Update on the latest business
Stocks bounce off lows
NEW YORK (AP) — Stock indexes are down in midday trading on Wall Street, but have bounced off their lows of the day as gains for industrial stocks and banks counter losses elsewhere in the market, particularly among retailers.
Macy’s plunged after surprising investors with a very weak report on holiday sales. Other retailers also fell, including Kohl’s. Airlines slumped after American gave a disappointing revenue forecast.
The market is coming off a four-day winning streak, its longest since September.
Retailers get hammered
NEW YORK (AP) — Macy’s is leading retailers lower after posting lackluster holiday sales numbers. Macy’s shares have been down more than 18 percent. Kohl’s, Target and Nordstrom are all sliding.
With low unemployment, rising wages and consumer confidence high, there had been optimism about holiday sales receipts. But investors were disappointed as Macy’s cut its full-year earnings and sales forecasts Thursday, and Kohl’s said holiday sales fell sharply from the previous year.
The pessimism on Wall Street spread quickly from department stores to virtually all other retail sectors, including specialty, dollar stores, luxury, and athletic apparel.
American Airlines shares tumble on more cautious 4Q outlook
FORT WORTH, Texas (AP) — Airline stocks are falling as American Airlines says fourth-quarter revenue and full-year profit will be lighter than expected.
American said Thursday that revenue for each seat flown one mile, a measure of pricing power, will rise about 1.5 percent over the previous fourth quarter. That’s about 1 percentage point less than American had been forecasting.
Added to recent comments by Delta, American’s report raises concern among investors that airlines are discounting too many seats because of cheaper fuel.
American is cutting its estimate of 2018 earnings per share to between $4.40 and $4.60, down from its earlier forecast of $4.50 to $5 per share.
FIAT CHRYSLER-DIESEL SETTLEMENT
Fiat Chrysler reaches settlement in emissions cheating cases
WASHINGTON (AP) — Fiat Chrysler will pay a $305 million fine to the U.S. government over emissions cheating allegations.
The settlement was announced Thursday by the Justice Department and the Environmental Protection Agency.
The Italian-American automaker separately agreed to pay $19 million to California. The company will also pay $280 million to settle lawsuits brought by vehicle owners.
Authorities say more than 100,00 vehicles were equipped with diesel engines programmed to run pollution controls during lab tests that would turn off under certain conditions on the road.
The settlement requires the company to start a recall to repair the Jeep SUVs and Ram pickup trucks made between 2014 and 2016.
Fiat Chrysler says it didn’t deliberately install devices to cheat emissions tests. The company didn’t admit wrongdoing in the settlement.
Ford to shake up European business, cut jobs
FRANKFURT, Germany (AP) — Ford Motor Co. says it is cutting jobs in Europe in a wide-ranging restructuring as it focuses on its most profitable models and shifts production towards electric cars.
In a statement, the company said Thursday that “structural cost improvements will be supported by a reduction of surplus labor,” both hourly and salaried.
The Dearborn, Michigan-based company didn’t reveal how many jobs would be cut and said reductions would be achieved as far as possible through voluntary departures negotiated with unions and employee representatives.
The move follows plans announced last year to reduce white-collar jobs across the company’s global business.
Jaguar Land Rover confirms 4,500 job losses
LONDON (AP) — Jaguar Land Rover says it will cut 4,500 jobs as the carmaker addresses slowing demand in China and growing uncertainty about the U.K.’s departure from the European Union.
The luxury carmaker says the cuts will be in addition to 1,500 people who left the business in 2018. The company employs about 44,000 people in the U.K.
The firm, owned by India’s Tata, last year outlined a 2.5 billion-pound ($3.2 billion) turnaround plan to deal with Brexit, trade tensions between China and the U.S. and new European emissions standards that combined pushed Jaguar into the red in the three months to Sept. 30, which compared with the same period the year before.
Georgia-Pacific will lay off nearly 700 people at mill
(Information in the following story is from: The Advocate, http://theadvocate.com)
BATON ROUGE, La. (AP) — Georgia-Pacific says consumers aren’t buying as much copy paper anymore, forcing it to lay off nearly 700 people at a Louisiana mill.
Company spokesman Kelly Ferguson says meeting the demand for office paper isn’t a viable business long term as society continues to shift toward electronic communications.
The Advocate reports that around 300 people will continue working at the Port Hudson mill, producing toilet tissue and paper towels. The company says it will permanently shut down its office paper production assets, wood yard, pulp mill and most of its energy-generating complex by mid-March.
The newspaper says Georgia-Pacific will work with union leaders and salaried staff on how to best shut down the divisions and find work for employees at other company-owned facilities.
US average mortgage rates fall; 30-year at 4.45 percent
WASHINGTON (AP) — U.S. long-term mortgage rates continued to fall this week, reaching their lowest levels in nine months.
The decline in home borrowing rates in recent weeks has been a spur to prospective homebuyers, reflected in a spike in applications for mortgages. Mortgage buyer Freddie Mac says the average rate on the benchmark 30-year, fixed-rate mortgage dipped to 4.45 percent this week from 4.51 percent last week.
Rates remain far above last year’s levels, however. The key 30-year rate averaged 3.99 percent a year ago.
The average rate for 15-year fixed-rate loans fell to 3.89 percent from 3.99 percent last week.
Liberal lawmakers challenge Trump with drug cost legislation
WASHINGTON (AP) — Leading congressional liberals are unveiling a legislative package that aims to radically reduce what Americans pay for prescription drugs by linking prices to lower costs in other countries.
The legislation has little chance of becoming law under a divided government, even though President Donald Trump has embraced some of the ideas at one time or another. The administration has released its own plan to reduce drug costs.
Vermont Independent Sen. Bernie Sanders and Maryland Democratic Rep. Elijah Cummings plan to introduce three bills on Thursday. That’s according to the senator’s office.
One proposal would open up generic competition to patent-protected brand-name drugs that are deemed “excessively priced.” A second bill would allow Medicare to directly negotiate with drugmakers. The third bill would allow consumers to import lower-priced medications from Canada.
PELVIC MESH LAWSUITS
Physicians criticize state lawsuits over pelvic mesh
SEATTLE (AP) — Doctors who specialize in female pelvic medicine say lawsuits by four states, including Washington and California, over products used to treat pelvic floor disorders and incontinence might scare patients away from the best treatment options.
Sixty-three Washington surgeons recently signed a letter to state Attorney General Bob Ferguson, arguing his consumer-protection lawsuit against Johnson & Johnson is off-base.
The lawsuit says the company failed to disclose risks associated with the transvaginal mesh products. But the doctors say they were never deceived and that the case is based on a misapprehension of how they assess risks posed by medical procedures.
The doctors say that while the mesh had higher-than-expected complication rates when used to treat some pelvic floor disorders, it remains the best surgical option for stress urinary incontinence, which is common among women after childbirth.
Coke-funded group swayed China’s obesity efforts, papers say
NEW YORK (AP) — New research says a food industry-funded group undermined China’s efforts to keep obesity rates in check by overemphasizing the importance of physical activity rather than dietary habits.
The International Life Sciences Institute was created by a former Coke executive and is funded by companies including McDonald’s, PepsiCo and Red Bull. In China, it organized obesity conferences focusing on physical activity, with speakers including Coke-funded researchers and a Coke executive. The group enjoyed close ties to government health agencies, according to papers in The BMJ and The Journal of Public Health Policy.
Susan Greenhalgh, a Harvard scholar who wrote the papers, says ILSI’s activities show the difficulty in assessing how food makers could skew public policy around the world.
ILSI says it “does not profess to have been perfect” in its 40-year history.
OCEAN RESORT CASINO TAKEOVER
APNewsBreak: Ocean Resort Casino changing hands
ATLANTIC CITY, N.J. (AP) — Atlantic City’s Ocean Resort Casino is changing hands after just six months of operation.
The property formerly known as Revel is being acquired by an outside company that will make a major investment into it.
Current owner Bruce Deifik (DY’-fihk) tells The Associated Press the new company will assume majority ownership of the casino, but he would not identify it.
The new owner will make a $70 million investment into Ocean Resort, which plans to remain open.
Ocean Resort was one of two formerly shuttered casinos that reopened on the same day last June, along with Hard Rock.
In its first incarnation as Revel, the $2.4 billion casino lasted just over two years before closing in 2014.
Deifik, a Colorado developer, bought it a year ago for $200 million.