati condemned the drone blast as a “new Israeli crime” and said it was an attempt to pull Lebanon into war.

In response to questions from Reuters, the Israeli military said it does not respond to reports in the foreign media.

Mark Regev, an adviser to the Israelii prime minister, said in an interview with MSNBC TV that Israel “has not taken responsibility for this attack. But whoever did it, it must be clear – this was not an attack on the Lebanese state … Whoever did this did a surgical strike against the Hamas leadership”.

Israel had accused Arouri of supervising and ordering Hamas attacks in the Israel-occupied West Bank in support of militants fighting Israel’s devastating air and ground offensive in Gaza.

“I am waiting for martyrdom (death) and I think I have lived too long,” Arouri said in August 2023, alluding to Israeli threats to eliminate Hamas leaders whether in Gaza or abroad.

The war was triggered by a shock cross-border Hamas assault on Israeli towns on Oct. 7 that Israel says killed 1,200 people with some 240 hostages spirited back to Gaza – the bloodiest single day in the Jewish state’s 75-year history.

The Gaza health ministry said 207 people had been killed in the past 24 hours, bringing the total recorded Palestinian death toll to 22,185 in nearly three months of war in Gaza, the most lethal chapter of the decades-long Israel-Palestinian conflict.

Hundreds of Palestinians took to the streets of Ramallah in the West Bank to condemn Arouri’s killing, chanting, “Revenge, revenge, Qassam!”

Israeli Defence Minister Yoav Gallant said operations around Khan Younis, southern Gaza’s main city, concentrated on areas above the tunnel network where Hamas leaders were believed to be hiding.

“We are reaching them all ways. There already is engagement and there are (Israeli) hostages there too, sadly,” he told troops in Gaza in footage shown on Israeli television.

“This will continue as high-intensity efforts in the heart of Khan Younis,” he said.

Civilian casualties have mounted in south Gaza as the brunt of Israel’s offensive has shifted there from the north. Israel says it tries to avoid harm to civilians but blames Hamas for embedding fighters among them, an accusation the militant group denies.

The United States, Israel’s main supporter, has been urging it to rein in its air and ground blitz, which has demolished vast tracts of densely populated Gaza, in favour of more targeted strikes focusing on Hamas leaders.

Israel has announced plans to pull back some troops, hinting at a new phase in the war amid a rising global outcry over the plight of Gaza civilians, although also warned its offensive has many months to run.

Israeli bombardments have engulfed Gaza’s 2.3 million residents in a humanitarian disaster in which thousands have been left destitute and threatened by famine due to a lack of food supplies.

HAMAS RESPONSE TO CEASEFIRE PROPOSAL

Shortly before Arouri’s killing, Hamas’ paramount leader Ismail Haniyeh, who is also based outside Gaza, said the movement had delivered its response to an Egyptian-Qatari ceasefire proposal.

He reiterated that Hamas’ conditions entailed “a complete cessation” of Israel’s offensive in exchange for further releases of hostages.

Israel believes 129 hostages remain in Gaza after some were released during a brief truce in late November and others were killed during air strikes and rescue or escape attempts.

Israel has vowed not to cease fighting until it has wiped out Hamas but it is unclear what it plans to do with the enclave should it succeed, and where that leaves the prospect of an independent Palestinian state.

Gaza residents said Israeli warplanes and tanks stepped up bombardments of eastern and northern districts of Khan Younis, where tens of thousands of displaced Palestinians have sought refuge after being forced to flee their homes elsewhere.

In separate statements, Hamas and its Islamic Jihad allies said they fired mortar bombs and anti-tank rockets at Israeli ground forces in Khan Younis and were preventing them advancing to its western area. Israel made no comment on these reports.

In the Gaza Strip’s north, Gallant said, Israel had destroyed 12 Hamas regiments and only a few thousand militants remained out of 15,000-18,000 that had been based in the area. Others had fled to the south, he said.

“The significance, tactically, operationally, is that in this (northern) area there will be attacks, entering and manoeuvring, special operations,” said Gallant. “This is to exhaust the enemy, kill it and control the territory.”

Israel said on Tuesday its forces had also killed dozens of Hamas militants in Gaza’s north in the past day. In addition, Palestinian residents said, Israeli tanks had shelled parts of the Al-Bureij refugee camp in the central area of the enclave.”In the Jabalia area (near Gaza City), troops killed dozens of terrorists, among them those who attempted to plant explosive devices, others who operated drones and those who were armed identified driving toward the forces,” the Israeli military said in its latest daily briefing.

(Reporting by Laila Bassam in Beirut, Nidal al-Mughrabi in Cairo, Arafat Barbakh in Gazaq, Maayan Lubell and Dan Williams in Jerusalem; Additional reporting by Doina Chiacu in Washington; writing by Angus MacSwan and Mark Heinrich; editing by Gareth Jones and Tomasz Janowski)

By Brendan O’Brien

(Reuters) – A suspect was arrested early on Tuesday after breaking into the Colorado Supreme Court building in Denver and opening fire at responding police officers, local media reported, citing authorities.

Shortly after 1 a.m. local time, police officers were called to the Ralph L. Carr Colorado Judicial Center in downtown Denver. Inside, they found a suspect who then opened fire at them, a spokesperson with the Denver Police Department told local ABC news affiliate Denver 7.

Responding officers did not fire back. The suspect, who was not identified, was taken into custody some two hours after officers arrived at the scene, the news station reported.

The Denver Police Department did not immediately respond to requests for comment. The suspect’s motive for the break-in was unclear.

The Colorado Supreme Court has been the center of a legal battle which has garnered national attention after it disqualified former President Donald Trump from the state’s Republican primary ballot for his role in the Jan. 6, 2021, attack on the U.S. Capitol by his supporters.

The court ruled that Trump was barred by a U.S. constitutional provision that prohibits anyone who “engaged in insurrection or rebellion” from holding public office. Last week, the Colorado Republican Party asked the U.S. Supreme Court to intervene in the case.

Authorities have said nothing about any possible connection between the break-in and the Trump case.

During Tuesday’s incident, an officer discovered a small fire had been extinguished by the building’s sprinkler system during the incident. Police did not say how the fire started or what was burning. They also did not disclosed how the suspect entered the building.

No one was hurt during the incident, Denver 7 reported.

(Reporting by Brendan O’Brien in Chicago, Editing by Nick Zieminski)

By Curtis Williams

HOUSTON (Reuters) – U.S. liquefied natural gas exports hit monthly and annual record highs in December, tanker tracking data showed, with analysts saying it positioned the United States to leapfrog Qatar and Australia to become the largest exporter of LNG in 2023.

The U.S. was the stand out in global LNG supply growth in 2023, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group of the rise to 8.6 million metric tons leaving U.S. terminals in December.

Qatar was the largest LNG exporter in 2022 and Australia the second-largest that year, U.S. government data showed.

“U.S. record production was driven by two factors: the return of Freeport LNG to full service, which added 6 MT and the full-year output of Venture Global LNG’s Calcasieu Pass facility that added 3 MT more than in 2022,” Munton said.

Full year exports from the U.S. rose 14.7% to 88.9 million metric tons (MT) driven largely by the return to full production of the Freeport LNG plant that had suffered a fire in 2022, and as others increased processing efficiency, LSEG data showed.

Shipments compare to 77.5 million metric tons in 2022, the data from the financial information provider showed.

Europe remained the main destination for U.S. LNG exports in December, with 5.43 MT, or just over 61%. In November, 68% of U.S. LNG exports were to Europe, LSEG data showed.

The month-over-month drop reflected warmer than normal temperatures in Europe and elevated storage levels, analysts at consultants Rystad Energy said. European gas storage was about 97% full at the beginning of December, it reported.

Asia was the second largest export market for U.S. LNG in December, taking 2.29 MT, or 26.6%, of exports, up from 18.5% in November. U.S. exports to Latin America were half a million metric tons, or just under 6% of total exports, LSEG ship tracking data showed.

Natural gas flows to the seven big U.S. LNG export plants have climbed an average 14.9 billion cubic feet per day (bcfd) so far in January, up from a monthly record of 14.7 bcfd in December. That topped the prior all-time monthly high of 4.3 bcfd in November, LSEG data showed.

U.S. gas was trading Tuesday morning at $2.55 per million British thermal units (mmBtu) at the Henry Hub benchmark in Louisiana, $9.81 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $11.52 per mmBtu at the Japan Korea Marker (JKM) in Asia. [NG/EU]

(Reporting by Curtis Williams in Houston; additional reporting by Scott DiSavino in New York; editing by Alexander Smith)

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. construction spending rose less than expected in November amid a decline in outlays on public projects, but data for the prior month was revised sharply higher suggesting underlying strength in the sector.

Despite coming below expectations, the report from the Commerce Department on Tuesday added to a recent raft of data on the labor market, consumer spending and confidence in suggesting that the economy regained its poise after appearing to stumble at the start of the fourth quarter.

Construction activity is being underpinned by the new single-family housing segment, thanks to an acute shortage of previously owned homes on the market. A policy by President Joe Biden’s administration to bring semiconductor manufacturing back to the United States is also boosting the construction of factories, helping the keep the economy afloat.

“Construction activity is one reason the Federal Reserve rate hikes have not brought the economy to its knees like the economic models from other business cycles had forecasted,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

“There’s money for new industrial building projects with the only risk being there is a severe nationwide shortage of construction workers.”

Construction spending increased 0.4%. Data for October was revised up to show construction spending surging 1.2% instead of gaining 0.6% as previously reported. Economists polled by Reuters had forecast construction spending rising 0.6%.

Construction spending shot up 11.3% on a year-on-year basis in November. Spending on private construction projects increased 0.7% in November after rising 1.2% in October.

Investment in residential construction advanced 1.1% after rising 2.0% in the prior month. Outlays on new single-family construction projects jumped 2.9%. With the rate on the popular 30-year fixed mortgage falling further below 7%, single-family homebuilding could surge in 2024.

Strong activity in this housing market segment helped to end nine straight quarters of decline in residential investment in the third quarter. Economists expect housing to have contributed to gross domestic product in the fourth quarter.

The Atlanta Federal Reserve is currently estimating GDP growth rising at a 2.3% annualized rate in the last quarter of 2023. The economy grew at a 4.9% pace in the third quarter.

ECONOMY EXPANDING

The government is scheduled to publish its advance estimate of fourth-quarter GDP later this month. The economy has continued to expand despite 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022.

The U.S. central bank last month held its policy rate steady at the current 5.25-5.50% range and policymakers signaled in new economic projections that the historic monetary policy tightening engineered over the last two years is at an end and lower borrowing costs are coming in 2024.

Stocks on Wall Street were mostly lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

“Investors should expect homebuilders to grow their business this year as the residential real estate market benefits from lower rates in the upcoming months,” said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina. “Given the construction activity, we expect residential investment contributed to economic growth in the fourth quarter.”

Outlays on multi-family housing projects edged up 0.1% in November. Momentum is fading amid a large stock of multi-family housing under construction. The rental vacancy rate also jumped to its highest level in 2-1/2 years in the third quarter.

Outlays on private non-residential structures like factories rose 0.2% in November. Spending on manufacturing construction projects increased 0.5% after accelerating 2.7% in October.

Bernard Yaros, lead U.S. economist at Oxford Economics, said while this segment of private fixed investment was cooling, he did not “anticipate an outright contraction in 2024, as federal tax credits aimed at expanding the nation’s domestic productive capacity in semiconductor manufacturing and green energy production are set to ramp up.”

Spending on public construction projects fell 0.7% after increasing 1.3% in October. State and local government spending declined 0.5% while outlays on federal government projects tumbled 3.1%.

While construction spending is holding its own despite the higher borrowing costs, manufacturing continues to struggle.

S&P Global said on Tuesday that its manufacturing PMI fell to a reading of 47.9 in December amid a steep decline in new orders. That was revised down from the preliminary reading of 48.2 and lower than 49.4 in November.

A reading below 50 indicates contraction in manufacturing, which accounts for 10.3% of the economy.

The decline in factory activity was mirrored across the globe, with manufacturing in the euro area contracting for an 18th straight month and Asia’s manufacturing powerhouses taking a hit due to China’s patchy economic recovery.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

By Alun John

LONDON (Reuters) -The dollar rose on the first trading day of the year, supported by higher U.S. yields as attention turned to U.S. jobs data and European inflation numbers this week which may provide clues on central banks’ next moves.

The dollar index, which measures the U.S. currency against six counterparts, was last up 0.67% at 102.05, on track for its biggest daily percentage gain since October.

It fell 2% in 2023, snapping two years of gains due to investor expectations that the U.S. Federal Reserve will cut rates significantly this year while the economy remains resilient.

On the other side of the dollar’s ascent was the euro which dipped 0.74% as traders digested data showing euro zone factory activity contracted in December for an 18th straight month and sterling, off 0.64% at $1.2657.

The dollar also climbed against the Japanese yen, rising 0.96% to 142.16 yen.

Underpinning the dollar’s gains was a move higher in U.S. yields. The benchmark 10-year yield was last up 10 basis points at 3.963%. That would be its biggest daily increase in over three weeks, and comes after a 100 basis point drop in November and December.

Investors have a fairly busy week ahead with a slew of economic data including European inflation data and U.S. data on job openings and non-farm payrolls, which will help shape market expectations regarding monetary policy moves from the Fed and European Central Bank.

“Primary corporate issuance ($60 bn estimated in the US alone) could support this mean reversion in yields. Then FOMC minutes and payrolls will set the tone, and fine tune expectations for Jan and March FOMC meetings,” said Kenneth Broux senior strategist FX and rates at Societe Generale.

Minutes from the most recent meeting of the Fed’s rate setting Federal Open Market Committee in December are scheduled for release on Wednesday and will provide further insight into the central bankers’ thinking.

Markets are now pricing in an 82% chance of interest rate cuts from the Fed to start from March, according to CME FedWatch tool, with over 150 basis points (bps) of easing anticipated this year.

Traders were also processing higher oil prices, with Brent up over 2%, on fears of potential disruption to Middle East supply after the latest attack on a container ship in the Red Sea. [O/R]

That, however, could not help currencies of oil exporting hold off the stronger greenback. The dollar climbed 0.4% on the Norwegian crown and 0.2% on the Canadian dollar while the Australian dollar dipped 0.33%.

The euro did dip around 0.4% on both the Aussie and the Loonie however.

The crypto world started the year with a bang, with bitcoin touching a 21-month peak of $45,532 on rising expectations that the U.S. Securities and Exchange Commission will soon approve exchange-traded spot bitcoin funds.

(Reporting by Ankur Banerjee in Singapore and Alun John in London; editing by Stephen Coates, Jason Neely and Chizu Nomiyama)