Alibaba risk: China's rise leaves out investors
WASHINGTON (AP) — American investors are clamoring to buy a stake in Chinese e-commerce giant Alibaba, which is launching what may prove the biggest initial public stock offering ever.
But history is stacked against them.
China's explosive economic rise has delivered virtually nothing to most stock investors. When Chinese companies have listed stocks on American markets, their shares have lost an average 1 percent a year for the next three years, compared with an average 7 percent annual gain for other U.S. IPOs, according to research by Jay Ritter, a finance professor at the University of Florida.
Big cities take aim at prescription painkillers
WASHINGTON (AP) — Some of the nation's largest cities are ratcheting up their criticism of prescription painkillers, blaming the industry for a wave of addiction and overdoses that have ravaged their communities and busted local budgets.
The heightened rhetoric comes as Chicago tries to recover millions in health care costs from opioid drugmakers, alleging that companies deliberately misled the public about the risks of their drugs. It's a legal strategy that could be attractive to other cash-strapped cities, but one that experts say will face hurdles in court.
On Tuesday, health commissioners from Chicago, New York and Boston came to Washington to lobby Congress and the White House on efforts to combat prescription opioid abuse, which is blamed for 17,000 deaths per year — more than three times as many as either heroin or cocaine.
US tobacco growers brace for tougher competition
DANVILLE, Va. (AP) — Starting next month, America's remaining tobacco growers will be totally exposed to the laws of supply and demand.
The very last buyout checks, totaling about $916.5 million, go out in October to about 425,000 tobacco farmers and landowners. They're the last holdovers from a price-support and quota system that had guaranteed minimum prices for most of the 20th century, sustaining a way of life that began 400 years ago in Virginia, when the leaf became the chief cash crop of the Jamestown colony.
Cigarette makers will have paid $10 billion to compensate growers for surrendering their quotas. Growers got another $5 billion from the companies as part of their 1998 settlement of state lawsuits over smoking-related health care costs.
When the last checks are cashed, surviving growers will be on their own, forced to find profits in a tremendously competitive global market. But those who remain in the business are thriving right now: Many are producing more leaf than they have in years, and enjoying higher prices as well.
A Closer Look: Your (online) life after death
NEW YORK (AP) — Sure, you have a lot to do today — laundry, bills, dinner — but it's never too early to start planning for your digital afterlife, the fate of your numerous online accounts once you shed this mortal coil.
Facebook, Google, Twitter and other sites have different policies on dealing with dead users. Some states are also considering laws that would automatically give loved ones access to, though not control of, their dead relative's digital accounts, unless otherwise specified.
Unless you take action, you might not like the outcome: Would you want to give your spouse automatic access to your email correspondences? Should parents automatically be able to browse through a deceased child's online dating profile?
House panel: Safety agency mishandled GM recall
WASHINGTON (AP) — The agency responsible for safety on the nation's roads was years late in detecting a deadly problem with General Motors cars and lacks the expertise to oversee increasingly complex vehicles, congressional Republicans charged in a report Tuesday.
The report by a House committee's GOP majority raised serious questions about the National Highway Traffic Safety Administration's ability to keep the public safe, and came as the Senate convened a hearing on the safety agency's shortcomings.
Safety regulators should have discovered GM's faulty ignition switches seven years before the company recalled 2.6 million cars to fix the deadly problem, the report concluded.
It also said the agency didn't understand how air bags worked, lacked accountability and failed to share information internally.
How the Fed's guidance on rates has evolved
WASHINGTON (AP) — "Extended period." 6.5 percent unemployment. "Considerable time."
Every six weeks or so, after the Federal Reserve holds a policy meeting, it issues a statement containing guidance to the financial world on when it might raise interest rates.
It's a moment of great expectation for investors and economists.
The language the Fed has used has steadily evolved since it cut its benchmark short-term rate to a record low in 2008. On Wednesday, after the Fed's latest meeting ends, it may or may not retain its most recent guidance: That it expects to keep its short-term rate near zero for a "considerable time" after it stops buying Treasurys and mortgage bonds. Those purchases are set to end in November.
US CEOs less optimistic about hiring, spending
WASHINGTON (AP) — Optimism among chief executives at the largest U.S. companies fell in the July-September quarter after reaching a two-year high in the previous quarter.
The Business Roundtable said Tuesday that its CEO outlook index fell to 86.4 in the third quarter, down from 95.4 in the April-June period.
Fewer CEOs expect to hire in the next six months: Just 34 percent plan to add jobs, down from 43 percent. And only 39 percent plan to boost their capital spending, down from 44 percent.
Nearly three-quarters of the chief executives expect higher sales, the same as in the second quarter.
Randall Stephenson, CEO of AT&T Inc. and chairman of the Roundtable, blamed the decline of the index on Congress' failure to extend temporary tax breaks that encourage research and development and investment spending.
Poverty rate drops for the first time since 2006
WASHINGTON (AP) — The poverty rate in the United States has dropped for the first time since 2006, bringing a bit of encouraging news about the nation's economy as President Barack Obama and Congress gear up for midterm elections.
The Census Bureau, in its annual look at poverty in the United States, said that the poverty rate in 2013 was 14.5 percent, down from 15 percent in 2012. The decrease in the poverty rate was attributed to the growth in year-round employment by 2.8 million jobs in the United States, government officials said.
White House officials cheered the positive information in the census release.
PG&E officials leave posts over improper emails
SAN FRANCISCO (AP) — Emails showing California regulators and Pacific Gas & Electric Co. appearing to negotiate which judge would be assigned to hear one of the utility's rate cases led the state's top regulator to remove himself from two PG&E cases and four senior officials on both sides to resign.
The emails released Monday show the commission ultimately assigned to the case a judge for whom PG&E had expressed a preference, rather than another judge who the utility said "has a history of being very hard on us."
California Public Utilities Commission president Michael Peevey, who was included in part of the January email exchange, cited the email exchange in removing himself from involvement in that rate case and in another, bigger case pending before the commission involving PG&E, California's largest utility.
By The Associated Press=
The Dow Jones Industrial average gained 100.83, or 0.6 percent, to close at 17,131.97. The Standard & Poor's 500 index climbed 14.85 points, or 0.8 percent, to 1,998.98. The Nasdaq composite rose 33.86 points, or 0.8 percent, to 4,552.76.
Benchmark U.S. crude rose $1.96 to close at $94.88 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.17 to close at $99.05 on the ICE Futures exchange in London. Wholesale gasoline rose 2.8 cents to close at $2.559 a gallon. Heating oil rose 1.6 cents to close at $2.756 a gallon. Natural gas rose 6.4 cents to close at $3.995 per 1,000 cubic feet.