Business Highlights

Tuesday, November 17, 2009

Business Highlights

Insurers stop selling new child-only health plans

INDIANAPOLIS (AP) — Several health insurers say they will stop selling new child-only individual insurance policies as they face a health care reform provision that will prevent them from excluding children with potentially costly pre-existing conditions.

An insurance industry representative said the decision affects a relatively small population and is being made to keep costs down for all policyholders. But a Georgetown University researcher said some middle-class children could be left vulnerable by the ensuing lack of coverage options.

Several provisions of the health care overhaul went into effect Thursday, six months after it was signed into law.

Financial bailout chief announces resignation

WASHINGTON (AP) — Herb Allison, the head of the government’s $700 billion financial bailout program, announced on Wednesday that he would resign. He is the latest in a series of departures from President Barack Obama’s economic team.

The Troubled Asset Relief Program, the formal name for the bailout program that began during President George W. Bush’s administration, has been widely criticized by the public as a rescue for wealthy bankers who took extraordinary risks.

Allison will be succeeded as head of the program by Tim Massad, 54, who will become acting assistant Treasury secretary for financial stability while the administration looks for a permanent successor.

Stocks waver as traders move into Treasurys, gold

NEW YORK (AP) — Traders put their September stock rally on hold and moved into Treasurys and gold Wednesday, a day after the Federal Reserve said it was ready to take more action to boost the economy.

The Dow Jones industrial average fell 21 points.

With no new economic data out Wednesday and the Fed’s announcement late Tuesday having a bigger impact on the bond and currency markets, Bob Auer, portfolio manager of the Auer Growth Fund, said it was natural for stocks to pause.

Novartis gains FDA approval for new MS drug

WASHINGTON (AP) — Federal health regulators have approved the first pill to treat the underlying causes of multiple sclerosis, a debilitating nervous system disorder that has traditionally been treated with injectable drugs.

The Food and Drug Administration approved Swiss drugmaker Novartis’ treatment Gilenya to reduce relapses in patients with multiple sclerosis, who experiences loss of balance, muscle spasms and other movement problems.

There is no cure for the disease, but steroids can reduce the duration and severity of symptoms in the short term, and seven treatments on the market have had success in reducing recurrence of symptoms.

Abbott recalls infant formula on bug contamination

WASHINGTON (AP) — Drugmaker Abbott Laboratories said Wednesday it is recalling millions of containers of its best-selling Similac infant formula that may be contaminated with insect parts.

The voluntary action affects up to 5 million Similac-brand powder formulas sold in the U.S., Puerto Rico, Guam and some Caribbean countries. The company said the products may contain a small beetle or larvae, which could cause stomach ache and digestion problems.

The recall does not affect any liquid formulas or other Abbott-brand products.

Geithner says US banks in good position to meet new global capital standards

WASHINGTON (AP) — Treasury Secretary Timothy Geithner said Wednesday that U.S. banks are in a good position to meet new global capital standards because of the stress tests conducted in the United States last year.

In testimony to the House Financial Services Committee, Geithner said that stress tests conducted in the spring of 2009 in the U.S. forced banks to raise needed capital, the cushion that banks have to hold against losses.

Because of those tests, Geithner said U.S. banks are in a strong position internationally and will be able to meet the new requirements.

More than half exit foreclosure-relief program

WASHINGTON (AP) — The Obama administration’s flagship mortgage-relief effort is failing to ease the foreclosure crisis as more than half of those who have enrolled have fallen out of the program.

As of August, approximately 680,000 homeowners who applied to get their mortgage payments lowered, or about 51 percent, have been disqualified, the Treasury Department said Wednesday. That’s up from about 48 percent in July.

The report gives ammunition to critics who say the program has failed to slow the tide of foreclosures. They say it’s better to let troubled homeowners lose their homes and home prices fall.

J&J lawyers: FDA knew of secret 2009 Motrin recall

TRENTON, N.J. (AP) — Lawyers for Johnson & Johnson insist government regulators knew the company was secretly pulling packets of ineffective Motrin from store shelves last year, rather than announcing a public recall.

But the lawyers, responding Wednesday to demands from a congressional panel probing the case, wrote they have no documents from the Food and Drug Administration approving what’s been dubbed the “phantom recall” of Motrin in the first half of 2009.

Documents the J&J attorneys turned over Wednesday to the House Oversight and Government Reform Committee seem to show the FDA received two brief company reports about the effort to remove small containers of faulty Motrin caplets from convenience store shelves. The committee has scheduled a hearing on the matter Sept. 30.

Stronger sales of key foods lift General Mills 1Q

PORTLAND, Ore. (AP) — General Mills Inc.’s first-quarter net income rose 12 percent on stronger sales of key products such as Cheerios, Cinnamon Toast Crunch and Yoplait yogurts.

The company said it sold more of its products all its operating segments and saw a shift by consumers to some of its higher-margin products such as cereal. But the company’s performance was hampered slightly by higher costs for ingredients and advertising.

General Mills reported that it earned $472.1 million, or 70 cents per share, for the quarter. That’s up from $420.6 million, or 62 cents per share, earned in the same quarter last year.

CarMax 2Q profit rises on used car sales

RICHMOND, Va. (AP) — Used car dealership chain CarMax Inc. said Wednesday its profit rose nearly 5 percent in its fiscal second quarter as a shaky economy continued to push consumers toward previously owned cars and trucks.

CarMax, which operates more than 100 stores, said its overall revenue climbed 13 percent while revenue at stores open at least a year rose 4 percent even though last year’s sales were boosted by the government’s Cash for Clunkers rebate program.

While used cars didn’t qualify under the federal program that gave rebates for junking older cars and buying more fuel-efficient vehicles, the Richmond, Va.-based company has said the program resulted in a spike in traffic.

New York Times expects 3Q loss, lower revenue

NEW YORK (AP) — The New York Times Co. said Wednesday it expects to show a loss for the third quarter, with newspaper advertising still in decline.

Unlike the prior quarter, the Times Co. said that growth in digital ad sales will not make up for declines on the print side. Making matters worse, the company expects a drop in revenue from subscription and newsstand sales.

All of which adds urgency to the company’s efforts to find greater sources of revenue outside of printed newspapers. Its flagship daily is set to impose fees for accessing material on its website,, beginning early next year. And the company has been working to expand its audience on mobile gadgets like the iPad, where it also hopes to find both subscription and advertising revenue.

By The Associated Press

The Dow Jones industrial average fell 21.72, or 0.2 percent, to 10,739.31. The Standard & Poor’s 500 index fell 5.50, or 0.5 percent, to 1,134.28, while the Nasdaq composite index fell 14.80, or 0.6 percent, to 2,334.55.

Benchmark crude for November delivery lost 26 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.

In other Nymex trading in October contracts, heating oil fell 1.29 cents to settle at $2.1070 a gallon and gasoline lost 1.82 cents to settle at $1.9014 a gallon. Natural gas rose 4.7 cents to settle at $3.966 per 1,000 cubic feet.

In London, Brent crude fell 47 cents to settle at $77.95 a barrel on the ICE Futures exchange.

Filed under: Cabinets, Consumer, Corporate, Corporate News, Currency Markets, Economic Growth, Economic Policy, Economy, Finance, Financial Crisis, Financial Markets, Financial Performance, Financial Services, Government, Industrial Products and Services, Industries, Stock Markets

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