By Sudarshan Varadhan

(Reuters) -Oil prices rose on Wednesday as China’s factory output and retail sales beat expectations, a day after the International Energy Agency (IEA) raised its oil demand growth forecast for this year.

Brent futures rose 20 cents, or 0.2%, to $82.67 a barrel by 0427 GMT, while U.S. West Texas Intermediate (WTI) crude rose 15 cents, also 0.2%, to $78.28.

China’s October economic activity perked up as industrial output grew at a faster pace and retail sales growth beat expectations, an encouraging sign for the world’s second-largest economy.

The IEA joined the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in raising oil demand growth forecast for this year, despite projections of slower economic growth in many major countries.

“It (IEA) sees oil demand remaining healthy. It raised its forecast due to better-than-expected consumption in China,” ANZ Research said in a note on Wednesday.

Expectations that the U.S. Federal Reserve could cut interest rates next spring sent the U.S. dollar down to a two-and-a-half-month low against a basket of other currencies. A weaker dollar can boost oil demand by making crude cheaper for buyers using other currencies.

The U.S. Energy Information Administration (EIA) will release its first oil inventory report in two weeks on Wednesday. EIA did not release a storage report last week due to a systems upgrade. [EIA/S]

For the week ended Nov. 10, analysts forecast energy firms added about 1.8 million barrels of crude into U.S. stockpiles, according to a Reuters poll, in line with from the American Petroleum Institute out Tuesday.

(Reporting by Sudarshan Varadhan and Laura Sanicola; Editing by Miral Fahmy and Raju Gopalakrishnan)

By David Morgan and Moira Warburton

WASHINGTON (Reuters) – The U.S. House of Representatives on Tuesday passed a temporary spending bill that would avert a government shutdown, with broad support from lawmakers in both parties.

The legislation, which would extend government funding through mid-January, now heads to the Senate, where Democratic and Republican leaders have voiced support.

To prevent a shutdown, the Senate and Republican-controlled House must enact legislation that President Joe Biden can sign into law before current funding for federal agencies expires at midnight on Friday.

The 336-95 vote was a victory for House Speaker Mike Johnson, who faced down opposition from some of his fellow Republicans, in the first consequential vote of his tenure.

Johnson was elected to the post less than three weeks ago, following weeks of tumult that left the chamber without a leader. With a slim 221-213 majority, he can afford to lose no more than three Republican votes on legislation that Democrats oppose.

Senate Majority Leader Chuck Schumer, a Democrat, said in a statement on Tuesday night after the vote that he was pleased the bill passed “with a strong bipartisan vote,” adding that he would work with his Senate Republican counterpart, Mitch McConnell, to pass it “as soon as possible.”

The stopgap spending bill would extend government funding at current levels into 2024, giving lawmakers more time to craft the detailed spending bills that cover everything from the military to scientific research.

Some Republicans on the party’s right flank said they were frustrated that it did not include the steep spending cuts and border-security measures they sought.

The bill passed with 209 Democratic and 127 Republican votes, while 93 Republicans and two Democrats voted against it.

Johnson’s predecessor as speaker, Kevin McCarthy, was ousted by a handful of Republicans after a similar vote in September that relied on Democratic votes to avert a shutdown.

But hardline conservatives said they were not turning against Johnson. “We don’t support it. But we do support him,” said Representative Bob Good.

Other Republicans said it was better than other options.

“This isn’t ideal,” Republican Representative Mike Garcia said. “But a shutdown is a far worse world to be in.”

Johnson’s bill would extend funding for military construction, veterans benefits, transportation, housing, urban development, agriculture, the Food and Drug Administration and energy and water programs through Jan. 19. Funding for all other federal operations – including defense – would expire on Feb. 2.

Congress is in its third fiscal standoff this year, following a months-long spring impasse over the more-than-$31 trillion in U.S. debt, which brought the federal government to the brink of default.

The ongoing partisan gridlock led Moody’s on Friday to lower its credit rating outlook on the U.S. to “negative” from “stable,” as it noted that high interest rates would continue to drive borrowing costs higher.

(Reporting by David Morgan; Additional reporting by Moira Warburton, Richard Cowan, Katharine Jackson and Susan Heavey; Editing by Andy Sullivan, Scott Malone, David Gregorio and Lisa Shumaker)

MEXICO CITY (Reuters) -Toymaker Lego will invest more than $200 million to expand its plant in the northern Mexican state of Nuevo Leon, the state’s government said on Tuesday in a statement.

A government spokesperson later clarified that the final figure was $205 million. The statement had initially cited two figures for the investment: $205 million and $250 million.

Lego did not immediately respond to a request for comment.

The expanded operations are due to start up in May 2025, Nuevo Leon said in a statement.

(Reporting by Kylie Madry; Editing by Tom Hogue)

By Caroline Valetkevitch

NEW YORK (Reuters) – The S&P 500 and Nasdaq posted their biggest daily percentage gains since April 27 on Tuesday as softer-than-expected inflation data supported the view that the Federal Reserve may be done raising interest rates.

The small-cap Russell 2000 index jumped 5.4%, outperforming the broader market, while the rate-sensitive S&P 500 real estate sector gained 5.3% and utilities rose 3.9%. All three registered their biggest daily percentage increases since Nov. 10, 2022.

Data showed U.S. consumer prices were unchanged in October as Americans paid less for gasoline, and the annual rise in underlying inflation was the smallest in two years. In the 12 months through October, the CPI climbed 3.2% – below economists’ estimates – after rising 3.7% in September.

“The clear catalyst was the softer-than-expected inflation report,” said Craig Fehr, head of investment strategy at Edward Jones.

“Getting some softer inflation readings provided markets some additional comfort that the Fed isn’t going to have to put in place a significant amount of additional restrictive policy to continue to bring consumer prices lower.”

Since March 2022, the Fed has hiked its policy rate 525 basis points to combat high inflation.

The Dow Jones Industrial Average rose 489.83 points, or 1.43%, to 34,827.7; the S&P 500 gained 84.15 points, or 1.91%, at 4,495.7; and the Nasdaq Composite added 326.64 points, or 2.37%, at 14,094.38.

Also, the KBW regional banking index rose 7.5% in its biggest daily percentage rise since January 2021.

“It’s difficult with higher rates with the commercial real estate on their balance sheets,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

Expectations on the Fed cutting rates next year also shifted following the day’s data. U.S. rate futures on Tuesday priced in a 65% chance of a rate cut in May, compared with 34% late on Monday, according to the CME’s FedWatch tool.

Investors also focused on negotiations by U.S. lawmakers over a funding bill as they face an end-of-week deadline to fund the federal government.

Among individual stocks, Snap Inc shares jumped 7.5% following news that Amazon.com will allow Snapchat users in the United States to buy some products listed on the ecommerce company directly from the social media app.

Home Depot gained 5.4% after the U.S. home improvement chain beat quarterly profit estimates.

Volume on U.S. exchanges was 12.62 billion shares, compared with the 11.09 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered decliners on the NYSE by a 9.80-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favored advancers.

The S&P 500 posted 45 new 52-week highs and no new lows; the Nasdaq Composite recorded 106 new highs and 139 new lows.

(Reporting by Caroline Valetkevitch; additional reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; additional reporting by Ankika Biswas; Editing by Shinjini Ganguli and Richard Chang)

By David Shepardson

WASHINGTON (Reuters) – The U.S. Postal Service on Tuesday reported a $6.5 billion net loss for the 12 months ending Sept. 30 with revenue down 0.4% to $78.2 billion as first-class mail fell to the lowest volume since 1968.

The Postal Service said results were significantly affected by the impact of inflation on operating expenses. The agency has been aggressively hiking stamp prices and is in the middle of a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade.

Postmaster General Louis DeJoy said USPS is “addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies.”

First-class mail volume fell 6.1% in 2023 to 46 million pieces and is down 53% since 2006, but revenue increased by $515 million because of higher stamp prices.

The net loss was also impacted by accounting for its underfunded retirements caused by actuarial revaluation and discount rate changes. USPS, which has 640,000 employees, said it had 28 million less work hours in the 2023 budget year but reported a 2.6% increase in employee compensation and benefits costs to $52.8 billion.

Total operating expenses were $85.4 billion for the year, an increase of $5.8 billion, or 7.3%. USPS said to preserve liquidity it did not make the full $5.1 billion in retirement plan payments due.

In April 2022, U.S. President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade.

Last month, USPS said it was seeking approval to raise the price of first-class stamps to 68 cents from 66 cents effective Jan. 21.

First-class mail, used by most people to send letters and pay bills, is the highest revenue-generating mail class, accounting for $24.5 billion, or 31% of USPS 2023 revenue.

(Reporting by David Shepardson; Editing by Chris Reese and Aurora Ellis)

By Catarina Demony

LISBON (Reuters) – Chelsea Manning, a former U.S. army analyst and WikiLeaks source, said on Tuesday that technology tools can be more efficient in protecting people’s privacy and information than legal or regulatory mechanisms that risk being tampered with.

“I believe very strongly that there are technical means of protecting information and those are more reliable,” Manning told Reuters in an interview during Europe’s largest technology conference, the Web Summit, in Lisbon, Portugal.

Manning was convicted by court-martial in 2013 of espionage and other offences for leaking an enormous trove of military reports, videos, diplomatic cables and battlefield accounts to online media publisher WikiLeaks while she was an intelligence analyst in Iraq.

Former President Barack Obama later reduced Manning’s sentence, and she was released in May 2017.

Manning currently works as a security consultant at Nym Technologies, a network that aims to prevent governments and companies from tracking people’s online activities.

The 35-year-old said that “technical means”, such as cryptography, ​​data obfuscation and end-to-end encrypted messaging platforms such as Signal, are ways to ensure privacy and a level of anonymity online.

Legal or regulatory mechanisms “can change on a whim … legislators can be lobbied … rules can be reinterpreted by courts and burdens of proof are very hard to meet”, Manning said.

“Regulation can set the tone of what the standards should be,” she said. “(But) actual math and actual technology … are much easier to control and have much more guarantees.”

‘SIDESTEPPING ETHICS’

Artificial intelligence (AI) is the big topic at this year’s Web Summit, which draws tens of thousands of participants and high-level speakers from global tech companies, as well as politicians.

AI is transforming the world and can be applied in diverse sectors, from improving the early detection of diseases to sorting out data and solving complex problems, but there are also concerns around it.

Some tech and political leaders have warned that AI poses huge risks if not controlled, ranging from eroding consumer privacy to danger to humans and causing a global catastrophe.

Manning, who herself has worked with and uses the technology, said that “damage has already been done” to some AI training models and that it will be “very hard to undo.”

“These companies have been overlooking and sidestepping the ethics of these things knowingly in many cases for many years,” she said. “The best thing we can do about it now is to try to address it.”

Earlier this month, at the UK’s artificial intelligence summit, leading AI developers agreed to work with governments to test new frontier models before they are released to help manage the risks of the rapidly developing technology.

(Reporting by Catarina Demony; Additional reporting by Supantha Mukherjee; Editing by Aurora Ellis)

(Reuters) – Airbnb said on Tuesday it has acquired GamePlanner.AI, a 12-person startup, for an undisclosed sum, amid rapid adoption of artificial intelligence that has taken the tech world by storm and pushed many companies to explore its uses.

GamePlanner.AI was co-founded by Adam Cheyer, who was also one of the founders of Apple’s voice assistant Siri.

The startup will add to Airbnb’s existing set of AI technologies that include large language models, computer vision models and machine learning.

“AI will rapidly alter our world more than any other technology in our lifetime,” Airbnb CEO Brian Chesky said in the statement.

CNBC, citing sources familiar with the matter, reported that the deal is valued at just under $200 million.

Airbnb declined to share any additional details of the deal.

Other travel companies, including Booking.com and Expedia have also made efforts to integrate AI to their existing technologies in an attempt to enhance customer-booking experiences and create more suitable itineraries and suggestions.

(Reporting by Priyamvada C in Bengaluru; Editing by Shilpi Majumdar)

By Sruthi Shankar and Amruta Khandekar

(Reuters) – Wall Street’s main stock indexes climbed on Tuesday as cooler-than-expected inflation data boosted expectations that the Federal Reserve was done raising interest rates and could start cutting them next year.

Both the S&P 500 and the tech-heavy Nasdaq were at a two-month high after data showed that U.S. consumer prices were unchanged in October amid lower gasoline prices.

In the 12 months through October, the CPI climbed 3.2% after rising 3.7% in September, while economists polled by Reuters had forecast a 3.3% gain on a year-on-year basis.

Core prices, which exclude the volatile food and energy components, rose 4.0% compared to economists’ estimate of a 4.1% increase.

“We’re happy to see both headline and core CPI come in lower than expected. It’s telling us that the Fed is done, there’s nothing left for it to do here,” said Thomas Hayes, chairman at hedge fund Great Hill Capital at New York.

“This is what the Fed was looking for, slowing inflation, slowing labor market and the economy’s holding up at the same time.”

Following the data, traders erased bets the Fed will raise borrowing costs any further and piled into bets on rate cuts starting by May.

U.S. Treasury yields dropped, with the two-year yield, which best reflects short-term interest rate expectations, sliding to two-week lows. [US/]

That in turn lifted megacap-growth stocks such as Nvidia, Alphabet, Amazon.com and Tesla up between 1.7% and 5% in early trading.

The small-cap Russell 2000 index jumped 3.3%.

Wall Street’s main indexes have seen a strong rebound in November on expectations that U.S. interest rates were near their peak, even as Fed Chair Jerome Powell last week left the door open to further tightening.

Fed Vice Chair for Supervision Michael Barr is set to testify before the Senate Banking Committee, while investors will parse comments from Cleveland Fed President Loretta Mester and Chicago Fed chief Austan Goolsbee later in the day.

Focus is also on negotiations by U.S. lawmakers over a funding bill, as lawmakers face an end-of-week deadline to fund the federal government.

U.S. House of Representatives Speaker Mike Johnson said on Tuesday he thinks the House will pass a short-term spending bill to avert a partial government shutdown beginning on Saturday.

At 9:36 a.m. ET, the Dow Jones Industrial Average was up 330.19 points, or 0.96%, at 34,668.06, the S&P 500 was up 60.77 points, or 1.38%, at 4,472.32, and the Nasdaq Composite was up 256.49 points, or 1.86%, at 14,024.23.

Snap Inc shares jumped 9.2% following news that Amazon.com will allow Snapchat users in the United States to buy some products listed on the ecommerce company directly from the social media app.

Home Depot gained 5.3% after the U.S. home improvement chain beat quarterly profit estimates.

Fisker slid 17.3% after the electric-vehicle startup slashed its 2023 production forecast.

Advancing issues outnumbered decliners by a 13.89-to-1 ratio on the NYSE and by a 5.44-to-1 ratio on the Nasdaq.

The S&P index recorded 31 new 52-week highs and no new lows, while the Nasdaq recorded 59 new highs and 45 new lows.

(Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; additional reporting by Ankika Biswas; Editing by Shinjini Ganguli)

By Sruthi Shankar and Amruta Khandekar

(Reuters) – The main U.S. stock indexes were poised for strong opening gains on Tuesday after cooler-than-expected inflation data boosted expectations that the Federal Reserve was done raising interest rates.

Data showed that U.S. consumer prices were unchanged in October amid lower gasoline prices, and underlying inflation showed signs of slowing.

In the 12 months through October, the CPI climbed 3.2% after rising 3.7% in September, while economists polled by Reuters had forecast a 3.3% gain on a year-on-year basis.

Core prices, which exclude the volatile food and energy components, rose 4.0%, below economists’ estimate of a 4.1% increase.

“We’re happy to see both headline and core CPI come in lower than expected. It’s telling us that the Fed is done, there’s nothing left for it to do here,” said Thomas Hayes, chairman at hedge fund Great Hill Capital at New York.

“You have to keep an eye on the potential for deflation, but right now this is Goldilocks. This is what the Fed was looking for, slowing inflation, slowing labor market and the economy’s holding up at the same time.”

Following the data, traders erased bets the Fed will raise borrowing costs any further and piled into bets on rate cuts starting by May.

U.S. Treasury yields dropped after the data, with the two-year yield, which best reflects short-term interest rate expectations, sliding to two-week lows of 4.872%. [US/]

That in turn lifted megacap-growth stocks such as Nvidia, Alphabet, Amazon.com and Tesla up between 1.8% and 4.3% in premarket trading.

Wall Street’s main indexes have seen a strong rebound in November, driven by a better-than-expected earnings season and expectations that U.S. interest rates were near their peak.

The gains came even as Fed Chair Jerome Powell last week left the door open to further policy tightening should progress toward the Fed’s 2% inflation goal stall out.

Fed Vice Chair for Supervision Michael Barr is set to testify before the Senate Banking Committee, while investors will parse comments from Cleveland Fed President Loretta Mester and Chicago Fed chief Austan Goolsbee later in the day.

Focus is also on negotiations by U.S. lawmakers over a funding bill, as lawmakers face an end-of-week deadline to fund the federal government. U.S. House of Representatives Speaker Mike Johnson said on Tuesday he thinks the House will pass a short-term spending bill to avert a partial government shutdown beginning on Saturday.

At 8:53 a.m. ET, Dow e-minis were up 390 points, or 1.13%, S&P 500 e-minis were up 64.5 points, or 1.46%, and Nasdaq 100 e-minis were up 287.25 points, or 1.85%.

Snap Inc shares rose 6.6% following news that Amazon.com will allow Snapchat users in the United States to buy some products listed on the ecommerce company directly from the social media app.

Home Depot gained 2.2% after the U.S. home improvement chain beat quarterly profit estimates and posted a lower-than-expected drop in comparable sales as it tapped into a switch by customers to small-scale projects and essential repair work.

Fisker slid 16.8% after the electric-vehicle startup slashed its 2023 production forecast as it struggles to ramp up deliveries, and flagged weakness in internal controls over financial reporting.

(Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; additional reporting by Ankika Biswas; Editing by Shinjini Ganguli)

(Reuters) – U.S. stock index futures extended gains on Tuesday as cooler-than-expected inflation data bolstered expectations that the Federal Reserve is done with its interest rate-hiking campaign.

The Labor Department’s report showed the consumer price index (CPI) rose 3.2% on an annual basis, compared to expectations of a 3.3% increase, according to economists polled by Reuters.

Core CPI, which excludes volatile food and energy costs, grew 4% year-on-year compared with forecasts of a 4.1% increase.

At 8:31 a.m. ET, Dow e-minis were up 327 points, or 0.95%, S&P 500 e-minis were up 55.5 points, or 1.25%, and Nasdaq 100 e-minis were up 249.5 points, or 1.6%.

(Reporting by Amruta Khandekar; Editing by Saumyadeb Chakrabarty)