UnitedHealth cuts outlook, casts doubt on overhaul exchanges
The nation’s largest health insurer is questioning its future in public insurance exchanges, the latest signal of major concerns about the online marketplaces that have helped the Affordable Care Act extend coverage to millions of people.
UnitedHealth Group said Thursday that it will scale back marketing for plans it sells on the exchanges and decide next year whether it will even stay in that business in 2017. It also cut its 2015 earnings forecast.
The announcements come a few weeks after several smaller, non-profit insurance co-operatives said they would stop selling coverage on the state-based exchanges.
Corporate America’s problem: Falling profit, revenue
NEW YORK (AP) — Corporate America has a profit problem. U.S company earnings are falling for the first time since 2009, when the economy was still reeling from the Great Recession.
The main culprit is the plunging price of oil, which has decimated earnings at big energy companies like Exxon Mobil and Chevron. Mining companies have also taken a beating because of tumbling prices for gold, silver and copper.
Earnings at energy companies dropped a staggering 59 per cent in the third quarter, enough to drag overall profits for companies in the Standard & Poor’s 500 index down 1.5 per cent, according to estimates by S&P Capital IQ. That marks the first quarterly decline in six years. Without the drag of energy companies, overall earnings would be up 6.2 per cent.
To be sure, earnings are still high by historical standards, and the U.S. economy is continuing to slowly improve.
VW has only a few costly options to fix polluting diesels
DETROIT (AP) — When Volkswagen submits a plan to fix emissions-cheating diesel engines on Friday, it will have only two options for most of the cars.
It can install a bigger exhaust system to trap harmful nitrogen oxide, or it can retrofit a chemical treatment process that cuts pollution.
The bigger exhaust will likely hurt performance and gas mileage, angering car owners. But the chemical treatment, while saving acceleration and mileage, needs a clumsy storage tank and multiple hardware changes to work. In either case, almost a half-million cars would have to be recalled for the repairs.
Experts say both options will be expensive, perhaps so costly that it will be cheaper to buy back some of the older models.
What’s for dinner? Genetically engineered salmon OK’d by FDA
WASHINGTON (AP) — What’s for dinner? Before long, it may well be genetically modified salmon, the first such altered animal cleared for human consumption in the United States.
Critics call it “frankenfish,” but the Food and Drug Administration granted its approval on Thursday, saying the faster-growing salmon is safe to eat. It could be available in a couple of years.
The Obama administration had stalled in approving the salmon for more than five years amid consumer concerns about genetically modified foods. The fish grows twice as fast as normal salmon, so it reaches market size more quickly.
Treasury issues new rules to limit tax inversions
WASHINGTON (AP) — The Obama administration is issuing new rules aimed at reducing the tax benefits available to companies that move their tax addresses overseas.
But Treasury Secretary Jacob Lew says there is only so much the administration can do and called on Congress to pass legislation to stop the manoeuvrs, known as tax inversions.
The new Treasury rules would make it harder for a U.S. company to qualify for a tax inversion. But they don’t address a key area known as “earnings stripping,” a process by which companies increase deductions for their U.S. operations as a way to move profits to low-tax countries.
Starboard urges Yahoo to keep Alibaba, sell core business
SAN FRANCISCO (AP) — Activist investor Starboard Value is urging Yahoo to scrap a planned spinoff of its lucrative stake in Chinese e-commerce company Alibaba and sell its own Internet business instead.
The demand, outlined in a Thursday letter to Yahoo CEO Marissa Mayer and the company’s board, represents a reversal for Starboard. The New York hedge fund last year began pressuring Mayer to spin-off Yahoo’s Alibaba Group stock into a different company to avoid paying future taxes on the gains on its original investment of $1 billion. Yahoo’s stake in Alibaba currently is worth $30 billion, far more than its main business of showing ads on its websites and mobile applications.
Starboard wants Yahoo to hold on to Alibaba because of the uncertainty raised by the Internal Revenue Service’s refusal to guarantee the spinoff will qualify for a tax exemption.
Manslaughter charges filed in deadly 2012 platform blast
NEW ORLEANS (AP) — A federal grand jury indicted two companies on involuntary manslaughter charges and three people face charges in a deadly 2012 explosion on an oil production platform in the Gulf of Mexico, the Justice Department said Thursday.
The explosion and fire started during welding work on a platform owned by Black Elk Energy Offshore Operations LLC, killing three workers and injuring several others. In lawsuits and a federal report, the company and its contractors have been accused of failing to follow proper safety practices and rushing work.
Black Elk Energy and one of its contractors, Grand Isle Shipyards Inc., were charged with three counts of involuntary manslaughter, as well as eight charges involving federal safety practices under the Outer Continental Shelf Lands Act and one violation of the Clean Water Act.
Square’s stock soars 45 per cent in first day of trading
SAN FRANCISCO (AP) — Square bounced back in its stock market debut Thursday after the once-hot mobile payments service slashed the price of its initial public offering to get the deal done.
The 6-year-old company’s shares gained $4.07, or 45 per cent, to close at $13.07. The surge helped ease the pain of a mortifying markdown in Square’s IPO price. The San Francisco company sold 25.7 million shares at $9 apiece after money managers leery of Square’s unprofitable history refused to pay $11 to $13.
The concession appeared to attract bargain hunters betting that Square is worth the price that its management team had been demanding in the IPO. Even with Thursday’s rally, Square’s stock remains below the $15.46-per-share price that the company fetched a year ago when it raised $180 million as a privately held startup.
Chinese financial reforms collide with ‘too big to fail’
BEIJING (AP) — Chinese leaders’ ambition to use market forces to make the state-dominated financial system more efficient is colliding with their version of “too big to fail.”
The latest reform target is China’s sleepy bond market. Until last year, Beijing protected buyers of corporate bonds by bailing out any company that ran short of cash to repay them. Since then, it has allowed a growing number of defaults, hoping investors will be encouraged to look more closely at companies and force risky borrowers to pay more.
Now, that stance is being tested by a credit crunch involving a steel maker that is owned by the Chinese Cabinet and part of an industry the Communist Party says is a pillar of the economy.
Wall Street feeling the chemistry with Match — shares fly
NEW YORK (AP) — The owner of Tinder, Match.com and OKCupid is having a great first date with Wall Street.
Shares of Match Group Inc. got a boost on their first day of trading, rising $2.17, or 18 per cent, to $14.17 Thursday afternoon.
The company had priced its IPO at $12, near the low end of its expected range. It sold about 33.3 million shares. They trade under the symbol MTCH on the Nasdaq market.
The Dallas-based company has 50 brands using 40 languages around the world, and about 59 million active monthly users. It has been profitable and had $1 billion in revenue over the 12 months that ended June 30.
By The Associated Press=
The Dow Jones industrial average fell 4.41 points, or 0.02 per cent, to 17,732.75. The Standard & Poor’s 500 index slipped 2.34 points, or 0.1 per cent, to 2,081.24. The Nasdaq composite lost 1.56 points, or 0.03 per cent, to 5,073.64.
Benchmark U.S. crude fell 21 cents to close at $40.54 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 4 cents to close at $44.18 a barrel in London. Wholesale gasoline rose 2 cents to $1.288 a gallon, heating oil fell 1 cent to $1.372 a gallon and natural gas fell 7 cents to $2.276 per 1,000 cubic feet.