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US stocks rise ahead of signing of 'Phase 1' trade deal
NEW YORK (AP) — Stocks are rising in afternoon trading on Wall Street following the signing of a preliminary trade deal between the U.S. and China. If the gains hold, the Dow Jones Industrial Average would have its first close above 29,000 points.
Health care stocks are leading the gains. UnitedHealth, the nation's largest health insurer, rose after reporting solid fourth-quarter earnings.
Technology companies also climbed. The sector is reliant on China for sales and supply chains and benefits from progress in trade relations.
Banks were broadly lower after Bank of America reported weaker profits.
Trump signs initial US-China deal
WASHINGTON (AP) — President Donald Trump signed a trade agreement Wednesday with China that is expected to boost exports from U.S. farmers and manufacturers and is aimed at lowering tensions in a long-running dispute between the economic powers.
Trump said during a White House ceremony that the deal is “righting the wrongs of the past." He promoted the signing as a way of delivering economic justice for American workers and said, "We mark a sea change in international trade" with the signing.
Chinese leader Xi Jinping (shee jihn-peeng), in a letter to Trump that was read by Beijing's chief negotiator Liu He, said concluding the first phase of the trade deal was "good for China, the U.S. and for the whole world."
The “Phase 1” trade agreement is expected to reduce tensions in a trade dispute that has slowed global growth, hurt American manufacturers and weighed on the Chinese economy. But it will do little to force China to make the major economic changes the Trump administration sought when it imposed tariffs on Chinese imports in July 2018.
US wholesale prices up slight 0.1% in December
WASHINGTON (AP) — U.S. wholesale prices rose a slight 0.1% in December as a jump in the cost of energy was offset by falling food prices.
The Labor Department said Wednesday the December increase in its producer price index, which measures inflation pressures before they reach the consumer, followed no change in November.
Energy prices were up 1.5%, more than double the 0.6% November gain, with gasoline costs up 3.7% and heating oil up 7.7%, the biggest monthly gain in two years.
Food costs were down 0.2%, the first drop since August, with the biggest drop in beef prices in more than two years offsetting a jump in the price of chicken.
For the year, wholesale prices are up a modest 1.3%, down from a 2.6% gain in 2018.
The 1.3% increase for 2019 was the smallest annual gain since wholesale prices fell 1.1% in the 12 months ending in December 2015.
Core prices, which exclude food and energy were up 0.1% in December and a modest 1.1% for the year.
The report on wholesale prices followed a report Tuesday showing that prices for consumers at the retail level were up a small 0.2% in December with consumer inflation rising 2.3% for the full year.
RETAIL-MISSING HOLIDAY CHEER
Target, like other retailers, did not have a Merry Christmas
UNDATED (AP) — Target reported a rare shortfall in holiday sales, raising concerns about the challenges ahead for the traditional retail industry even as the economy remains strong.
Target's disappointing growth of 1.4% percent for November and December, dragged down by toys and electronics, fell well below the previous year. Target joined a growing list of retailers reporting meager performances during the critical holiday shopping season.
Target cut its expectations for same-store sales growth for the entire quarter Wednesday. Shares fell more than 7% in afternoon trading, making it the biggest decliner in the benchmark S&P 500.
The latest evidence of weak numbers from a major retailer cast a pall over the entire sector, with investors leery of any hints that the consumer, a major driver of the U.S. economy, is getting nervous. The retail sector declined while overall markets were up.
The report of weak toys and electronics sales also hit other companies like Hasbro and Best Buy.
Another strong UnitedHealth quarter, 2019 profit at $13.84B
UNDATED (AP) — UnitedHealth’s fourth-quarter net income surged 16%, and investors shrugged off a rare revenue miss to make the nation’s largest health insurer higher one of the biggest gainers in Wednesday trading.
Growing Medicare Advantage coverage and fat profits from UnitedHealth’s Optum business, which strays beyond the company’s health insurance core, contributed to better-than-expected earnings in the quarter.
Revenue grew 4% to $60.9 billion, just shy of analyst projections for $60.96 billion, according to FactSet.
The insurer brought in more than $47 billion in insurance premiums during the quarter, but its product sales tumbled 11% to $7.62 billion. Product sales include the company’s pharmacy benefit management operation, which took a hit when it lost business from Cigna after the rival insurer bought its own PBM.
UnitedHealth earned $3.54 billion in the final quarter of 2019, with adjusted per share profits of $3.90 per share. That's 12 cents better than expected, according to a survey of analysts polled by FactSet.
The Minnetonka, Minnesota, company covers more than 49 million people, including 5.7 million in its international business. The company saw Medicare Advantage enrollment climb more than 6 percent year over year to 5.2 million people in the quarter. Medicare Advantage plans are privately run versions of the federal government’s coverage program for people over age 65.
NISSAN-AIR BAG RECALL
Nissan adds nearly 346K vehicles to Takata recall saga
DETROIT (AP) — Nissan is recalling nearly 346,000 vehicles worldwide to replace dangerous Takata air bag inflators that can explode and hurl shrapnel.
The Nissan front passenger inflators are among 10 million from 14 different automakers that Takata is recalling. It's the last recall that the bankrupt Takata agreed to in a 2015 settlement with U.S. safety regulators.
The Nissan recall covers certain 2001 through 2003 Maximas, 2002 through 2006 Sentras, 2002 through 2004 Pathfinders, and 2007 through 2011 Versas. Also included are 2001 through 2004 Infiniti I30 and I35s, 2002 through 2003 QX4s, 2003 through 2008 FX35 and FX45s and 2006 through 2010 M35 and M45s.
Owners will be notified and dealers will replace the inflators starting around Feb. 10, at no cost to owners.
Most of the recalled vehicles are in North America, but some are in Europe, the Middle East and Latin America, Nissan said in a statement.
The Nissan inflators are part of a recall that Takata announced earlier this month. They were sold to 14 different automakers, who will conduct their own recalls. Ford, Fiat Chrysler, Honda, Subaru, Ferrari and Mazda already have made recall announcements.
The recalled inflators were used to replace dangerous ones made by Takata until a permanent remedy could be developed.
GENERAL MOTORS-TEMPORARY WORKERS
GM says over 1,350 temps will get full-time jobs by March 31
DETROIT (AP) — More than 1,350 temporary workers at 14 General Motors facilities in the U.S. will get full-time positions before the end of March, the company says.
The workers will start at $21 to $24 per hour depending on their seniority and will get improved health care benefits at a low cost, dental and vision benefits, company 401(k) contributions and annual profit-sharing checks.
Eventually they'll reach the top wage for a full-time production worker of $32.32 per hour. The manufacturing plants and other sites are in Michigan, Indiana, New York, Tennessee, Missouri, Kansas and Kentucky, GM said Wednesday in a statement.
The workers got a path to full-time status in contract negotiations between the United Auto Workers union and the company. The agreement came after a contentious 40-day strike last fall that crippled GM's U.S. production and cost the company well over $1 billion.
Temporary workers can get permanent jobs after two or three years depending on their start dates, but they start at the low end of a pay scale, so people doing the same work can end up at different pay rates.
Amazon to invest $1 billion in India
NEW DELHI (AP) — Amazon founder Jeff Bezos said Wednesday that his company plans to invest $1 billion in digitizing small and medium businesses in India.
Bezos, who is currently on a three-day visit, also said that Amazon is going to use it size, scale and global footprint to export $10 billion in goods made in India by 2025.
He addressed representatives of small and medium businesses in New Delhi. Amazon.com launched e-commerce in India through Amazon India in 2013.
There are more than 550,000 sellers on Amazon India and more than 60,000 Indian manufacturers and brands are exporting their products to customers worldwide through Amazon, according to the Press Trust of India news agency.
Bezos’s visit comes at a time when the government-appointed Competition Commission of India is investigating alleged deep discounts, preferential listing and exclusionary tactics adopted by Amazon India and its e-commerce rival Flipkart.
DAVOS FORUM-GLOBAL RISKS
Environmental issues top worries for those heading to Davos
LONDON (AP) — Following another year of extreme heat and ice sheet melt, environmental issues are now considered to be the top five long-term risks confronting the global economy, organizers of next week's gathering of elites in the Swiss resort of Davos said Wednesday.
Citing a survey of more than 750 key decision-makers, the World Economic Forum said catastrophic trends like global warming and the extinction of animal species would be front and center at next week's meeting.
But while the environment has surged up the rank of priorities for policymakers ahead of risks like cyberattacks and recession, concerns are compounded by growing international divisions, evident in disputes like the trade war between the United States and China.
Brende said the world has a decade to deal with the climate emergency, and that not doing so within that time frame would be akin to “moving deckchairs on the Titanic."
Those surveyed inthe WEF's Global Risks Report 2020 identified economic disputes as the number one risk to the global economy this year. For the longer-term outlook, however, environmental concerns accounted for the top five risks.
The biggest long-term risk cited in the report was the possibility of extreme weather events, such as floods or storms. The others were the failure to properly plan for climate change, man-made environmental disasters such as oil spills, major biodiversity loss, and natural disasters such as earthquakes or tsunamis.
Sonoma County prepares to sue PG&E for damages from fire
SONOMA, Calif. (AP) — A county in Northern California wine country is exploring plans to sue a utility over a massive wildfire last fall that combined with rolling power shutoffs caused losses of $725 million.
The Sonoma County Board of Supervisors voted Tuesday to hire two law firms to pursue legal action against pacific Gas & Electric, the nation's largest utility. The 121-square-mile (313-square-kilometer) blaze destroyed 374 structures in the county in October 2019.
The supervisors also released findings of a report assessing the economic impact of the fire and four PG&E power shutoffs. The report by Moody Analytics research company found the fire cost the county $620 million in losses and that the shutoffs caused an additional $105 million in losses.
Almost 195,000 residents, or 39% of the county's population, were affected by the shutoffs between Oct 9 and Nov. 20, with the average resident disrupted for 2.5 days by any single outage, the report said.
The county's action comes as PG&E is trying to dig out of a financial hole created by a series of catastrophic fires from 2015 to 2018 that have been blamed on the utility's outdated electrical system and managerial negligence. Faced with more than $50 billion in claims from fire victims, insurers and government agencies, PG&E has been trying to rehabilitate itself in bankruptcy court for the past year. The company has settled most of those claims for a combined $25.5 billion.
DRILLING RIG EXPLOSION-OKLAHOMA
Trial begins against company in Oklahoma oil rig explosion
McALESTER, Okla. (AP) — The wrongful death trial against a oilfield equipment contractor in connection with a January 2018 explosion and fire that killed five men in southeastern Oklahoma is underway.
The McAlester News-Capital reports that attorneys for the families of Parker Waldridge of Crescent; Matt Smith of McAlester; Roger Cunningham from Seminole; Josh Ray of Fort Worth, Texas; and Cody Risk of Wellington, Colorado, said in opening statements Tuesday that National Oilwell Varco in primarily to blame for the men's deaths when the rig exploded in Quinton.
Attorneys for the families say NOV was primarily responsible because it failed to provide proper oversight of the operation. and now “refuses any responsibility for this incident.”
Houston-based NOV argues that another company working at the site, Red Mountain Operating, LLC, was at fault and that the company’s employee on site had no responsibilities at the time of the fire and explosion.
The families have reached settlements with Red Mountain Operating; Red Mountain Energy, LLC; Patterson-UTI Drilling Company, LLC; Patterson-UTI Energy Inc.
The Jan. 22, 2018, explosion, about 100 miles (160 kilometers) southeast of Tulsa, was the deadliest drilling accident since the Deepwater Horizon rig exploded in the Gulf of Mexico in 2010, killing 11 people.
Ahead in the clouds: Alibaba plans to change the Olympics
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LAUSANNE, Switzerland (AP) — Alibaba’s promise to the Olympic family is to bring its technological might to help organizers, broadcasters and fans.
The Chinese tech giant's Olympic sponsorship deal is worth hundreds of millions of dollars and runs for 12 years, starting in 2017 and continuing through the upcoming Tokyo Games and the 2022 Winter Games in Beijing and into the 2024 Paris Olympics and the 2028 Los Angeles Games.
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