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FINANCIAL MARKETS
S&P 500 clings to chance for longest win streak since April
NEW YORK (AP) — A rally for U.S. stocks came closer to fading out on Wednesday, with indexes stalling near their record levels, but the S&P 500 clung to a chance for its longest winning streak in eight months.
Stocks have jumped recently on optimism around a “Phase 1” trade deal announced last week between the United States and China, among other factors. But after five straight days of gains, the S&P 500 has less fuel to push higher.
FedEx slumped sharply after it cut its profit forecast for its fiscal year and reported weaker quarterly earnings than analysts expected. It cited “weak global economic conditions” and higher expenses. Cigna, though, jumped after it agreed to sell its group life and disability coverage business for $6.3 billion.
Stock markets overseas were mixed, with most making only modest moves in a relatively quiet day of trading. Treasury yields were steady, and the price of crude oil headed for its first drop in five days.
TRUMP-PRESCRIPTION DRUG IMPORTS
Plan to import cheaper Canadian drugs advances under Trump
WASHINGTON (AP) — The Trump administration, eager to show progress on prescription drug costs, on Wednesday moved forward with its plan to allow Americans to safely and legally get access to lower-priced medicines from abroad.
But patients are unlikely to see quick relief on prices, even in states such as Florida that are pursuing their own plans to import medications. Meanwhile, major legislation to lower costs for seniors has gotten bogged down in a Congress consumed by the impeachment of President Donald Trump.
Health officials in Washington unveiled a proposed regulation that would allow states to import many brand name drugs from Canada, with federal oversight. A second draft plan would let pharmaceutical companies seek approval to import their own drugs, from any country.
Health and Human Services Secretary Alex Azar traveled to Florida on Wednesday to promote the plan with Republican Gov. Ron DeSantis. Earlier this year, DeSantis signed a bill intended to allow pharmacies and wholesalers in his state to import drugs from Canada, for patients covered by government programs like Medicare.
NAVAJO NATION-MANAGED CARE
Navajo Nation to create its own managed health care entity
WINDOW ROCK, Ariz. (AP) — The Navajo Nation is seeking become one of the first Native American tribes to create its own managed health care entity, the tribe recently announced.
The tribe said it plans to contract with Molina Healthcare to work toward a managed health care offering under New Mexico’s Centennial Care Medicaid program.
Navajo Nation Counselor Daniel Tso, chair of the Health, Education and Human Services Committee, said the new entity “will be a one-of-a-kind medicaid program” designed to improve access and quality of health care on the largest Native American reservation.
Navajos access care at lower rates and experience worse outcomes when compared to the average Medicaid populations, Tso said.
About 75,000 Navajos living in New Mexico are eligible for Medicaid.
Under provisions established by the federal government, each state is allowed to structure and tailor their Medicaid programs. In 2017, New Mexico’s Medicaid program received approval by Centers for Medicaid and Medicare to collaborate with Indian Managed Care Entities, including a pilot project with the Navajo Nation.
DARK OVERLORD-HACKING
British man pleads not guilty in alleged hacking scheme
ST. LOUIS (AP) — A British man pleaded not guilty Wednesday to charges alleging that he and co-conspirators in a hacking group called The Dark Overlord stole data from health care and accounting companies in the U.S. and threatened to release the information unless the companies paid ransom.
Nathan Francis Wyatt, 38, appeared in federal court in St. Louis on Wednesday, after he lost a long fight against his extradition to the U.S.
It was not immediately clear which companies were involved in the alleged plot or why the charges were filed in St. Louis. Records from Wyatt's extradition case indicate he was charged with two counts of aggravated identity theft and three counts of threatening damage to a computer, The St. Louis Post-Dispatch reported.
Wyatt and his co-conspirators are accused of accessing company data and threatening to release it publicly unless ransom was paid in the cryptocurrency bitcoin.
A judge's opinion in Wyatt's extradition case say the Dark Overlord hackers threatened the daughter of the owners of a health care company, stole money from the PayPal account of another health care provider, demanded $75,000 in bitcoin from a third health care company, and extorted money from a fourth health care company and an accounting firm.
Prosecutors have asked that Wyatt be kept in jail until trial. He has a fiance and three children in England, but no ties to St. Louis or the United States.
MERCEDES FINED
Mercedes agrees to $13M US fine for recall reporting flaws
DETROIT (AP) — Mercedes Benz will pay a $13 million penalty to U.S. safety regulators for a string of reporting failures involving recalled vehicles.
The German automaker agreed to the payment in a settlement with the National Highway Traffic Safety Administration. Last year the agency opened an investigation into recall reporting lapses by Mercedes involving more than 1.4 million vehicles.
The investigation covered allegations of recall notification letters being sent too slowly to vehicle owners as well as slow reporting of safety problems to the agency.
The settlement also addresses flaws with the operation and functionality of Mercedes' internet site that lets vehicle owners check for recalls by their vehicle identification numbers, the agency said Wednesday in a statement.
Mercedes agreed to pay the $13 million penalty with another $7 million deferred if certain conditions are met.
The automaker will meet with NHTSA regularly to discuss recall execution and reporting, as well as the recall lookup site, the agency's statement said.
FIAT-CHRYSLER-PSA PEUGEOT
Fiat Chrysler and Peugeot sign merger dealor 50-50 merger deal
MILAN (AP) — The boards of Fiat Chrysler Automobiles and PSA Peugeot on Wednesday signed a binding merger creating the world’s fourth-largest automaker with the scale to confront the challenges of stricter emissions regulations and the transition to new driving technologies.
The companies said in a joint statement the new group will be led by PSA's cost-cutting CEO Carlos Tavares, with Fiat Chrysler’s chairman John Elkann as head of the board of the merged group. Fiat Chrysler CEO Mike Manley will stay on, though it was unclear in what capacity.
The merger is expected to yield 3.7 billion euros in savings a year, which will be invested in "the new era of sustainable mobility'' and to meet strict new emissions regulations, particularly in Europe.
The new technologies include electrified engines, autonomous driving and connectivity, part of what Tavares described as ‘’the transition to a world of clean, safe and sustainable mobility.'' Both companies have lagged in developing electric cars in particular.
NEW YORK LIFE-CIGNA DEAL
New York Life to spend $6.3 B on Cigna business
UNDATED (AP) — New York Life will spend more than $6 billion in cash to acquire the group life and disability coverage business of the insurer Cigna.
New York Life said Wednesday that the deal will add millions of customers to its business. Cigna Corp. gets a significant amount of cash that it will use to buy back stock and pare its debt, among other things.
New York Life has been in the life insurance business for more than 174 years, making it one of the nation’s oldest. The company is owned by policy holders and does not trade publicly.
The deal is expected to close in next year’s third quarter.
Cigna covers more than 17 million people as one of the nation’s largest health insurers. Like its competitors, it has been focusing its business more on managing patient care and improving the health of its customers instead of just waiting to pay the bills for care as they come in.
Cigna spent about $52 billion to buy one of the nation's largest pharmacy benefits managers, Express Scripts, in a deal that closed last year.
CALIFORNIA WILDFIRES-UTILITY
Judge OKs nearly $25 billion for PG&E fire victims, insurers
SAN FRANCISCO (AP) — A federal bankruptcy judge on Tuesday approved two Pacific Gas & Electric settlements totaling $24.5 billion to help pay the losses suffered by homeowners, businesses and insurers in the aftermath of catastrophic Northern California wildfires that sent the nation’s largest utility into a financial morass.
The decision by U.S. Bankruptcy Judge Dennis Montali at the end of a five-hour court hearing bolsters PG&E’s chances of following its preferred path for getting out of bankruptcy by a make-or-break June 30 deadline. Montali also handed the utility another victory by rejecting attempts by a competing group to offer an alternative proposal to steer PG&E out of bankruptcy instead of the company's plan.
Despite the strides made Tuesday, PG&E still faces huge obstacles. The most significant is California Gov. Gavin Newsom's recent conclusion that PG&E’s plan to emerge from bankruptcy doesn’t comply with state law, which the company must do to qualify for coverage in a wildfire fund approved by the California Legislature.
PG&E sought refuge in bankruptcy in January as it grappled with $36 billion in claims from people who lost homes, businesses and family members in wildfires that raged through Northern California in 2017 and 2018, killing dozens. Those claims will now be settled as part of a $13.5 billion deal that PG&E worked out earlier this month with lawyers representing uninsured and underinsured victims of the past fires.
TWIN METALS MINE
Twin Metals Minnesota files formal mine plan with regulators
ST. PAUL, Minn. (AP) — Twin Metals Minnesota formally submitted a plan to regulators Wednesday for an underground copper-nickel mine near Ely in northeastern Minnesota, a project that has drawn fierce opposition because it would sit just upstream from the Boundary Waters Canoe Area Wilderness.
Company officials said in interviews that the mine is designed to prevent pollution from reaching the wilderness while creating about 765 full-time mining jobs and more than 1,500 spinoff jobs, plus thousands of construction work hours for union labor.
Twin Metals, which is owned by Chilean mining giant Antofagasta PLC, says it has spent more than $450 million developing the project.
The filing launches what’s expected to be a lengthy environmental review and permitting process for what would be Minnesota’s second copper-nickel mine.
BOEING 737 MAX-SPIRIT AEROSYSTEMS
Governor: Kansas may have to help pay Spirit workers
WICHITA, Kan. (AP) — Kansas may have to help pay workers at a company that makes fuselages for the grounded Boeing 737 Max if the planes don't return to the sky soon, Gov. Laura Kelly said.
Kelly said she talked with Wichita-based Spirit AeroSystems CEO Tom Gentile on Tuesday, one day after Boeing announced that it was temporarily halting production of the 737 Max as it struggles to get approval from regulators to put the plane back in the air, The Wichita Eagle reported.
Although the jet has been grounded since March following a pair of deadly crashes, Spirit has continued to build 737 Max fuselages as well as parts for other planes. It now has dozens of the fuselages lined up on a tarmac near the company’s south Wichita factory.
Kelly said Gentile is optimistic that production of the aircraft will resume soon and that he told her he’s not expecting to have to lay off workers.
She said it’s important to keep the Spirit workers employed so that the city and state don’t lose that talent pool, which will be needed if and when the 737 Max goes back into production.
BREWERY SALE
New Belgium Brewing workers back sale to Kirin subsidiary
FORT COLLINS, Colo. (AP) — Employees approved the sale of one of the largest U.S. craft breweries to a subsidiary of Japanese beverage company Kirin in a vote that ended Tuesday, clearing the way for the sale to close by the end of the year.
New Belgium Brewing Co. declined to release the number of employees who voted in favor of the sale to Lion Little World Beverages of Australia or a breakdown of how they voted, the Coloradoan reported.
New Belgium CEO Steve Fechheimer has said New Belgium does not anticipate any changes for employees or its beer product offerings because of the sale.
New Belgium has breweries in Fort Collins and Asheville, North Carolina, with about 700 employees. It is currently employee owned but will no longer be after the sale.
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