Omicron Surge Prompts CES to Trim a Day from Schedule

This year’s Consumer Electronics Show will end a day earlier than planned, the organizer of the global technology and gadget show said, after companies including Amazon and General Motors dropped out of attending the Las Vegas event in person because of omicron concerns. 

“The step was taken as an additional safety measure to the current health protocols that have been put in place for CES,” event organizer Consumer Technology Association said on Friday, announcing the event will now end on January 7. 

The spread of the omicron variant has led to a sharp jump in COVID-19 infections across the world, making many reconsider their travel plans and leading to thousands of flight cancellations. 

The number of new COVID-19 cases in the U.S. has doubled in eight days to a record of 587,143 new cases on Thursday, according to a Reuters tally. 

As worries over the new variant loom, many companies have withdrawn from presenting in-person at the event, planned both virtually and in-person, that begins on January 5 with more than 2,200 exhibitors. 

Over the last few days, a host of firms including Advanced Micro Devices, Proctor & Gamble, Google, and Facebook parent Meta Platforms have also dropped their in-person plans. 

Sony Group’s Sony Electronics has said it will have limited staffing and attendees at the event. 

All attendees in Las Vegas will be required to be fully vaccinated and masked. COVID-19 test kits will also be provided at the venue, according to CTA’s statement. 

 


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Tesla Recalls 675,000 Cars in US, China

Tesla has recalled 675,000 cars in the United States and China over issues with the trunk and front hood of two models, raising new questions about the safety of the popular electric vehicle. 

Chinese regulators announced the recall of almost 200,000 cars on Friday, hours after some 475,000 Tesla vehicles were flagged in the United States. 

The problems with the trunk and hood increase the risk of crashes, according to U.S. and Chinese regulators. 

Authorities said the repeated opening and closing of the trunk of the Model 3 can damage a cable for the rearview camera. 

An issue with the latch assembly for the front hood of the Model S could cause it to open without warning and obstruct the driver’s visibility, according to the U.S. National Highway Traffic Safety Administration (NHTSA). 

Tesla estimates that the problems affect 1% of Model 3 and 14% of Model S vehicles recalled in the United States, without causing any accidents so far. 

Mass recalls are not rare in the auto industry.

Volkswagen had to take 8.5 million cars out of circulation in 2015 due to the Dieselgate scandal, in which the German company admitted tampering with millions of diesel vehicles to dupe emissions tests. 

At least 100 million vehicles were recalled by car companies across the world in recent years due to a defect with airbags made by bankrupt Japanese group Takata. 

Tesla’s recall represents a quarter of the number of cars Elon Musk’s young company has produced so far. 

“It is a reality wake-up call for Tesla though, with a slap-in-the-face welcome to the automotive world that is perhaps more complex than the smartphone industry that many like to compare it to,” said German auto analyst Matthias Schmidt. 

“After all, a dysfunctional car on four wheels can do a lot more potential damage than a dysfunctional iPhone,” Schmidt said. 

Other incidents 

In June, Tesla recalled more than 285,000 cars in China over issues with its assisted driving software that could cause accidents. 

The company also recalled thousands of Model 3 and Model Y vehicles earlier that month to inspect brake calipers for loose bolts. 

In November, the NHTSA recalled nearly 12,000 Tesla cars due to errors with their communication software. 

U.S. safety officials are also investigating Tesla’s Autopilot after identifying 11 crashes involving the driver assistance system. 

The previous month, U.S. highway safety regulators demanded details from Tesla on issues with its new autonomous system, building on a previously announced probe. 

Tesla executives have downplayed the regulatory inquiries, saying they were to be expected with “cutting edge” technology and that they were cooperating “as much as possible.” 

Banner year 

The issues have been blights to an otherwise banner year for Tesla, as it joined the exclusive club of companies with a market capitalization of $1 trillion. 

The company delivered a record 240,000 vehicles in the third quarter, and Tesla’s billionaire chief Elon Musk was named Time magazine’s person of the year. 

Tesla’s good fortune contrasted with other, traditional automakers that were heavily affected by the coronavirus pandemic and a shortage of semiconductors that are key components in cars. 

Trip Chowdhry, analyst at Global Equities Research consultancy, said the latest Tesla recall is a “non-event” as the company still holds a big advantage over its competitors. 

 


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US Jobless Claims Dip Below 200,000

Applications for state unemployment benefits fell by 8,000 from 206,000 applications last report to 198,000 for the week ending December 25, the U.S. Labor Department reported Thursday.

Economists had predicted 205,000 applications.

The number of applications was near a 50-year low, but concerns over COVID-19, low labor market participation rates and rising inflation continue to add to economic uncertainty.

Labor participation, the number of people working or actively seeking a job, continues to hover at rates not seen since the early 1970s

“The claims data may be more volatile in the upcoming weeks due to the seasonal adjustment process, but looking past that noise, we expect claims to remain around 200,000 as layoffs remain low amid tight labor market conditions,” said Nancy Vanden Houten, lead economist at Oxford Economics, according to CBS News.

Continuing claims reportedly were 1.72 million for the week ending December 18, which is the lowest since March of 2020, when the pandemic began to peak.

n October, the U.S. had nearly 11 million job openings, a near record.

The news sent the stock market slightly higher on low, pre-holiday volume.


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Iran Says Rocket Launch Sent 3 ‘Research Payloads’ Into Space 

Iran has used a satellite launch rocket to send three research devices into space, a Defense Ministry spokesman said on Thursday, as indirect U.S.-Iran talks take place in Austria to try to salvage a 2015 nuclear deal. 

He did not clarify whether the devices had reached orbit. 

Iran, which has one of the biggest missile programs in the Middle East, has suffered several failed satellite launches in the past few years due to technical issues. 

Spokesman Ahmad Hosseini said the Simorgh satellite carrier rocket, whose name translates as “Phoenix”, had launched the three research devices at an altitude of 470 kilometers (290 miles). He did not give further details. 

“The intended research objectives of this launch were achieved,” Hosseini said, in comments broadcast on state television. “This was done as a preliminary launch … God willing, we will have an operational launch soon.” 

Iranian state television showed footage of what it said was the firing of the launch vehicle. 

Thursday’s reported space launch comes as Tehran and Washington hold indirect talks in Vienna in an attempt to salvage a nuclear accord that Iran reached with world powers and that former U.S. president Donald Trump abandoned in 2018. 

The United States imposed sanctions on Iran’s civilian space agency and two research organizations in 2019, claiming they were being used to advance Tehran’s ballistic missile program. 

Tehran denies such activity is a cover for ballistic missile development. 

Iran launched its first satellite Omid (Hope) in 2009 and its Rasad (Observation) satellite was also sent into orbit in June 2011. Tehran said in 2012 that it had successfully put its third domestically-made satellite, Navid (Promise), into orbit. 

In April 2020, Iran said it successfully launched the country’s first military satellite into orbit, following repeated failed launch attempts in the previous months. 


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2 US Stock Market Indexes Set Records as Omicron Worries Ease

The Dow and S&P 500 closed at all-time highs on Wednesday on a boost from retailers including Walgreens and Nike as investors shrugged off concerns on the spreading omicron variant. 

The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5-15 this year. 

Walgreens Boots Alliance and Nike rose 1.59% and 1.42% respectively against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers. 

Data on Wednesday showed the U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record and the coronavirus pandemic has limited spending by Americans on services. 

Some early studies pointing to a reduced risk of hospitalization in omicron cases have eased some investors’ concerns over the travel disruptions and powered the S&P 500 to record highs this week. 

Meanwhile, the S&P 1500 airlines index dipped. Delta Air Lines and Alaska Air Group canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged. 

Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, in a phenomenon known as the “Santa Claus Rally.” Market participants, however, warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers, which can cause exaggerated price action. 

The Dow Jones Industrial Average rose 90.42 points, or 0.25%, to 36,488.63, the S&P 500 gained 6.71 points, or 0.14%, to 4,793.06 and the Nasdaq Composite dropped 15.51 points, or 0.1%, to 15,766.22. 

As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999. 

The focus next year will shift to the U.S. Federal Reserve’s path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound. 

Volume on U.S. exchanges was 7.89 billion shares, compared with the 11.15 billion average for the full session over the past 20 trading days. 

 


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US Goods Trade Gap Hits Record; Pending Home Sales Slip

The U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record ahead of the second straight COVID-19-distorted holiday shopping season along with industrial supplies, while exports slipped after a historic gain a month earlier.

The goods trade gap reported Wednesday by the Commerce Department is likely to remain historically high as long as the coronavirus pandemic continues, economists said. The emergence of the fast-spreading omicron variant of COVID-19 that has driven U.S. and global caseloads to a record this week may exacerbate it further in the near term if it limits American consumers’ spending on services and restokes demand for imported goods.

Omicron also stands as a downside risk in the housing market. A reading of pending home sales also out Wednesday showed an unexpected drop in November, and while that data largely predated omicron’s ascendance in the United States, the highly contagious new variant could further limit home sales in the near term, the National Association of Realtors (NAR) said.

The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, Census Bureau data showed. That exceeds the previous record deficit set in September of $97 billion and may damp optimism that trade might finally add to U.S. economic growth this quarter for the first time in more than a year.

Imports rose by 4.7% with industrial supplies leading the way with an increase of $5.7 billion to $63.2 billion, followed by consumer goods rising by $2.9 billion to just shy of $67 billion as retailers rushed to fill store shelves ahead of Christmas. Both were record highs.

“The emergence of the omicron variant may further ignite demand for imported goods if services activity is restricted” in the first quarter of 2022, Nancy Vanden Houten, lead economist at Oxford Economics, wrote after Wednesday’s report.

Goods exports, meanwhile, declined 2.1%, with weakness across the board outside of a 4.3% increase in food exports. The drop was led by declines of $1.4 billion in industrial supplies and $1.3 billion in capital goods.

The worldwide surge of coronoavirus cases to a record in recent days – including a record U.S. caseload – may weigh on global demand in the months ahead, risking an even wider trade gap, Vanden Houten said.

The so-called Advance Indicators report also showed wholesale inventories climbed 1.2% last month, while retail inventories increased 2.0%. Retail inventories, excluding autos, which go into the calculation of gross domestic product, edged up by 1.3% to $465.2 billion, the latest in a string of record-high readings.

The economy grew at a 2.3% annualized rate in the third quarter, a step-down from earlier in the year, but activity has rebounded in the fourth quarter with a consensus among economists building around a growth rate of 6% to 7% in the final three months of 2021.

Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.

Earlier this month, the Commerce Department reported a sharp reduction in the overall trade deficit – including services – for October, which had generated some optimism that trade may contribute to the improvement in output in the final quarter of the year. The big reversal to a record goods trade gap in November may prompt a rethinking of that.

Economists at Action Economics have dialed back their fourth-quarter GDP growth estimate to 6.5% from 7.0%, with exports now seen subtracting from growth rather than adding to it as had been previously expected. Economists at JPMorgan and Goldman Sachs, meanwhile, left their estimates intact at 7%.

Meanwhile, contracts to buy U.S. previously owned homes fell unexpectedly in November as limited housing stock and lofty prices crimped activity, and the explosion of new coronavirus cases poses a risk to the housing market headed into 2022.

NAR said its Pending Home Sales Index, based on signed contracts, fell 2.2% last month to 122.4. Pending home sales were lower in all four regions.

Economists polled by Reuters had forecast contracts, which typically become final sales after a month or two, would rise 0.5% in November.

“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR’s chief economist.

Looking ahead, Yun said Omicron poses a risk to the housing market’s performance, as buyers and sellers are sidelined, and home construction is delayed.


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Kenyan Slum Dwellers Evicted for China-Built Nairobi Expressway   

Rights groups in Kenya are pushing authorities to resettle tens of thousands of squatters evicted just ahead of the holidays to make way for a Chinese-backed expressway.  

Kenyan Lucy Wangare, in her forties, cleans a makeshift tent that has provided her family flimsy shelter since October, when Nairobi city authorities evicted them from their home of almost two decades.

She, her husband, and her sister spent the holiday season living in the tent, enduring cold and wet nights. 

City authorities evicted more than 40,000 squatters like Wangare from the Mukuru Kwa Njenga slum and razed their homes to make way for construction of the Nairobi Expressway.  

What is left of the Mukuru slum looks like a wasteland, with scores of makeshift tents forming a small island.  

 

Authorities gave them just days’ notice to vacate their homes, says Wangare.

“If you look at where I sleep, you’d think I wasn’t a Kenyan citizen, you’d think I was a refugee, said Wangare. 

They used to have property and houses but, right now, they’ve been left destitute. She blames Kenya’s government.

The half a billion dollars elevated expressway aims to ease Nairobi’s notorious traffic by connecting the main international airport to the city center and wealthy suburbs.      

The Chinese state-owned China Road and Bridge Corporation is building and financing the expressway, which should be working in 2022, and will collect the tolls for nearly three decades.    

Despite critics calling it a road for the rich, Kenya’s President Uhuru Kenyatta defended the project while taking a tour of it the day before Christmas.  

“The difference that is being occasioned by the road building, the drainage being build, by the sewage being put in — I do believe that within another two years, Nairobi will be a truly 21st century city, catering for its population in a positive manner and in a manner befitting our people,” said Kenyatta.    

But Kenyan rights activists fault the government for not striking a balance between the need for infrastructure and human dignity for those evicted.  

Anami Daudi, 25, is with the Mukuru Community Justice Center.

“It’s so traumatizing, people are having mental issues here, we have other special challenges, they should get like special attention.  But you find out that even the facilities we have around they can’t even accommodate to create maybe that space to provide such services,” he said. 

The single squatters left homeless, like 38-year-old Pauline Gathoni, struggle with security fears.      

“It’s very dangerous to spend the night here, especially for us, women,” she said. The men can defend themselves if attacked,  but she can’t fight anybody. ”If someone attacks me and steals my property, tells me to leave, I will have no choice but to obey them,” she said.

City authorities’ promises to compensate and help resettle the evicted families have yet to come true.    


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Russian Gas Supplies to Europe Under Scrutiny 

With the arrival of winter in Europe and energy prices soaring, tensions are running high over the provision of gas from Russia — especially through the Yamal-Europe pipeline that runs through Poland and Belarus. 

But the Yamal pipeline is just one part of a complex gas infrastructure network shaped not only by energy needs but also wider economic interests and politics, including strife between Russia and Ukraine. 

The pipeline, opened in 1994, runs over 2,000 kilometers (1,242 miles) to Germany from the city of Torjok in central Russia, transiting through Belarus and Poland. 

It delivers 30 billion cubic meters of gas to Europe each year, making it one of the most important vehicles for the provision of Russian gas to the continent. 

Russia sells Germany gas at a cheaper rate than it does to Poland, in part to make up for the higher transit fees through the longer delivery distance. 

But this means that it is more cost efficient for Poland to buy Russian gas from Germany. 

Some of the gas sold by German traders to Poland flows directly into Polish territory, or if that is not sufficient, the pipeline can also operate in reverse to send more to Germany’s eastern neighbor. 

Since December 21, the pipeline has been operating in reverse, with gas flowing east back into Poland from the German border, according to data from management company Gascade seen by AFP. 

This means that over the last days, Germany itself has not been receiving gas via Yamal. 

Meanwhile, Russian gas continues to flow to Europe through other major pipelines such as Nord Stream I and TurkStream. 

It is not unusual for the Yamal pipeline to operate in reverse for short periods, but this latest about-turn comes against a backdrop of political tension over fears that Russia may invade Ukraine. 

Political pressure 

In Germany, the government has said that in the event of any “escalation”, it will put the brakes on another gas pipeline, Nord Stream 2, which is still awaiting the green light from the authorities. 

Some European states, such as Poland and Ukraine, have accused Moscow and Russian energy company Gazprom of cutting gas supplies to Europe to exert political pressure over these tensions. 

Russian President Vladimir Putin has said the change in gas flow through the Yamal pipeline is purely down to fluctuating orders and denied any political motive. 

Gazprom, for its part, has called accusations that it is failing to deliver enough gas to Europe “absolutely groundless and unacceptable” and blamed Germany for dipping into its reserves to supply neighboring Poland. 

Berlin on Monday denied any intervention on its part. “It is not the government that decides on gas flows, but the market, the traders,” the Economy and Climate Ministry said. 

According to George Zachmann, a specialist in energy issues for the Brussels-based Bruegel think tank, Gazprom may also be “favoring its own pipelines” over those it does not 100% control, such as the Yamal pipeline. 

Low reserves

A spokeswoman for the German Economy and Climate Ministry told AFP that “security of supply is still guaranteed.” 

 

But Berlin, which has “relatively low” gas reserves with its tanks just 53 percent full, could soon have “difficulties”, according to Christophe Bonnery, president of the Association of Energy Economists. 

 

“If contracts are adhered to there will be no problems until at least March,” said Zachmann. But “if Russia cannot or will not deliver gas for technical or other reasons, then supplies could fall short.” 

 

The wrangling comes amid an explosion in gas prices, which are up to seven times higher than at the beginning of the year.

 

The surge is thought to be partly down to a particularly cold winter and an increase in activity linked to the post-coronavirus economic recovery. 

With 40% of gas consumed in Europe coming from Russia, Moscow is suspected of taking advantage of the tensions on the world market to reduce supply and drive up prices. 

 

The International Energy Agency (IEA) in September called on Russia to be a “reliable supplier” and send more gas to Europe. 


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The Euro: How It Started 20 Years Ago

As Europe rang in the New Year 20 years ago, 12 of its nations said goodbye to their deutschmarks, French francs, liras and pesetas as they welcomed the euro single currency. 

On January 1, 2002, euro notes and coins became a reality for some 300 million people from Athens to Dublin, three years after the currency was formally launched in “virtual” form. 

Here is a recap of the event, drawn from AFP reporting at the time: 

In a far cry from the austere New Year’s celebrations imposed by the COVID-19 pandemic 20 years later, fireworks, music and lights blazed at midnight into the early morning of January 1, 2002, to mark the biggest monetary switch in history. 

AFP reported that many people passed on their traditional New Year’s Eve parties, choosing instead to queue up at cash dispensers in their enthusiasm to get hold of the first pristine euro notes. 

In Berlin, Germans said hello to the euro and goodbye to their beloved mark at a special ceremony at the Brandenburg Gate, as up to 1 million people thronged the streets for the traditional giant New Year’s Eve street party there. 

The euro cash was also a hit in the coffee shops and red-light district of Amsterdam. 

Irish revelers were, however, less in a hurry to welcome the euro, continuing to pay for Guinness, Ireland’s favorite tipple, in the national currency, leaving the headache of the changeover until the next day. 

As many feared, the euro switch provoked sporadic price hikes across Europe. 

From Spanish bus tickets, which jumped by 33%, to a Finnish bazaar, where “everything for 10 markka (1.68 euros)” was now “everything for two euros,” many price tags were a bit heftier since the single currency became legal tender. 

The European Central Bank president at the time, Wim Duisenberg, who warned merchants not to take advantage of the euro launch to increase prices, said he had not seen signs of widespread abuse. 

“When I bought a Big Mac and a strawberry milkshake this week it cost 4.45 euros, which is exactly the same amount as I paid for the same meal last week,” Duisenberg told reporters. 

Europe surprised itself with the almost glitch-free transition to the single currency, AFP reported. 

The Germans — reputedly skeptical about the single currency and nostalgic for their mark — turned out to be among the most enthusiastic. 

An editorial in the popular German tabloid Bild proclaimed: “Our new money is moving full speed ahead. No problems whatsoever in saying adieu to the mark, no tears to be shed.” 

Initial “europhoria” was, however, tempered as a few hiccups appeared, such as cash shortages and long lines in banks, post offices and at toll booths. 

France urged citizens to not rush all at once to the banks with their savings, often hoarded under mattresses and in jam jars, since they had until June 30 to get rid of their francs at commercial banks and until 2012 at the Bank of France. 

And the European Commission reported minor problems in getting small euro bills and coins distributed in most countries. 

Duisenberg said, however, he was sure that January 1, 2002, would be written into history books as the start of a new European era. 

 


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A Year After Booting Trump, Social Media Companies Face More Challenges Over Elections

For U.S. social media companies, the violent mob storming the U.S. Capitol on January 6 last year spurred action. They shut down then-President Donald Trump’s accounts. One year later, are Facebook, Twitter and YouTube any better prepared to face similar situations in the U.S. or in other countries? Michelle Quinn reports.

Camera: Deana Mitchell Produced by: Matt Dibble


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Omicron Variant Causing Flight Cancellations Worldwide 

Holiday travelers continued to experience widespread flight cancellations as the omicron variant causes airline staff to call in sick.

According to FlightAware, which tracks delays and cancellations, there have been 2,395 total flight cancellations around the world Monday with 869 of those impacting flights “within, into, or out of the United States.” 

Some 6,342 flights have been delayed around the world with 1,602 delays impacting U.S flights. 

Over the Christmas weekend, thousands more flights were canceled, leaving travelers stranded. 

“We apologize to our customers for the delay in their holiday travel plans,” Delta said in a statement. “Delta people are working hard to get them to where they need to be as quickly and as safely as possible on the next available flight.” 

The holiday season is the busiest time of year for air travel. The U.S. Transportation Security Administration said 2.19 million passengers were screened on Dec. 23, and the previous day saw more travelers than the same day in 2019. 

When things might return to normal is unclear. 

 

Delta and JetBlue have reportedly asked the U.S. Centers for Disease Control and Prevention to reduce quarantine times for their vaccinated employees. Some airlines are also reportedly offering bonuses to work more to cover for sick employees. 

Amid the scramble, some are expressing concern. 

“We’ve got to make sure employees don’t feel pressured to come to work when they’ve been exposed to COVID or they think they may have the symptoms,” Captain Dennis Tajer, a spokesperson for the Allied Pilots Association, told ABC News. 


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Omicron Grounds Hundreds More US Flights over Christmas Weekend 

U.S. airlines called off hundreds of flights for a third day in a row on Sunday as surging COVID-19 infections due to the highly transmissible Omicron variant grounded crews and forced tens of thousands of Christmas weekend travelers to change their plans. 

Commercial airlines canceled 656 flights within, into or out of the United States on Sunday, slightly down from nearly 1,000 from Christmas Day and nearly 700 on Christmas Eve, according to a tally on flight-tracking website FlightAware.com. 

Further cancellations were likely, and more than 920 flights were delayed. 

The Christmas holidays are typically a peak time for air travel, but the rapid spread of the Omicron variant has led to a sharp increase in COVID-19 infections, forcing airlines to cancel flights with pilots and crew needing to be quarantined. 

Delta Air Lines Inc expected more than 300 of its flights to be canceled on Sunday. 

“Winter weather in portions of the U.S. and the Omicron variant continued to impact Delta’s holiday weekend flight schedule,” a Delta spokesperson said in an emailed statement, adding that the company was working to “reroute and substitute aircraft and crews to get customers where they need to be as quickly and safely as possible.” 

When that was not possible, it was coordinating with impacted customers on the next available flight, the spokesperson said. 

Globally, FlightAware data showed that nearly 2,150 flights were called off on Sunday and another 5,798 were delayed, as of 9.40 a.m. EST (1440 GMT). 

Omicron was first detected in November and now accounts for nearly three-quarters of U.S. cases and as many as 90% in some areas, such as the Eastern Seaboard. The average number of new U.S. coronavirus cases has risen 45% to 179,000 per day over the past week, according to a Reuters tally. 

While recent research suggests Omicron produces milder illness and a lower rate of hospitalizations than previous variants of COVID-19, health officials have maintained a cautious note about the outlook.


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Wall Street Week Ahead -‘Santa Claus’ Stocks Rally?

Investors are closely watching the latest news on the rapidly spreading Omicron variant for signs of how much the virus could impact the U.S. economy and earnings as the market heads into what has historically been a strong time of year for equities.

Overall, the S&P 500 is slightly ahead since Nov. 24, prior to news of the variant hitting markets. It marked a record-high close on Thursday, as encouraging developments gave investors more ease about the economic impact of the variant.

“The market is extremely reactionary now and every little bit of news has a huge impact,” said George Young, a portfolio manager at Villere & Co. Young is planning on taking advantage of any Omicron-induced volatility to add to stocks that rely on tourism and travel such as bank company First Hawaiian Inc . Shares of the company are up 14.4% for the year to date.

The Omicron variant is causing infections to double in 1.5 to 3 days, according to the World Health Organization. The variant now accounts for 73% of all new U.S. cases, up from less than 1% at the beginning of the month.

Still, questions about Omicron’s virulence have made investors less pessimistic than the original reaction. The S&P 500 closed down 2.3% on Nov. 26 after the variant was discovered, on fears of fresh economic lockdowns.

A South African study offered hope about the severity of Omicron and the trend of COVID-19 infections on Wednesday. Shares of vaccine makers slumped in December as investors expect the Omicron variant’s impact to be limited based on recent data.

That bodes well for what is known in the market as a Santa Claus rally. Historically, U.S. stocks have risen during the last five trading days of December and the first two days of January in 56 out of 75 years since 1945, according to data from CFRA Research. This year, the time period starts on Dec. 27. The average Santa Claus rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader’s Almanac.

It is unclear to what extent Wall Street analysts expect Omicron to affect earnings and the economy. Estimated 2022 S&P 500 earnings growth was at 8.3% as of Friday, compared with 8.0% at the start of December, according to Refinitiv data.

Goldman Sachs cut its estimate for U.S. GDP growth to 3.8% from 4.2% due to the uncertainty of the impact of the Omicron wave.

Possible Volatility

While there will likely be some economic impact from Omicron, U.S. consumer spending will likely remain strong, said Cliff Hodge, chief investment officer for Cornerstone Wealth.

He is focused on any signs that Senator Joe Manchin could reach an agreement to support President Joe Biden’s signature $1.75 trillion Build Back Better climate and social spending bill. Manchin, who would provide one of the key votes to pass the bill in a divided Senate, said on Sunday that he could not support the bill in its current form. Senate Majority Leader Chuck Schumer said that the Senate will vote on the bill in early January.

“We need a little bit of good news whether on the Manchin front or Omicron to get a rally going,” Hodge said. “We are fully invested and anticipate a little bit of a relief rally into January.”

The week ahead will be light on economic data, with the release of the S&P Case-Shiller U.S. home price index on Tuesday among the few notable data points.

The lack of new reads of the strength of the economy at a time when coronavirus case counts are rising may leave the stock market more volatile through the end of the year, said Dana D’Auria, co-chief investment officer of Envestnet PMC.

“The market has gotten pretty good at pricing in and leading off from what we are learning about on the health side,” she said.

Should Omicron cases continue to spike or there are signs that economic restrictions could be reimposed, investors will likely rebalance into the shares of giant technology companies such as Apple Inc that have emerged as defensive plays given their large cash positions and revenue growth as a result of remote work, D’Auria said.

“At the end of the day if Omicron really causes problems I would be ready for a more volatile market” well into the new year, she said.


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Canceled Flights Snarl Holiday Plans for Thousands

Airlines continued to cancel hundreds of flights Saturday because of staffing issues tied to COVID-19, disrupting holiday celebrations during one of the busiest travel times of the year.

FlightAware, a flight-tracking website, noted nearly 1,000 canceled flights entering, leaving or inside the U.S. Saturday, up from 690 flights scrapped on Friday. Over 250 more flights were already canceled for Sunday. FlightAware does not say why flights are canceled.

Delta, United and JetBlue had all said Friday that the omicron variant was causing staffing problems leading to flight cancellations. United spokesperson Maddie King said staffing shortages were still causing cancellations and it was unclear when normal operations would return. “This was unexpected,” she said of omicron’s impact on staffing. Delta and JetBlue did not respond to questions Saturday.

According to FlightAware, the three airlines canceled more than 10% of their scheduled Saturday flights. American Airlines also canceled more than 90 flights Saturday, about 3% of its schedule, according to FlightAware. American spokesperson Derek Walls said the cancellations stemmed from “COVID-related sick calls.” European and Australian airlines have also canceled holiday-season flights because of staffing problems tied to COVID-19. 

For travelers, that meant time away from loved ones, chaos at the airport and the stress of spending hours standing in line and on the phone trying to rebook flights. Peter Bockman, a retired actor, and his daughter Malaika, a college student, were supposed to be in Senegal on Saturday celebrating with relatives they hadn’t seen in a decade. But their 7:30 p.m. flight Friday from New York to Dakar was canceled, which they found out only when they got to the airport. They were there until 2 a.m. trying to rebook a flight.

“Nobody was organizing, trying to sort things out,” he said, faulting Delta for a lack of customer service. “Nobody explained anything. Not even, ‘Oh we’re so sorry, this is what we can do to help you.'” 

Their new flight, for Monday evening, has a layover in Paris, and they are worried there will be issues with that one as well. They have already missed a big family get-together that was scheduled for Saturday.

FlightAware’s data shows airlines scrapped more than 6,000 flights globally for Friday, Saturday and Sunday combined as of Saturday evening, with almost one-third of affected flights to, from or within the United States. Chinese airlines made up many of the canceled flights, and Chinese airports topped FlightAware’s lists of those with most cancellations. It wasn’t clear why. China has strict pandemic control measures, including frequent lockdowns, and the government set one on Xi’an, a city of 13 million people, earlier this week. 

Air China, China Eastern and Lion Air, an Indonesian airline with many canceled flights, did not respond to emails Saturday. 

Flight delays and cancellations tied to staffing shortages have been a regular problem for the U.S. airline industry this year. Airlines encouraged workers to quit in 2020, when air travel collapsed, and were caught short-staffed this year as travel recovered. 

To ease staffing shortages, countries including Spain and the U.K. have reduced the length of COVID-19 quarantines by letting people return to work sooner after testing positive or being exposed to the virus. 

Delta CEO Ed Bastian was among those who have called on the Biden administration to take similar steps or risk further disruptions in air travel. On Thursday, the U.S. shortened COVID-19 isolation rules for health care workers only.


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Robots Serve Food to Diners at Iraq Restaurant

The White Fox restaurant in Mosul, Iraq, isn’t known for its comfortable atmosphere or its great food and drinks. It’s known for its servers. VOA’s Kawa Omar filed this report, narrated by Rikar Hussein.

Producer and camera: Kawa Omar.


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