StocksTumble AfterWeakonline.wsj.com/public/resources/documents/pageone121314.pdf · 2018. 8....

YELLOW

VOL. CCLXIV NO. 140 * * * * * * * *

SATURDAY/SUNDAY, DECEMBER 13 - 14, 2014

HHHH $3 .00

WSJ.com

WEEKEND

Womenat Work: A Guide

for Men

REVIEW

BigIdeasForTinyBubbles

OFF DUTY

n Crude-oil prices sank totheir lowest level in five yearsafter the IEA cut its forecastfor global oil demand for thefifth time in six months. A1n U.S. stocks tumbled asoil’s sustained slide raiseddoubts about the health of theworld economy. The Dow fell315.51 points to 17280.83. B1nBaidu has agreed to make astrategic investment in Uber,giving the car-hailing ser-vice a new ally in China. B1n Gucci’s top two executiveswill depart as parent Keringmoves to stem falling sales anda perception of creative drift.B3n The NLRB set new rulesfor union elections in theprivate sector, aiming tostreamline the process. B4n Spain’s Repsol is circlingCanada’s beleaguered Talis-man Energy, discussing a dealfor as much as $6.9 billion. B3nTheMinneapolis Fed’spresident, Narayana Kocherla-kota, said he would step downwhen his term ends in 2016. A2n RadioShack said that itcould be forced to seek bank-ruptcy protection leading toa possible liquidation. B2nBinder & Binder, one of thelargest Social Security disabil-ity firms, is preparing for apossible Chapter 11 filing. B2nHearst is raising its stake inFitch in a deal that will give themedia conglomerate majorityownership of the ratings firm.B2

What’sNews

i i i

Business&Finance

World-Wide

i i i

CONTENTSBooks...................C5-16,20Corporate News.... B3,4Eating & Drinking D1,5,6Heard on Street.......B14In the Markets...........B5Letters to Editor......A12

Opinion.....................A11-13Sports.............................A14Stock Listings.....B12,13Style & Fashion.....D2-4Travel.............................D7,8Weather Watch.......A14Weekend Investor B7-9

s Copyright 2014 Dow Jones & Company.All Rights Reserved

>

InsideNOONAN A13

An ImportantLesson of a

Flawed Report

The wrangling betweenthe White House and

Congress over the spendingbill foreshadows two yearsof battles between the twoparties—and within them. A1 Senate leaders pushed off avote on the bill amid resis-tance, sending the chamberinto a rare weekend session. A4n Japanese Prime MinisterAbe’s party is poised to retainits majority in parliamentaryelections Sunday, polls show. A6n A powerful storm on theWest Coast left pockets ofdestruction but also boosteddepleted water reserves. A3n The push for a global cli-mate deal is leading to callsfor big cuts in coal usage,provoking stiff opposition. A8nMexico’s opposition calledfor a probe into a loan andpurchase of a vacation homeby the finance minister. A8n A Palestinian man at-tacked an Israeli family withacid in theWest Bank, underlin-ing tension in the territory.A9n A German court threw outan attempt to allow EdwardSnowden to travel to Berlin totestify on NSA activities. A7nWidespread power black-outs have emerged as the lat-est challenge to South Africa’sability to generate growth. A8n Negotiations over Iran’snuclear program will resumenext week, the first talks since aNovember deadline passed. A9

New Boss at Christie’sHints at Art Shake-Up

Since the 1970s, Nigeria hassent a steady stream of high-qual-ity crude oil to North Americanrefineries. As recently as 2010,tankers delivered a million bar-rels a day.

Then came the U.S. energyboom. By July of this year, oil im-ports from Nigeria had fallen tozero.

Displaced by surging U.S. oilproduction, millions of barrels ofNigerian crude now head to India,Indonesia and China. But MiddleEastern nations are trying to en-tice the same buyers. This has setup a battle for market share thatcould reshape the Organization ofthe Petroleum Exporting Coun-tries and fundamentally changethe global market for oil.

On Friday, crude pricesdropped to their lowest level infive years after the InternationalEnergy Agency cut its forecast forglobal oil demand for the fifthtime in six months. That signaledto investors that the world econ-omy would struggle in the comingyear, sending the Dow Jones In-dustrial Average tumbling by315.51 points, or 1.8%, to 17280.83.That’s the Dow’s biggest weeklypercentage loss in three years.

Since June, the IEA has cut itsdemand forecast for 2015 by800,000 barrels, while it says U.S.oil output will rise next year by1.3 million barrels a day.

The drop in global oil pricesfrom over $110 a barrel to under$62 on Friday has been portrayed

as a showdown between SaudiArabia and the U.S., two of theworld’s biggest oil producers. Butthe reality is more complex, in-volving Libyan rebels and Indone-sian cabdrivers as well as Texasroughnecks and Middle Easternoil ministers. It reflects both thesurging supply of crude and thecrumbling demand for oil.

And the oil-price plunge maynot end soon. Bank of AmericaMerrill Lynch says U.S. oil pricescould drop to $50 in 2015.

The roots of the price collapsego back to 2008 near Cotulla,Texas, a tiny town between SanAntonio and the Mexican border.This was where the first well wasdrilled into the Eagle Ford Shale.At the time, the U.S. pumpedabout 4.7 million barrels a day ofcrude oil.

In 2009 and 2010, the globaleconomy improved, demand foroil increased and crude pricesrose, creating a large incentive tofind new supplies. In Cotulla andelsewhere, U.S. drillers answeredthe call. “There was, for lack of abetter term, an arms race for oil,and we found a ton of oil,” saysDean Hazelcorn, an oil trader atCoquest in Dallas.

Today, two hundred drillingrigs blanket South Texas, steeringmetal bits deep underground intothe rock. Once drilled and hydrau-lically fractured, these wells yieldlarge volumes of high-quality oil;at the moment, the U.S. is pro-ducing 8.9 million barrels a day,thanks to the Eagle Ford and

PleaseturntopageA9

BY RUSSELL GOLD

Stocks TumbleAfter WeakOil ForecastDow Drops 300 Points on Growth FearsAs U.S. Boom Shuffles Export Markets

Eddie Sorrells is evaluating jobapplicants he knows he can’t hire.

The chief operating officer ofDSI Security Services, a providerof security guards, is checkingout potential employees with fel-ony or certain misdemeanorconvictions even though theywouldn’t get licensed in many ofthe 23 states where the firm op-erates.

Driving the company in that di-rection are government officialsin Washington and elsewhere whowant to give people with rapsheets a better shot at a job. Mr.Sorrells figures the reviews takeup hundreds of hours of staff timea year.

“It defies common sense,” saidMr. Sorrells, who is general coun-sel as well as COO of the Dothan, Ala., family-ownedcompany.

Three decades of tougher laws and policing haveleft nearly one in three adult Americans with a crim-inal record, according to data kept by the Federal

BY JOHN R. EMSHWILLERAND GARY FIELDS

SECOND CHANCE

Hiring Managers BedeviledBy Flood of Arrest Records

French billionaire FrançoisPinault popped into the Londonheadquarters of auction houseChristie’s one day in 1994 to seesome art. He was accompaniedby one of his employees, PatriciaBarbizet, who helped translate,recalls Brett Gorvy, the Christie’sexpert who greeted them.

Last week, Mr. Pinaultstunned the art world by pro-moting Ms. Barbizet to chief ex-ecutive of Christie’s, which hebought in 1998. “I had no ideahow far she’d go,” says Mr.Gorvy, now Christie’s chairmanand international head of post-war and contemporary art. “Thetranslator is now the boss.”

The move has unleashed aswirl of speculation about the248-year-old auction house’s fu-ture, including a potential re-structuring. The 59-year-old Ms.Barbizet wouldn’t confirm ordeny that possibility during a se-nior-level staff meeting Wednes-day in New York to introduceherself and other members ofher new executive team.

“Give us a few days to lookaround,” she said, according toone person at the meeting.

Ms. Barbizet and Mr. Pinaultdeclined to be interviewed forthis article. She isn’t expected tospeak publicly until Christie’s re-ports financial results in Janu-ary. The auction house is part of

PleaseturntopageA7

BY KELLY CROW AND JASON CHOW

WAGING, Germany—Whenthis Alpine town’s long-servingSanta announced he would retireahead of the holiday season,leaving no successor, the com-munity scrambled for an idea tosave Christmas.

The solution: Create a newholiday icon. Someone younger,prettier and minus the four-legged sidekicks.

So on a recent Saturday after-noon, 30 female teen applicantsgathered to vie for the new titleof “town angel.” Contestants—required to be aged 12 to 15,

demonstrate charismaand recite a poem frommemory—hoped to winthe crown as well as amakeover and a familytrip to a theme park.

In return, the victo-rious seraph is ex-pected to assume someof Santa’s yuletide du-ties—including hearingkids’ wish lists overthe next few weeks.

“I’m Helen Hassel-berger,” said one 15-year-oldblonde hopeful, appearing beforea jury of six. “I want to be theWaging angel because I love kids

and I want to makekids happy.”

For all the good-natured cheer, thecontest was a re-minder that this vil-lage of 6,500 neededits own Christmasmiracle of sorts.Without a Santa, lo-cals feared, shoppersand tourists mightnot be inspired tocome out in the cold.

Even before St. Nick hung up hishat, business owners had com-plained about thinning holiday

PleaseturntopageA10

BY HARRIET TORRY

After Santa Resigns, Small Town Rewrites Job Descriptioni i i

German Villagers Hope Teen ‘Angel’ Will Draw More Shoppers

Manuela Fenninger

WASHINGTON—The wran-gling between the White Houseand Congress over a $1.1 trillionspending bill is the first test ofhow political forces unleashed bythe midterm elections and im-pending 2016 campaigns will in-fluence governing here.

The fight foreshadows twoyears of legislative battles de-fined by tensions not just be-tween the two parties—as hasbeen the case since the Republi-can takeover of the House in2010—but within them.

As Senate leaders attemptedFriday to win support for quickpassage of a House bill to fundmost of the government throughnext September, they confrontedthe same resistance from conser-vative Republicans and liberalDemocrats that nearly derailedthe bill in the House. In the Sen-ate, opposition could slow downthe bill but isn’t expected todoom it.

Liberal Democrats say theparty’s steep midterm electionlosses revealed a void in eco-nomic policy, which they are nowmoving forcefully to fill. Thisweek, they rebelled against con-servative provisions in thespending bill that President Ba-rack Obama has been willing toaccept.

Among Republicans, partyleaders are contending with de-mands from the most conserva-tive lawmakers to do more toscale back Mr. Obama’s health-care and immigration policies.

The open question is whetherthe newly energized ideological

PleaseturntopageA4

BY CAROL E. LEEAND JANET HOOK

SpendingVoteGivesGlimpseOf Future

Bureau of Investigation. That ar-rest wave is washing up on thedesks of America’s employers.

Companies seeking new em-ployees are forced to navigate apatchwork of state and federallaws that either encourage or de-ter hiring people with criminalpasts and doing the checks thatreveal them. Employers are hav-ing to make judgments about whois rehabilitated and who isn’t. Andwhichever decision they make,they face increasing possibilitiesfor ending up in court.

Employers are in this positionbecause there are nearly 80 mil-lion Americans with criminal re-cords, including arrests thatdidn’t lead to a conviction, at atime when the Internet and com-puterized databases make such in-formation easier than ever to ob-tain. Ignoring the records can

leave a company vulnerable to making bad hiring de-cisions and to lawsuits. But using them can raise theire of government officials and lead to charges ofdiscrimination.

PleaseturntopageA10

Who Checks

The Wall Street Journal

Note: Percentages don’t equal 100% dueto rounding.

Source: Society for Human ResourceManagement survey of 406 randomlyselected human resource professionalsconducted Dec. 28, 2011, to Feb. 7, 2012.

Percent of employers thatcheck applicants for criminalbackgrounds

Check allcandidates

Check somecandidates

None

2012

18%

14%

69%

The blue chips end the week with a thud. Friday’s Markets, B1

Crude RealityOil’s slide to five-year lows this week roiled markets.Stocks had the biggest weekly loss in three years,capping a rough start to the month.

Photo: Associated Press

Sources: SIX Financial (Dow, crude, dollar); RyanALM (treasury note)

The Wall Street Journal

Dow Jones Industrial Average Nymex crude-oil futures

Yield on 10-year Treasury note WSJ Dollar Index

18000

17200

17400

17600

17800

Dec. 1

17280.83t 3.1%

$70

50

55

60

65

a barrel

Dec. 1

$57.81t 12.6%

2.6

1.8

2.0

2.2

2.4

%

Dec. 1

2.102%t0.068pct. pts.

82.5

80.5

81.0

81.5

82.0

Dec. 1

81.73s1.0%

Cla

ssiq

ueH

ora

Mun

di

B R E G U E T B O U T I Q U E SNEW YORK BEVERLY H ILLS BAL HARBOUR LAS VEGAS

TOLL FREE 877- 891-1272

CM Y K CompositeCompositeMAGENTA CYAN BLACK

P2JW347000-8-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WEBG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO

P2JW347000-8-A00100-1--------XA