China Launches Tech Hub Megalopolis to Rival Silicon Valley

As the global race to gain the lead in next generation tech heats up, China is stepping up its efforts, recently announcing a long-awaited plan to link up its southern Pearl River Delta into a massive hub of technology, research finance and innovation.

The possibilities and challenges of the project are both equally challenging and promising, analysts say.

Some describe the plan as an attempt to create a mega-city to rival Silicon Valley, the U.S. technology powerhouse that is home to companies such as Google, Facebook, and Apple.

But while Silicon Valley has a population of 3.1 million and covers an area 121.4 square kilometers, the Greater Bay Area will link up nine cities together with Hong Kong and Macau and cover an area of 56,000 square kilometers. The area will have a population of about 70 million and the economic heft, state media argues, to drive the Chinese economy, let alone the world.

According to the plan, which was announced recently and is expected to be a prominent topic during high-level political meetings this month in Beijing, each city will focus on an area of strength. For example, Hong Kong will focus on finance, Macau tourism, Shenzhen, innovation and technology, Guangzhou will be a gateway and logistic hub and so on.

The plan is not necessarily new. China’s opening up to the world more than four decades ago began in the south and the Pearl River Delta has long been home to some of the country’s leading companies from telecommunications – such as Huawei to Internet giant Tencent and host of other technology and manufacturing enterprises.

“It’s (the plan) a natural evolution of economic growth and the growth engine,” said Adam Xu, partner at OC&C Strategy Consultants. “If you really look at history in China, a lot of top down plans always have some bottom up support. A lot of economic activity has already happened there, then you have a grand plan to first officially recognize, then to promote and to further accelerate.”

Xu said that as labor costs rise in China, the country is looking to move up the industrial value chain and the program seeks to do just that to push the region on to the next wave, be it the manufacturing of electric cars, financial services or telecommunications.

It also aims to drive investment to the area at a time when foreign funds flowing into the country are sagging.

Challenges

One key challenge, Xu adds, will be execution. The plan will tie together three different legal jurisdictions and that makes the plan unique compared to the two other major mega-city projects in China – the Beijing, Hebei, Tianjin merger and the Yangtze River Delta integration plan near Shanghai.

“We don’t know how effective the top down grand plan will (be in) guiding the many independent growing forces at the city level to coordinate and be successful,” Xu said. “This part will be quite an important challenge.”

China has long had deep pockets when it comes to making investments that push forward technological advances. In many cases, however, that has led to overlaps in development and spending on technology and in turn oversupply.

“Looking at the grand scheme each city doesn’t have anything new,” said C.Y. Huang, partner of FCC Partners. “The biggest challenge and the biggest beauty – if they can pull it off – will be linking all of these together. 

One way the plan could do that is not just by lifting physical barriers, but the flow of people, information and money.

China has already taken major strides to overcome some of the physical obstacles such as linking Hong Kong with Guangzhou and Shenzhou by high-speed rail and its recent opening of the 55-kilometer Hong Kong-Zhuhai-Macau bridge. 

But other barriers may prove to be a bigger challenge.

“I think it is really the barriers in systems that is the challenge. If they can really pull that off that will be a tremendous benefit and synergy in the long term,” Huang said.

At the same time, he added, we shouldn’t underestimate the social and political aspect of the challenges because we are talking about people.

“One is a communist country, and the other is a free society. Although they talk about one country two systems, still it is different,” Huang said.

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New Lab Gives Biomechanical Students Real-Life Experience

Studying engineering isn’t just about learning, it’s about using skills in the real world. But for biomechanical engineering students, it can be hard to get that real-world experience. However, students at the University of the District of Columbia are able to see how their schoolwork translates to helping people. VOA’s Kevin Enochs reports.

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Space X Crew Capsule Reaches Space Station

The first American commercially built-and-operated crew spacecraft in eight years docked successfully Sunday at the International Space Station.

There was, however, no crew aboard the spacecraft, just a test dummy named Ripley, in a nod to the lead character in the Alien movies.

The docking was carried out autonomously by the Crew Dragon capsule, as the three astronauts on board the International Space Station watched.

The Space X Crew Dragon capsule lifted off atop a Falcon 9 rocket early Saturday from Florida’s Kennedy Space Center.

The Dragon brought supplies and test equipment to the space station where it will spend five days as astronauts conduct tests and inspect the Dragon’s cabin.

NASA has awarded millions of dollars to Space X and Boeing to design and operate a capsule to launch astronauts into orbit from American soil some time this year.

It is not immediately clear whether that goal will be reached.

Space X is entrepreneur Elon Musk’s company. Musk is also the CEO of electric carmaker Tesla.

Currently, America relies on Russia to launch astronauts to the space station.

Russia charges about $80 million per ticket.

 

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Space X Crew Capsule Reaches Space Station

The first American commercially built-and-operated crew spacecraft in eight years docked successfully Sunday at the International Space Station.

There was, however, no crew aboard the spacecraft, just a test dummy named Ripley, in a nod to the lead character in the Alien movies.

The docking was carried out autonomously by the Crew Dragon capsule, as the three astronauts on board the International Space Station watched.

The Space X Crew Dragon capsule lifted off atop a Falcon 9 rocket early Saturday from Florida’s Kennedy Space Center.

The Dragon brought supplies and test equipment to the space station where it will spend five days as astronauts conduct tests and inspect the Dragon’s cabin.

NASA has awarded millions of dollars to Space X and Boeing to design and operate a capsule to launch astronauts into orbit from American soil some time this year.

It is not immediately clear whether that goal will be reached.

Space X is entrepreneur Elon Musk’s company. Musk is also the CEO of electric carmaker Tesla.

Currently, America relies on Russia to launch astronauts to the space station.

Russia charges about $80 million per ticket.

 

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Silicon Valley Skeptical of Washington’s China Concerns

With the U.S. and China still negotiating a trade deal, and ongoing concerns in the U.S. about China’s technology goals, Silicon Valley is caught between two superpowers. Michelle Quinn reports.

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Silicon Valley Skeptical of Washington’s China Concerns

With the U.S. and China still negotiating a trade deal, and ongoing concerns in the U.S. about China’s technology goals, Silicon Valley is caught between two superpowers. Michelle Quinn reports.

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FIFA’s Infantino: Look to Women’s Game to Improve Men’s

Striving to improve behavior at soccer matches, FIFA President Gianni Infantino sees women as role models for male players.

There is less simulation and time-wasting in the women’s game, according to Infantino, and it’s time for men to clean up their act to improve the image of soccer.

“The men’s game has developed incredibly, positively, but a few maybe side effects have unfortunately developed as well that we are fighting now,” Infantino said Saturday. “Let’s take the example of the women’s game.”

Infantino’s admiration for the conduct of female players stands in contrast to predecessor Sepp Blatter, who urged them to wear tighter kits to make the game more popular.

“Women are nicer than men, probably, generally,” Infantino said. “Sometimes we men feel that we need to show how strong we are, probably in the human nature, and this is reflected as well in some of the behavior in society in general but also on the football pitch.”

On field behavior

Infantino was speaking after the game’s lawmaking body, the International Football Association Board, discussed ways of improving on-field behavior at its annual meeting, including treatment of referees. Yellow and red cards for misconduct by team officials are now entered in the laws of the game after successful trials.

“When it comes to behavior,” Infantino said, “if there’s something to learn from the women’s game … it’s certainly this: This is much less time lost and wasted on simulations or on other situations we criticize in the men’s game. We are intervening now.”

Such as ensuring someone substituted “doesn’t greet all the players before going out (leaving the pitch) and so on — wasting time,” Infantino said. “All the things you don’t see in the women’s game.”

Diving has been reduced by the introduction of video review, Infantino said, while announcing his support for VAR at the June 7-July 7 Women’s World Cup in France. The decision will have to be ratified by the FIFA Council at a meeting in two weeks in Miami.

“Players now know that it’s not just sufficient to have a look where is the referee, so if he doesn’t see me I can simulate, because he or she will be caught,” Infantino said. “That’s why VAR automatically helps the fight against simulation and diving in a very efficient way.”

Handballs

To reduce controversies, the handball law has been adjusted.

Referees won’t necessarily have to decide if there was deliberate handling, but judge the outcome and whether an unfair advantage was obtained by gaining possession or control of the ball.

It won’t be an offense if the arm or hand is very close to the body but it will be if they are in an elevated position when the ball is handled. But even if a player accidentally handled while scoring, the goal would be ruled out.

Kicks and penalties

Disruptive behavior around free kicks should be reduced from June. The attacking team will not be allowed within 1 meter (yard) of the defensive wall in an attempt to stop players jostling and matches being delayed by the necessary intervention of referees.

In two changes affecting goalkeepers, goal kicks won’t have to leave the penalty area and only one foot will have to remain on the line when facing a penalty.

Substitutes

To speed up the game, players being substituted must leave the field at the nearest point rather than at the halfway line.

“It’s a fairly standard time-wasting tactic that when a manager wants to make a substitution, he can send a player to be substituted to the opposite end of the pitch,” said Scottish Football Association chief executive Ian Maxwell, one of the eight IFAB members.

FIFA has four delegates and the British nations have the other four, with six votes required for a change to the laws which come into effect from June.

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FIFA’s Infantino: Look to Women’s Game to Improve Men’s

Striving to improve behavior at soccer matches, FIFA President Gianni Infantino sees women as role models for male players.

There is less simulation and time-wasting in the women’s game, according to Infantino, and it’s time for men to clean up their act to improve the image of soccer.

“The men’s game has developed incredibly, positively, but a few maybe side effects have unfortunately developed as well that we are fighting now,” Infantino said Saturday. “Let’s take the example of the women’s game.”

Infantino’s admiration for the conduct of female players stands in contrast to predecessor Sepp Blatter, who urged them to wear tighter kits to make the game more popular.

“Women are nicer than men, probably, generally,” Infantino said. “Sometimes we men feel that we need to show how strong we are, probably in the human nature, and this is reflected as well in some of the behavior in society in general but also on the football pitch.”

On field behavior

Infantino was speaking after the game’s lawmaking body, the International Football Association Board, discussed ways of improving on-field behavior at its annual meeting, including treatment of referees. Yellow and red cards for misconduct by team officials are now entered in the laws of the game after successful trials.

“When it comes to behavior,” Infantino said, “if there’s something to learn from the women’s game … it’s certainly this: This is much less time lost and wasted on simulations or on other situations we criticize in the men’s game. We are intervening now.”

Such as ensuring someone substituted “doesn’t greet all the players before going out (leaving the pitch) and so on — wasting time,” Infantino said. “All the things you don’t see in the women’s game.”

Diving has been reduced by the introduction of video review, Infantino said, while announcing his support for VAR at the June 7-July 7 Women’s World Cup in France. The decision will have to be ratified by the FIFA Council at a meeting in two weeks in Miami.

“Players now know that it’s not just sufficient to have a look where is the referee, so if he doesn’t see me I can simulate, because he or she will be caught,” Infantino said. “That’s why VAR automatically helps the fight against simulation and diving in a very efficient way.”

Handballs

To reduce controversies, the handball law has been adjusted.

Referees won’t necessarily have to decide if there was deliberate handling, but judge the outcome and whether an unfair advantage was obtained by gaining possession or control of the ball.

It won’t be an offense if the arm or hand is very close to the body but it will be if they are in an elevated position when the ball is handled. But even if a player accidentally handled while scoring, the goal would be ruled out.

Kicks and penalties

Disruptive behavior around free kicks should be reduced from June. The attacking team will not be allowed within 1 meter (yard) of the defensive wall in an attempt to stop players jostling and matches being delayed by the necessary intervention of referees.

In two changes affecting goalkeepers, goal kicks won’t have to leave the penalty area and only one foot will have to remain on the line when facing a penalty.

Substitutes

To speed up the game, players being substituted must leave the field at the nearest point rather than at the halfway line.

“It’s a fairly standard time-wasting tactic that when a manager wants to make a substitution, he can send a player to be substituted to the opposite end of the pitch,” said Scottish Football Association chief executive Ian Maxwell, one of the eight IFAB members.

FIFA has four delegates and the British nations have the other four, with six votes required for a change to the laws which come into effect from June.

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Hiplet: When Ballet Meets Hip-Hop

A new dance style, born in Chicago, is recognized around the world. It’s called hiplet and combines hip-hop and ballet. Ksenia Turkova traveled to Chicago to meet the Godfather of hiplet, Homer Hans Bryant.

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Hiplet: When Ballet Meets Hip-Hop

A new dance style, born in Chicago, is recognized around the world. It’s called hiplet and combines hip-hop and ballet. Ksenia Turkova traveled to Chicago to meet the Godfather of hiplet, Homer Hans Bryant.

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Hip-Hop Guru Opens Dance Studio in US Capital

Jason Cerda is a professional dancer and recording artist. He’s performed on stage with Jennifer Lopez, Ricky Martin and other big-name musicians and now uses his expertise to teach young performers how to dance. Maxim Moskalkov has the story.

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Smog-Fighting Shingles Helping to Clean California Air

Northern California is famous for many things, the sun, the surf, the wine, but it has also been infamous for its smog. Smog is a noxious collection of nitrogen and sulfur oxides, along with smoke and dirty particles, which all combine to form a foglike haze in the air. But some new technology is promising to turn a roof into an air cleaner. VOA’s Kevin Enochs reports.

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SpaceX Tests Crew Capsule in Flight to Space Station

America’s newest capsule for astronauts rocketed Saturday toward the International Space Station on a high-stakes test flight by SpaceX.

The only passenger was a life-size test dummy, named Ripley after the lead character in the “Alien” movies. SpaceX needs to nail the debut of its crew Dragon capsule before putting people on board later this year.

This latest, flashiest Dragon is on a fast track to reach the space station Sunday morning, just 27 hours after liftoff.

Five day round trip

It will spend five days docked to the orbiting outpost, before making a retro-style splashdown in the Atlantic next Friday — all vital training for the next space demo, possibly this summer, when two astronauts strap in.

“This is critically important … We’re on the precipice of launching American astronauts on American rockets from American soil again for the first time since the retirement of the space shuttles in 2011,” said NASA Administrator Jim Bridenstine. He got a special tour of the pad on the eve of launch, by SpaceX founder and chief executive Elon Musk.

An estimated 5,000 NASA and contractor employees, tourists and journalists gathered in the wee hours at Kennedy Space Center with the SpaceX launch team, as the Falcon 9 rocket blasted off before dawn from the same spot where Apollo moon rockets and space shuttles once soared. Across the country at SpaceX Mission Control in Hawthorne, California, company employees went wild, cheering every step of the way until the capsule successfully reached orbit.

Looking on from Kennedy’s Launch Control were the two NASA astronauts who will strap in as early as July for the second space demo, Doug Hurley and Bob Behnken. It’s been eight years since Hurley and three other astronauts flew the last space shuttle mission, and human launches from Florida ceased.

Private companies

NASA turned to private companies, SpaceX and Boeing, and has provided them $8 billion to build and operate crew capsules to ferry astronauts to and from the space station. Now Russian rockets are the only way to get astronauts to the 250-mile-high outpost. Soyuz tickets have skyrocketed over the years; NASA currently pays $82 million per seat.

Boeing aims to conduct the first test flight of its Starliner capsule in April, with astronauts on board possibly in August.

Bridenstine said he’s confident that astronauts will soar on a Dragon or Starliner, or both, by year’s end. But he stressed there’s no rush.

“We are not in a space race,” he said. “That race is over. We went to the moon and we won. It’s done. Now we’re in a position where we can take our time and make sure we get it right.”

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SpaceX Tests Crew Capsule in Flight to Space Station

America’s newest capsule for astronauts rocketed Saturday toward the International Space Station on a high-stakes test flight by SpaceX.

The only passenger was a life-size test dummy, named Ripley after the lead character in the “Alien” movies. SpaceX needs to nail the debut of its crew Dragon capsule before putting people on board later this year.

This latest, flashiest Dragon is on a fast track to reach the space station Sunday morning, just 27 hours after liftoff.

Five day round trip

It will spend five days docked to the orbiting outpost, before making a retro-style splashdown in the Atlantic next Friday — all vital training for the next space demo, possibly this summer, when two astronauts strap in.

“This is critically important … We’re on the precipice of launching American astronauts on American rockets from American soil again for the first time since the retirement of the space shuttles in 2011,” said NASA Administrator Jim Bridenstine. He got a special tour of the pad on the eve of launch, by SpaceX founder and chief executive Elon Musk.

An estimated 5,000 NASA and contractor employees, tourists and journalists gathered in the wee hours at Kennedy Space Center with the SpaceX launch team, as the Falcon 9 rocket blasted off before dawn from the same spot where Apollo moon rockets and space shuttles once soared. Across the country at SpaceX Mission Control in Hawthorne, California, company employees went wild, cheering every step of the way until the capsule successfully reached orbit.

Looking on from Kennedy’s Launch Control were the two NASA astronauts who will strap in as early as July for the second space demo, Doug Hurley and Bob Behnken. It’s been eight years since Hurley and three other astronauts flew the last space shuttle mission, and human launches from Florida ceased.

Private companies

NASA turned to private companies, SpaceX and Boeing, and has provided them $8 billion to build and operate crew capsules to ferry astronauts to and from the space station. Now Russian rockets are the only way to get astronauts to the 250-mile-high outpost. Soyuz tickets have skyrocketed over the years; NASA currently pays $82 million per seat.

Boeing aims to conduct the first test flight of its Starliner capsule in April, with astronauts on board possibly in August.

Bridenstine said he’s confident that astronauts will soar on a Dragon or Starliner, or both, by year’s end. But he stressed there’s no rush.

“We are not in a space race,” he said. “That race is over. We went to the moon and we won. It’s done. Now we’re in a position where we can take our time and make sure we get it right.”

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White House Worries Too Few American Kids Study Science & Math

White House officials are worried that unless more American students study math and science the United States won’t be able to compete with China, India and other nations. The U.S. administration has just published a five-year plan to boost the number of kids who go into Science, Technology, Engineering and Math, or STEM subjects. VOA’s Sahar Majid has more in this report narrated by Bezhan Hamdard.

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White House Worries Too Few American Kids Study Science & Math

White House officials are worried that unless more American students study math and science the United States won’t be able to compete with China, India and other nations. The U.S. administration has just published a five-year plan to boost the number of kids who go into Science, Technology, Engineering and Math, or STEM subjects. VOA’s Sahar Majid has more in this report narrated by Bezhan Hamdard.

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US Stocks Rise as Trade Optimism Counters Weak Data

The S&P 500 and the Dow Jones industrial average snapped a three-day run of losses on Friday as optimism about the prospects for a U.S.-China trade agreement countered downbeat U.S. and China manufacturing data. 

The Nasdaq, meanwhile, marked its longest streak of weekly gains since late 1999. 

Following President Donald Trump’s announcement last weekend of a delay in higher tariffs on Chinese imports, Bloomberg reported late Thursday that a summit between Trump and his Chinese counterpart, Xi Jinping, to sign a final trade deal could happen as soon as mid-March.

“The optimism over trade resolution is outweighing the weakening economic data,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, N.C. 

A private survey showed China’s factory activity contracted for a third straight month in February, though at a slower pace, indicating a marginal improvement in domestic demand as a flurry of policy stimulus kicked in from late last year. 

ISM data also showed U.S. manufacturing activity for February dropped to its lowest since November 2016, and the University of Michigan survey showed consumer sentiment fell short of expectations in the month. 

Detrick said that while the data were weak, investors hoped a U.S.-China trade deal would improve global growth prospects. 

The Dow Jones industrial average rose 110.32 points, or 0.43 percent, to 26,026.32; the S&P 500 gained 19.2 points, or 0.69 percent, to 2,803.69; and the Nasdaq Composite added 62.82 points, or 0.83 percent, to 7,595.35. 

Good sign

Friday marked the first close above 2,800 for the S&P since Nov. 8. Nate Thooft, global head of asset allocation for Manulife Asset Management in Boston, said technical investors would see a close above that level “as a good omen.” 

The index closed 4.2 percent under its September record closing high. It has risen 11.8 percent so far this year, bolstered by trade hopes and the Federal Reserve’s cautious stance on interest rates. 

For the week, the S&P rose 0.4 percent while the Dow fell 0.02 percent and the Nasdaq rose 0.9 percent. 

Of the 11 major S&P 500 sectors, eight were gainers on the day. The health care sector rose 1.4 percent, providing the biggest boost and supported by gains in companies including health insurer UnitedHealth Group which bounced back after falling for much of the week. 

The consumer discretionary sector rose 0.9 percent, with the biggest lift from Amazon.com. 

Foot Locker shares rose 5.9 percent after the retailer beat quarterly same-store sales estimates and helped drive a 1.9 percent gain in shares of Nike Inc., the second-biggest boost to the sector. 

Gap Inc. surged 16 percent, making it the biggest percentage gainer in the S&P, after it said it would separate its better-performing Old Navy brand and close about 230 Gap stores. 

The energy sector rose 1.8 percent despite a decline in oil prices. 

A U.S. Commerce Department report showed inflation pressures remaining tame, which along with slowing domestic and global economic growth gave more credence to the Federal Reserve’s “patient” stance toward raising interest rates further this year. 

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favored advancers. 

The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 92 new highs and 29 new lows. 

Volume on U.S. exchanges was 7.95 billion shares, compared with the 7.27 billion average for the last 20 trading days. 

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US Stocks Rise as Trade Optimism Counters Weak Data

The S&P 500 and the Dow Jones industrial average snapped a three-day run of losses on Friday as optimism about the prospects for a U.S.-China trade agreement countered downbeat U.S. and China manufacturing data. 

The Nasdaq, meanwhile, marked its longest streak of weekly gains since late 1999. 

Following President Donald Trump’s announcement last weekend of a delay in higher tariffs on Chinese imports, Bloomberg reported late Thursday that a summit between Trump and his Chinese counterpart, Xi Jinping, to sign a final trade deal could happen as soon as mid-March.

“The optimism over trade resolution is outweighing the weakening economic data,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, N.C. 

A private survey showed China’s factory activity contracted for a third straight month in February, though at a slower pace, indicating a marginal improvement in domestic demand as a flurry of policy stimulus kicked in from late last year. 

ISM data also showed U.S. manufacturing activity for February dropped to its lowest since November 2016, and the University of Michigan survey showed consumer sentiment fell short of expectations in the month. 

Detrick said that while the data were weak, investors hoped a U.S.-China trade deal would improve global growth prospects. 

The Dow Jones industrial average rose 110.32 points, or 0.43 percent, to 26,026.32; the S&P 500 gained 19.2 points, or 0.69 percent, to 2,803.69; and the Nasdaq Composite added 62.82 points, or 0.83 percent, to 7,595.35. 

Good sign

Friday marked the first close above 2,800 for the S&P since Nov. 8. Nate Thooft, global head of asset allocation for Manulife Asset Management in Boston, said technical investors would see a close above that level “as a good omen.” 

The index closed 4.2 percent under its September record closing high. It has risen 11.8 percent so far this year, bolstered by trade hopes and the Federal Reserve’s cautious stance on interest rates. 

For the week, the S&P rose 0.4 percent while the Dow fell 0.02 percent and the Nasdaq rose 0.9 percent. 

Of the 11 major S&P 500 sectors, eight were gainers on the day. The health care sector rose 1.4 percent, providing the biggest boost and supported by gains in companies including health insurer UnitedHealth Group which bounced back after falling for much of the week. 

The consumer discretionary sector rose 0.9 percent, with the biggest lift from Amazon.com. 

Foot Locker shares rose 5.9 percent after the retailer beat quarterly same-store sales estimates and helped drive a 1.9 percent gain in shares of Nike Inc., the second-biggest boost to the sector. 

Gap Inc. surged 16 percent, making it the biggest percentage gainer in the S&P, after it said it would separate its better-performing Old Navy brand and close about 230 Gap stores. 

The energy sector rose 1.8 percent despite a decline in oil prices. 

A U.S. Commerce Department report showed inflation pressures remaining tame, which along with slowing domestic and global economic growth gave more credence to the Federal Reserve’s “patient” stance toward raising interest rates further this year. 

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favored advancers. 

The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 92 new highs and 29 new lows. 

Volume on U.S. exchanges was 7.95 billion shares, compared with the 7.27 billion average for the last 20 trading days. 

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US Consumer Spending Fell 0.5 Percent in December

U.S. consumer spending tumbled 0.5 percent in December, the biggest decline in nine years, as the holiday shopping season ended in disappointment. Meanwhile, incomes rose sharply in December but edged down in January.

The fall in consumer spending followed sizable gains of 0.7 percent in October and 0.6 percent in November, the Commerce Department reported Friday. December’s result means that spending for the quarter decelerated significantly, a primary factor in the slowing of overall economy in the final three months of the year. Gross domestic product recorded a growth rate of 2.6 percent after a 3.4 percent gain in the third quarter.

Incomes jumped 1 percent in December, though slipped 0.1 percent in January. The government did not release spending data for January because of delays stemming from the government shutdown.

The big fall in spending reflected sizable declines in purchases of durable goods such as autos, as well as nondurable goods such as clothing during the all-important holiday shopping season. The result shows that consumer spending, which accounts for 70 percent of economic growth, was showing significant weakness heading into the current quarter.

Many economists believe that GDP growth will slow further during the current January-March period, with some expecting GDP to drop to a growth rate of 2 percent or lower.

Inflation, as measured by a gauge preferred by the Federal Reserve, was up 1.7 percent for the past 12 months ending in December. That’s the slowest 12-month pace since a similar 12-month gain for the period ending in October 2017 and is below the Fed’s 2 percent target for annual price increases.

Federal Reserve Chairman Jerome Powell told Congress this week that with a number of economic risks facing the country and with inflation so low, the central bank intends to be “patient” in deciding when to change interest rates again.

The move to a prolonged pause in further rate hikes, which the Fed had announced at its January meeting, has cheered financial markets which had been worried that the central bank, which hiked its benchmark rate four times last year, could move rates up too quickly, raising the risks of an economic downturn.

The spending and income report showed that the saving rate jumped to 7.6 percent of after-tax income in December, compared to 6.1 percent in November. That was the highest saving rate since January 2016.

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US Consumer Spending Fell 0.5 Percent in December

U.S. consumer spending tumbled 0.5 percent in December, the biggest decline in nine years, as the holiday shopping season ended in disappointment. Meanwhile, incomes rose sharply in December but edged down in January.

The fall in consumer spending followed sizable gains of 0.7 percent in October and 0.6 percent in November, the Commerce Department reported Friday. December’s result means that spending for the quarter decelerated significantly, a primary factor in the slowing of overall economy in the final three months of the year. Gross domestic product recorded a growth rate of 2.6 percent after a 3.4 percent gain in the third quarter.

Incomes jumped 1 percent in December, though slipped 0.1 percent in January. The government did not release spending data for January because of delays stemming from the government shutdown.

The big fall in spending reflected sizable declines in purchases of durable goods such as autos, as well as nondurable goods such as clothing during the all-important holiday shopping season. The result shows that consumer spending, which accounts for 70 percent of economic growth, was showing significant weakness heading into the current quarter.

Many economists believe that GDP growth will slow further during the current January-March period, with some expecting GDP to drop to a growth rate of 2 percent or lower.

Inflation, as measured by a gauge preferred by the Federal Reserve, was up 1.7 percent for the past 12 months ending in December. That’s the slowest 12-month pace since a similar 12-month gain for the period ending in October 2017 and is below the Fed’s 2 percent target for annual price increases.

Federal Reserve Chairman Jerome Powell told Congress this week that with a number of economic risks facing the country and with inflation so low, the central bank intends to be “patient” in deciding when to change interest rates again.

The move to a prolonged pause in further rate hikes, which the Fed had announced at its January meeting, has cheered financial markets which had been worried that the central bank, which hiked its benchmark rate four times last year, could move rates up too quickly, raising the risks of an economic downturn.

The spending and income report showed that the saving rate jumped to 7.6 percent of after-tax income in December, compared to 6.1 percent in November. That was the highest saving rate since January 2016.

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