Archives for March 2021

MANILA, Philippines (AP) — The United States said Tuesday it’s backing the Philippines in a new standoff with Beijing in the disputed South China Sea, where Manila has asked a Chinese fishing flotilla to leave a reef. China ignored the call, insisting it owns the offshore territory.

The U.S. Embassy said it shared the concerns of the Philippines and accused China of using “maritime militia to intimidate, provoke, and threaten other nations, which undermines peace and security in the region.”

“We stand with the Philippines, our oldest treaty ally in Asia,” the U.S. Embassy in Manila said in a statement.

Philippine Defense Secretary Delfin Lorenzana on Sunday demanded about 200 Chinese vessels he said were militia boats leave the Whitsun Reef, a shallow coral region about 175 nautical miles (324 kilometers) west of Bataraza town in the western Philippine province of Palawan.

Philippine officials said the reef, which they call Julian Felipe, is well within the country’s internationally recognized exclusive economic zone, over which the Philippines “enjoys the exclusive right to exploit or conserve any resources.”

The Philippine coast guard spotted about 220 Chinese vessels moored at the reef, which Beijing and Vietnam also claim, on March 7.

On Monday, a surveillance aircraft spotted 183 Chinese vessels still at the reef, said Philippine military chief Lt. Gen. Cirilito Sobejana, who released aerial pictures of the Chinese vessels in one of the most hotly contested regions in the strategic waterway.

The Philippines has filed a diplomatic protest over the Chinese presence, Foreign Secretary Teodoro Locsin Jr. said.

China insisted it owns the reef, which it calls Niué Jiao, and said the Chinese vessels converged in the area to avoid rough waters.

Beijing denied the vessels were maritime militias. “Any speculation in such helps nothing but causes unnecessary irritation,” the Chinese Embassy said in a statement on Monday. “It is hoped that the situation could be handled in an objective and rational manner.”

The U.S. Embassy, however, said “Chinese boats have been mooring in this area for many months in ever increasing numbers, regardless of the weather.”

China, the Philippines, Vietnam, Malaysia, Taiwan and Brunei have been locked in a tense territorial standoff over the resource-rich and busy waterway for decades.

President Rodrigo Duterte would talk to the Chinese ambassador in Manila about the issue, his spokesman, Harry Roque told a news conference.

Duterte has nurtured friendly ties with Beijing since taking office in 2016 and has been criticized for not immediately demanding Chinese compliance with an international arbitration ruling that invalidated Beijing’s historic claims to virtually the entire sea. China has refused to recognize the 2016 ruling, which it called “a sham,” and continues to defy it.

Duterte has sought infrastructure funds, trade and investments from China, which has also donated and pledged to deliver more COVID-19 vaccines as the Philippines faces an alarming spike in coronavirus infections.

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Stocks closed broadly lower on Tuesday and gave back nearly all of their gains from a day earlier as technology, industrial and bank stocks fell.

The S&P 500 fell 30.07 points, or 0.8%, to 3,910.52. Technology stocks were the biggest drag on the market and pushed the Nasdaq 149.85 points lower, or 1.1%, to 13,227.70. The Dow Jones Industrial Average fell 308.05 points, or 0.9% to 32,423.15.

Stocks of smaller companies, which have far outpaced the rest of the market this year, fell even more. The Russell 2000 index gave back 3.6%.

Industrial and health care companies also accounted for a good part of the selling. Energy stocks helped drag down the market too as oil prices fell.

Bond yields declined. That weighed on banks and other financial companies which look to yields as a benchmark for the interest rates they charge on mortgages and other loans.

Investors continue to be focused on the future outlook for the U.S. economy as millions of Americans get vaccinated every day. Investors are wavering between optimism that coronavirus vaccines that might allow business and travel to return to normal and fears of higher inflation after struggling economies were flooded with credit and government spending.

“The market feels like it is in this inflection point,” said Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management. “It’s a good day for reflection.”

The price of U.S. crude oil dropped 6.2% to $57.76 a barrel, pulling energy companies lower. Energy prices have been steadily climbing this year until recently, as the global economy recovers and oil demand worldwide increases while production remains constrained. Marathon Oil fell 6.1%.

Another drop in long-term bond yields pulled bank stocks lower. When bond yields fall they mean lower interest rates on loans such as mortgages, and weaker profits for banks and other lenders. Bank of America fell 2.0% and Wells Fargo dropped 1.9%. American Express slid 2.8%.

The yield of the 10-year Treasury note fell to 1.63%. The yield was well above 1.70% last week, which had put some pressure on the stock market.

The S&P 500 hit a pandemic-era low exactly one year ago, on March 23, 2020, having dropped nearly 34% in about a month. That wiped out three years’ worth of gains. The index wound up roaring back in the coming months, and recovered all its losses by August. Through Monday, it had surged 76% from that low point.

Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell told Congress on Tuesday that more must be done to limit the economic damage from the coronavirus pandemic. Powell also stressed that he does not expect programs aimed at reviving the economy will trigger unwanted inflation.

Cronk said many of the signs in the market point to an early-stage recovery. Interest rates are rising as the economy strengthens, commodities like oil are making steady gains and sectors tied closely to economic growth are doing well. “It’s playing out exactly as it should play out.”

AstraZeneca fell 3.5% after U.S. authorities said that the drug company’s COVID-19 vaccination trial data contained “incomplete” information, which may impact its efficacy. AstraZeneca’s vaccine is being primarily used in Europe.

GameStop, whose stock price soared in January after a social media-fueled frenzy, reported a jump in fourth-quarter profit because of a hefty tax benefit, but the company’s latest results fell short of Wall Street forecasts. The report was released after the close of regular stock trading. The stock fell 3% in after-hours trading.

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AP Business Writer Stan Choe contributed.

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