Aetna Sells Medicare Business as it Eyes Close of CVS Deal

Aetna is selling its Medicare prescription drug business, potentially clearing the way for CVS Health to complete its $69 billion takeover of the insurer.

CVS announced plans to buy Aetna late last year. The deal is expected to give the drugstore chain a bigger role in health care, with the companies combining to manage care through CVS stores, clinics and prescription drugs.

Industry experts say regulators may have been concerned about a Medicare business overlap between the companies. But Leerink analyst David Larsen says he is more confident the deal will be approved due to the sale that Aetna announced Thursday.

Aetna is not disclosing terms of its deal with fellow insurer WellCare.

Aetna Inc. and CVS Health Corp. expect their combination to close before the end of this year.

WTO Cuts Trade Growth Forecast amid US Tariff Disputes

The World Trade Organization lowered Thursday its global trade growth forecasts, citing increased trade tensions between large economies and heightened uncertainty.

The Geneva-based trade body cut its estimate for this year by half a percentage point to a still-robust 3.9 percent. It predicts a further slowing of growth in volume terms next year, to 3.7 percent.

“While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners,” said WTO Director General Roberto Azevedo.

The WTO cited new trade measures targeting exports from “large economies,” a clear allusion to U.S. tensions with key trading partners.

The United States has imposed tariffs on goods including steel and aluminum from many countries, including longtime allies like the European Union and Canada. And it has engaged in an escalating dispute with China, which it accuses of unfairly requiring foreign companies to share technology if they want to access its markets.

U.S. President Donald Trump on Monday approved a tariff increase on $200 billion of Chinese goods. Beijing responded by imposing penalties on $60 billion of American products. That was on top of an earlier duty increase by both sides on $50 billion of each other’s goods.

A Board Reshuffle at Rite Aid After 2 Failed Merger Attempts

After two failed buyouts, Rite Aid is shuffling its board of directors and dividing power at the top of the drugstore chain.

Rite Aid said Thursday that three new, independent directors will be nominated to its board and that CEO John Standley will no longer hold the title of chairman. That goes to current board member Bruce Bodaken.

Shareholders will vote next month on whether to approve new board nominees Robert Knowling Jr., Louis Miramontes and Arun Nayar.

Bodaken said in a prepared statement that the board reorganization was accelerated after hearing from shareholders following the collapse last month of an attempted buyout by Albertsons. Rival Walgreens also failed in a separate attempt to acquire Rite Aid Corp., which is based in Camp Hill, Pennsylvania.

Bed Bath & Beyond Nosedives After Cutting Forecasts

Bed Bath & Beyond’s stock plunged to its lowest price in 18 years after the home goods store chain posted weak results in the second quarter and cut its forecasts for the rest of the year.

The company’s profit fell by almost 50 percent compared to a year ago. Its stock sank 21.5 percent to $14.76 in very heavy trading. It’s down about 33 percent in 2018.

Bed Bath & Beyond, which traded above $75 in early 2015, fell to its lowest level since early 2000.

KeyBanc analyst Bradley Thomas said competition for Bed Bath & Beyond from both online and physical retailers is getting worse. He said that competition, along with continued spending on its website and mobile business, will continue to hurt the company’s profits.

US Mortgage Rates Up; 30-Year at 7-Year High 4.72%

Long-term U.S. mortgage rates are up for the fifth straight week, with the key 30-year rate reaching its highest level in more than seven years.

Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.72 percent from 4.65 percent last week. The average benchmark rate has risen from 3.83 percent a year ago.

The average rate on 15-year, fixed-rate loans increased to 4.16 percent this week from 4.11 percent last week.

The Federal Reserve signaled its confidence in the economy on Wednesday by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end.

US Pending Home Sales Fell in August

Pending home sales slipped in August as fewer Americans signed contracts to purchase a house, the fourth decline in the past five months.

The National Association of Realtors said Thursday that its pending home sales index fell 1.8 percent last month to 104.2. This measure of contract signings has tumbled 2.3 percent in the past year, with the sharpest annual decline of 11.2 percent in the West where homes generally cost more.

The recent setbacks suggest that the combination of rising prices, higher mortgage rates and a limited number of sales listings are hurting affordability.

In August contract signings slipped on a monthly basis in the four major geographic regions: Northeast, Midwest, South and West.

Pending sales are a barometer of home purchases that are completed a month or two later. Over the past year, the completed sales of existing homes have tumbled 1.5 percent.

The costs pressures caused by rising prices had been minimized by historically low mortgage rates. But the average interest charged on a 30-year fixed-rate mortgage was 4.72 percent, the highest since April 2011, according to the mortgage buyer Freddie Mac.

Orders for US Durable Goods Jumped 4.5% Last Month

Orders for long-lasting U.S. factory goods rose at a healthy pace last month, though the increase was mostly driven by a surge in aircraft demand.

The Commerce Department says orders increased 4.5 percent in August, the most in six months. Excluding aircraft, cars, and other transportation equipment, however, orders increased just 0.1 percent.

U.S. manufacturing is expanding at a solid pace, with orders up 9.2 percent year-to-date. Consumers are confident and spending more, and businesses have stepped up investment in machinery and equipment. Still, President Trump’s trade battles with China, Europe, and Canada pose a risk in the coming months.

A category of orders that is a proxy for business investment fell 0.5 percent last month, but that follows two strong months and those orders are up 7.4 percent year-to-date.

Carnival Fiscal 3Q Income Tops $1.71B

Carnival Corp. (CCL) on Thursday reported fiscal third-quarter net income of $1.71 billion.

On a per-share basis, the Miami-based company said it had net income of $2.41. Earnings, adjusted for asset impairment gains and non-recurring gains, came to $2.36 per share.

The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $2.31 per share.

The cruise operator posted revenue of $5.84 billion in the period, also topping Street forecasts. Five analysts surveyed by Zacks expected $5.82 billion.

For the current quarter ending in November, Carnival expects its per-share earnings to range from 65 cents to 69 cents.

The company expects full-year earnings in the range of $4.21 to $4.25 per share.

Carnival shares have risen roughly 1 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen almost 9 percent. The stock has climbed 2.5 percent in the last 12 months.

Conagra Shares Tumble 6% on Earnings Miss

Shares in Conagra Brands are down 6 percent in early trading after reporting first-quarter earnings that fell short of expectations.

The Chicago packaged food maker reported a nearly 17 percent increase in sales and earnings of 45 cents per share, better than the same period last year, but short of Wall Street’s target of 49 cents per share. The company had earnings per share of 37 cents per share in last year’s first quarter.

Conagra, which announced in June that it was buying Pinnacle Foods for about $10.9 billion, had earnings of $178.2 million for the first fiscal quarter of 2019, better than $152.5 million in last year’s fiscal first quarter.

Shares in Conagra slumped nearly 6 percent to $33.99 Thursday.

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