North Carolina elections board orders new U.S. House election

By Gabriella Borter

(Reuters) – North Carolina’s elections board on Thursday unanimously ordered a new election for a U.S. House seat after officials said corruption surrounding absentee ballots tainted the results of last November’s vote.

The bipartisan board’s 5-0 decision came after Republican candidate Mark Harris requested a new vote, telling the panel that evidence of possible ballot fraud had undermined confidence in the election.

In the televised hearing, board Chairman Bob Cordle said “the corruption” and “absolute mess” with the election’s absentee ballots had cast doubt on the fairness of the contest.

“It certainly was a tainted election,” Cordle said ahead of the vote. “The people of North Carolina deserve a fair election.”

Harris’ request for a new vote came as a surprise. For months, he had said he should be declared the victor in the 9th Congressional District after he led Democrat Dan McCready by 905 votes out of 282,717 ballots cast on Nov. 6. Elections officials, however, had refused to certify him as the winner due to allegations of irregularities in the vote.

“Through the testimony I’ve listened to over the past three days, I believe a new election should be called,” Harris said at a hearing in Raleigh.

It was unclear whether Harris would run in the new race. He told the board he was recovering from an infection that led to sepsis and two strokes and he was not prepared for the “rigors” of the hearing.

During this week’s hearing, Harris’ son said he had warned his father of potential illegal activity in the election by one of his political operatives, Leslie McCrae Dowless.

North Carolina’s Democratic Party said the hearing had laid bare the Harris campaign’s “illegal scheme to steal an election.”

“This saga could only have ended in a new election,” the state Democrats said.

Harris’ statement came on the fourth day of a hearing on whether his campaign benefited from what state investigators called illegal election manipulation by Dowless.

Earlier on Thursday, Harris said he had known Dowless was going door to door on the candidate’s behalf to help voters obtain absentee ballots, a process that is legal. Harris said Dowless assured him he would not collect the ballots from the voters, which would violate state law.

But residents of at least two counties in the district said Dowless and his paid workers collected incomplete absentee ballots and, in some instances, falsely signed as witnesses and filled in votes for contests left blank, according to testimony at the hearing.

Harris campaign officials said they did not pay Dowless to do anything illegal, and Dowless maintained his innocence.

(Additional reporting by Andrew Hay; Editing by Colleen Jenkins, Dan Grebler and James Dalgleish)

U.S., North Korea to seek understanding on denuclearization at summit

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) – The United States and North Korea will seek a common understanding of what denuclearization means when President Donald Trump presses Kim Jong Un next week to give up all of the North’s nuclear weapons, U.S. officials said on Thursday.

Trump and Kim are set to meet in Vietnam for their second summit in an effort to thaw relations between the former foes and reduce one of the world’s biggest nuclear threats.

U.S. officials have downplayed expectations for the meeting, and Trump has made clear he does not expect it to be his last with Kim, a dictator he once derided as “little rocket man” but now considers a partner with whom he can work.

Critics have said Trump gave Kim too much simply by meeting with him in Singapore last year. That criticism may be levied again for the Vietnam summit.

But the U.S. officials said the United States remained focused on getting the North Korean leader to denuclearize, even if he had not made that decision himself so far.

“I don’t know if North Korea has made the choice yet to denuclearize, but the reason why we’re engaged in this is because we believe there is a possibility,” one official said.

The two sides have not agreed previously on what denuclearization means.

Kim agreed in Singapore to work toward the denuclearization of the Korean peninsula, which could be taken to include removal of the U.S. nuclear umbrella for South Korea and nuclear-capable forces, while the United States has been demanding that North Korea give up all of its nuclear and missile programs.

“It is ultimately about the denuclearization of North Korea. That was what was agreed between the two sides and that is the overriding goal that President Trump is seeking to achieve with this summit. This is an important step towards that ultimate goal,” the official said.

He said the United States would press for a freeze on all weapons of mass destruction and missile programs and a “roadmap” to set expectations for negotiations.

The two sides are not discussing the removal of U.S. troops from South Korea, however. The United States keeps some 28,500 troops in South Korea.

Asked whether Trump was open to withdrawing all U.S. troops from the Korean peninsula for a peace treaty that would formally end the war, a second official said that was “not the subject of discussions.”

The officials noted that punishing U.S. sanctions would remain in place to give North Korea an incentive to move.

Trump’s national security adviser John Bolton is traveling to South Korea for consultations with South Korean officials ahead of the Hanoi summit, a senior White House official said.

U.S. special representative for North Korea Stephen Biegun is already there, negotiating with North Korean officials ahead of the summit.

The two sides are seeking to build the goals outlined in a joint statement from the Singapore meeting to recast relations between the United States and North Korea, establish peace on the peninsula, denuclearize, and return the remains of those missing or killed in action during the Korean War.

(Additional reporting by David Brunnstrom and Susan Heavey; Editing by James Dalgleish)

Consumer Reports pushes carmakers on automatic emergency braking

By Nick Carey

DETROIT (Reuters) – Influential U.S. magazine Consumer Reports on Thursday turned up the pressure on automakers to include automatic emergency braking (AEB) as standard on new U.S. models by withholding its 2019 annual top vehicle picks from best-selling brands like General Motors Co’s Chevrolet.

“We’ve been pushing for this feature for a long time because it’s very good at preventing crashes,” Jake Fisher, Consumer Reports’ senior director of automotive testing, told Reuters. “We have telegraphed for some time that this was coming.”

Millions of prospective auto buyers consult the magazine’s rankings, which are based on road testing, reliability, safety and owner satisfaction scores.

A growing number of new vehicle models now include AEB as standard, including Subaru Corp’s Ascent, Consumer Reports’ 2019 top pick for the midsize SUV category.

Last year Chevrolet, GM’s best-selling brand, won top picks for its fully-electric compact Bolt sedan and its full-size Impala sedan.

GM, which constantly stresses it is aiming for “zero crashes, zero emissions and zero congestion,” did not respond to a request for comment.

This year’s top picks included several wins for Toyota Motor Corp, including for its full-size Avalon hybrid electric sedan and the Toyota Prius. Subaru won for its compact Forester SUV and its mid-size Ascent SUV.

Tesla Inc’s rollout of its mass-market Model 3 electric sedan hurt the brand’s overall standing, knocking it down 11 spots to No. 19 out of 33 brands ranked by Consumer Reports.

Fisher said Tesla’s ramp-up of production of the Model 3 had been accompanied by rising reports of problems with the car’s body, interior, windows and paint, though he added Model 3 owners said they love their vehicles despite reliability issues.

Those reliability issues mean that Consumer Reports no longer recommends the Model 3, Fisher said.

Subaru was ranked as Consumer Reports’ top car brand, followed by Hyundai Motor Co’s luxury Genesis then Volkswagen AG units Porsche and Audi in third and fourth place respectively. Toyota’s luxury Lexus brand ranked fifth.

GM’s Chevrolet brand was ranked 23rd, while the Cadillac brand ranked 26th and GMC 27th.

Ford Motor Co’s Ford brand ranked 20th and its Lincoln brand 8th, but its best-selling F-150 pickup truck was named best pickup.

Fiat Chrysler Automobiles NV’s Chrysler brand ranked 22nd, with its Dodge brand 25th and Jeep brand in 29th place.

The automaker’s Fiat unit finished last among 33 brands rated.

(Reporting By Nick Carey; Editing by Bernadette Baum)

EPA fines for polluters at lowest level in two decades, data shows

WASHINGTON (Reuters) – The U.S. Environmental Protection Agency issued $72 million in civil penalties to polluters last year, the lowest level in at least two decades when adjusted for inflation, according to an analysis of agency data.

Environmental advocates called the level of fines a symptom of the Trump administration’s pro-fossil-fuel agenda. The EPA rejected that assertion and said it was using “all the tools” at its disposal to deter pollution.

The analysis, conducted by President Barack Obama’s former EPA assistant administrator, Cynthia Giles, and first reported by the Washington Post, showed civil fines for polluters during 2018 at $72 million, the lowest level since at least 1994.

Over the previous 20 years, EPA had issued a wide range of fine totals, ranging from a low of $86 million in 2007 to over $6 billion during Obama’s final year in office – a massive outlier because of a settlement the EPA finalized with BP over its oil spill in the Gulf of Mexico.

The median level of the EPA’s annual fines during that period was about $155 million, according to the data, which Giles shared with Reuters on Thursday.

The Environmental Integrity Project, an advocacy group, blasted the EPA’s performance on enforcement under Republican President Donald Trump, saying it reflected the administration’s pro-fossil-fuel and de-regulation agenda.

Trump was elected partly on a promise to revive the U.S. coal industry and boost oil and gas drilling, and he has been working to undo Obama-era environmental protections.

“President Trump promised to reduce EPA to little tidbits during his campaign, so it should be no surprise to see enforcement of environmental laws he’s never liked decline on his watch,” Eric Schaeffer, executive director of the Environmental Integrity Project and a former director of civil enforcement at the EPA.

The EPA said it was not giving polluters any breaks, and cited a recent $305 million settlement with Fiat Chrysler over emissions violations.

“Let there be no mistake — EPA enforcement will continue to correct non-compliance using all the tools at its disposal, including imposing civil penalties to maintain a level playing field and deter future misconduct,” said Susan Bodine, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

(Reporting by Valerie Volcovici; Writing by Richard Valdmanis; Editing by Leslie Adler)

Delaware judge orders Papa John’s to turn over documents to founder

By Tom Hals

WILMINGTON, Del. (Reuters) – A Delaware judge said on Tuesday Papa John’s International Inc <PZZA.O> must turn over internal documents to the company’s founder who has been seeking to reassert control over the pizza delivery chain after he resigned as chairman in July.

John Schnatter, who owns about 30 percent of the company, has been seeking the documents to try to show the company was mismanaged and to determine if he was improperly pushed out.

The founder of the third-largest pizza delivery chain resigned in July following a Forbes story that he had used a racial slur on a media training conference call.

Schnatter said the comment was mischaracterized and since then he has battled the company in court.

On Tuesday, Chancellor Andre Bouchard of Delaware’s Court of Chancery ordered the company’s directors to turn over documents and communications, including text messages on personal devices, related to Schnatter’s firing. The order covered some messages between directors and their lawyers.

Both sides said in statements they were pleased with the ruling. The company noted the judge narrowed the scope of the document requests, while Schnatter called it a vindication of his right to the information.

The ruling comes as Papa John’s is working to identify potential buyers for the company, which has drawn the interest of private equity investors.

Bouchard rejected the company’s argument that Schnatter did not deserve the documents because it claimed he was seeking them for his personal gain, not for the benefit of shareholders.

The judge said Schnatter’s testimony during a one-day trial led credence to his concern that he was forced out before the board investigated the Forbes story. The judge also noted he had a right to investigate why the company would quickly abandon him as the long-standing face of the company, which raised questions about management and oversight.

Schnatter also sued the board in August for breaching its fiduciary duties and causing what he said was “irreparable harm” to the company.

In November, the company reported a smaller-than-expected decline in quarterly comparable sales in North America, helped by new advertising aimed at moving past its split with Schnatter.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Tom Brown)

White House considering former PepsiCo CEO, Treasury official to lead World Bank

WASHINGTON (Reuters) – The White House is considering former PepsiCo Inc <PEP.O> Chief Executive Indra Nooyi, Treasury Department official David Malpass and Overseas Private Investment Corp CEO Ray Washburne among candidates to head the World Bank, an administration official said on Tuesday.

The trio of names surfaced a day after officials said President Donald Trump’s daughter Ivanka Trump was helping lead the search for a new World Bank president to succeed Jim Yong Kim, who is stepping down on Feb. 1.

Nooyi, who stepped down from her Pepsi position in October, Malpass, who is undersecretary of Treasury for international affairs, and Washburne, who has been the OPIC CEO since August 2017, are among several candidates being looked at to head the World Bank, the official said.

The United States, which has a controlling voting interest in the World Bank, has traditionally chosen the institution’s leader since it began operations in 1946.

Kim announced his surprise Feb. 1 departure earlier this month to join private equity fund Global Infrastructure Partners, more than three years before his term ends in 2022, amid differences with the Trump administration over climate change and the need for more development resources.

(Reporting by Steve Holland and Jeff Mason; Editing by Peter Cooney)

Apple, Facebook propel Wall Street to three-week peak

By Noel Randewich

(Reuters) – The S&P 500 jumped to a three-week high on Tuesday, led by Apple, Amazon, Facebook and industrial shares on bets that the United States and China would strike a deal to end their trade war.

The three-day rally kicked off on Friday following robust U.S. jobs data and dovish comments on interest rates by Federal Reserve chief Jerome Powell has lifted the S&P 500 <.SPX> by over 9 percent from 20-month lows touched around Christmas.

The S&P 500 has gained in seven of the past nine sessions.

The United States and China will extend trade talks in Beijing for an unscheduled third day, a member of the U.S. delegation said, as the world’s two largest economies looked to resolve their bitter trade dispute. So far, officials from both sides have sounded optimistic, with President Donald Trump saying talks were going well.

“You’re seeing some negotiations happen and the market is starting to think that perhaps we’ll start to see a framework evolve,” said Anik Sen, global head of equities at PineBridge Investments.

The trade-sensitive S&P industrials sector <.SPLRCI> rose 1.41 percent. Boeing Co <BA.N> shares jumped 3.79 percent, contributing the most to the Dow’s rise, after the company said it had delivered a record 806 aircraft in 2018.

Apple Inc <AAPL.O> rose 1.91 percent, regaining some ground after the company last week warned of weaker-than-expected demand for its iPhones. But tech sector gains were limited by a drop in chip stocks after Samsung <005930.KS> blamed an estimated 29 percent drop in quarterly profit on weak chip demand.

The Philadelphia Semiconductor index <.SOX> slid 0.49 percent. Adding to the woes, Goldman Sachs forecast a tough year for chipmakers, particularly in the first half.

Other investors remained upbeat about upcoming U.S. quarterly results.

“It’s the new year and investors are really stepping back and taking a look at the fundamentals, and realizing it’s not as bad a story as maybe we thought toward the end of the year,” said Jeff Kravetz, a regional investment strategist at U.S. Bank Wealth Management.

The communication services index <.SPLRCL> climbed 1.58 percent, with Facebook Inc <FB.O> adding 3.25 percent after JPMorgan said the social media company was among its favorite internet picks for 2019.

Amazon.com Inc <AMZN.O> rose 1.66 percent, increasing its market capitalization to $810 billion and cementing its position as the most valuable U.S. company.

The Dow Jones Industrial Average <.DJI> jumped 1.09 percent to end at 23,787.45 points, while the S&P 500 <.SPX> gained 0.97 percent to 2,574.41. The Nasdaq Composite <.IXIC> added 1.08 percent to 6,897.00.

Financials <.SPSY> was the only S&P index not to gain, ending unchanged as the U.S. Treasury yield curve <US2US10=TWEB> flattened.

PG&E Corp <PCG.N> shares continued to decline, falling 7.34 percent after S&P Global Ratings stripped the California power utility of its investment-grade credit rating.

Union Pacific Corp <UNP.N> rose 8.73 percent after the No. 1 U.S. railroad named industry veteran Jim Vena as chief operating officer.

Advancing issues outnumbered declining ones on the NYSE by a 3.36-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and one new low; the Nasdaq Composite recorded 28 new highs and 15 new lows.

Volume on U.S. exchanges was 8.0 billion shares, compared to the 9.0 billion average over the last 20 trading days.

(GRAPHIC: U.S. profit growth since 1968 – https://tmsnrt.rs/2RzHi550

(Reporting by Noel Randewich; Additional reporting by Sruthi Shankar and Aparajita Saxena in Bengaluru; Editing by Chizu Nomiyama and Leslie Adler)

Prosecutors in ‘El Chapo’ trial play calls intercepted by FBI

By Jonathan Stempel

NEW YORK (Reuters) – Prosecutors in the trial of “El Chapo” Joaquin Guzman on Tuesday played excerpts from what they said were incriminating phone calls made by the accused Mexican drug lord and intercepted by the FBI after they infiltrated his encrypted messaging system.

Nearly two months into the trial of Guzman on charges of drug trafficking as leader of the Sinaloa cartel, FBI special agent Steven Marston testified the 61-year-old was easily identifiable by his higher-pitched voice, which had “kind of a sing-songy nature to it” and a “nasally undertone.”

The phone call excerpts that wafted through the Brooklyn courtroom on Tuesday included discussions of dealings with local officials, including one where Guzman appears to admonish an associate to be careful dealing with police.

“Well, you taught us to be a wolf, acting like a wolf,” the associate replied.

Guzman was extradited to the United States in January 2017 to face charges of trafficking cocaine, heroin and other drugs into the country. Prosecutors have said he also played a central role in a Mexican drug war in which more than 100,000 people have died.

Guzman’s lawyers have portrayed their client as a scapegoat for what they called Sinaloa’s real leader, Ismael “El Mayo” Zambada, who also faces U.S. charges but remains at large.

The trial began Nov. 13 and is expected to last a few more weeks. Guzman faces life in prison if convicted.

Marston said the FBI tapped into more than 800 calls on the encrypted system with the help of a cooperating witness, Christian Rodriguez.

The agent said the system’s servers were moved to the Netherlands, where they “would not be suspicious” to Sinaloa, and that calls were intercepted from April 2011 to January 2012.

Jurors had previously heard from former Guzman associates testifying about multi-ton drug shipments, deadly wars between rival drug lords, and corruption by Mexican public officials.

The defendant mostly sat quietly during testimony, but waved enthusiastically to his wife in the courtroom before it started.

Tuesday’s proceedings began with testimony from government witness Edgar Galvan, a low-level drug trafficker who the defense said fabricated payments from another trafficker to Guzman with the hope of reducing his own 24-1/3-year prison term.

Galvan denied making up the payments, though he admitted to having previously lied to investigators.

“Would you say you’re a pretty good liar?” defense lawyer William Purpura asked Galvan.

“I used to be,” Galvan said.

(Reporting by Jonathan Stempel; Editing by Sonya Hepinstall)

Boeing delivers record 806 aircraft in 2018, shares jump 4 percent

By Ankit Ajmera

(Reuters) – Boeing Co delivered a record 806 aircraft in 2018 as it overcame supplier woes, retaining the title of the world’s biggest planemaker for the seventh straight year.

The company’s shares rose as much as 3.9 percent to $340.90 and were the biggest percentage gainer on the Dow Jones Industrial Average.

European rival Airbus SE, which will report its numbers on Wednesday and lags behind Boeing due to engine delays, said it achieved its 800-jet target pending final audit.

“Overall, Boeing is taking market share from its main competitor Airbus and is well positioned with strong commercial and military demand,” said CFRA Research analyst Jim Corridore, who upgraded the stock to “strong buy” from “buy”.

Investors and analysts closely watch the number of planes Boeing turns over to airlines and leasing firms for hints on the company’s cashflow and revenue.

The latest numbers indicate that fuselage and engine delays at suppliers in 2018 are largely behind Boeing as it gears up to meet surging demand for airplanes in 2019 amid booming air travel.

“In addition to the ongoing demand for the 737 MAX, we saw strong sales for every one of our twin-aisle airplanes,” said Ihssane Mounir, senior vice president of commercial sales and marketing.

To mitigate supply chain snarls, Boeing helped expand production capacity at suppliers who have hired workers, including retirees this year.

In October, its biggest supplier Spirit AeroSystems Holdings Inc said it was back on track to meet the surging demand for its aircraft parts.

CFM International, co-owned by France’s Safran and General Electric Co, also affirmed in the same month its commitment to deliver 1,100 to 1,200 units despite being roughly four weeks behind schedule.

ORDER BOOM

Boeing also looked set to beat Airbus for aircraft orders on a like-for-like basis in 2018 after booking 893 net orders, excluding cancellations in the year.

Meanwhile, Airbus ended November with 380 net orders, to which it has since added confirmed deals for another 220 aircraft.

According to industry sources, it won another 150 from Asian-backed leasing companies that are yet to be announced, with Boeing also getting a lift from Chinese demand.

The Airbus tally, however, included 120 of the former Bombardier CSeries, a Canadian plane program which it bought last year.

Orders for Boeing and Airbus are seen down compared to 2017 as airlines fret over trade tensions and the slowing global economic growth. But deliveries at both rose on the back of an earlier order boom.

“69 December 737 deliveries suggest (supplier) bottlenecks easing. Solid December book-to-bill closes year at 1.1x and helps mitigate cycle concerns,” Credit Suisse analyst Robert Spingarn said in a client note.

(Reporting by Ankit Ajmera in Bengaluru and Tim Hepher in Paris; Editing by Saumyadeb Chakrabarty and Arun Koyyur)

Oil Rises in choppy trade as OPEC supply cuts vie with demand worry

By Stephanie Kelly

NEW YORK (Reuters) – Oil prices rose more than 1 percent on Thursday in volatile trade, drawing support from signs that Saudi Arabia is cutting crude output but pressured by concerns that slowing global economic growth could dent demand.

Brent crude <LCOc1> futures gained $1.04 to settle at $55.95 a barrel, a 1.89 percent gain. U.S. West Texas Intermediate (WTI) crude <CLc1> futures rose 55 cents to settle at $47.09 a barrel, a 1.18 percent gain.

(GRAPHIC: Shanghai crude oil futures vs Brent & WTI crude – https://tmsnrt.rs/2AmwzBl)

Prices traded in a wide range, with Brent hitting a session high of $56.30 a barrel and a low of $53.93 a barrel. WTI posted a session high of $47.49 a barrel and a low of $45.35 a barrel.

Supporting futures were signs of reduced supply from members of the Organization of the Petroleum Exporting Countries. OPEC oil supply fell in December by the largest amount in almost two years, a Reuters survey found, as top exporter Saudi Arabia made an early start to a supply-limiting accord while Iran and Libya posted involuntary declines.

OPEC led by Saudi Arabia, alongside allied producers led by Russia, agreed last year to rein in supplies starting from January after oil prices tumbled from above $86 on worries about surging output.

“The Saudis are still spearheading a significant production cut that became official this week. Thus far, strong adherence to adjusted quotas appears a high probability,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

But oil price gains were capped by concerns about a faltering global economy.

Tech giant Apple Inc <AAPL.O> cut its sales forecast, citing a slowdown in China. [.N] The news rattled U.S. equity markets and weighed on oil prices, which at times track Wall Street.

Weaker-than-expected U.S. factory data also added to economic worries.

“Oil is flip-flopping on concerns of supply and demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “It’s really a battle between the supply situation, which looks to be tightening, versus the possibility that demand will drop off.”

U.S. oil and gas executives’ outlook turned negative for the first time since the low point of the last oil bust, according to results of a survey released on Thursday by the Federal Reserve Bank of Dallas.

Investors have been concerned about rising supply from top producers, including the United States and Russia.

U.S. crude stocks fell last week, while gasoline and distillate inventories built, data from industry group the American Petroleum Institute showed on Thursday.

Crude inventories fell by 4.5 million barrels in the week ended Dec. 28 to 443.7 million, compared with analysts’ expectations for a decrease of 3.1 million barrels.

Gasoline stocks rose by 8 million barrels, compared with analysts’ expectations in a Reuters poll for a 2 million-barrel gain. Distillate fuels stockpiles rose by 4 million barrels, compared with expectations for a 1.6 million-barrel gain, the API data showed.

Official U.S. government data is due to be released on Friday.

Riyadh was expected to cut February prices for heavier crude grades sold to Asia due to weaker fuel oil margins while reducing prices for light grades to keep Saudi oil competitive against rising U.S. shale oil supplies, a Reuters survey showed on Thursday.

(Reporting by Stephanie Kelly; Additional reporting by Noah Browning in London; Editing by Susan Thomas and Lisa Shumaker)