YCLOAK

Once-admired auto executive Carlos Ghosn’s fall from grace deepened Thursday when directors of Nissan Motor Co. voted unanimously to fire the recently jailed businessman from his post as board chairman.

Dismissed along with Ghosn was another director, Greg Kelly, whom the board accused of working with Ghosn to understate their incomes on formal declarations and use company assets for personal purposes.

An internal investigation presented to the board found that Kelly had “been determined to be the mastermind of this matter, together with” Ghosn, the company said in a statement.  The board also said that Nissan’s longstanding partnership with the French automaker Renault “remains unchanged.”

While he has been fired as chairman, the company said, it will require a vote of shareholders to remove Ghosn from the board altogether.

The financial world was stunned on Monday when it was announced that Ghosn had been detained by Japanese authorities on suspicion of having failed to report millions of dollars in income.  He could face up to 10 years in prison.

Ghosn also served as board chairman of Renault and another Japanese automaker, Mitsubishi.  The news of his arrest drove down share prices in all three.

Nissan said this week that its internal probe of Ghosn and Kelly was prompted by a report from a whistleblower. It said the investigation showed Ghosn had underreported his income to the Tokyo Stock Exchange by more than $40 million over five years.

The Brazilian-born Ghosn, who is of Lebanese descent and a French citizen, was the rare foreign top executive in Japan.

Ghosn was sent to Nissan in the late 1990s by Renault SA of France, after it bought a controlling stake of Nissan. He is credited with rescuing Nissan from the brink of bankruptcy.

In 2016, Ghosn also took control of Mitsubishi, after Nissan bought a one-third stake in the company, following Mitsubishi’s mileage-cheating scandal.

Together, the three automakers comprise the biggest global car-making alliance, manufacturing one of every nine cars sold around the world.  The three companies employ more than 470,000 people in nearly 200 countries.

Before Ghosn’s arrest, Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm, said his detention would “rock the Renault-Nissan-Mitsubishi alliance as he is the keystone of the alliance.”

(VOA’s Ken Bredemeier and Fern Robinson contributed to this story.)
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Lebanon is marking 75 years of independence with a military parade Thursday in Beirut, but many anxious Lebanese feel they have little to celebrate: the country’s corruption-plagued economy is dangerously close to collapse and political bickering over shares in a new Cabinet is threatening to scuttle pledges worth $11 billion by international donors.

The World Bank issued a stark warning last week, with one official saying that unless a government is formed soon to carry out badly needed reforms, “the Lebanon we know will fizzle away.”

It’s been more than six months since Lebanon held its first national elections in nine years but the prime minister-designate, Saad Hariri, still hasn’t formed a government to undertake the reforms necessary to unlock the donors’ funds.

 

The vote, in which the Shi’ite militant Hezbollah group and its allies made significant gains, did little to pull Lebanon out of a political impasse. Anger against politicians’ apparent indifference, worsening public services and distress over down-spiraling finances and gloomy predictions are building up.

 

Last Friday, heavy rains caused Beirut’s sewage system to burst, turning the city’s famous Mediterranean coastal avenue into a river of filthy, foul-smelling black water that engulfed motorists along the otherwise scenic route. On the same day, the military had closed a main artery for drills ahead of the Independence Day parade, paralyzing traffic for hours. Flights from Beirut’s international airport were missed and a woman reportedly went into labor on the road. The army later apologized.

 

Despite a population of over 4.5 million that is among the most educated in the region, Lebanon still has a primitive infrastructure, widespread electricity and water cuts and a longstanding waste crisis that over the past few years saw trash piling in the streets for weeks at a time.

 

“There is no independence [to celebrate] because corruption is eating us up,” said Mohammed al-Rayyes, a shop owner in Beirut’s Hamra district. “The coming days are going to be very difficult.”

 

The tiny Arab country has coped with multiple political and security crises over the past decades and also suffered from the seven-year civil war in neighboring Syria, a conflict that has occasionally spilled over the border and brought more than 1 million refugees into Lebanon, putting even more pressure on its dysfunctional infrastructure.

 

A soaring debt of $84 billion and unemployment believed to be around 36 percent are compounding concerns that the country will finally cave in.

 

“It is a shame because so much time is being wasted,” Ferid Belhaj, the World Bank’s vice president for the Middle East and North Africa, said during a meeting with a group of journalists last week.

 

For years, he said, Lebanese officials have been promising to work on solving the electricity crisis, which costs the country about $2 billion a year and has been the main factor in accumulating Lebanon’s debt.       

 

Of immediate concern is the future of $11 billion in loans and grants pledged by international donors at a meeting in Paris in April, which Lebanon risks losing if no Cabinet is in place soon to unlock the funds and approve reforms that were set as conditions by the donors and which have been delayed for years. In April, Hariri pledged to reduce the budget deficit by 5 percent over the next five years.

 

The crisis has prompted some Lebanese to change their deposits from the local currency, which has been pegged to the U.S. dollars since 1997, to U.S. dollars for fear the Lebanese pound might collapse. Riad Salameh, the Central Bank governor, has been repeatedly reassuring the markets, saying the local currency is stable.

 

Mohamad Shukeir, head of the Chambers of Commerce, Industry and Agriculture, told the local MTV station that 2,200 businesses closed doors so far this year.

 

Aftershocks of rising tension between the United States and Iran are also felt in Beirut, with Tehran ally Hezbollah being blamed by opponents for preventing Western-backed Hariri from forming a national unity government.

 

Hezbollah has demanded that six Sunni lawmakers allied with the Shiite group and opposed to Hariri be included in his Cabinet — something that Hariri, the country’s top Sunni Muslim leader, categorically rejects.

 

Despite the dangers, political bickering is not likely to end soon and the debt is mounting.

 

 “The level of debt that we have in Lebanon requires us to act very quickly,” said economist Kamel Wazne.  “Any delay will expose us to financial collapse.”

 

Belhaj of the World Bank said that reforms would act as a buffer to the crisis. But in their absence, “the crisis can be very nasty.”

 

“If we don’t go about these reforms fast, the Lebanon that we know will fizzle away,” he said.

  
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Retailers will once again offer big deals and early hours to lure shoppers into their stores for the start of the holiday season. But they’ll also try to get shoppers out of their stores faster than ever by minimizing the thing they hate most: long lines.

Walmart, Target and other large retailers are sending workers throughout their stores to check out customers with mobile devices. And at Macy’s, shoppers can scan and pay for items on their own smartphones.

Retailers hope the changes will make in-store shopping less of a hassle. Long lines can irritate shoppers, who may leave the store empty handed and spend their money elsewhere, or go online.

“I’m all about quick and convenient,” says Carolyn Sarpy, who paid for a toy basketball hoop on a mobile device issued to a worker at a Walmart store in Houston. Sarpy says she “will turn around and walk out” of a store if she sees long lines.

Walmart says workers will stand in the busiest sections of stores, ready to swipe customer credit cards when they are ready to pay. To make them easier to find, workers wear yellow sashes that say, “Check out with me.”

The world’s largest retailer first tested the service in the spring at more than 350 stores in its lawn and garden centers. It fared well, Walmart says, and expanded the program for the holiday season.

Retailers are trying to catch up to technology giants. Apple, for example, has let those buying iPhones, laptops and other gadgets in its stores to pay on mobile devices issued to workers. And Amazon has been rolling out cashier-less convenience stores in San Francisco, Chicago and Seattle.

Barbara Kahn, a marketing professor at the Wharton School at the University of Pennsylvania, says shoppers know the technology is out there for faster shopping. “That makes them even more impatient,” she says.

The true test of their success will be whether retailers can handle the big crowds who are expected to turn out for Black Friday weekend. The day after Thanksgiving is expected to be the busiest shopping day this year, according to retail analytics company ShopperTrak. The Saturday after Thanksgiving also ranks in the top 10.

“The biggest pain point on Black Friday is standing in line,” says Jason Goldberg, senior vice president of commerce and content practice at consulting group SapientRazorfish.

J.C. Penney, which has been offering mobile checkout for years, says it sent an additional 6,000 mobile devices to stores this year so workers can check shoppers out quicker, like when lines get long on Black Friday. Other stores are testing it for the first time: Kohl’s says iPad-wielding workers will roam 160 of its more than 1,100 stores.

Macy’s, which announced its program in May, says customers need to use its mobile app to scan price tags and pay. After that, they have to go to a mobile checkout express line and show the app to a worker, who then removes security tags from clothing.

Target’s mobile checkout program, which is being rolled out to all its 1,800 stores, is similar to Walmart’s. Target says that at its electronics area, where there are usually two cash registers, four workers will be sent with handheld devices to help ring up customers buying TVs, video games and other devices.

“This is about servicing the guest however they want and as quickly as they want,” says John Mulligan, Target’s chief operating officer.

 
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Nissan Motor Co will hold a board meeting on Thursday to oust Chairman Carlos Ghosn after the shock arrest of its once-revered leader, starting what could be a long period of uncertainty in its 19-year alliance with Renault.

The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors, has been rattled to its core by Ghosn’s arrest in Japan on Monday, with the 64-year-old group chairman and industry star accused of financial misconduct.

Ghosn had shaped the alliance and was pushing for a deeper tie-up including potentially a full Renault-Nissan merger at the French government’s urging, despite strong reservations at the Japanese firm.

Amid growing uncertainty over the future of the alliance, finance ministers of Japan and France are due to meet in Paris on Thursday to seek ways to stabilize it.

Renault has refrained from removing Ghosn from his position, although he remains in detention along with Representative Director Greg Kelly, whom Nissan also accuses of financial misconduct.

“For me, the future of the alliance is the bigger deal,” one senior Nissan official told reporters on Wednesday, when asked about Ghosn’s arrest. “It’s obvious that in this age, we need to do things together. To part would be impossible.”

Nissan’s board meeting will be held sometime after 4:00 p.m. at its headquarters in Yokohama and the company is likely to issue a statement afterwards, the official said, requesting anonymity as the details were confidential. Renault executives are expected to join by video conference.

Nissan said on Monday an internal investigation triggered by a tip-off from an informant had revealed that Ghosn engaged in wrongdoing including personal use of company money and under-reporting of his earnings for years.

Japanese prosecutors said he and Kelly conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen.

Ghosn and Kelly have not commented on the accusations and Reuters has not been able to reach them.

The Asahi Shimbun said on Thursday, quoting unnamed sources, that Ghosn had given Kelly orders by email to make false statements on his remuneration. Tokyo prosecutors likely seized the related emails and may use them as evidence, the report said.

The Yomiuri, Japan’s biggest-circulation daily, cited unnamed sources as saying that Nissan’s internal investigation found that Ghosn had since 2002 instructed that about $100,000 a year be paid to his elder sister as remuneration for a non-existent “advisory role.”

Shares in Nissan were flat, in line with a broader market, ahead of the board meeting.
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Canada will allow businesses to write off additional capital investments to make them more competitive at a time when the United States is aggressively cutting taxes, Finance Minister Bill Morneau said Wednesday. 

But Morneau, speaking as he unveiled a budget update that forecast a slightly smaller than predicted deficit for 2018-19, said Ottawa would not be slashing taxes to match aggressive moves by Washington. 

“If we were to do that, it would add tens of billions in new debt,” he told the House of Commons. 

The move could disappoint business groups that said Ottawa needed to do much more to match the U.S. cuts. Morneau acknowledged their concern and said it would be neither rational nor responsible to do nothing. 

The federal government will allow businesses to immediately write off for tax purposes the full cost of machinery and equipment used in the manufacturing and processing of goods. The measure covers purchases made on or after Wednesday and expires in 2027. 

The budget update projected a C$18.1 billion ($13.7 billion) deficit for 2018-19, which was smaller than a revised C$18.8 billion projection made in the February budget. The fiscal year ends on March 31. 

Ottawa is also introducing an accelerated capital cost allowance for all businesses and allowing some clean energy equipment to be eligible for an immediate write-off. 

The combined effect of the measures means the average overall tax rate in Canada on new business investment will fall to 13.8 percent from 17.0 percent, the lowest level in the Group of Seven large industrialized nations.
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The Trump administration has invited the heads of Volkswagen, BMW and Daimler to the White House to discuss U.S. tariffs on carmakers, the Handelsblatt newspaper reported on Wednesday.

Citing industry and diplomatic sources, the paper said the meeting could possibly take place as soon as next week, depending on circumstances. Handelsblatt said it was not known whether U.S. President Donald Trump would attend the meeting.

A spokesman for Volkswagen declined to confirm or deny whether the carmaker had received an invitation. Sources close to VW said it had not received an invitation.

 

Daimler and BMW did not immediately respond to requests for comment. The White House did not immediately respond to a request for comment.

Trump has threatened for months to impose tariffs on all European Union-assembled vehicles, a move that could up-end the industry’s business model for selling cars in the United States.

But he has refrained from imposing car tariffs while the United States and European Union launch negotiations to cut other trade barriers.
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U.S. President Donald Trump on Wednesday thanked Saudi Arabia for tamping down world oil prices, a day after saying the U.S. would not turn its back on Riyadh despite its responsibility for killing a dissident U.S.-based Saudi journalist.

From his retreat along the Atlantic Ocean in Florida, Trump praised the Saudis, second only to the U.S. as an oil producer but the biggest global exporter, for sending enough crude to world markets to keep oil prices in check.

Before leaving Washington for the Thanksgiving holiday, Trump told reporters at the White House that U.S. national security and economic interests outweigh any human rights concerns. He said turning his back on Saudi Arabia, despite the killing of Jamal Khashoggi, “would be a terrible mistake.”

“We’re staying with Saudi Arabia,” Trump announced. He noted the kingdom’s opposition to Iran and its purchases of American military equipment that mean, according to the president, “hundreds of thousands of jobs and billions of dollars of investment.”

Russia and China “are not going to get that gift,” Trump said before adding that oil prices would soar if the U.S.-Saudi relationship is broken up.

Secretary of State Mike Pompeo, in an interview with a Kansas City radio station, defended Trump’s stance favoring Saudi Arabia, while noting that the U.S. had sanctioned 17 Saudis believed involved in the Khashoggi killing.

“We are going to make sure that America always stands for human rights,” Pompeo said.

But the top U.S. diplomat said the protection of Americans was of paramount concern to Trump.

“The Kingdom of Saudi Arabia has been an important national security partner to the United States, pushing back against the murderous regime in Iran that actually presents real risk to the American people, and we are determined to make sure that the relationship between the United States and Saudi Arabia stays strong so that we can protect America,” Pompeo said.

‘Maybe he did, maybe he didn’t’

Asked at the White House about the CIA’s reported conclusion that Saudi Crown Prince Mohammed bin Salman likely knew about or ordered the plot to kill Khashoggi inside Riyadh’s consulate in Istanbul, Trump replied: “Maybe he did, maybe he didn’t.” Of the CIA’s finding, he declared: “They have nothing definitive.”

The president denied his decision to avoid harshly punishing the Saudis for the October 2 killing has anything to do with his personal business interests.

“I don’t make deals with Saudi Arabia. I don’t make money from Saudi Arabia,” Trump said. “Being president has cost me a fortune.”  

Trump said earlier he understands that some lawmakers in Congress want to pursue sanctions against Riyadh for the killing “for political or other reasons” and said, “They are free to do so.”

“I will consider whatever ideas are presented to me, but only if they are consistent with the absolute security and safety of America,” Trump said.

But the leaders of the Senate Foreign Relations Committee, Republican Bob Corker and Democrat Robert Menendez, sent a letter to Trump Tuesday reminding him U.S. law requires him to examine whether the crown prince ordered Khashoggi’s death.

The Global Magnitsky Human Rights Accountability Act requires the president to determine if a foreign official is responsible for a human rights violation.

The act is named for Russian accountant Sergei Magnitsky who was apparently beaten to death in prison in 2009 after accusing Russian officials of tax fraud.

 

“I never thought I’d see the day a White House would moonlight as a public relations firm for the Crown Prince of Saudi Arabia,” Senator Corker tweeted Tuesday. He added that  Congress will consider “all the tools at our disposal” to determine the role of the crown prince in the Khashoggi killing. 

Khashoggi lived in the United States, writing opinion articles for The Washington Post that were critical of the crown prince and Riyadh’s military involvement in Yemen.

His editor at the Post, Karen Attiah, described Trump’s statement as “full of lies and a blatant disregard for his own intelligence agencies. It also shows an unforgivable disregard for the lives of Saudis who dare criticize the regime. This is a new low.”

 

U.S Intelligence Community

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Veterans of the U.S. Intelligence Community are also expressing their disdain with the president’s stance.

Former CIA Director John Brennan, who has repeatedly clashed with Trump, said on Twitter that Trump “excels in dishonesty” so now it is up to Congress to obtain and declassify the CIA findings on Khashoggi’s death.

“No one in Saudi Arabia — most especially the Crown Prince — should escape accountability for such a heinous act,” Brennan wrote.

Former CIA officer Ned Price wondered Tuesday “how appointed intelligence leaders could continue to serve after this betrayal is beyond me.”

A Saudi prosecutor cleared the crown prince of wrongdoing last week while calling for the death penalty for five of the 11 suspects indicted in the killing.  The prosecutor said a total of 21 people have been detained.

Turkish officials concluded that Khashoggi was tortured and killed and his body dismembered. His remains have not been found.

Foreign Minister Mevlut Cavusoglu said Tuesday Turkey might formally seek a United Nations investigation of the killing if cooperation with Riyadh reaches an impasse.
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The Trump administration on Tuesday said that China has failed to alter its “unfair” practices at the heart of the U.S.-China trade conflict, adding to tensions ahead of a high-stakes meeting later this month between U.S. President Donald Trump and Chinese President Xi Jinping.

The findings were issued in an update of the U.S. Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies, which sparked U.S. tariffs on $50 billion worth of Chinese goods that later ballooned to $250 billion.

“We completed this update as part of this Administration’s strengthened monitoring and enforcement effort,” USTR Robert Lighthizer said in a statement. “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.”

In the update, USTR said it had found that China had not responded “constructively” to the initial section 301 reports and failed to take any substantive actions to address U.S. concerns. It added that China had made clear it would not change its policies in response to the initial investigation.

USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of U.S. intellectual property and was continuing discriminatory technology licensing restrictions.

The update said that despite the relaxation of some foreign ownership restrictions, “the Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from U.S. companies to Chinese entities.”

The report comes as the Trump administration and top Chinese officials are discussing possible ways out of their trade war and negotiating details of the Trump-Xi meeting on the sidelines of the G20 leaders summit in Buenos Aires at the end of November.

But acrimonious trade rhetoric between the governments of the world’s two largest economies has been increasing in recent days, spilling over into an Asia-Pacific Economic Cooperation (APEC) summit last weekend. A top Chinese diplomat said on Tuesday that the failure of APEC officials to agree on a communique from the summit was a result of certain countries “excusing” protectionism, a veiled criticism of Washington’s tariffs.

U.S. Vice President Mike Pence said on Saturday that the United States would not back down from the trade dispute, and might even double tariffs, unless Beijing bowed to U.S. demands.
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Stocks dropped again Tuesday as losses mounted for the world’s largest technology companies. Retailers also fell, and energy companies plunged with oil prices as the market sank back into the red for the year. 

 

Oil prices tumbled another 6.6 percent as Wall Street reacted to rising oil supplies and concerns that global economic growth will slow down, a worry that’s intensified because of the trade tensions between the U.S. and China. 

 

Technology companies were hit after the Trump administration proposed new national security regulations that could limit exports of high-tech products in fields such as quantum computing, machine learning and artificial intelligence. 

 

Retailers also skidded. Target’s profit disappointed investors as it spends more money to revamp its stores and its website, while Ross Stores, TJX and Kohl’s also fell on disappointing forecasts. 

 

The S&P 500 index lost 48.84 points, or 1.8 percent, to 2,641.89. The Dow Jones industrial average sank 551.80 points, or 2.2 percent, to 24,465.64. 

 

The tech-heavy Nasdaq composite lost 119.65 points, or 1.7 percent, to 6,908.82. The Russell 2000 index of smaller-company stocks shed 27.53 points, or 1.8 percent, to 1,469.01. 

 

The Dow industrials have lost 3.7 percent in the last two days, and the S&P 500 is off 3.4 percent. The Nasdaq is off 4.7 percent. The S&P 500 index has fallen 9.9 percent from the record high it set exactly two months ago. 

 

Investors are measuring several headwinds and increasingly playing it safe. The global economy is showing signs of weakening, with the United States, China and Europe all facing the rising threat of a slowdown, which can hurt demand for commodities such as oil and threaten company profits. Trade tensions between the U.S. and China appear to be getting worse instead of improving, contributing to the sell-off in tech stocks and multinational industrial companies. 

 

For much of this year, investors were hopeful the U.S. and China would easily resolve their differences on trade. That hope has faded in the last two months. While U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet this month at a gathering of the Group of 20 major economies, the proposed limits on tech exports were one more reason to worry. 

 

“A resolution doesn’t seem to be coming in the short term,” said Katie Nixon, the chief investment officer for Northern Trust Wealth Management. “A lot of the companies that are front and center [like] Alphabet, Apple, IBM … could be significantly limited in the way they export their technology.” 

 

Apple fell 4.8 percent to $176.98 and is down 23.7 percent from the peak it reached Oct. 3, though it’s still up almost 5 percent this year. Microsoft lost 2.8 percent to $101.71 and IBM fell 2.6 percent to $117.20. 

 

As the tech giants swoon, investors have lately turned to safer bets such as utilities, real estate companies and makers of household goods. They’ve also sought the safety of U.S. Treasuries. 

 

The price of oil has been falling sharply in recent weeks and is now down 30 percent since Oct. 3. 

 

Saudi Arabia and other countries started producing more oil after the Trump administration announced renewed sanctions on Iran, Nixon noted. The administration granted waivers to several countries that allowed them to continue importing oil from Iran, creating a supply glut that pushed prices dramatically lower. 

 

Nixon said OPEC countries will probably cut back on oil production, but some investors are worried that the buildup in crude stockpiles is a sign the global economy isn’t doing as well as expected. 

 

Earnings from retailers didn’t help investors’ mood. Target plunged 10.5 percent to $69.03 after reporting earnings that missed Wall Street’s estimates because of higher expenses. Ross Stores, TJX and Kohl’s also fell on disappointing forecasts. 

 

Tech stocks were among the biggest losers in Europe, too. Nokia and Ericsson, two top suppliers of telecom networks, each fell about 3 percent. European indexes fell, with Germany’s DAX index dropping 1.6 percent and the French CAC 30 falling 1.2 percent. Britain’s FTSE 100 lost 0.8 percent. 

 

Stocks also declined in Asia. Japan’s Nikkei 225 lost 1.1 percent and Hong Kong’s Hang Seng shed 2 percent. 

 

Benchmark U.S. crude lost 6.6 percent to $53.43 a barrel in New York. Brent crude, used to price international oils, fell 6.4 percent to $62.53 per barrel in London. Oil prices have nosedived since early October. 

 

Wholesale gasoline fell 5.5 percent to $1.50 a gallon and heating oil skidded 4.6 percent to $1.99 a gallon. Natural gas dipped 3.8 percent to $4.52 per 1,000 cubic feet. 

 

Bond prices were steady. The yield on the 10-year Treasury note remained at 3.06 percent. 

 

Gold slipped 0.3 percent to $1,221.20 an ounce. Silver fell 0.9 percent to $14.27 an ounce. Copper slid 1.2 percent to $2.77 a pound. 

 

The dollar fell to 112.40 yen from 112.54 yen. The euro fell to $1.1399 from $1.1453. 
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Analysts say Boeing Co. is canceling a conference call that it scheduled to discuss issues around its newest plane, which has come under scrutiny since a deadly crash in Indonesia. 

The company didn’t immediately give an explanation Tuesday. 

CFRA Research analyst Jim Corridore said canceling the call as “a bad look for the company” when it’s facing questions about potential problems with sensors on the 737 MAX. 

U.S. airline pilots say they weren’t told about a new feature that could pitch the nose down automatically if sensors indicate the plane is about to stall. 

On Oct. 29, a Lion Air MAX 8 plunged into the Java Sea, killing all 189 people on board. 

Boeing shares are down about 13 percent since Nov. 9. 
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