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Business Highlights: Fed makes shift, stocks end higher

December 15, 2021 GMT

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Fed will tighten credit faster and sees 3 rate hikes in 2022

WASHINGTON (AP) — The Federal Reserve will quicken the pace at which it’s pulling back its support for the post-pandemic U.S. economy as inflation surges, and it expects to raise interest rates three times next year. In an abrupt policy shift, the Fed announced that it will shrink its monthly bond purchases at twice the pace it previously announced, likely ending them in March. The bond purchases were intended to hold down long-term rates to aid the economy but are no longer needed with unemployment falling and inflation at a near-40-year high. The accelerated timetable puts the Fed on a path to start raising rates in the first half of next year.

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Stocks end higher after Fed accelerates stimulus pullback

Stocks rose steadily on Wall Street Wednesday after the Federal Reserve said it would accelerate its pullback of economic stimulus and would likely raise interest rates three times next year to tackle rising inflation. The Fed will shrink its monthly bond purchases at twice the pace it previously announced, putting it on pace to end them altogether in March. The S&P 500 shook off an early loss and closed up 1.6%, just below the record high it set last Friday. The index is coming off two days of losses. The Dow Jones Industrial Average rose 1.1% and the Nasdaq gained 2.2%.

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UK COVID cases hit record; Top doctor warns of worse to come

LONDON (AP) — The U.K. recorded the highest number of confirmed new COVID-19 infections Wednesday since the pandemic began, and England’s chief medical officer warned the situation is likely to get worse as the omicron variant drives a new wave of illness during the Christmas holidays. Professor Chris Whitty described the current situation as two epidemics in one, with omicron infections rising rapidly even as the country continues to grapple with the older delta variant, which is still causing a large number of infections. Public health officials expect omicron to become the dominant variant across the U.K. by Christmas and in London much sooner. The U.K. recorded 78,610 new infections on Wednesday, 16% higher than the previous record set in January.

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Evictions on the rise months after federal moratorium ends

BOSTON (AP) — Housing advocates say evictions are increasing around the country, several months after a federal moratorium was allowed to end. The rise in cases, although below pre-pandemic levels in most states and cities, shows the limits on the tens of billions of dollars in federal assistance and the impact of lax protections in some places. Data collected by the Eviction Lab at Princeton University show that evictions have been rising in most of the 31 cities and six states where it collects data since the federal moratorium ended in August.

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Fashion icon Chanel chooses Indian-born Leena Nair as CEO

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NEW DELHI (AP) — The luxury fashion house Chanel has chosen Leena Nair, an industry outsider from India and longtime executive at Unilever, to be its new CEO. Analysts say her hiring signals how the brand is accounting for changing consumer awareness of the industry’s environmental impact and the importance of diverse hires. Nair tweeted that she was “humbled and honored” to be appointed to the role at the “iconic and admired company.” The news made a huge splash Wednesday in India, Nair’s birthplace, where she received scores of congratulations and compliments, one calling her a “serial glass-ceiling breaker.” Nair is due to step into her new role in January.

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Modest 0.3% November retail sales bump, optimism still high

NEW YORK (AP) — Americans slowed their spending from October to November but still continued to shop ahead of the critical holiday season, brushing off rising prices and shortages. The U.S. Commerce Department said Wednesday that retail sales rose a modest 0.3% in November compared with the previous month when sales jumped 1.8%. That was a bit weaker than most economists had expected, yet early holiday shopping may have pushed holiday shopping traditionally done in November, up a month to October with news of shortages and supply chain issues consistently in headlines. And there were also hints of a return to pre-pandemic behavior with Americans spending more on services, like going out for dinner, which has been under significant pressure due to the fear of infection.

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AP source: Biden, Manchin sharply divided over $2T Dem bill

WASHINGTON (AP) — President Joe Biden and Sen. Joe Manchin are sharply divided over Democrats’ huge social and environment bill, with the holdout senator pushing to erase the measure’s improved child tax credit. That word comes from a person familiar with the talks who described them on condition of anonymity. Manchin says there are “a lot of bad rumors” about his position. The rocky status of the talks are among the indications that Senate Majority Leader Chuck Schumer faces a struggle just to begin debate on the massive measure before the holiday. Letting work on the legislation slip into next year, when congressional elections will be held, would be an ominous sign about its prospects.

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Discontent with Johnson imperils his future, UK virus rules

LONDON (AP) — British Prime Minister Boris Johnson is facing questions about his future after almost 100 Conservative lawmakers defied him and opposed new restrictions to help slow the fast-spreading omicron variant. The measures were approved with opposition support and took effect Wednesday. Conservative lawmaker Mark Harper said the vote was “a very clear message that colleagues are not happy with how the government is operating.” Johnson’s approval ratings have plummeted and many Conservatives have lost faith in his response to the pandemic. Still, Britain recorded 78,610 new virus cases on Wednesday, the highest daily total of the pandemic, and health officials say infections are doubling about every two days.

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Freelance journalist accredited to AP detained in Ethiopia

NAIROBI, Kenya (AP) — The Associated Press says a freelance video journalist accredited to the AP in Ethiopia has been detained by police in the capital of Addis Ababa. Amir Aman Kiyaro was detained under the country’s new war-related state of emergency powers on Nov. 28 after returning home from a reporting trip. He has not been charged. Officials with Ethiopia’s government have not responded to repeated requests from the AP for information about him since his detention. State media on Wednesday reported his detention, citing federal police, and said he was accused of “serving the purposes” of a terrorist group by interviewing it. Ethiopia in November declared a state of emergency after a year of war as rival forces moved closer to the capital.

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India unveils $10.2B plan to attract semiconductor makers

NEW DELHI (AP) — India has announced a $10.2 billion incentive plan in an attempt to attract global chipmakers and transform the country into a semiconductor production hub. The plan announced Wednesday by government officials comes amid a global semiconductor shortage which has delayed delivery of consumer goods including cars. The supply disruption has been caused by the COVID-19 pandemic. India wants to woo companies that could shift their manufacturing bases from China amid trade disputes between United States and China. India’s government will extend financial support of up to 50% of a project’s cost to eligible display and semiconductor fabricators.

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The S&P 500 rose 75.76 points, or 1.6%, to 4,709.85. The Dow Jones Industrial Average rose 383.25 points, or 1.1%, to 35,927.43. The Nasdaq rose 327.94 points, or 2.2%, to 15,565.58. The Russell 2000 index of smaller companies rose 35.56 points, or 1.6%, to 2,195.21.