Credit Card Firms Stocks Slump         01/12 09:37

   Stocks of credit-card companies are tumbling on Monday after President 
Donald Trump threatened moves that could eat into their profits. 

   NEW YORK (AP) -- Stocks of credit-card companies are tumbling on Monday 
after President Donald Trump threatened moves that could eat into their 
profits. The rest of Wall Street, meanwhile, was showing only modest signals of 
concern after tensions ramped to a much higher degree between the White House 
and the Federal Reserve.

   The S&P 500 edged down by 0.1% from its all-time high as U.S. stocks drifted 
through mixed morning trading, while prices for gold and other investments that 
tend to do well when investors are nervous rose. The value of the U.S. dollar 
also dipped against the euro and other currencies amid concerns that the Fed 
may have less independence in setting interest rates to keep inflation under 
control.

   The Dow Jones Industrial Average was down 179 points, or 0.4%, as of 10 a.m. 
Eastern time, and the Nasdaq composite was nearly unchanged.

   Some of the market's sharpest drops came from credit-card companies, as 
Synchrony Financial, Capital One Financial and American Express all fell 
between 4% and 7%. They sank after Trump said he wanted to put a 10% cap on 
credit-card interest rates for a year. Such a move could eat into profits for 
credit card companies.

   But it was a separate move by Trump that was grabbing more attention on Wall 
Street. Over the weekend, the Federal Reserve's chair, Jerome Powell, said the 
U.S. Department of Justice subpoenaed the Fed and threatened a criminal 
indictment over his testimony about renovations underway at its headquarters.

   With an unusual video statement released on Sunday, Powell said his 
testimony and the renovations are "pretexts" for the threat of criminal 
charges, which is really "a consequence of the Federal Reserve setting interest 
rates based on our best assessment of what will serve the public, rather than 
following the preferences of the President."

   The Fed has been locked in a feud with the White House about interest rates. 
Trump has been loudly calling for lower interest rates, which would make 
borrowing cheaper for U.S. households and companies and could give the economy 
a kickstart.

   The Fed did cut its main interest rate three times last year and has 
indicated more cuts may be arriving this year. But it's been moving slowly 
enough that Trump has nicknamed Powell "Too Late."

   In a brief interview with NBC News Sunday, President Donald Trump insisted 
he didn't know about the investigation into Powell. When asked if the 
investigation is intended to pressure Powell on rates, Trump said, "No. I 
wouldn't even think of doing it that way."

   Powell's term as chair ends in May, and Trump administration officials have 
signaled that he could name a potential replacement this month. Trump has also 
sought to fire Fed governor Lisa Cook.

   The Fed has traditionally operated separately from the rest of Washington, 
making its decisions on interest rates without having to bend to political 
whims. Such independence, the thinking goes, gives it freedom to make unpopular 
moves that are necessary for the economy's long-term health.

   Keeping interest rates high, for example, could slow the economy and 
frustrate politicians looking to please voters. But it could also be the 
medicine needed to get high inflation under control.

   In the bond market, the yield on the 10-year Treasury ticked up to 4.19% 
from 4.18% late Friday. A less independent Fed and higher inflation in the long 
term could also erode the value of the U.S. dollar, and it slipped 0.3% against 
the euro and 0.4% against the Swiss franc.

   In stock markets abroad, indexes rose across much of Europe and Asia. Stocks 
jumped 1.4% in Hong Kong and 1.1% in Shanghai for two of the world's bigger 
gains following reports that Chinese leaders were preparing more help for the 
economy.