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Business Highlights

February 26, 2016

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CEO Tim Cook defends Apple’s resistance in FBI iPhone case

CUPERTINO, Calif. (AP) — Apple stockholders have given the company’s CEO Tim Cook a standing ovation at his first stockholder’s meeting since the company began its clash with the FBI.

Yesterday, Apple formally challenged a court order that would force it to help the FBI unlock an encrypted iPhone used by one of the San Bernardino, California, shooters.

Federal officials have said they’re only asking for narrow assistance to bypass some of the security features but Apple says the order would require a program that would make other iPhones vulnerable to hacking.

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Insurer warnings cast doubt on ACA exchange future

Political uncertainty isn’t the only threat to the Affordable Care Act’s future. Cracks also are spreading through a major pillar supporting the law

Health insurance exchanges created to help millions of people find coverage are turning into money-losing ventures for many insurers.

The nation’s largest, UnitedHealth Group Inc., could lose as much as $475 million on its exchange business this year and may not participate in 2017. And a dozen nonprofit insurance cooperatives created by the law have already closed, forcing around 750,000 people to find new plans.

Insurer defections would lead to fewer coverage choices on the exchanges and could eventually undermine the law.

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Zuckerberg in Germany: No place for hate speech on Facebook

BERLIN (AP) — Mark Zuckerberg conceded Friday that Facebook didn’t do enough until recently to police hate speech on the social media site in Germany, but said it has made progress and has heard the message “loud and clear.”

German authorities, concerned about racist abuse being posted on Facebook and other social networks as the country deals with an influx of hundreds of thousands of migrants, have been pressing social media sites for months to crack down.

The Facebook CEO talked personally about the issue in September with German Chancellor Angela Merkel, and met her chief of staff during a visit to Germany this week.

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US economy ends 2015 on better note, starts 2016 with a bang

WASHINGTON (AP) — The U.S. economy got a double dose of good news Friday. Economic growth in the final three months of 2015 didn’t slow as much as previously estimated, and consumers roared back to life in January, spending at the fastest clip in eight months.

The Commerce Department said that consumer spending increased 0.5 percent last month, the best showing since May. In a separate report, the government said the gross domestic product, the broadest measure of economic health, grew at an annual rate of 1 percent in the fourth quarter.

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Stocks end strong week on flat note

NEW YORK (AP) — Stocks ended a strong week on a flat note as lower oil prices and utility stocks offset encouraging economic news.

Still, the market ended Friday with a second straight weekly gain.

All three indexes finished the week up by 1.5 percent or more. Oil, despite Friday’s decline, was up 3.6 percent for the week.

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Evenflo recalls over 56,000 child seats for harness problem

DETROIT (AP) — Evenflo is recalling over 56,000 child safety seats because curious children can loosen the internal harness, increasing the risk of injury in a crash.

The recall covers Transitions Three-in-One Combination Booster Seats made from Dec. 18, 2014 through Jan. 29, 2016. The company says in government documents that the central front adjuster button that loosens the harness may be within a child’s reach. If the harness doesn’t fit snugly, that increases the chance of injury.

Evenflo says the problem only affects the seats when they’re used as forward-facing harnessed boosters.

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US: Computer breach bigger than first thought; 700K victims

WASHINGTON (AP) — The IRS says the number of taxpayers whose tax information may have been stolen by computer hackers now exceeds 700,000 — more than double the agency’s previous estimate.

The tax collecting agency says 390,000 more taxpayer accounts may have compromised than the 334,000 it warned about a year and a half ago. The breach was first discovered in May 2015.

The sensitive information can be used for identity theft or to claim fraudulent tax refunds.

The thieves accessed a system called “Get Transcript,” where taxpayers can get tax returns and other filings from previous years.

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Dow Chemical settles case citing Supreme Court uncertainty

Dow Chemical said Friday it will pay $835 million to settle a long-standing class action lawsuit, after the death of Justice Antonin Scalia decreased its chances of prevailing at the Supreme Court.

The announcement is an early indication of how corporations are shifting their legal strategy following the loss of the court’s 5-4 conservative majority. The company said Friday that the court’s current lineup has “increased the likelihood for unfavorable outcomes for business involved in class action suits.”

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Hilton to spin off timeshares, most of real estate business

NEW YORK (AP) — Hilton plans to spin off its timeshare business and most of its real estate business in a move to boost shareholder value.

The lodging company said Friday that the real estate business will be spun off into a publicly traded real estate investment trust with 70 properties. Its timeshare business, Hilton Grand Vacations, will become a separate publicly traded company that’s expected to manage almost 50 club resorts in the U.S. and Europe. Both spinoffs are expected to be completed by year’s end.

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Revlon CEO Lorenzo Delpani to step down next week

NEW YORK (AP) — Revlon said Friday that CEO Lorenzo Delpani will step down from the job next week for personal reasons.

The announcement comes several weeks after the makeup company’s biggest shareholder said it wanted to seek “strategic alternatives” for the company.

Revlon said Delpani will remain on the board and will also be a paid adviser. The company did not name a replacement.

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J.C. Penney’s shares rise after upbeat revenue outlook

NEW YORK (AP) — Beware the underdog. J.C. Penney Co. delivered strong fourth-quarter results, wrapping up a year when it stole market share from rivals.

The company offered an upbeat sales outlook, as efforts to spruce up its merchandise are winning over shoppers. It also pledged that it would return to a profit this year, on an adjusted basis. The results were a bright spot in an otherwise dismal holiday quarter, where department store rivals like Macy’s and Kohl’s offered disappointing outlooks after struggling with weak sales.

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The Dow Jones industrial average closed down 57.32 points, or 0.3 percent, to 16,639.97. The Standard & Poor’s 500 index lost 3.65 points, or 0.2 percent, to 1,948.05. The Nasdaq composite added 8.27 points, or 0.2 percent, to 4,590.47.

Crude oil closed down 29 cents, or 1 percent, to $32.78. Brent crude, the global benchmark, fell 19 cents to close at $35.10. In other energy commodities, heating oil fell 1.9 cents to $1.051 a gallon. Wholesale gasoline futures fell 3.9 cents to $1.017 a gallon and natural gas rose 0.6 cents to $1.791 per 1,000 cubic feet.

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