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U.S. indicts Venezuela's Maduro, a political foe, for 'narco-terrorism'

WASHINGTON (Reuters) – The U.S. government on Thursday indicted Venezuelan President Nicolas Maduro and more than a dozen other top Venezuelan officials on charges of “narco-terrorism,” the latest escalation of the Trump administration’s pressure campaign aimed at ousting the socialist leader.

The State Department offered a reward of up to $15 million for information leading to the arrest and conviction of Maduro, whose country has been convulsed by years of a deep economic crisis and political upheaval.

The indictment, a rare U.S. action against a sitting foreign head of state, marks a serious new phase against Maduro by Washington at a time when some U.S. officials have privately said President Donald Trump is increasingly frustrated with the results of his Venezuela policy.

Attorney General William Barr, announcing charges that include narco-terrorism conspiracy, corruption, and drug trafficking, accused Maduro and his associates of colluding with a dissident faction of demobilized Colombian guerrilla group, the FARC, “to flood the United States with cocaine.”

“While the Venezuelan people suffer, this cabal lines their pockets with drug money and the proceeds of their corruption,” Barr said of Maduro and the others who were indicted.

Venezuelan Foreign Minister Jorge Arreaza said the charges and rewards being offered showed the Trump administration’s “desperation” as well as its “obsession” with the South American country aimed at benefiting Trump’s 2020 re-election campaign.

Trump’s pressure on Venezuela has gone over well among Cuban Americans in South Florida, a key voting bloc in a major presidential swing state.

The U.S. government has previously lodged criminal indictments against members of Maduro’s family and inner circle. He and his allies have dismissed such allegations as a smear campaign, and argue the United States is responsible for drug trafficking, given its role as a leading consumer.

Maduro is already under U.S. sanctions and has been the target of a U.S. effort aimed at pushing him from power. He took office in 2013 after the death of his mentor President Hugo Chavez, a staunch foe of the United States.

Other Venezuelan officials whose indictments were announced on Thursday include Defense Minister Vladimir Padrino Lopez, senior socialist leader Diosdado Cabello, and the chief justice of the country’s supreme court, Maikel Jose Moreno Perez, who was charged with money laundering. The U.S. government is offering $10 million for information leading to Cabello’s arrest.

The United States and dozens of other countries have recognized opposition leader Juan Guaido as Venezuela’s legitimate president, regarding Maduro’s 2018 re-election as a sham. But Maduro has remained in power, backed by the country’s military and by Russia, China and Cuba.

U.S. officials have long accused Maduro and his associates or running a “narco-state,” saying they have used proceeds from drugs transshipped from neighboring Colombia to make up for lost revenue from a Venezuelan oil sector hit by heavy sanctions by the United States.

‘DEPLOYED COCAINE AS A WEAPON’

The indictments were unsealed in New York, Florida and Washington.

Barr dodged a reporter’s question on whether Trump, who has pressed his aides in recent months for a tougher approach on Venezuela, was briefed in advance, saying, “I don’t talk about internal deliberations.”

Maduro and his closest allies ran a “narco-terrorism partnership with the FARC for the past 20 years,” stated Geoffrey Berman, the U.S. Attorney for the Southern District of New York, who said the Venezuelan president “very deliberately deployed cocaine as a weapon.”

“The scope and magnitude of the drug trafficking alleged was made possible only because Maduro and others corrupted the institutions of Venezuela and provided political and military protection for the rampant narco-terrorism crimes described in our charges,” he added.

The U.S. Attorney for the Southern District of Florida, Ariana Fajardo Orshan, said she sees signs of Venezuelan officials’ laundered money throughout her area every day, from fancy yachts to million-dollar condos.

“This party is coming to an end,” she said.

Asked whether the U.S. government was also considering designating Venezuela a state sponsor of terrorism, which carries further sanctions, Barr said: “It’s really one step at time, so I really have nothing to say about that right now.”

CNN, citing sources familiar with the situation, reported earlier that Venezuela was expected to be named to the blacklist as soon as Thursday. But a U.S. official told Reuters such a move was not likely imminent.

Thursday’s charges altogether carry a maximum penalty of up to life in prison. Asked whether the U.S. government wants to capture Maduro dead or alive, Barr said: “We want him captured so he can face justice in U.S. court.”

Barr said the administration does “expect eventually to gain custody of these defendants.” But he offered no indication of how U.S. authorities might get their hands on Maduro, who has endured more than a year of heavy international pressure and on-again, off-again street protests as the OPEC member’s economy has continued to unravel.

Maduro’s international travel could be restricted, given Washington would be able to request that he be handed over if he visits a country that has an extradition treaty with the United States. U.S. authorities can also freeze any assets he has in the United States, though such holdings are considered unlikely.

The Justice Department said that since at least 1999, Maduro, along with Cabello and others, “acted as leaders and managers of the ‘Cartel of the Suns’.” The name, it said, refers to the sun insignias affixed to the uniforms of high-ranking Venezuelan military officials.

An indictment accused Padrino, who holds the rank of general, of using his control of the Venezuelan military to facilitate cocaine flights to the United States.

Venezuelan Vice President Tareck el-Aissami, who already faced U.S. sanctions for alleged drug trafficking, was charged with evading U.S. sanctions.

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Business

Virtual tours, coronavirus clauses: Pandemic up-ends homebuying across the U.S.

(Reuters) – Prospective buyers arriving at Betsy and Eric Melby’s house for sale in Memphis, Tennessee, last week were greeted by a large pump bottle of hand sanitizer and a box of disposable gloves.

Inside, every light was on, the closet doors ajar and the shower curtains pulled back, all to forestall the need to touch any surfaces.

“We wanted to make those coming to see our home feel comfortable that we’re taking every precaution,” said Eric Melby, who accepted an offer on Thursday, two days after listing the house.

The process of buying and selling a home, like virtually every other aspect of American life, has been upended by the coronavirus pandemic. Open houses have been eliminated, closings are being conducted through car windows and home showings require plenty of caution – if they’re even permitted by local officials.

Millions of U.S. residents are under stay-at-home orders here in more than 20 states, and unemployment figures are soaring, all but ensuring the housing market – which had been strong, thanks to the robust economy and low mortgage rates – will suffer a major downturn.

“This is catastrophic,” said Judi Desiderio, a real estate agent based in East Hampton, New York, who works in the eastern Long Island suburbs.

Sales of new single-family homes dropped in February, after January saw the highest level since 2007, and analysts expect March could bring a sharper decline.

Several real estate agents described buyers backing out of deals due to the stock market slump, or clients delaying plans to sell until the uncertainty subsides.

Even for those who had an agreement before the outbreak exploded, concerns over contagion have had an effect. In Sacramento, a couple that had planned to move in with their elderly parents had to delay their closing because the parents were under quarantine, according to their agent, Jeanine Roza.

Some closings are proceeding at a distance. In one instance, a notary observed a buyer in a car signing paperwork through the window of an office, said Chris Reese, president of the Ohio Realtors association.

“Our whole way of doing business has changed,” she said.

In New York state, some county clerks’ offices have closed, leaving it unclear whether sales can be completed if they cannot be recorded.

Some real estate associations have written a “coronavirus addendum” that allows deals to be called off if the pandemic makes it impossible to close: travel restrictions, lack of house inspectors and title company closures are among the covered reasons.

The level of disruption varies from state to state, and even city to city, based on the patchwork approach officials have taken to combating the virus.

In New York and California, where all “non-essential” businesses were shuttered, real estate is not considered “essential,” and agents are barred from even showing homes.

That has ground home-buying to a near halt, though some agents are using online tools, including 3D software, to conduct “virtual” showings.

In other states like Ohio, where real estate was added to the “essential” businesses list, agents and their clients are still navigating the new reality.

“We’ve never had anything like this,” said Brenda Conner, an agent in Cincinnati.

One of her clients has instructed her not to show a house anymore; an elderly couple who had accepted an offer before the outbreak accelerated is now balking at allowing a required inspection to complete the deal.

Cindi Bulla, who chairs the Texas Realtors association, toured a house this week with a client who asked the sellers to leave the home at least three hours before the showing. The request was based on some reports the virus might be able to survive in the air for hours, though most researchers have concluded that is unlikely.

Some agents are concerned about losing their livelihoods.

Roza, the Sacramento agent, runs an office with her wife, Sindy Kirsch, and will soon have no new business, due to the California shutdown.

“How are we going to survive?” Kirsch asked.

Memphis agent Barbie Dan, who helped the Melbys sell their house, has taken a page out of their book, asking clients to provide washing stations and fresh towels to put buyers at ease. She has also been giving video tours of houses using her phone.

“This is uncharted territory,” she said.

(This story corrects spelling of Brenda Conner’s last name from Connor; corrects to say Cindi Bulla’s title is chairman, not president, of the Texas Realtors association)

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Business

U.S. consumer spending increases moderately in February

WASHINGTON (Reuters) – U.S. consumer spending rose moderately in February and momentum is set to fade rapidly in the coming months, with the coronavirus pandemic upending life for Americans.

The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% last month as households spent more on electricity and gas, offsetting decreases in outlays on motor vehicles and parts as well as recreational goods.

Last month’s increase matched the gain in January and was in line with economists’ expectations.

The United States now has the most coronavirus cases in the world, with more than 82,000. Governors in more than half of the nation’s 50 states have ordered residents to stay mostly indoors, affecting more than 100 million people.

Restaurants and bars have been shuttered and airline travel severely curtailed, which economists say will greatly offset any boost to consumer spending from grocery purchases following a wave of panic buying as Americans prepared to hunker down.

When adjusted for inflation, consumer spending edged up 0.1% in February, matching January’s rise.

With “social distancing” measures to contain the virus throwing millions out of work and severely curtailing discretionary spending, economists are predicting a moderate decline in consumer spending in the first quarter, which would give way to a sharper contraction in the second quarter.

Consumer spending grew at an annualized rate of 1.8% in the fourth quarter, slowing from the brisk 3.2% pace logged in the July-September period.

Labor market strength, which was driving a steady pace of wage growth, was the economy’s main pillar of support. In February, personal income increased 0.6% after rising by the same margin in January.

Income was boosted by higher wages and government payments to farmers caught in the U.S.-China trade war.

Inflation remained muted in February. Consumer prices as measured by the personal consumption expenditures (PCE) price index edged up 0.1% after rising by the same margin in January. In the 12 months through February, the PCE price index rose 1.8%, matching the year-on-year gain in January.

Excluding the volatile food and energy components, the PCE price index gained 0.2% in February after nudging up 0.2% in January. That lifted the annual increase in the so-called core PCE price index to 1.8% in February from 1.7% January.

The core PCE index is the Fed’s preferred inflation measure. It missed the central bank’s 2% target in 2019.

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Business

Futures fall after two-day rally as focus turns to jobless numbers

(Reuters) – U.S. stock index futures slipped on Thursday after a two-day rally as investors braced for what is expected to be one of the worst U.S. jobless claims reports in history, underlining the wide-ranging economic damage from the coronavirus pandemic.

A Reuters poll predicts weekly jobless claims ranging from a minimum of 250,000 initial claims to up to 4 million. The poll shows a median forecast of 1 million claims, which would top highs logged during recessions in 1982 and 2009.

The Labor department is expected to release the data at 8:30 a.m. ET.

In an unusual appearance, U.S. Federal Reserve Chairman Jerome Powell is scheduled to speak on NBC television around 7:00 a.m. ET, which may provide more information about policymakers’ response to the outbreak.

At 05:24 a.m. EDT, Dow e-minis 1YMcv1 were down 282 points, or 1.33%, S&P 500 e-minis EScv1 were down 42.25 points, or 1.71% and Nasdaq 100 e-minis NQcv1 were down 114.25 points, or 1.53%.

SPDR S&P 500 ETFs (SPY.P) were down 1.69%.

The S&P 500 index .SPX closed up 1.15% at 2,475.56​ on Wednesday.

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Business

Dow wraps up strongest three days since 1931

(Reuters) – The Dow Jones Industrial Average .DJI wrapped up its strongest three days in nine decades on Thursday as record weekly U.S. jobless claims came in below investors’ worst fears and the focus stayed on an unprecedented $2 trillion stimulus awaiting approval by the U.S. House of Representatives.

The Dow finished up 21% from its Monday low, establishing it in a bull market, according to a widely used definition. It was the index’s strongest three-day percentage increase since 1931.

The number of Americans filing claims for unemployment benefits surged to 3.28 million last week as state-wide lockdowns brought the economy to a halt and unleashed a wave of layoffs.

The median expectation of analysts polled by Reuters was for 1 million claims, but the top end of the forecast was as high as 4 million.

Expectations are high that the House will pass the stimulus measure to support distressed industries, including airlines, after the Senate cleared the proposal.

It would flood the country with cash in an effort to stem the crushing economic impact of an intensifying pandemic that has killed about 1,000 and infected nearly 70,000 people in the United States.

As well as the Dow, the S&P 500 .SPX index logged a third straight day of gains for the first time since mid-February, before coronavirus fears stopped Wall Street’s 11-year bull market. Since Monday, the S&P 500 has surged about 17%, although it remains down 22% from its Feb. 19 record high.

“It’s encouraging to see people buying a day after a big up day because we hadn’t seen that in a month,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “That doesn’t guarantee that the bottom is in, but it is indicative of a bottoming process.”

Boeing Co (BA.N) rose 14%, boosted by a $58 billion provision for the aerospace industry in the latest aid bill. Boeing has surged over 90% in the past four sessions.

Adding to upbeat sentiment, Federal Reserve Chair Jerome Powell said the central bank stood ready to act “aggressively” to shore up credit in the market on top of the unprecedented policy easing announced on Monday.

“He said the Fed is not going to run out of ammunition and that the committee still has policy room for more action,” said Charalambos Pissouros, senior market analyst at JFD Group in Cyprus.

He added: “By saying that he raises the question – will they go for negative interest rates?”

Many analysts expect more wild market swings, with macroeconomic indicators likely to worsen heading into the second quarter as a breakdown in business activity and fears of corporate defaults foreshadow a deep global recession.

The CBOE volatility index fell 2.9 points, but was still near levels far above those in 2018 and 2019.

The Dow Jones Industrial Average .DJI jumped 6.38% to end at 22,552.17, while the S&P 500 .SPX surged 6.24% to 2,630.07.

The Nasdaq Composite .IXIC added 5.6% to 7,797.54.

The S&P utilities index .SPLRCU was the strongest among 11 sectors, jumping 8.4%.

Advancing issues outnumbered declining ones on the NYSE by a 5.15-to-1 ratio; on Nasdaq, a 3.71-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and no new lows; the Nasdaq Composite recorded 4 new highs and 13 new lows.

Volume on U.S. exchanges was 15.0 billion shares, compared with the 16.2 billion-share average for the full session over the last 20 trading days.

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Business

Wall Street slumps after three-day rally as virus threat intensifies

(Reuters) – Doubts about the fate of the U.S. economy in the face of the coronavirus hammered Wall Street again on Friday, halting its best three-day bounce in almost a century as the number of cases across the country skyrocketed.

The United States surpassed China as the nation with the most number of COVID-19 cases, putting more pressure on lawmakers to flood the country with cash to support businesses and families.

“We have still not fully understood the degree of the economic impact,” said Massud Ghaussy, senior analyst at Nasdaq IR Intelligence in New York.

“Currently, from a policymaker’s perspective, it’s a relative balance between managing the spread of the virus and opening the economy.”

The U.S. House of Representatives is widely expected to clear a $2 trillion economic rescue package after the Senate passed the proposal on Thursday.

The stimulus bill and unprecedented policy easing by the Federal Reserve have set the S&P 500 .SPX for its best week in over a decade, but it is still down 14% in March and on pace for its worst month since the height of the financial crisis.

The Dow Jones .DJI, briefly establishing a bull market on Thursday, is on course for its biggest weekly gain since 1938, largely helped by a stunning four-day rally for Boeing Co (BA.N).

But with growing fears of a global recession, traders expect more wild swings in financial markets until there are signs of new virus cases peaking and sweeping restrictions placed on entire countries being lifted.

A record 3 million surge in U.S. weekly jobless claims offered the first glimpse of the extent of the economic hit from the outbreak.

“We’re not out of the woods yet on the health or economic crisis,” said Eddie Perkin, chief equity investment officer at Eaton Vance in Boston.

“It would seem odd to me if the markets fully stabilize before we get more clarity on the health front.”

At 11:18 a.m. ET the Dow Jones Industrial Average .DJI was down 595.76 points, or 2.64%, at 21,956.41, the S&P 500 .SPX was down 61.81 points, or 2.35%, at 2,568.26 and the Nasdaq Composite .IXIC was down 188.82 points, or 2.42%, at 7,608.72.

Delta Airlines (DAL.N), United Airlines (UAL.O) and American Airlines (AAL.O) fell between 4% and 8% as U.S. Treasury Secretary Steve Mnuchin said the aid designated for airlines in the package was not a bailout and that taxpayers would need to be compensated.

Boeing shed 10% after gaining as much as 90% this week, as Mnuchin said the planemaker had no intention of participating in the package.

The banking index .SPXBK fell 5%, tracking U.S. Treasury yields, while oil majors Exxon Mobil (XOM.N) and Chevron Corp (CVX.N) fell about 6%, following a drop in oil prices.

Declining issues outnumbered advancers for a 4.58-to-1 ratio on the NYSE and 3.63-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and one new low, while the Nasdaq recorded four new highs and 19 new lows.

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World News

Venezuela says U.S. drug trafficking charges against Maduro show 'desperation'

(Reuters) – Venezuelan Foreign Minister Jorge Arreaza said on Thursday that drug trafficking charges by the U.S. against President Nicolas Maduro announced earlier in the day showed the “desperation” of the “Washington elite.”

Arreaza said the Trump administration’s decision to offer rewards for the capture of Maduro and other high-ranking officials accused of drug trafficking show the administration’s “obsession” with Venezuela, which he said was due to its desire to reap “electoral returns” in the state of Florida

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Business

Treasury: U.S. will be 'compensated' for assistance to airlines

WASHINGTON (Reuters) – U.S. Treasury Secretary Steve Mnuchin said on Friday that taxpayers will “compensated” for providing up to $25 billion in direct grants to the airline industry.

“I’ve been very clear this is not an airline bailout,” Mnuchin told Fox Business Network Friday. “It is support to the airlines for national security reasons that the taxpayers are going to be compensated for.”

U.S. airlines are preparing to tap the government to cover payroll in a sharp travel downturn triggered by the coronavirus, even after the government warned it may take stakes in exchange for bailout funds or other financial instruments, people familiar with the matter said.

U.S. President Donald Trump said he would hire “brilliant financial minds” from Wall Street to assist in the government’s airline assistance efforts.

“We will be able to handle United and we will be able to handle Delta,” Trump said, adding it is “possible” the government could own large stakes in the airlines. “Saving the airlines is very important.”

Under the bill signed by Trump Friday, Mnuchin can demand equity, warrants or other financial instruments to “provide appropriate compensation to the federal government.” Mnuchin did not directly answer whether he will seek warrants or equity.

The Treasury has an internal working group already discussing how to proceed, people briefed on the matter said. A person briefed on the matter said Mnuchin is expected to take a hard line with the airlines who had threatened to furlough tens of thousands of workers without immediate cash.

Airline stocks fell Friday on Mnuchin’s comments.

American Airlines Inc (AAL.O) fell 6%, while Southwest Airlines Co (LUV.N) fell 9% and JetBlue Airways (JBLU.O) fell 7%.

“We have people coming from other agencies in the government to come and help us out,” Mnuchin said, saying officials are working at “lighting speed.”

American Airlines chief executive Doug Parker said Thursday the largest U.S. airline is eligible for $12 billion of the $50 billion in U.S. government loans and grants. Parker said the conditions for the grants are “not currently well-defined.” But he added “I expect their terms will not be onerous.”

Delta Air Lines (DAL.N) said Friday the “payroll assistance funds ensure there will be no involuntary furloughs or reductions in pay rates through Sept. 30.”

Airlines are supposed to receive payments within 10 days of the law’s signing.

Boeing Co (BA.N) has sought at least $60 billion in government loans or loan guarantees aerospace industry. Earlier this week, Boeing chief executive Dave Calhoun said the company was not interested in giving the government equity in exchange for loans.

“Boeing has said they have no intention of using the program – that may change in the future,” Mnuchin said.

Trump said Friday that “Boeing will probably need a hand.”

Boeing did not immediately comment Friday. “The taxpayers will be fully compensated,” Mnuchin said. “No bailout for Boeing or anyone else.”

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World News

U.S. Senate passes $2 trillion coronavirus relief bill

WASHINGTON (Reuters) – The U.S. Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment.

After bitter negotiations, the deeply divided Senate came together and passed the bill by a unanimous 96-0 vote, which sent the massive stimulus package to the House of Representatives, which could vote sometime this week.

President Donald Trump, whose top aides helped negotiate the bipartisan measure, promised to sign it into law as soon as it reaches his desk. “I will sign it immediately,” Trump told reporters on Wednesday.

The massive bill – which would be the largest economic stimulus measure ever passed by Congress – includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of U.S. families.

The package is intended to flood the economy with cash in a bid to stem the impact of an intensifying epidemic that has killed more than 900 people in the United States and infected at least 60,000.

Only two other nations, China and Italy, have more coronavirus cases and the World Health Organization has warned the United States looks set to become the epicenter of the global coronavirus pandemic.

Top aides to Trump and senior senators from both parties announced that they had agreed on the unprecedented stimulus bill in the early hours of Wednesday after five days of talks.

But it was delayed by criticism from both the right and left on Wednesday, pushing the final vote on passage almost another full day.

Several Republican senators had insisted the bill needed to be changed to ensure that laid-off workers would not be paid more in unemployment benefits than they earned on the job. However, an amendment that would have changed the unemployment provision failed just before the Senate approved the measure.

(Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser.)

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Politics

U.S. Senate approves $2-trillion coronavirus economic, medical aid bill

WASHINGTON (Reuters) – The U.S. Senate on Wednesday unanimously passed a $2-trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus pandemic, as well as providing billions of dollars to buy urgently needed medical equipment.

By a vote of 96-0 the Senate passed the bill, sending it to the House of Representatives, which could vote sometime this week.

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