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FINANCIAL MARKETS
Stocks rise as investors focus on solid corporate earnings
NEW YORK (AP) — U.S. stocks rose in midday trading Thursday as investors continued focusing on the latest round of corporate earnings and China cut tariffs on key imports as part of a trade war truce.
China is also promising tax cuts and other help to businesses to offset the economic blow from the virus outbreak that has put its economy on lockdown. The measures come as the world’s second-largest economy cuts $75 billion on tariffs affecting pork, soybean and other imports from the U.S. as part of a previously signed “Phase 1” trade agreement.
Investors continued rewarding solid corporate earnings. Twitter and Coach brand owner Tapestry were among the standouts in the early going following their latest financial results. Twitter surged 17.3% after the messaging service reported surprisingly good growth for daily users and solid revenue in the fourth quarter. The most recent quarter marks the first time the company’s revenue topped $1 billion. Coach parent Tapestry rose after the company’s fiscal second-quarter profit and revenue beat Wall Street forecasts.
Online mattress pioneer Casper Sleep soared 25% in its public debut. The company, which was founded in 2014, has expanded beyond online selling, opening 60 Casper stores and selling to 18 retail partners like Target and Amazon. It has plans to eventually expand to more than 200 stores in North America.
Yum Brands fell after the operator of Pizza Hut, Taco Bell, and KFC restaurants reported weak fourth-quarter profit.
Bond yields held steady with the yield on the 10-year Treasury at 1.65%.
PRODUCTIVITY
US productivity up 1.7% in 2019, best gain in 9 years
WASHINGTON (AP) — U.S. productivity rebounded in the final three months of last year, helping to boost productivity growth for the year to the best showing in nearly a decade.
The Labor Department’s Bureau of Labor Statistics said Thursday that productivity grew at an annual rate of 1.4% in the October-December quarter, reversing the direction of a 0.2% drop during the third quarter.
For the year, productivity increased 1.7%, up from 1.3% advances in both 2017 and 2018. While a 1.7% rise in productivity is considered modest, it was the best annual showing since a 3.4% advance in 2010.
Labor costs rose 1.4% in the fourth quarter, a slowdown from a 2.5% jump in the third quarter. For the year, labor costs rose 2%, up from a 1.8% gain in 2018.
The 1.7% annual gain in productivity has followed a long stretch of very weak gains which have left productivity growing at average annual rates of just 1.3% since 2007.
MORTGAGE RATES
US mortgage rates decline; 30-year loan lowest in 3 years
WASHINGTON (AP) — U.S. long-term mortgage rates fell this week for the third straight week, as the benchmark 30-year loan marked its lowest point in three years.
Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year fixed-rate mortgage declined to 3.45% from 3.51% last week. The key rate stood at 4.41% a year ago.
The average rate on a 15-year mortgage eased to 2.97% from 3% last week.
Freddie Mac surveys lenders nationwide between Monday and Wednesday each week to compile its mortgage rate figures.
CHINA-OUTBREAK-US DRUG
Chinese scientists ask for patent on US drug to fight virus
BEIJING (AP) — Scientists in the city at the center of China’s virus outbreak have applied to patent a drug made by U.S. company Gilead Sciences Inc. to treat the disease, possibly fueling conflict over technology policy that helped trigger Washington’s tariff war with Beijing.
The government-run Wuhan Institute of Virology said this week it applied for the patent in January along with a military laboratory. An institute statement acknowledged there are “intellectual property barriers” but said it acted to “protect national interests.”
On Thursday, the official Xinhua News Agency said clinical trials of the drug, remdesivir, were due to start.
Gilead, headquartered in Foster City, California, said it applied in 2016 for a Chinese patent on use of remdesivir against coronaviruses and is waiting for a decision. The coronavirus family includes the novel coronavirus, or 2019-nCoV, blamed for the outbreak in Wuhan.
China has the right under World Trade Organization rules to declare an emergency and compel a company to license a patent to protect the public. It would be required to pay a license fee that is deemed fair market value. The government might be able to avoid that fee if the patent were granted to the Wuhan institute, part of the elite Chinese Academy of Sciences.
CHINA-HUAWEI-VERIZON
Huawei, guarding US business, says Verizon violated patents
BEIJING (AP) — Chinese tech giant Huawei (WAH'-way) is accusing U.S. phone company Verizon of violating its patents in a lawsuit Thursday, broadening efforts to defend the company's business in the United States amid government sanctions.
Huawei Technologies Ltd. accused Verizon Communications Inc. of violating 12 patents on optical transmission, digital communications and other technology, according to a copy of the lawsuit released by the company. Huawei said Thursday that it filed the lawsuit after negotiations failed to produce a licensing agreement.
The lawsuit asks a U.S. federal court in Waco, Texas, to award unspecified damages and license fees.
Verizon, one of the largest U.S. telecom companies, said Thursday that the lawsuit was a “PR stunt” and that Huawei's target was “any country or company that defies it.” It said the company will defend itself.
Huawei, the No. 2 global smartphone brand and the biggest maker of network equipment for phone companies, denies U.S. allegations it might be a security risk or facilitate Chinese spying.
Sanctions imposed by the Trump administration in May block Huawei’s access to most U.S. components technology. The company says it has replaced most American technology in its main products.
JUSTICE DEPARTMENT-CHINA
Barr warns against Chinese 'dominance' in wireless networks
WASHINGTON (AP) — Attorney General William Barr waded into ongoing diplomatic tensions between the United States and China on Thursday, decrying what he said was Beijing's determination to establish “dominance” in the market of next-generation, high-speed wireless networks.
Barr spoke as the Trump administration has accelerated efforts to warn other countries to be wary of Chinese investment and influence. The U.S. government has been lobbying allies to ban Chinese tech giant Huawei from involvement in the network because of cybersecurity concerns.
Barr's comments came at a conference for FBI and Justice Department officials centered on concerns about Chinese economic espionage and intellectual property theft.
The number of FBI arrests in cases related to Chinese espionage has risen sharply in the last five years, corresponding with what the U.S. government sees as an urgent threat to American economic prosperity and intellectual property, federal law enforcement officials said.
There were 24 China-related arrests in the last fiscal year, up from 15 five years earlier, and there have been 19 this year, according to Justice Department figures presented Thursday.
CASPER SLEEP-IPO
Online mattress pioneer Casper soars in debut trading
NEW YORK (AP) — Shares of online mattress pioneer Casper Sleep Inc. popped in their debut trading on the New York Stock Exchange Thursday.
In midday trading, the shares were changing hands at $15.23, nearly 30% above the $12 IPO price. The stock opened at $14.50.
The strong opening offers encouraging news after recent IPO flops. Casper had said earlier this week that it anticipated an offering of $12 to $13 per share, but then later pegged that to the low end of that range.
Last month, Casper said it expected to price the IPO between $17 and $19 per share.
Casper has expanded beyond online selling, opening 60 Casper stores and selling to 18 retail partners like Target and Amazon. It has plans to eventually expand to more than 200 stores in North America. It has also expanded beyond mattresses to pillows, sheets and dog beds. It currently operates in seven countries.
Founded in 2014, Casper proved naysayers wrong who said no one would buy a mattress online. In fact, it revolutionized the way mattresses were delivered by coming up with a mattress flexible enough to be folded into a box small enough to fit into a trunk of a car.
AUTONOMOUS VEHICLE APPROVED
US lets autonomous vehicle bypass human-driver safety rules
DETROIT (AP) — For the first time, the U.S. government's highway safety agency has approved a company's request to deploy a self-driving vehicle that doesn't meet federal safety standards that apply to cars and trucks driven by humans.
The National Highway Traffic Safety Administration granted temporary approval for Silicon Valley robotics company Nuro to run low-speed autonomous delivery vehicles that were designed so they can't carry humans.
Nuro's vehicles won't be required to have side and rear-view mirrors and other safety provisions. Also not on the safety feature list; windshield wipers, steering wheels or brake pedals.
The vehicles previously were subject to federal standards for low-speed vehicles that travel under 25 miles per hour. Those didn't need steering wheels or brake pedals and didn't have to have human backup drivers. Nuro's battery-powered vehicles can be monitored and controlled remotely by a human operator, if needed.
CALIFORNIA WILDFIRES-UTILITY
Victims: PG&E still has rickety power line near Paradise
SAN FRANCISCO (AP) — Pacific Gas & Electric is still operating a rickety power line near the one that ignited a 2018 wildfire that wiped out the Northern California city of Paradise and killed 85 people, according to an expert inspection conducted as part of a legal claim.
In an inspection just two months ago, an expert hired by the wildfire victims' attorneys found a power line with rusty equipment and some parts apparently held in place by electrical tape.
The potential hazards were spotted along a transmission line known as “Cresta-Rio Oso," about 100 yards from another line, known as Caribou-Palermo. A rusting piece of equipment that failed in 2018 on the Caribou-Palermo line has been blamed for causing the fire that destroyed thousands of homes and other buildings, mostly in Paradise.
The findings, made public Thursday by lawyers for victims who lost family members and homes, come as PG&E tries to persuade California Gov. Gavin Newsom that the company has turned over a new leaf as it tries to emerge from a bankruptcy case stemming from more than $50 billion in claimed wildfire losses. Newsom has threatened a government takeover bid of PG&E unless the company proves it can operate more safely.
A federal judge has also been pressing the utility to provide evidence that it has improved its safety practices and is thoroughly inspecting its transmission lines to reduce the risks of future fires.
TEEN VAPING-DISPOSABLES
FDA crackdown on vaping flavors has blind spot: disposables
WASHINGTON (AP) — The U.S. government on Thursday began enforcing restrictions on flavored electronic cigarettes aimed at curbing underage vaping. But some teenagers may be one step ahead of the rules.
Parents, researchers and students warn that some young people have already moved on to a newer kind of vape that isn't covered by the flavor ban.
These disposable e-cigarettes are sold under brands like Puff Bar, Stig and Fogg in flavors such as pink lemonade, blueberry ice and tropical mango.
The Food and Drug Administration’s crackdown narrowly targets reusable vaping devices like Juul, the blockbuster brand that helped trigger the teen vaping craze in the U.S. Under the new policy, only menthol and tobacco flavors are allowed for those devices.
Critics of the FDA policy fear teens will simply switch to the cheaper disposables, which are widely available at convenience stores and gas stations.
The FDA confirmed that the flavor restriction won’t apply to “self-contained, disposable products," but only to rechargeable ones that use pods or cartridges prefilled with a nicotine solution.
The FDA's top tobacco regulator said it can still go after any vaping product that appeals to teenagers.
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