Friday March 5, 2010
Business: Pam Haynes
DOW JONES 10,444.14 +47.38
NASDAQ 2,292.31 +11.63
S&P 1,122.97 +4.18
PHaynes@hpe.com (336) 888-3617
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CEO: Citigroup has changed since crisis WASHINGTON (AP) — Facing sharp questions from bailout overseers, Citigroup Inc. CEO Vikram Pandit said Thursday the bank is “fundamentally different” than the tangled behemoth that took more than $45 billion in government aid during the recent financial crisis. “I am pleased to say we are in a far different and much healthier position,” Pandit said in testimony Thursday before the Congressional Oversight Panel. The independent watchdog group oversees the $700 billion financial bailout. Pandit said Citi’s experience during the crisis showed the need for a clearer process to deal with large, failing financial firms — a key priority of the Obama administration.
Insurers debate increases WASHINGTON (AP) — Keeping up the pressure for President Barack Obama’s health care overhaul, Health and Human Services Secretary Kathleen Sebelius chastised top insurance executives Thursday over proposed double-digit rate hikes she said top the list of reasons that Congress must quickly pass his plan. Obama’s chief health care Cabinet member convened a White House meeting with the CEOs of Wellpoint, Aetna, Cigna, UnitedHealth Group and other companies, as well as state insurance commissioners from Kansas, West Virginia and Pennsylvania. On the agenda:
proposed premium hikes Sebelius said are making consumers’ jaws drop around the country. The increases affect people buying their own coverage directly, as opposed to the majority of Americans, who have employer provided policies. Wellpoint subsidiary Anthem Blue Cross recently announced plans to boost individual insurance premiums in California by as much as 39 percent. Since then, Sebelius said she’s heard from many Americans who are concerned they will be priced out of the market. “They’re terrified they’re next,” she said. Obama has proposed cre-
ating a new federal consumer protection agency that would have the power to roll back premium increases, and order refunds. But Sebelius said the long-term solution is a new health insurance marketplace that Obama wants to create for individuals and small businesses. It would foster competition, helping to keep rate increases in check. “We want to make sure Americans have some options for affordable health coverage in the future,” she said. Obama dropped by the meeting and told participants that the current system is not sustainable,
Sebelius told reporters after the meeting. Sebelius said the executives agreed with that assessment. Although the insurance industry opposes much of Obama’s overhaul plan, the CEOs said they share the administration’s concern about rising cost. It’s leading their healthiest customers to drop coverage, leaving the companies with a relatively sicker pool of people. Aetna’s Ronald Williams said the administration, states and insurers share a common goal: “Making sure working families have access to affordable health care.” He praised the adminis-
BofA warrants set record
Bristol-Myers: 60 drugs in testing NEW YORK (AP) — Executives at drugmaker Bristol-Myers Squibb Co. are telling analysts at a business briefing they have 60 potential drugs in development, seven in late-stage studies. The company says it expects future revenue from those medicines and growing sales from existing drugs to help offset an expected plunge in Plavix sales in 2012. That’s when U.S. generic competition will start slashing sales of the $6 billion-a-year blood thinner, the world’s second-best-selling drug.
AB InBev sees flat beer sales BRUSSELS (AP) — The world’s largest brewer and maker of Budweiser reported Thursday a fourth quarter profit of $1.28 billion, helped by cost cuts and price hikes, but said global beer sales were stagnant and forecast no rebound in 2010. Anheuser-Busch InBev SA sold 0.7 percent less beer and soft drinks in 2009 during the economic downturn and says that global beer demand is neither growing nor shrinking.
Oil prices drop, but gas rises NEW YORK (AP) — Oil prices fell as the dollar increased against other major currencies. Benchmark crude for April delivery fell 49 cents to $80.38 on the Nymex as the U.S. Dollar Index gained 0.6 percent. At the pump, retail gas prices ticked higher overnight to a new national average of $2.706 per gallon, according to AAA.
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tration for bringing the group together and said: “This is what we need more of — everyone at the table collaborating.” “Fundamentally, we want the insurance market to work for everyone,” he added. “People are reaching the breaking point,” when it comes to premiums, said Sandy Praeger, Kansas’ insurance commissioner. “As important as rate oversight is, it will ultimately fail unless costs are contained. The real key will be bending the cost curve. Unless we do so, premiums will continue to rise uncontrollably with or without reform.”
AP
WASHINGTON (AP) — The Treasury Department has received a record $1.54 billion from the sale of warrants it received from Bank of America as part of the support it provided during the financial crisis. The Treasury said Thursday it sold 272.17 million warrants in an auction held because Bank of America and the government could not agree upon an acceptable price. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. The $1.54 billion total is the largest amount raised from a single institution from the sale of warrants as part of the government’s $700 billion financial rescue effort.
Mercy Del Rosario looks over her resume while attending a job fair in Chicago on Feb. 25.
Jobless claims drop, retail climbs WASHINGTON (AP) — New claims for jobless benefits fell last week in a sign that layoffs may be easing as the economy slowly recovers. Meanwhile, retailers reported Thursday that sales rose in February by the largest amount since November 2007, a month before the recession began. Factory orders also rose in January, the Commerce Department said. The reports provide fresh evidence that the economy is steadily growing. But it’s not clear when that improvement will translate into new hiring. The Labor Department said Thursday that initial claims for unemployment insurance fell by 29,000 to a seasonally adjusted 469,000.
That nearly matches Wall Street analysts’ estimates of 470,000. Still, last week’s drop only partly reverses a sharp rise in claims in the previous two weeks. The four-week average of claims, which smooths out volatility, fell by 3,500 to 470,750. Despite the drop, the average has risen by about 20,000 since the beginning of the year. Initial claims are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers. But they have been volatile in recent weeks as last month’s severe snowstorms in the Northeast have distorted the data. Claims rose sharply two weeks ago partly because several states processed a backlog of claims that had built up from previous weeks
when government offices closed due to bad weather. No states reported backlogs this week, a Labor Department analyst said. “It might be another couple of weeks until we get a clear picture of where claims are settling in,” said Conrad DeQuadros, an economist at RDQ Economics. In another sign that companies are raising output without adding many jobs, the department said in a separate report that productivity rose by 6.9 percent in the fourth quarter, higher than analysts’ expectations of a 6.3 percent rise. While higher productivity, or output per hour worked, raises living standards in the long run, it also enables companies to get by with fewer workers.
Factory orders rise 1.7 percent WASHINGTON (AP) — Orders to U.S. factories posted the biggest increase in four months in January, led by a surge in demand for commercial aircraft. The increase was another sign that manufacturing is helping to support the economic recovery. The Commerce Department said Thursday that factory orders rose 1.7 percent in January, slightly below the 1.8 percent gain economists had expected.
TiVo prevails in patent rights case NEW YORK (AP) — A federal appeals court has sided with TiVo in the second phase of its longrunning patent lawsuit against Dish Network. TiVo Inc. says the decision Thursday paves the way for the digital video recorder pioneer to col-
lect about $300 million from Dish Network Corp. in damages and contempt sanctions it had been awarded. TiVo has also sued AT&T and Verizon for allegedly infringing on certain DVR patents. Shares of TiVo rose by $4.81, or more than 47 per-
cent, to $15.02 in midday trading Thursday. Dish Network Corp. lost $1.23, or 5.7 percent, to $20.48. Dish says it will seek a review of the threejudge panel’s decision by the full U.S. Court of Appeals for the Federal Circuit.