Financial News from The Wall Street Journal

  • Carl Icahn Mulled Selling Herbalife Stake to Group That Included Bill Ackman The Wall Street Journal - Fri, Aug 26, 2016 6:03 PM AEST

    Carl Icahn has recently discussed selling his stake in Herbalife Ltd. to a group including the company’s arch-nemesis William Ackman, another surprising twist in a battle between billionaires that has riveted Wall Street for years. The status of the talks and which other investors may be involved wasn’t clear and Mr. Icahn may sell nothing in the end. The fact that he even entertained selling his shares, by far the biggest single stake in Herbalife—and that Mr. Ackman could be a buyer—adds more drama to a tug of war over a once-obscure nutritional-products company that Mr. Ackman says is a pyramid scheme, an allegation it denies.

  • Popular Investments Are Ripe for a Fall The Wall Street Journal - Fri, Aug 26, 2016 2:01 PM AEST

    Government bonds, dividend-paying stocks and emerging-market securities have been bid up in the global search for yield. In an unusually quiet market, any shift in sentiment could send investors who have piled into similar positions all heading to the exits at the same time. One test could come as soon as Friday, with Federal Reserve Chairwoman Janet Yellen scheduled to speak at the central bank’s annual conference in Jackson Hole, Wyo.

  • Italian Earthquake Survivors Recount Harrowing Escapes, Tragic Loss The Wall Street Journal - Fri, Aug 26, 2016 1:03 PM AEST

    PESCARA DEL TRONTO, Italy—Rita Caiella is staying put here, even after a powerful earthquake destroyed her house and much of the town she has called home for four decades. The 69-year-old refused offers of hospitality from friends in other towns, preferring to sleep in a tent city erected near Pescara del Tronto, which was flattened when the 6.2-magnitude earthquake struck early Wednesday. Ms. Caiella knew all of the 11 residents who have been confirmed dead in the town of about 100.

  • U.S. Nudges States to Help Private-Sector Workers Save for Retirement The Wall Street Journal - Fri, Aug 26, 2016 8:46 AM AEST
    U.S. Nudges States to Help Private-Sector Workers Save for Retirement

    WASHINGTON—The Obama administration on Thursday finalized a new regulation to encourage states to set up retirement savings plans with automatic enrollment features for private-sector employees, part of its push to promote Americans to build their own nest eggs to supplement social security. The rule, announced by Labor Secretary Thomas Perez and the White House, gives states a road map for establishing the retirement plans. Several states already have passed legislation to create their own vehicles to enroll workers who don’t have access to pension or retirement savings plans in the workplace.

  • Why Are Americans Buying Less Jewelry? The Wall Street Journal - Fri, Aug 26, 2016 3:25 AM AEST

    People aren’t buying as much jewelry at Signet Jewelers Ltd., but executives said it wasn’t because of concerns that some diamonds at its shops were swapped with lesser-quality stones. The retailer, which also owns the Kay Jewelers, Zales and Jared chains, cut its earnings and sales targets for the year, sending shares down more than 14% to $82.65 in Thursday morning trading. In a move to support the company’s stock, Signet on Thursday said it had secured a $625 million investment from private-equity firm Leonard Green & Partners.

  • China’s Central Bank Moves to Clamp Down on Speculation The Wall Street Journal - Thu, Aug 25, 2016 11:33 AM AEST

    SHANGHAI—China’s central bank has made a subtle change to the way it supplies the financial system with cash, a move that market watchers see as an attempt to cool investments in assets such as bonds, which have ballooned on an influx of cheap, short-term money. For the past two weeks, the People’s Bank of China has been decreasing the amount of the cheap seven-day loans—known as reverse repurchase agreements, or repos—that it makes to commercial banks in its daily money-market operations. Such short-term loans are typically used for the daily cash needs of financial institutions.

  • Warren Buffett Could Lose an $8-Per-Second Windfall on His Dow Chemical Stock The Wall Street Journal - Thu, Aug 25, 2016 10:45 AM AEST

    Warren Buffett’s Berkshire Hathaway Inc. continues to reap rich dividends from a canny loan extended to Dow Chemical Co. seven years ago. Shares of Dow have spent much of the past month hovering above $53—perilously close to a level that would cause Berkshire to lose a $255 million-a-year dividend. Since 2009, when Berkshire lent Dow Chemical $3 billion to help finance its purchase of Rohm & Haas, Dow has been on the hook for paying an 8.5% annual dividend on three million shares of preferred stock.

  • States Start to Approve Steep Increases in Health Premiums The Wall Street Journal - Thu, Aug 25, 2016 8:46 AM AEST

    WASHINGTON—The first handful of states have released approved 2017 rates for people who buy health insurance on their own and the results so far are consistent with what many expected: There are significant increases in premiums for next year. The Obama administration, seeking to reassure consumers who could be concerned by increases in more states in the coming weeks, released an analysis showing financial help from the government could soften the blow for people who qualified. Some insurance regulators have begun announcing their approval of rate increases, including an average jump of 62% for the biggest plan in Tennessee and increases of around 43% in Mississippi and 23% in Kentucky for large carriers.

  • A Surprising New Boost for Dollar Stores The Wall Street Journal - Thu, Aug 25, 2016 5:14 AM AEST

    Dollar General Corp. and Dollar Tree Inc. have been big winners in the stock market, up more than 20% over the past year on strong sales growth and higher store traffic. Rising wages among their core clientele suggest the good times may continue as both companies gear up to release second-quarter earnings reports, expected Thursday. Dollar General has added more items priced between $1 and $5, boosting its margins.

  • Airlines, Trackers Aim to Prevent a Travel Nightmare: Lost Luggage The Wall Street Journal - Thu, Aug 25, 2016 5:05 AM AEST

    American and Delta can now tell you when your bags are loaded and unloaded through their apps. The rate of mishandled bags improved by 10% last year, but still translates into one lost bag on every flight of 150 people. Delta Air Lines is the first to switch to all baggage tags embedded with radio-frequency ID (or RFID) chips in the paper—very thin panels about the size of a business card.

  • Where Riedel Crystal’s CEO Goes to Clear His Head The Wall Street Journal - Thu, Aug 25, 2016 4:57 AM AEST

    Tracing its origins back to a 16th-century tavern that was constructed there, Stanglwirt sits on the foot of the Wilder Kaiser mountain range in the Austrian Alps. Mr. Riedel, whose name rhymes with needle, grew up 40 miles away and is an 11th-generation head of his family’s 260-year-old enterprise. As he awaited construction of his new apartment upon his return to Austria in 2013, he resided in a serviced apartment there with his partner.

  • Trump Faces Narrow Path to Win The Wall Street Journal - Wed, Aug 24, 2016 2:01 PM AEST

    As the traditional Labor Day kickoff of the fall presidential race approaches, Republican Donald Trump faces an increasingly narrow path to the White House. A Trump victory over Democratic rival Hillary Clinton likely would require a sweep of a set of battleground states where he is competitive but trailing in recent opinion polls—Ohio, Florida, Pennsylvania and North Carolina—and both campaigns describe them as the heart of the race. Mrs. Clinton, by contrast, could win with just one of them, partly because Democrats start with a larger number of states that historically side with them. “It just becomes very hard and difficult to understand how the Trump campaign gets to 270” Electoral College votes needed to win, said Russ Schriefer, a strategist for Republican Mitt Romney’s 2012 campaign.

  • Putin’s Ukraine Games The Wall Street Journal - Wed, Aug 24, 2016 9:01 AM AEST

    Ukraine marks a quarter century of independence from the Soviet Union on Wednesday, and Vladimir Putin’s idea of a birthday gift is to mass troops on its border. The Kremlin’s buildup includes deploying the S-400 air-defense system in Crimea and air and naval assets in the Black Sea, while conducting tank exercises in the Russian-occupied strip of Moldovan territory called Transnistria. In May the Kremlin formed a new motorized rifle division in Russia’s western Rostov region, which borders Ukraine’s separatist regions of Donetsk and Luhansk.

  • Trump Wins Even If He Loses The Wall Street Journal - Wed, Aug 24, 2016 8:43 AM AEST

    Keep all this in mind as you ponder the latest Trump campaign news—the departure of Paul Manafort, the arrival of Breitbart propaganda chief Stephen Bannon, the murmured suspicion that Trump and company are more interested in becoming the kings of angry white man media than winning the White House. Mr. Bannon is a former Goldman Sachs banker and would-be Hollywood film producer. Mr. Trump is a thrice-married New York playboy.

  • Why Trump Is Failing With College Grads The Wall Street Journal - Wed, Aug 24, 2016 8:42 AM AEST

    The support of white voters with a college education is the key battle of the 2016 presidential contest, and Donald Trump is losing it. In 2012 Mitt Romney beat Barack Obama by 14 points among college-educated whites, according to exit polls. The average of top national surveys shows Mr. Trump trailing Hillary Clinton among these voters by nine points, and the latest Pew Research Center survey gives Mrs. Clinton a 14-point edge.

  • CBO Boosts U.S. Deficit Forecast on Tax-Revenue Slowdown The Wall Street Journal - Wed, Aug 24, 2016 7:52 AM AEST

    WASHINGTON—A slowdown in tax receipts, especially from corporate profits, will cause the U.S. federal budget deficit to widen this year for the first time since 2009, while other forces will contain the growth rate of the national debt in coming years, analysts said Tuesday. The Congressional Budget Office expects the deficit for the fiscal year that ends next month to expand to $549 billion, or 3% of gross domestic product, up from $500 billion, or 2.7%, in its estimate earlier this year. At the same time, the CBO made two major changes to its long-term economic forecasts that, taken together, reduce projected deficits by around $700 billion between now and 2026.

  • The Elites Have Always Forsaken the Masses The Wall Street Journal - Wed, Aug 24, 2016 6:56 AM AEST

    Social elites have always separated themselves from the masses. Peggy Noonan’s most recent column “A Dramatic Lesson About Political Actors” (Declarations, Aug. 20) reminds me of the Narodniks of czarist Russia: youthful, idealistic members of the intelligentsia who went out to the people to uplift them with Western enlightenment, only to be turned over to the police, in many instances. Smarting from rejection, the Narodniks became terrorists.

  • Investor Group Sees Its Future in the Burbs The Wall Street Journal - Wed, Aug 24, 2016 5:10 AM AEST

    A venture led by Rubenstein Partners LP is zigging while other investors are zagging by making a $162.9 million bet on a suburban Indianapolis office park at a time when such properties have fallen out of favor. The venture, which includes Strategic Capital Partners, is buying the eight-building complex in Carmel, Ind., from Duke Realty Corp., a real-estate investment trust in the final stages of a five-year effort to sell its suburban office portfolio for more than $3 billion. Duke’s sale of Parkwood Crossing is being financed by Bank of America Corp., which is lending the buyers about $106 million of the sale price.

  • Graduate Students Can Unionize at Private Colleges, U.S. Labor Panel Rules The Wall Street Journal - Wed, Aug 24, 2016 3:42 AM AEST

    A federal labor board ruled that graduate students who teach at private universities are employees with full rights to join unions, a sweeping decision that paves the way for student unionization on campuses nationwide. In a 3-1 decision announced Tuesday, the National Labor Relations Board said a group of Columbia University students who sought to join a union deserved employee protections when they get paid for work at the direction of the school. The victory for the Columbia students could deliver tens of thousands of new members to the nation’s beleaguered labor movement, which has seen its ranks decline dramatically.

  • Why 4 a.m. is the most productive hour The Wall Street Journal - Wed, Aug 24, 2016 3:04 AM AEST
    Why 4 a.m. is the most productive hour

    Russ Perry, the 33-year-old Scottsdale, Ariz., resident and founder of graphic design firm Design Pickle, says that 4 a.m. to 6 a.m. is “the most planned, most organized and most scheduled part of my day. No one is expecting you to email or answer the phone at 4 a.m. No one will be posting on Facebook.

  • Across the U.S., workers at the bottom of the ladder get pay raises The Wall Street Journal - Wed, Aug 24, 2016 2:12 AM AEST
    Across the U.S., workers at the bottom of the ladder get pay raises

    The gains appear to be driven by more competition for workers, minimum-wage increases and initiatives by companies from McDonald’s Corp. to Nationwide Mutual Insurance Co. to J.P. Morgan Chase & Co., who have proudly declared that they would give their lowest-paid workers a boost. Such pay increases also hint at a corporate shift toward more profit-sharing, said Princeton economist Alan Krueger, a former economic adviser to President Barack Obama.

  • Attention, Jumbo-Mortgage Shoppers: Deals Ahead The Wall Street Journal - Tue, Aug 23, 2016 11:43 PM AEST

    With more lenders offering jumbo loans, borrowers have more bargaining power to negotiate the best terms. During the first quarter of this year, 20.3% of all first mortgages originated were jumbo loans, according to Guy Cecala, CEO and publisher of trade publication Inside Mortgage Finance. “At the end of the day, it’s all just supply and demand for capital,” says Doug Lebda, founder and CEO of LendingTree, an online financing marketplace.

  • It’s Getting Scarily Quiet in the Stock Market The Wall Street Journal - Tue, Aug 23, 2016 12:02 PM AEST

    Calm has descended on the U.S. stock market. The past 30 days have been the least volatile of any 30-day period in more than two decades. Only five days during the most recent stretch saw the S&P 500 move ...

  • Voter Influx Appears Missing for Trump The Wall Street Journal - Tue, Aug 23, 2016 10:34 AM AEST

    This year’s presidential primaries produced a slight increase in new voters compared with 2012, but not in numbers that suggest a major influx that might benefit Republican candidate Donald Trump, a new analysis of voter registration data finds. The study by the Democratic firm Catalist, which analyzed records from 10 battleground states this year through June, suggest that the record-breaking turnout seen in the Republican primaries was the result of general election voters becoming motivated to show up for the party’s turbulent primary season, rather than a big inflow of new supporters into the Republican Party. Mr. Trump has been trying to capitalize on his strong support among working-class whites, while his hold on African-American voters is weak, polling shows.

  • The Robots Are Coming. Welcome Them The Wall Street Journal - Tue, Aug 23, 2016 9:15 AM AEST

    Last week analysts at Morgan Stanley, using data from an Oxford University study, predicted that nearly half of U.S. jobs will be replaced by robots over the next two decades. Abundant Robotics, a company spun from the same Stanford Research Institute that brought us the mouse and networked computing, has begun testing a robot that picks apples. According to a 2013 Stanford University study, some manufacturing robots now cost the equivalent of about $4 an hour—and they keep getting cheaper .

  • Students Lose, Liberals Elated The Wall Street Journal - Tue, Aug 23, 2016 8:56 AM AEST

    Remember when progressives worked to break down the barriers to minority education? You know, Brown v. Board and all that. The plaintiffs, backed by some public-spirited donors, had won in lower court but lost on appeal and now the state Supreme Court has doomed tens of thousands to lives of diminished possibility, if not poverty.

  • It Depends On What the Meaning of Ransom Is The Wall Street Journal - Tue, Aug 23, 2016 6:51 AM AEST

    Regarding your editorial “Obama’s R-Word for Iran” (Review & Outlook, Aug. 19): The Obama administration’s insistence that there was absolutely no relationship at all between the cash delivery and hostage release finally gave way to an admission that the cash was used as leverage to secure the freedom of American hostages. The officials didn’t promise that they were telling the whole truth this time, but the leverage explanation sounds plausible. One presumes, though, that without the leverage of cash withheld, Iran might have chosen to keep the hostages locked up.

  • New Emails Show Clinton Foundation Sought Access to State Department on Donors’ Behalf The Wall Street Journal - Tue, Aug 23, 2016 6:48 AM AEST

    Emails released Monday provide new examples of a Clinton Foundation official seeking access to the State Department on behalf of donors at a time when Hillary Clinton led the department. The emails—obtained through a lawsuit by conservative watchdog group Judicial Watch—could fuel criticism that the Clinton family’s charitable foundation, in fundraising with wealthy donors, corporations and foreign nations, created a conflict of interest for Mrs. Clinton during her work as the nation’s top diplomat. In an exchange from June 2009, a Clinton Foundation official and longtime aide to former President Bill Clinton wrote to Huma Abedin, a top adviser to Mrs. Clinton at the State Department, seeking a meeting between the crown prince of Bahrain and Mrs. Clinton.

  • In Scramble for Yield, Pension Funds Will Try Almost Anything The Wall Street Journal - Mon, Aug 22, 2016 6:46 AM AEST

    Some pension funds are seeking to profit from others’ fear. Pension funds in Hawaii and South Carolina are plying an arcane options strategy called cash-secured put writing. The upside for the pension funds, which are writing options on the S&P 500 index, is that they earn regular income.

  • Replacing Steve Jobs: How Apple CEO Tim Cook Has Fared Five Years Later The Wall Street Journal - Mon, Aug 22, 2016 4:45 AM AEST

    Five years ago, Apple Inc.’s iconic and visionary co-founder Steve Jobs passed the torch to his handpicked successor, Tim Cook. The official transition took place six weeks before Mr. Jobs passed away. Now Apple is the world’s largest company by market value and remains one of the most influential.

  • Spending on Home Improvement Is Set to Pick Up as Building Pace Slows The Wall Street Journal - Mon, Aug 22, 2016 2:57 AM AEST

    Spending on single-family home construction remains 40% below the levels of a decade ago, but new forecasts project that U.S. investment in residential remodeling and repairs this year will surpass records set during the housing boom. Expense for repairs and remodeling is expected to surpass $300 billion this year, according to forecasts from John Burns Real Estate Consulting and the Harvard Joint Center for Housing Studies, ahead of the previous high of about $285 billion in 2007. Remodeling and home building both declined significantly in the years following the bust, but the fall was much less steep for home renovation.

  • Wilbur Ross’s Next Big Bet: Oil and Gas The Wall Street Journal - Sat, Aug 20, 2016 9:00 PM AEST

    Wilbur Ross, known for big investments in downtrodden industries, is betting that the oil and gas slump has dragged on long enough to shake out weaker players. The firm sat out the early innings of the downturn, when other investors pounced on perceived bargains that continued losing value when oil and gas prices fell further. WL Ross is angling to swap debt for ownership in Breitburn Energy Partners LP, which filed for chapter 11 protection in May, and has been buying debt of Permian Resources LLC, a Texas oil producer founded by late wildcatter Aubrey McClendon that might ultimately have to hand at least part-ownership to creditors in a restructuring, said people familiar with the matter.

  • Cracking the Codes of New York City The Wall Street Journal - Sat, Aug 20, 2016 9:39 AM AEST

    Whether or not New Yorkers are paying attention, their digital connectivity can sometimes rely on the finer points of a mess of paint on the street. “It’s kind of scrawly and intense,” said the artist and writer Ingrid Burrington. Ms. Burrington is the author of “Networks of New York: An Illustrated Field Guide to Urban Internet Infrastructure,” a playful, approachable handbook that pairs written bits of historical and expositional text with pencil drawings of arcane finds by the author.

  • The Profit and Peril of Cancer Drugs The Wall Street Journal - Sat, Aug 20, 2016 3:12 AM AEST

    Despite a recent hiccup, new treatments for cancer are among the brightest spots on the drug development landscape. Drugs that attempt to leverage the body’s immune system to fight tumors have been approved for some forms of cancer. Clinical trials for many other possible treatment areas are ongoing. For a small group of patients, they have generated significant survival benefits.

  • The controversial way wealthy Americans are lowering their estate taxes The Wall Street Journal - Fri, Aug 19, 2016 11:53 PM AEST
    The controversial way wealthy Americans are lowering their estate taxes

    The proposed regulations, issued by the Treasury Department and Internal Revenue Service in early August, apply to moves known as “valuation discounts.” They allow people with assets greater than the current exemption of $5.45 million per person ($10.9 million for a couple) to lower the value of their assets that are subject to gift and estate taxes. To get the lower valuations, the owner of assets typically puts them into a holding company or other entity that isn’t traded and gives pieces of the company to family members and perhaps a charity. Thus a wealthy taxpayer could reduce the taxable value of $10 million of blue-chip stocks to $6 million and cut his estate tax by $1.6 million.