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Stocks plunge, then recover as wild ride continues

NEW YORK — The stock market recovered after an early plunge Tuesday and was little changed in morning trading, raising hopes of a halt to a global sell-off in stock markets. The swings came one day after the steepest drop in 6 ½ years.

Major indexes in Asia and Europe fell following Monday's 1,175-point drop in the Dow Jones industrial average. Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.

Trading was choppy in the early going Tuesday, likely to be one of the most watched days on the markets in years.

The Dow Jones industrial average fell as much as 567 points shortly after the opening bell, then jumped as much as 367 points in the first half-hour of trading.

The Dow was little changed at 24,334 as of 10:49 a.m. The Standard & Poor's 500 index, a broader market barometer that many index funds track, was down 6 points, or 0.3 percent, to 2,641. The Nasdaq composite was down 9 points, or 0.1 percent, to 6,966.

The steep drops Friday and Monday erased the gains the Dow and S&P 500 made since the beginning of the year, but both remain higher over the past 12 months. The Dow is still up 20 percent over that time, the S&P 500 15 percent.

After the sharp losses over the past three days, the S&P 500 is down 8.5 percent from the most recent record high it set on January 26. That's less than the 10 percent drop that is known on Wall Street as a "correction."

Corrections are seen as entirely normal during bull markets, and even helpful in removing speculative froth and allowing new investors to buy into the market at lower prices. The last time the market had a correction was two years ago, which is seen as an uncommonly long time.

In Tuesday's trading, high-dividend companies including utility and real estate companies fell, as bond yields increased after a sharp drop on Monday. Technology and industrial companies and retailers moved higher, a possible sign of confidence the U.S. economy will keep growing.

The market mood turned decidedly fearful on Monday when the Dow Jones industrial average posted its biggest percentage decline since August 2011, driven by fears the U.S. Federal Reserve will raise interest rates faster than expected due to a pick-up in wages. Those stemmed from the U.S. jobs report on Friday.

That has fed into widespread concerns that markets were stretched following a strong run over the past year that pushed many indexes to record highs. Some also question the possible role of computer-driven algorithmic trading in the precipitous declines or even the ramifications of the rise and fall in the value of virtual currencies, notably bitcoin.

"If investors look at underlying earnings growth and the fundamentals of the global economy, there is reason for optimism," said Neil Wilson, senior market analyst at ETX Capital.

"However once this kind of stampede starts it's hard to stop."

Among the biggest losers Tuesday was Tokyo's Nikkei 225 stock average, which ended 4.7 percent lower. Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent.

In Europe, the British FTSE 100 index fell 1.6 percent while the CAC 40 in France fell 1.9 percent and Germany's DAX was down 1.8 percent. All three were lower earlier.

Though many stock indexes are close to where they started the year, the losses mark a reversal of fortune following a sustained period of gains, a pullback that some market pros have been predicting for some time.

Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets.

"Seemingly the only hope for the markets at the moment is that investors suddenly decide that the sell-off has been a bit overdone," said Connor Campbell, a financial analyst at Spreadex.

Despite the sea of red in global stock markets, there are hopes that the retreat won't last long given that global economic growth has picked up and the financial system is more robust since the financial crisis.

"That is not to say that we won't see further falls in coming days, but in an environment where growth is good and earnings are expected to rise globally, there are decent underpinnings," said James Knightley, chief international economist at ING.

On Monday, the Dow finished down 4.6 percent while the S&P 500 sank 4.1 percent, to 2,648.94. The last fall of that size came in August 2011 when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a U.S. credit rating downgrade.


Education
Coos Bay School District teacher Karla Delgado comes full circle
Karla Delgado receives Chamber of Commerce award

COOS BAY — The Coos Bay School District has an “Innovative Educator.” Third grade teacher Karla Delgado received the title from the Coos Bay Chamber of Commerce at the end of January.

The Blossom Gulch teacher said she was nominated by the elementary school vice principal, who threw Delgado’s name into consideration without her knowledge.

Jillian Ward / JILLIAN WARD The World 

Karla Delgado, 3rd grade teacher at Blossom Gulch Elementary, received the Education Innovator award from Coos Bay Chamber of Commerce last month, something she called "an honor."

“Being given this award is an honor because I love what I do and I love coming to school every single day,” Delgado said. “This is my 22nd year teaching, something I have an even bigger heart for because Blossom Gulch holds the hallways I walked through as a child.”

In fact, when Delgado left to first teach in Portland, she never thought she would return to Coos Bay.

“It’s so great to give back to the community that raised me,” she said. “When I returned 18 years ago, some of the same teachers I had as a child were still here and it was wonderful to work with those teachers you looked up to.”

But teaching wasn’t ever something Delgado expected to do. When she went off to college, her major was actually pre-law. That all changed when she worked for the Boys and Girls Club one summer and they were short a T-ball coach for the Blossom Gulch kindergarten boys’ team.

“I fell in love with working with small children, hearing them say ‘wow’ when they learned to bat and catch,” she said. “So when I went back to school I changed my major to elementary education, which is a huge change. I had wanted to defend certain things but just realized my heart needed to be with kids.”

During her two decades teaching, Delgado has been both disheartened and proud. She said choosing to be a teacher has been fulfilling overall.

“I’m excited about the district’s new schools and where we’re going,” she said. “It’s a good district and we’re doing great things.”


Lee-wire
AP
Declassify? House Dems vote to air their Russia-probe memo

WASHINGTON — The House intelligence committee's probe of Russian interference in the 2016 election spun further into charges and counter-charges among angry U.S. lawmakers and President Donald Trump on Monday as the panel voted to release a second classified memo about whether the FBI and Justice Department conspired against him.

This memo was written by Democrats on the panel who are pushing back against a GOP document, declassified by Trump last week, that criticizes the methods the FBI used to obtain a surveillance warrant on a onetime Trump campaign associate. The Democratic document attempts to counter some of the arguments and evidence put forward by the Republicans.

The battle of classified memos has further deepened the partisan divide on the committee, which is supposed to be jointly investigating the Russian meddling and possible connections between Russia and the Trump presidential campaign. It also takes attention from the separate investigations by special counsel Robert Mueller and the Senate intelligence committee.

Trump said over the weekend that the GOP memo "totally vindicates" him. Both Republicans and Democrats disputed that, and Democrats also bemoaned the release of formerly classified information and the possibility the precedent could compromise future investigations.

After the House committee's vote, which was unanimous, Rep. Adam Schiff of California, the panel's top Democrat, said he believed the Democratic document would "help inform the public of the many distortions and inaccuracies in the majority memo." But he also said he was concerned about "political redactions" the White House might make before its release.

The president now has five days to decide whether to allow the material's publication.

Schiff said he would compare any deletions the FBI and the Department of Justice might request with any White House edits to try to identify any attempts to withhold information for political purposes.

Texas Republican Rep. Mike Conaway, a leader of the panel's Russia probe, said after the vote that parts of the document should not be released.

"There are things in the memo that I would be uncomfortable with if the White House did not redact," he said.

Tensions between Trump and the Democrats were high before the vote, as the president and Schiff traded insults on Twitter on Monday morning — less than a week after Trump called for more bipartisanship in his State of the Union address.

Trump tweeted that Schiff is "one of the biggest liars and leakers in Washington" and "must be stopped."

Schiff quickly shot back: "Instead of tweeting false smears, the American people would appreciate it if you turned off the TV and helped solve the funding crisis, protected Dreamers or ... really anything else."

White House spokesman Raj Shah said merely that consideration of a release would "allow for a legal review, national security review led by the White House counsel's office."

As a second week of memo-watching commenced, the committee also was prepared to interview Steve Bannon, Trump's former chief strategist, as part of the Russia probe. But that meeting was put off, according to two people familiar with the committee's schedule. They declined to be named because the schedule is private.

It was unclear if the House would hold Bannon in contempt. He has been subpoenaed and has now delayed answering the panel's questions three times as the committee negotiates with his lawyer and the White House over the terms of his interview.

At issue is whether the White House will allow him to answer questions about his time in the Trump administration.

As the committee continues to negotiate Bannon's interview, Democrats have been raising questions about whether the committee chairman, Rep. Devin Nunes of California, coordinated with the White House in drafting the GOP memo. After the document's release last week, the president quickly seized on it to vent his grievances against the nation's premier law enforcement agencies.

"The goal here is to undermine the FBI, discredit the FBI, discredit the Mueller investigation, do the president's bidding," Schiff said. "I think it's very possible his staff worked with the White House."

"I think it's very possible his staff worked with the White House," Schiff added, referring to Nunes.

Nunes was asked during a Jan. 29 committee meeting whether he had coordinated the memo with the White House. "As far as I know, no," he responded, then refused to answer when asked whether his congressional staff members had communicated with the White House. He had previously apologized for sharing with the White House secret intelligence intercepts related to an investigation of Russian election interference before talking to committee members.

Trump praised Nunes in a separate tweet Monday, calling him "a man of tremendous courage and grit, may someday be recognized as a Great American Hero for what he has exposed and what he has had to endure!"

The Republican memo released last Friday alleges misconduct on the part of the FBI and the Justice Department in obtaining a warrant under the Foreign Intelligence Surveillance Act to monitor former Trump campaign foreign policy adviser Carter Page and his ties to Russia. Specifically, it takes aim at the FBI's use of information from former British spy Christopher Steele, who compiled a dossier containing allegations of ties between Trump, his associates and Russia.

The underlying materials that served as the basis for the warrant application were not made public. Even as Democrats described that memo as inaccurate, some Republicans quickly cited it — released over the objections of the FBI and Justice Department — in their arguments that the FBI investigation that Mueller inherited is politically tainted. Still, some Republicans, including Rep. Trey Gowdy of South Carolina and House Speaker Paul Ryan have said the memo should not be used to undermine Mueller's probe.

The GOP memo's central allegation is that agents and prosecutors, in applying in October 2016 to monitor Page's communications, failed to tell a judge that the opposition research that provided grounds for the FBI's suspicion received funding from Hillary Clinton's presidential campaign and the Democratic National Committee. Page had stopped advising the campaign sometime around the end of that summer.

Steele's research, according to the memo, "formed an essential part" of the warrant application. But it's unclear how much or what information Steele collected made it into the application, or how much has been corroborated.


Lee-wire
AP
House Republicans working on averting another shutdown (copy)

WASHINGTON — House Republican leaders have come out with a plan to keep the government open for six more weeks while Washington grapples with a potential follow-up budget pact and, perhaps, immigration legislation.

GOP leaders announced they would seek to pass the stopgap spending bill by marrying it with a full-year, $659 billion Pentagon spending bill that's a top priority of the party's legion of defense hawks.

The measure would keep the government running through March 23 and also reauthorize for funding for community health centers that enjoy widespread bipartisan support.

Pairing the Pentagon's budget with only temporary money for the rest of the government wouldn't go anywhere in the Senate, vowed Minority Leader Chuck Schumer, D-N.Y., who said it "would be barreling head first into a dead-end."

On the other hand, the Senate might respond with a long-awaited spending pact to give whopping increases both to the Pentagon and domestic programs. Talks in the Senate on such a framework appeared to intensify in hopes of an agreement this week, aides and lawmakers said, and the House GOP strategy appeared designed in part to invite the Senate to complete budget negotiations and use the temporary spending bill to advance such a budget agreement.

Under Washington's arcane ways, a broad-brush agreement to increase legally binding spending "caps" — which would otherwise keep the budgets for Pentagon and domestic agencies both essentially frozen — would be approved, then followed by a far more detailed catchall spending bill that would takes weeks to negotiate.

"We are making real headway in our negotiations over spending caps and other important issues," said Senate Majority leader Mitch McConnell, R-Ky.

Republicans had been scrambling to pass the stopgap measure through the House because they can't count on support from Democrats — who feel stymied by inaction on legislation to protect young immigrants from deportation — to advance the legislation.

The situation in both the House and Senate was murky, although it's clear Senate Democrats have no appetite for sparking another government shutdown. Their unity splintered during last month's three-day shutdown.

One especially tricky question is whether House Democrats would approve of a spending agreement if there isn't much progress in addressing the issue of immigrants left vulnerable with the looming expiration of former President Barack Obama's Deferred Action for Childhood Arrivals program. That's a top priority for many House Democrats, especially lawmakers from the influential Hispanic Caucus.

House Minority Leader Nancy Pelosi, D-Calif., has linked progress on the budget with action to address the program but other Democrats are beginning to agitate for delinking the two, lest the opportunity for a budget pact be lost.

The broader budget picture is one in which GOP defense hawks are prevailing over the party's depleted ranks of deficit hawks while Democrats leverage their influence to increase spending for domestic priorities, such as combating opioid misuse.

Details are closely held and subject to change. But at issue is a two-year deal to increase caps on spending set by a failed 2011 budget deal. Republicans have pushed for defense increases in the neighborhood of $80 billion a year and have offered Democrats nearly as much — $60 billion or so per year — for nondefense programs.

Add in $80 billion to $90 billion worth of hurricane aid for Texas, Florida and Puerto Rico, health care funding and money for President Donald Trump's border security plan, and the final tally could total close to $400 billion. The potential cost, over the 2018-19 budget years, would rival the deficit impact of last year's tax measure over that period.

After last year's tax bill, the Congressional Budget Office says the deficit for 2018 will hit about $700 billion — before any fresh increase. Next year's deficit already is estimated to reach $975 billion, so the brewing agreement would mean the first $1 trillion-plus deficit since Obama's first term.