Update on the latest business



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FINANCIAL MARKETS

Stocks fall in midday trading as investors turn cautious

NEW YORK (AP) — Stocks turned broadly lower in midday trading Thursday as investors became more cautious following a record-setting day for major indexes.

The virus outbreak originating in China remains a lingering concern as more companies say they'll be affected. The world’s biggest shipper, A.P. Moller Maersk, expects a profit hit in 2020. Air France also expects earnings to suffer and Australia’s Qantas is slashing flights to Asia.

Technology and health care companies led the losses. Energy companies held up better than most of the market as crude oil prices rose 1%. Real estate companies also held up well.

E-Trade soared after agreeing to be acquired by Morgan Stanley.

MORGAN STANLEY-E-TRADE

Morgan Stanley to buy E-Trade for $13 billion

NEW YORK (AP) — Morgan Stanley, the investment bank for millionaires, big business and megamergers, is buying E-Trade Financial, the online brokerage that encouraged waves of regular investors to get into the market with ads featuring its talking spokesbaby.

The roughly $13 billion, all-stock deal would be one of the biggest deals on Wall Street since the financial crisis more than a decade ago, and it would mark the latest chapter in Morgan Stanley's transformation from a scrappy, deal-doing, stock-trading investment bank to a more well-rounded financial firm more reliant on its asset and wealth management businesses.

E-Trade will bring with it 5.2 million client accounts, $360 billion in retail client assets and a pool of customers who may become wealthier and use more of Morgan Stanley’s full-service offerings. Morgan Stanley has 3 million client relationships and $2.7 trillion in client assets.

E-Trade shareholders will receive 1.0432 Morgan Stanley shares for each share they own. That values each E-Trade share at $58.74, based on Morgan Stanley’s stock price Wednesday. That’s 30.7% more than E-Trade shares closed at Wednesday.

TRUMP-ECONOMIC REPORT

WH report says economy accelerated under Trump

WASHINGTON (AP) — A new White House report says the U.S. economy is growing faster than expected, even though the annual gains of 3% that President Donald Trump promised to voters have yet to be achieved.

The annual economic report of the president released Thursday said the economy added more jobs, experienced a lower unemployment rate and grew faster than the projections in an August 2016 report by the Congressional Budget Office. It's part of a broader effort to refute evidence that Trump simply inherited a healthy economy from the Obama administration that had been expanding since the middle of 2009.

Job gains and the unemployment rate have been following similar paths since Trump succeeded Barack Obama — and the former president tweeted out Monday that the roughly $800 billion stimulus package he signed into law 11 years ago had “paved the way for more than a decade of economic growth and the longest streak of job creation in American history."

The Trump administration can accurately say that growth has occurred faster than what the non-partisan CBO forecast in 2016. But Trump's tax cut was not part of that forecast — and the budget deficit is 42% — or $301 billion — higher today than the CBO estimated at the time. Also, the interest charged on 10-year U.S. Treasury notes is half of what CBO predicted, meaning that it is cheaper for the government and consumers to borrow than what government economists believed it would be.

VIACOMCBS-STREAMING

CBS streaming service to grow with Viacom, Paramount videos

NEW YORK (AP) — ViacomCBS is planning a new streaming service that will combine the existing CBS All Access service with Paramount movies and shows from Viacom channels such as MTV and BET.

The move had been expected since CBS and Viacom combined in August to better compete in the increasingly competitive streaming environment.

CBS was one of the first media companies to launch its own streaming service. Its $6-a-month service CBS All Access includes original programming such as new “Star Trek” series and a revival of “The Twilight Zone.” The service also has old and current broadcast shows.

Since then, Disney launched its $7-a-month Disney Plus service, while Comcast’s NBCUniversal and AT&T’s WarnerMedia have services coming, tapping movies and shows from their channels and production studios. The companies are all trying to challenge Netflix, Amazon and other established players in the streaming arena as their channels face challenges from people ditching cable TV subscriptions.

SPAIN-US-5G NETWORKS

US expert says 5G tiff could affect information exchanges

MADRID (AP) — The top U.S. diplomat for cybersecurity policy says he welcomes European Union moves toward recognizing the risks at stake in 5G technology, but warned that the U.S. will not be able to share top-level information with countries that choose “untrusted” vendors, such as China’s Huawei (WAH'-way).

Robert Strayer, deputy assistant secretary for Cyber and International Communications and Information Policy at the U.S. State Department told journalists in Madrid that a new EU “5G toolbox” recognized security risks in 5G technology and that vendors must be trustworthy.

Strayer was in Spain as part of a European tour as President Donald Trump's administration puts pressure on allies to avoid Chinese tech firm Huawei in next-generation mobile networks. The U.S. fears China's communist leaders can use the company to tap into communications in equipment Huawei sells globally.

VICTORIA'S SECRET-SALE

A diminished Victoria's Secret sold as women look elsewhere

NEW YORK (AP) — Victoria's Secret is being sold as women increasingly look for styles that more realistically fit their body types.

The company's owner, L Brands, said that the private-equity firm Sycamore Partners will buy 55% of Victoria's Secret for about $525 million. The Columbus, Ohio, company will keep the remaining 45% stake. After the sale, L Brands will be left with its Bath & Body Works chain and Victoria's Secret will become a private company.

Les Wexner, who founded the company in 1963, will step down as chairman and CEO after the transaction is completed and become chairman emeritus. Wexner has been grappling with his own troubles, including questions over his ties to the late financier Jeffrey Epstein, who was indicted on sex-trafficking charges.

The selling price for Victoria's Secret signifies a marked decline for a brand with hundreds of stores that booked about $7 billion in revenue last year. Shares of L Brands, slid more than 7% Thursday before recovering their losses.

FISHING MAGNATE

Fishmonger's finale: The Codfather's boats are sold

UNDATED (AP) — A Massachusetts company is slated to acquire most of what's left of the boats owned by a former fishing magnate known as the Codfather, who was forced out of the industry after committing an elaborate fraud.

Blue Harvest, a fishing and processing company in New Bedford, has reached an agreement to buy a dozen of Carlos Rafael's boats and his remaining permits for fish such as cod and haddock.

The sale means the boats will get back into the water this spring, and the jobs will stay local, said Keith Decker, chief executive officer of Blue Harvest. Decker declined to comment on the price of the sale.

Carlos Rafael was the owner of one the largest commercial fishing operations in the U.S. before his arrest for dodging quotas and smuggling profits led to his downfall. Rafael agreed to a settlement with the federal government that required him to sell off his assets.

His attorney, John Markey of New Bedford, said the sale of the fishing boats means more than 95% of Rafael's fishing assets have been divested. The only federal fishing permit left is one for herring, he said.

NORTHEAST GAS PIPELINE

Transco back again, seeking permits for Eastern gas pipeline

MIDDLETOWN, N.J. (AP) — A hotly contested proposal to build a pipeline to take natural gas to customers in New York City and Long Island is back before New Jersey regulators.

The Northeast Supply Enhancement Project would add to the existing Transco pipeline and would carry enough gas to heat 2.3 million homes. It would take gas from Pennsylvania through New Jersey and its Raritan Bay to New York.

Oklahoma-based Williams Companies plans to spend $926 million on the project, saying that it is needed to ensure adequate heating and energy supplies to New York City and Long Island, and that it can be built safely with minimal environmental disruption.

But opponents say it is unneeded and will encourage the burning of fossil fuels at a time when climate change is causing serious harm.

BRITAIN-SNOOPING ON WORKERS

Bank backs off program monitoring workers' bathroom breaks

LONDON (AP) — London-based bank Barclays backed away Thursday from a software program that monitored an employee's productivity - including bathroom breaks - after privacy campaigners described it as “creepy.’’

The City A.M. newspaper first reported that the bank had installed the “Big Brother’’ type program that tracked how long employees were at their desks and sent warnings if they spent too long on breaks.

The program tracked productivity in real time and recorded bathroom breaks as “unaccounted activity.” Employees would receive a daily readout complete with tips such as “mute the phone'' or “disable email/chat pop ups,'' the newspaper reported.

Human rights campaigners, such as Silkie Carlo, the director of Big Brother Watch, challenged the idea, arguing that intrusive monitoring “denies staff the privacy, respect and dignity they deserve at work.’’

OBIT-HAIR CLUB FOR MEN FOUNDER

Hair Club for Men founder -- and client - Sy Sperling dies

FORT LAUDERDALE, Fla. (AP) — Hair Club for Men founder Sy Sperling, famous for the TV commercials where he proclaimed “I'm not only the Hair Club president but I'm also a client,” died in Florida. He was 78.

Sperling died Wednesday in Boca Raton after a lengthy illness, spokeswoman Terri Lynn said Thursday.

In the late 1960s, Sperling was a balding New York City swimming pool salesman who was growing frustrated with toupees.

Using a weaving technique he learned from his hair stylist, Sperling took $10,000 in credit card debt to open his own salon on Madison Avenue where he perfected a system where a nylon mesh cap was glued to the scalp. The client's remaining hair would grow through it and then hair purchased from women that matched the color was woven into the mesh. The clients would then come in several times a year for adjustments.

Business took off but by the late 1970s had stagnated. Word of mouth was unreliable as many clients weren't eager to tell their friends they were using a hair-replacement system. He began advertising on television and in 1982, he went national with commercials running 400 times daily on late-night TV. They became so ubiquitous they were spoofed on the “Tonight” show and “Saturday Night Live.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Associated Press

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