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  • Pentagon drops COVID-19 vaccine mandate for troops

    Pentagon drops COVID-19 vaccine mandate for troops

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    WASHINGTON — The Pentagon formally dropped its COVID-19 vaccination mandate Tuesday, but a new memo signed by Defense Secretary Lloyd Austin also gives commanders some discretion in how or whether to deploy troops who are not vaccinated.

    Austin’s memo has been widely anticipated ever since legislation signed into law on Dec. 23 gave him 30 days to rescind the mandate. The Defense Department had already stopped all related personnel actions, such as discharging troops who refused the shot.

    “The Department will continue to promote and encourage COVID-19 vaccination for all service members,” Austin said in the memo. “Vaccination enhances operational readiness and protects the force.”

    Austin said that commanders have the authority to maintain unit readiness and a healthy force. He added, however, that other department policies — including mandates for other vaccines — remain in place. That includes, he said, “the ability of commanders to consider, as appropriate, the individual immunization status of personnel in making deployment, assignment, and other operational decisions, including when vaccination is required for travel to, or entry into, a foreign nation.”

    The contentious political issue, which has divided America, forced more than 8,400 troops out of the military for refusing to obey a lawful order when they declined to get the vaccine. Thousands of others sought religious and medical exemptions. Austin’s memo ends those exemption requests.

    Austin, who instituted the mandate in August 2021 after the Pfizer vaccine was approved by the Food and Drug Administration and as the coronavirus pandemic raged, was staunch in his desire to maintain it insisting the vaccine was necessary to protect the health of the force. He and other defense leaders argued that for decades troops, particularly those deployed overseas, had been required to get as many as 17 different vaccines. No other vaccine mandates were affected by the new law.

    But Congress agreed to rescind the mandate, with opponents reluctantly saying that perhaps it had already succeeded in getting the bulk of the force vaccinated. Roughly 99% of active-duty troops in the Navy, Air Force and Marine Corps had gotten the vaccine, and 98% of the Army. The Guard and Reserve rates are lower, but generally are more than 90%.

    Austin’s memo was unapologetic in his continued support for the vaccine, and his belief that the mandate kept the force healthy and able to protect America. The Pentagon’s vaccine efforts, he said, “will leave a lasting legacy in the many lives we saved, the world-class force we have been able to field, and the high level of readiness we have maintained, amidst difficult public health conditions.”

    In addition to ending efforts to discharge troops who refuse the vaccine, Austin’s memo says that those who sought exemptions and were denied will have their records updated and any letters of reprimand will be removed.

    Those who were discharged for refusing to obey a lawful order to take the vaccine received either an honorable discharge or a general discharge under honorable conditions. Austin’s memo says that anyone who was discharged can petition their military service to request a change in the “characterization of their discharge” in their personnel records. It does not, however, say what possible corrections could be awarded.

    Austin’s decision leaves some discretion to commanders, allowing them to decide whether they can require vaccines in some circumstances, such as certain deployments overseas.

    Military officials vividly recall the overwhelming crisis of the USS Theodore Roosevelt, the Navy aircraft carrier that was knocked out of duty and sidelined in Guam for 10 weeks in early 2020 as the emerging virus swept through the ship. More than 1,000 crew members eventually became infected, and one sailor died.

    Military leaders worry that if troops begin to refuse the vaccine in large numbers, similar outbreaks could occur. The risk is particularly high on small ships or submarines where service members are jammed into close quarters for weeks or months at a time, or on critical combat missions, such as those involving special operations forces that deploy in small teams.

    According to data compiled by the military as of early December, the Marine Corps leads the services with 3,717 Marines discharged. There have been 2,041 discharged from the Navy, 1,841 from the Army and 834 from the Air Force. The Air Force data includes the Space Force.

    What’s not clear is if the services, who are facing recruiting challenges, will want — or be able to — allow any of those service members to return to duty, if they still meet all necessary fitness and other requirements.

    Lawmakers argued that ending the mandate would help with recruiting. Defense officials have pushed back by saying that while it may help a bit, a department survey during the first nine months of last year found that a large majority said the mandate did not change the likelihood they would consider enlisting.

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  • FAA says air traffic operations ‘resuming gradually’ across U.S. after it lifts ground stop

    FAA says air traffic operations ‘resuming gradually’ across U.S. after it lifts ground stop

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    Normal air traffic operations are “resuming gradually” across the U.S. following the lifting of a ground stop by the Federal Aviation Administration, the agency said in a tweet Wednesday. The stop was lifted following a computer outage that resulted in thousands of delays. More than 3,700 flights were delayed and more than 640 were canceled, according to the Associated Press. President Joe Biden said he expects a report on the outage in a couple of hours.

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  • Airline stocks fell premarket after FAA says all U.S. flights grounded over computer outage

    Airline stocks fell premarket after FAA says all U.S. flights grounded over computer outage

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    Airlines stocks fell across the board in premarket trade Wednesday, after the Federal Aviation Administration said a computer outage had led to all U.S. fights being grounded. The agency said on its website that its “Notice to Air Missions” system has been activated “to address the equipment outage issues for the U.S. NOTAM system.” A NOTAM is a notice for workers engaged in flight operations. There was no indication of when service might be restored. Southwest Airlines Co.
    LUV,
    +1.68%

    led the decliners, falling 2.5%. American Airlines Group Inc.
    AAL,
    +3.97%

    was down 1.6%, United Airlines Holdings Inc.
    UAL,
    +5.54%

    was down 0.8%, JetBlue Airways Corp.
    JBLU,
    +4.92%

    was down 0.7% and Delta Air Lines Inc.
    DAL,
    +3.59%

    was down 0.7%. The U.S. Global Jets ETF
    JETS,
    +2.40%

    was down 0.7% and has fallen 14% in the last 12 months, while the S&P 500
    SPX,
    +0.70%

    has fallen 17%.

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  • J Sainsbury sees 2023 profit toward upper end of views on robust Christmas period

    J Sainsbury sees 2023 profit toward upper end of views on robust Christmas period

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    J Sainsbury PLC said Wednesday that it expects to deliver profits for fiscal 2023 toward the upper end of its current guidance following record trading during the Christmas period.

    The U.K. grocer
    SBRY,
    -3.09%

    said like-for-like sales excluding fuel rose 5.9% in the 16 weeks ended Jan. 7 compared with the same period a year ago. Like-for-like sales including fuel rose 6.8%, it said.

    The FTSE 100 listed company currently expects underlying pretax profit for the year ending March to be toward the upper end of the guidance range of between 630 million pounds and 690 million pounds ($765.5 million and $838.4 million).

    The company said the performance of its digital retailer business Argos was exceptional over the Christmas week.

    Write to Michael Susin at michael.susin@wsj.com

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  • Wells Fargo, once a mortgage giant, shrinks home-lending business

    Wells Fargo, once a mortgage giant, shrinks home-lending business

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    Wells Fargo said late Tuesday it was shrinking its home-mortgage business, aiming to serve its own bank customers as well as people in “minority communities.”

    Wells Fargo
    WFC,
    -0.07%

    also said it was exiting the correspondent business, in which a bank serves as a third-party intermediary in transactions, and that it plans to reduce the size of its loan-servicing portfolio.

    The stock edged lower in the extended session after ending the regular trading day down less than 0.1%.

    “These plans continue the work the company has advanced over the past three years to simplify this business,” Wells Fargo said in a statement.

    Mortgage is “an important relationship product,” hence the decision to continue to be a lender to Wells Fargo bank customers as well as minority home buyers, Kleber Santos, chief executive of consumer lending, said.

    “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” Santos said.

    “As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.”

    Wells Fargo was once among the top mortgage lenders in the U.S.

    Late last month, the Consumer Financial Protection Bureau ordered it to pay $3.7 billion relating to alleged mismanagement of auto loans, mortgages and deposit accounts. The bank did not admit wrongdoing as part of the settlement.

    Shares of Wells Fargo have lost about 24% in the past 12 months, compared with losses of around 16% for the S&P 500 index.
    SPX,
    +0.70%

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  • China takes first steps to punish countries that imposed testing mandates for Chinese travelers

    China takes first steps to punish countries that imposed testing mandates for Chinese travelers

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    China on Tuesday suspended visas for South Koreans to enter the country for tourism or business in apparent retaliation for South Korea’s COVID-19 testing requirements for Chinese travelers, the Associated Press reported.

    No other details were given, although China has threatened to retaliate against countries that require travelers from China to show a negative result for a test taken within the previous 48 hours.

    That has not stopped about a dozen countries from following the U.S. in requiring Chinese travelers produce a test after China lifted most of its strict COVID-related restrictions for the first time since the start of the pandemic. The end of those restrictions has resulted in a surge of new cases.

    The World Health Organization and several nations have accused China of withholding data on its outbreak. The testing requirements are aimed at identifying potential virus variants carried by travelers.

    Separately on Tuesday, the head of the WHO for Europe said the surge of cases in China is not likely to have a big impact on Europe, although he cautioned against complacency.

    Hans Kluge told reporters it was “not unreasonable for countries to take precautionary measures to protect their populations” but called for such measures “to be rooted in science, to be proportionate and nondiscriminatory,” as AFP reported.

    Tens of thousands of people resumed travels in and out of China after the country lifted almost all of its border restrictions, ending three years of strict pandemic controls. Photo: Tyrone Siu/Reuters

    In the U.S., the seven-day average of new cases stood at 67,012 on Monday, according to a New York Times tracker. That’s up 2% from two weeks ago and below the recent peak of 70,508 on Christmas Eve.

    The daily average for hospitalizations was up 18% to 47,503. The average for deaths was 467, up 10% from two weeks ago. 

    Cases are currently rising in 21 states, along with Guam, Washington, D.C., and the U.S. Virgin Islands. They are led by Florida, where cases are up 90% from two weeks ago. On a per-capita basis, New York, New Jersey and Rhode Island are seeing the highest rates. New York has 37 cases per 100,000 people, New Jersey 35 and Rhode Island 31.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • Thailand sent three cabinet ministers to welcome Chinese tourists with flowers and gifts as they arrived Monday at Bangkok’s Suvarnabhumi Airport after China relaxed travel restrictions, the AP reported. The high-profile event reflected the importance Thailand places on wooing Chinese travelers to help restore its pandemic-battered tourism industry. Before COVID, Chinese visitors accounted for about one-third of all arrivals.

    • Moderna Inc.
    MRNA,
    +3.10%

    is considering pricing its COVID vaccine at $110 to $130 per dose, the Wall Street Journal reported. That’s the same price range as mooted by Pfizer Inc.
    PFE,
    -1.59%

    and German partner BioNTech SE
    BNTX,
    +3.30%

    once their vaccine moves to the commercial market. For now, vaccines are being purchased and distributed by the U.S. government.

    Getting the flu can increase the risk of getting a second infection, such as strep throat. The Wall Street Journal’s Daniela Hernandez explains the science behind that, plus what it means for the rest of the winter and how we can protect ourselves from the tripledemic. Illustration: David Fang

    • India has detected the presence of all the COVID omicron subvariants in the community after testing more than 300 samples since late December, the health ministry said in a statement, Reuters reported. “No mortality or rise in transmission were reported in the areas where these variants were detected,” the ministry said.

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  • Moderna, CureVac and Ocugen offer updates on COVID vaccines, while China cracks down on critics of government’s pandemic response

    Moderna, CureVac and Ocugen offer updates on COVID vaccines, while China cracks down on critics of government’s pandemic response

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    A flurry of announcements relating to COVID vaccines dominated headlines on the pandemic on Monday, with Moderna telling investors it expects to generate some $5 billion in sales in 2023.

    That’s down from $18.4 billion in sales in 2022. The company plans to boost spending on research and development to $4.5 billion this year, up from $3.3 billion in 2022.

    Moderna
    MRNA,
    +1.79%

    provided the update in advance of the company’s presentation at the annual J.P. Morgan Healthcare Conference in San Francisco.

    Separately, CureVac
    CVAC,
    +24.46%

     said preliminary data from its early stage trial for its COVID and seasonal flu shots had positive results to advance to the next stage of clinical testing.

    CureVac is developing the shots with GlaxoSmithKline
    GSK,
    -0.79%

     
    GSK,
    -0.75%
    .
     CureVac said the shot was well tolerated, and that neutralizing antibodies were beginning at the lowest tested dose for younger adults. The seasonal flu shot was also well tolerated with an increase in antibodies compared to those from a flu vaccine comparator in younger adults, CureVac said.

    Ocugen announced positive results in a trial of its COVID vaccine Covaxin, which uses the same vero cell manufacturing platform that has been used in the production of polio vaccines for decades. The Phase 2/3 trial involved 491 U.S. adult participants who received two doses of Covaxin or placebo 28 days apart.

    “Covaxin, an inactivated virus vaccine adjuvanted with TLR7/8 agonist, has been demonstrated in clinical trials to generate a broader immune response against the whole virus covering important antigens such as S-protein, RBD, and N-protein; whereas currently approved vaccines in the U.S. target only S-protein antigen,” the company said in a statement.

    Chief Executive Dr. Shankar Musnuri said the company is hoping the vaccine will offer an option for those who are still hesitant to take an mRNA vaccine, which uses newer technology.

    U.S. cases were lower on Sunday, according to a New York Times tracker. The seven-day average of new cases stood at 67,246, down 1% from two weeks ago.

    The daily average for hospitalizations was up 18% at 47,500., the highest level since last March. The average for deaths was 509, up 19% from two weeks ago.

    Hospitalizations are becoming concerning, according to the Times trackers, with the Northeast seeing the highest per capita rates, along with the Southeast.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • China has suspended or closed the social-media accounts of more than 1,000 critics of the government’s COVID response, as the country rolls back harsh anti-virus restrictions and gears up for the coming Lunar New Year holiday, the Associated Press reported. The popular Sina Weibo social media platform said it had addressed 12,854 violations including attacks on experts, scholars and medical workers and issued temporary or permanent bans on 1,120 accounts. The ruling Communist Party had largely relied on the medical community to justify its tough lockdowns, quarantine measures and mass testing, almost all of which it abruptly abandoned last month, leading to a surge in new cases that have stretched medical resources to their limits. The party allows no direct criticism and imposes strict limits on free speech.

    Tens of thousands of people resumed travels in and out of China on Sunday as the country lifted almost all of its border restrictions, ending three years of strict pandemic controls. Some travelers expressed relief to be reunited with their families. Photo: Tyrone Siu/Reuters

    • Pfizer’s
    PFE,
    -4.77%

    antiviral Paxlovid has not been included in the Chinese government’s national reimbursement list that would have allowed patients to get it at a cheaper price throughout the country, saying it was too expensive, the AP reported separately. Although it is supposed to be prescribed by medical professionals, that hasn’t stopped people from scrambling to purchase it on their own through any means at their disposal—including buying generic Indian versions of the drug through the internet, according to local media reports.

    • The union representing a group of nurses at a New York City hospital reached a tentative contract agreement with its management, but close to 9,000 nurses at several other major hospitals were still preparing to go on strike, the AP reported. The New York State Nurses Association and BronxCare Health System said Saturday that a tentative agreement had been reached; the union said it included pay raises every year of its three-year term as well as staffing increases. Another hospital, Flushing Hospital Medical Center, got to a tentative agreement with nurses on Friday evening.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 664.3 million on Monday, while the death toll rose above 6.7 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 101.2 million cases and 1,096,523 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 229.3 million people living in the U.S., equal to 69.1% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 48.2 million Americans, equal to 15.4% of the overall population, have had the updated COVID booster that targets both the original virus and the omicron variants.

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  • Tesla extends late-Friday rally to trade up 6%

    Tesla extends late-Friday rally to trade up 6%

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    Tesla Inc. stock
    TSLA,
    +5.93%

    rallied anew in early trade Monday, continuing the move that saw it reverse an intraday loss Friday of about 8% to close up 2.5%. The initial dip came after Tesla said it has slashed prices in China for the second time in three months, in an apparent effort to boost sales of its electric vehicles hours after announcing disappointing December deliveries in China. Prices for the Model 3 sedan and Model Y SUV were cut by more than 10%, according to Tesla’s website late Thursday, with the Model 3 falling to 229,900 yuan ($33,415) from 265,900 yuan ($38,647), and the Model Y dropping to 259,900 yuan ($37,775) from 288,900 yuan ($41,990). Tesla also announced prices for two models new to the Chinese market: 789,900 yuan ($114,809) for the high-performance Model S Plaid, and 879,900 yuan ($127,890) for the Model X Plaid. In October, Telsa cut Model 3 and Model Y prices in China by as much as 9%. The stock has been under pressure from weak demand and the perception that Chief executive Elon Musk is distracted by Twitter Inc., which he acquired in November for $44 billion, a part of which he funded by selling Tesla stock. The stock is down 65% in the last 12 months, while the S&P 500
    SPX,
    -0.08%

    has fallen 17%.

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  • SEC charges ex–McDonald’s CEO Easterbrook for making false statements relating to his 2019 ouster

    SEC charges ex–McDonald’s CEO Easterbrook for making false statements relating to his 2019 ouster

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    The Securities and Exchange Commission said Monday it has filed charges against Stephen J. Easterbrook, former chief executive of McDonald’s Corp., for making “false and misleading” statements to investors about the circumstances that led to his ouster in November 2019.

    The agency has also filed charges against McDonald’s for “shortcomings” in its public disclosures relating to Easterbrook’s severance agreement.

    McDonald’s
    MCD,
    -0.55%

    fired Easterbrook for exercising poor judgment and violating company policy by engaging in an inappropriate personal relationship with a McDonald’s employee. However, the separation agreement struck with the executive concluded that his termination was without cause, allowing him to retain substantial equity compensation that would have been forfeited in other circumstances.

    “In making this conclusion, McDonald’s exercised discretion that was not disclosed to investors,” the SEC said in a statement.

    In July 2020, McDonald’s discovered in an internal probe that Easterbrook had engaged in other, undisclosed relationships with employees. Those findings were not disclosed prior to Easterbrook’s termination, in the knowledge that they would influence the board’s decision making, according to the SEC.

    “When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives,” said Gurbir S. Grewal, the SEC’s director of the division of enforcement. 

    The SEC is charging Easterbrook with violating anti-fraud provisions of the SEC Securities Act of 1933 and the Securities Exchange Act of 1934. Easterbrook has consented to a cease-and-desist order and five-year officer and director bar and a $400,000 civil penalty, without admitting to or denying the charges.

    McDonald’s is charged with violating section 14(a) of the Exchange Act and Exchange Act Rule 14a-3. The fast-food giant has consented to a cease-and-desist order, without admitting to or denying SEC findings. The SEC has opted not to fine the company, as it cooperated with the agency and clawed back compensation after its probe.

    The stock was slightly lower Monday in early trades.

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  • Voyager, Neurocrine ink gene-therapy deal

    Voyager, Neurocrine ink gene-therapy deal

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    Shares of Voyager Therapeutics Inc.
    VYGR,
    +10.65%

    rallied 35% in premarket trading on Monday after the company announced a deal with Neurocrine Biosciences Inc.
    NBIX,
    +0.06%

    to develop and commercialize gene therapies, including one that is being tested as a treatment for Parkinson’s disease. Neurocrine will make a $175 million upfront payment, including a $39 million equity investment, with up to $1.5 billion in potential milestones. Voyager’s stock has soared 148.7% over the past year, while the S&P 500
    SPX,
    +2.28%

    is down 17.0%.

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  • Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group

    Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group

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    Shares of Alibaba Group Holdings are higher following news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant.

    Alibaba’s Hong Kong-listed shares
    9988,
    +7.78%

    advanced as much as 8.3% in early trade Monday, widening its year-to-date gains to 27%. Shares are outperforming a 1.7% gain in the city’s broader Hang Seng Index
    HSI,
    +1.65%

    and helping lift the city’s tech index by 3.0%. Alibaba is a shareholder of Ant.

    Ant, which owns China’s most widely used digital-payment platform, Alipay, has been overhauling its operations amid a government crackdown that began with Beijing calling off the company’s plans for an IPO in late 2020. The new change of control, announced by Ant over the weekend, moves the company a step closer to restructuring.

    Alibaba added Sunday that its equity interest in Ant remains unchanged.

    Shares of Alibaba were last up 7.6%. Shares of unit Alibaba Health Information Technology Ltd.
    241,
    +7.27%

    were 8.0% higher.

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  • Jack Ma Cedes Control of Fintech Giant Ant Group

    Jack Ma Cedes Control of Fintech Giant Ant Group

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    Jack Ma Cedes Control of Fintech Giant Ant Group

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  • Kevin McCarthy elected House speaker, narrowly prevailing in 15th round of voting

    Kevin McCarthy elected House speaker, narrowly prevailing in 15th round of voting

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    Top House Republican Kevin McCarthy succeeded early Saturday in his push to become his chamber’s next speaker, claiming the job after first falling short in well over a dozen rounds of voting.

    McCarthy could handle only a few GOP defections given his party’s narrow majority in the House of Representatives, but in ballots this week he repeatedly saw around 20 Republicans vote against him before finally prevailing.

    On Friday, McCarthy began to pick up some support from those Republican holdouts in a 12th round of voting, though it wasn’t sufficient to give him the job, so 13th and 14th ballots were held, followed by the 15th and final ballot.

    See: House moves to 15th speaker ballot after McCarthy falls one vote short in 14th

    Ahead of Friday’s voting, there were signs of a deal that could help McCarthy take the gavel. One of McCarthy’s critics, GOP Rep. Scott Perry of Pennsylvania, tweeted that he had switched to supporting the top Republican due to that deal.

    “The framework for an agreement is in place, so in a good-faith effort, I voted to restore the People’s House by voting for @gopleader McCarthy,” Perry said.

    See: Kevin McCarthy’s speaker deal to win over holdouts would ‘neuter’ him, and could mean more government shutdowns  

    There hadn’t been a need for multiple votes for a speaker election since 1923, and it’s the most ballots required since1860, just before the Civil War, when 44 ballots were needed.

    Related: Think the McCarthy House speaker vote is wild? Meet Frederick Huntington Gillett and Nathaniel P. Banks. 

    Analysts have warned that the tensions over what’s typically a ceremonial election could signal that the GOP-run House will be dysfunctional throughout 2023 and 2024.

    “In our view, the challenge to McCarthy underscores the difficulty that a narrow and fractured GOP majority will have in working with Democrats in the Senate on key issues such as the debt limit, government funding, and Ukraine in 2023,” said Benjamin Salisbury, director of research at Height Capital Markets, in a research note ahead of McCarthy’s election.

     Related: Fight over House speaker job offers ‘ominous portent of how the U.S. debt-ceiling fight will go,’ analyst says 

    Republicans have taken control of the House thanks to wins in November’s midterm elections, returning to power in that chamber after four years in the minority.

    But the GOP’s hopes for a strong red wave two years into President Joe Biden’s term were dashed, as the party has claimed just a small House majority and Democrats have maintained their grip on the Senate.

     U.S. stocks 
    SPX,
    +2.28%

     
    DJIA,
    +2.13%

    closed sharply higher Friday as a monthly employment report showed that wage growth had slowed even as the unemployment rate fell to 3.5%, fueling hopes that the Federal Reserve’s interest-rate hikes aimed at taming inflation are starting to have the desired effect.

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  • Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

    Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

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    Shares of department-store chain Macy’s Inc. slid 8% in after-hours trading on Friday after the retailer gave a more downbeat forecast on its fourth-quarter sales, with management citing big “lulls” in the holiday-shopping season and saying customers would likely feel the squeeze from inflation into next year.

    Executives said they expected those sales to land in the “low-end to mid-point” of prior expectations for between $8.161 billion to $8.401 billion. They said they expected adjusted earnings per share to be within its previously forecast range of $1.47 to $1.67.

    “Black Friday/Cyber Monday sales were in line with our expectations, while the week leading up to and following Christmas were ahead,” Macy’s
    M,
    +2.64%

    Chief Executive Jeff Gennette said in a statement. “However, the lulls of the non-peak holiday weeks were deeper than anticipated.”

    “Based on current macro-economic indicators and our proprietary credit card data,” he continued, “we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.”

    Macy’s issued the sales and profit figures as Wall Street parses consumer behavior during the holiday season. Adobe on Thursday said online sales surpassed $210 billion and beat expectations. Costco Wholesale Corp., a day earlier, reported an increase in December sales, even though online sales fell.

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  • CES 2023: AMD, Nvidia, auto applications get the hype, but analysts say this one chip maker ruled

    CES 2023: AMD, Nvidia, auto applications get the hype, but analysts say this one chip maker ruled

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    As CES 2023 draws to a close, much of the attention in the chip world was lauded on companies like Advanced Micro Devices Inc. and Nvidia Corp. but a lower profile chip maker appears better positioned coming out of the convention.

    Morgan Stanley analyst Joseph Moore said there’s still a lot of caution about overall chip demand especially with softness in China, but autos appear to be one of the strong themes of CES 2023, he said.

    “The areas that have been weak remain somewhat weaker – notably memory, semi cap, and generally PC and cloud builds – while the markets that have been strong (such as automotive and industrial) remain strong but with lead times clearly starting to normalize, which likely points to longer term revenue pressures particularly in a weaker economy,” Moore said.

    “Still, the longer term themes remain positive, especially for autos (which is increasingly the focus of CES),around themes such as EVs, ADAS and autonomous.”

    Such was the case when Nvidia Corp.
    NVDA,
    +4.16%

     said on Tuesday it was partnering with Hon Hai Technology Group
    2317,
    +0.41%

     , or Foxconn, best known for being the manufacturer of Apple Inc.’s
    AAPL,
    +3.68%

    iPhone, to make electric vehicles that use Nvidia’s Drive Orin chips and sensors, and bringing its GeForce Now streaming video game service to autos made by Hyundai Motor Group
    005380,
    +0.31%
    ,
    BYD
    1211,
    -2.60%
    ,
    and Swedish EV maker Polestar.

    “We generally think that Nvidia numbers are likely OK from here, though there was some caution on sell through in China for gaming, and a clear awareness that while the company’s position within cloud is very good, that pressure in cloud budgets leads to somewhat lower visibility,” Moore said. “But we would say that generally we think that they are past the worst of the pressures in their business, in contrast to most of the semiconductor group where there are still likely numbers cuts ahead.”

    Meanwhile, Advanced Micro Devices Inc.
    AMD,
    +2.62%

    used the CES keynote to introduce the Instinct MI300 chip as “world’s first data-center integrated CPU + GPU.” The  combined central processing unit and graphics processing unit meant for AI inference, the months-long process where data centers spend millions of dollars a year on electricity to train and develop artificial intelligence. AMD Chief Executive and Chair Lisa Su said the MI300 can reduce the time it takes for an inference modeling process from months to weeks.

    But one chip maker that doesn’t get a lot of attention appeared to emerge from CES best positioned for the year: ON Semiconductor Corp.
    ON,
    +4.57%
    ,
    which focuses on electric vehicles and advanced driver assistance systems as primary growth drivers, leveraging its legacy position in auto chips.

    “Most notably, the company’s push into [Silicon Carbide] remains on track, and expect to still exit the year at a run-rate where the majority of crystal driving the business is internally sourced,” Moore said. “The company remains confident that demand in the EV space will far outpace supply for a long time and have thus shifted their focus over to execution on the production side.”

    Citi Research analyst Christopher Danley lauded ON as being the most bullish chip maker of CES 2023.

    “ON remains on track to triple Silicon Carbide revenue YoY from roughly $300 million in 2022 to $1.0 billion in 2023,” Danley said. “The company stated it is sold out through 2023.”

    But ON aside, Danley said everyone at CES is “nervous” about “cracks” in data-center demand, “and they should be.”

    “There was a tone of nervousness on the data center outlook with many execs and investors cautious and talking about ‘uncertainty’ in data center outlooks from both hyperscalers and enterprise customers,” Danley said. “We continue to believe data center correction will happen given a multitude of datapoints and leading indicators.”

    Back in early December, Danley said his checks “indicate order rates from the data center end market are fading with downside from the enterprise end market (roughly 40% of the data center end market) and Facebook,” which is owned by parent company Meta Platforms Inc.
    META,
    +2.43%

    “We continue to expect a correction in the data center end market in 1H23,” Danley said.

    That said, Danley said his top pick was and continue to believe a correction there is inevitable. We remain cautious on semis until all end markets and companies correct and our top pick remains chip maker Analog Devices Inc.
    ADI,
    +3.65%

    Back to autos: Ambarella Inc.
    AMBA,
    +6.77%

    on Thursday, Ambarella said it was partnering with Continental AG
    CON,
    +2.32%

    to develop hardware and software for assisted driving using AI with the ultimate goal of an autonomous driving system. The companies hope to have systems in production in 2026.

    Moore said Ambarella’s tech “continues to impress,” and said the Continental partnership will provide software revenue that’s shared but with the larger portion going to Continental.

    At CES 2023, “the companies are showing a full L2+ ADAS implementation for a 10-camera system running on a single chip, which per AMBA was only using 8% of the compute value of the chip.”

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  • Mercedes recalls nearly 324,000 vehicles due to engine stalling

    Mercedes recalls nearly 324,000 vehicles due to engine stalling

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    DETROIT (AP) — Mercedes is recalling nearly 324,000 vehicles in the U.S. because the engines can stall while they’re being driven.

    The recall covers a range of models from the 2012 to 2020 model years including the ML550, ML350, AMG ML63, ML250, ML400, GLE450, GLE300, GLE350, GLE550, GLE400, AMG GLE43, and AMG GLE63.

    The National Highway Traffic Safety Administration says in documents posted Thursday that water can accumulate in the spare tire wheel well and damage the fuel pump control unit. That can make the engines stall.

    Dealers will check for water intrusion, install a drain plug and replace the fuel pump if needed. Owners will be notified by letter starting Feb. 21.

    Mercedes says in documents that it’s aware of 773 U.S. warranty claims, field reports, and service reports due to the problem. The company says it’s not aware of any crashes or injuries caused by the defect.

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  • U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures

    U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures

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    The numbers: The U.S. generated 223,000 new jobs in December to mark the smallest increase in two years, but the labor market still showed surprising vigor even as the economy faced rising headwinds.

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6%, the government said Friday.

    The jobless rate has touched 3.5% several times since 2019. That matches the lowest rate since 1969.

    One good sign for Wall Street and the Federal Reserve. Hourly pay rose a modest 0.3% last month, suggesting wages are coming off a boil.

    The increase in wages over the past year also slowed to 4.6% from 4.8%, marking the smallest gain since the summer of 2021.

    U.S. stocks
    DJIA,
    -1.02%

     
    SPX,
    -1.16%

    rose in premarket trades and bond yields edged higher after the report.

    Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000.

    The resilient labor market is a double-edged sword for the Federal Reserve.

    For one thing, a scarcity of workers has driven up wages and threatens to prolong a bout of high inflation. The Fed wants the labor market to cool off further to ease the upward pressure on prices.

    Yet the strong labor market also offers the best hope for the Fed to avert a recession as it jacks up interest rates to the highest level in years. Higher rates reduce inflation by slowing the economy.

    James Bullard, president of the St. Louis Federal Reserve, said on Thursday the odds of so-called soft landing have gone up in part because of the sturdy labor market. He was referring to a Goldilocks scenario in which the central bank vanquishes inflation without causing a recession.

    Senior Fed officials still want to see the jobs market slacken some more, however. They are likely to keep raising rates — and keep them high — until demand for labor, goods and services ease up.

    Big picture: The U.S. economy has shown more fragility, especially in segments like housing and manufacturing that are sensitive to high interest rates. Many economists predict a recession is likely this year due to the higher cost of borrowing.

    The Fed, for its part, is trying to thread the needle: Bring down high inflation and keep the economy out of recession.

    Whatever the outcome, one thing is virtually certain: The unemployment rate is expected to rise as U.S. growth wanes. Whether it’s enough to help the Fed achieve is far from clear. 

    Key details: Health care providers, hotels and restaurants accounted for most of the increase in employment last month. They added a combined 150,000-plus jobs.

    Hiring was weaker in most other sectors, suggesting that the labor market is likely to soften further.

    High-tech has been hit particularly hard and is experiencing a wave of layoffs.

    Employment in so-called professional businesses, which includes some tech, fell by 6,000, largely reflecting fewer temps being hired. It was the only major category to post a decline.

    The share of working-age people in the labor force — known as the participation rate — rose a tick to 62.3%.. A lack of people looking for work is a chief source of the labor shortage.

    Hiring in November and October was little changed after government revisions. The economy added 256,000 jobs in November and 263,000 in October.

     Market reaction:  The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Friday trades.

    Investors worry a strong labor market will push the Fed to take sterner measures to slow the economy. The slowdown in hiring and wage growth is likely to be seen in a positive light.

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  • Costco stock rises as holiday sales gain even as online sales recede

    Costco stock rises as holiday sales gain even as online sales recede

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    Costco Wholesale Corp. shares ticked higher in the extended session Thursday after the warehouse club reported a rise in holiday sales from a year ago, even as online sales pulled back.

    Costco
    COST,
    -1.40%

    said December sales rose 7% to $23.8 billion, up from $22.24 billion a year ago.

    For the 18 weeks ending Jan. 1, sales rose 7.6% to $81.16 billion, up from $76.34 billion in the year-ago period.

    While same-store sales grew for each period, e-commerce sales declined. Total company same-store sales rose 5.5% for the month and 6.1% for the 18 weeks ending Jan. 1., while e-commerce sales declined 6.4% and 4.8%, respectively.

    Costco shares rose more than 2% after hours, following a 1.4% decline to close the regular session at $450.19.

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  • WHO is ‘concerned’ about coronavirus variant XBB.1.5 and its apparent growth advantage

    WHO is ‘concerned’ about coronavirus variant XBB.1.5 and its apparent growth advantage

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    The global tally of COVID cases rose 25% in the period stretching from Dec. 5 to Jan. 1 to more than 14.5 million, the World Health Organization said Thursday.

    Known case numbers appeared to fall in the latest week, but the WHO said those numbers were not reliable given the reduction in testing and delays in reporting during the year-end holiday period.

    BA.5 and its sublineages remained dominant, based on sequences sent to a central database, with six under monitoring, including XBB and its sublineage XBB.1.5, which has become dominant in the U.S., according to data released last Friday by the Centers for Disease Control and Prevention.

    While XBB.1.5 does not so far appear more lethal than earlier variants, it has spread fast across the U.S., rising from about 1.3% of cases in early December to about 41% in the week through Dec. 31.

    “We are concerned about its growth advantage, in particular in some countries in Europe and the Northeast part of the United States, where XBB.1.5 has rapidly replaced other circulating sub-variants,” Maria Van Kerkhove, the WHO’s COVID technical lead, told reporters on Wednesday, as Politico reported.

    U.S. numbers are also likely a little distorted by the holiday season, according to the team running a New York Times tracker.

    The seven-day average for new U.S. cases stood at 64,087 on Wednesday, according to the tracker. That’s down 5% from two weeks ago and below the recent peak of 70,508 on Christmas Eve.

    The daily average for hospitalizations was up 7% at 44,458. The average for deaths was 457, up 11% from two weeks ago.

    Test positivity, meanwhile, has climbed 25% to 16%, and the number of patients in intensive-care units is up 8% to 5,312.

    Cases are rising in 21 states, led by Louisiana, where they have climbed 75% from two weeks ago. On a per capita basis, New Jersey and New York are worst hit with an average of 34 cases per 100,000 people in the former and an average of 29 cases per 100,000 people in the latter.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • Chinese hospitals are running out of beds as they struggle with a wave of COVID cases in the wake of the government’s scrapping of what were the most strict restrictions in the world, the Associated Press reported. Patients, mostly older people, laid on stretchers in hallways or took oxygen while sitting in wheelchairs as a COVID-19 outbreak stretched public health facilities’ resources in China’s capital Beijing, even after its reported peak. The Chuiyangliu hospital in the city’s east was packed Thursday with newly arrived patients. Beds ran out by midmorning, even as ambulances continued to bring more people in. Hard-pressed nurses and doctors rushed to take information and triage the most urgent cases.

    As China relaxes pandemic restrictions and reopens to foreign travelers, clinics and hospital hallways overflow with patients amid a wave of infections that is testing the healthcare system, following the abrupt removal of the so-called zero-Covid strategy. Photo: Noel Celis/AFP/Getty Images

    • The European Union on Wednesday “strongly encouraged” its member states to impose pre-departure COVID-19 testing of passengers from China, in a move that is likely to upset Beijing and has already been criticized by the global airline industry, the AP reported separately. Following a week of talks between EU health experts, the bloc stopped short of agreeing that all 27 member states impose such a travel restriction that members like Italy, France and Spain had already implemented at a national level. Instead, it only urged nations to do so. China has already vehemently rejected such actions, warning of “countermeasures” if such policies were to be imposed across the bloc.

    • The collapse of Buffalo Bills safety Damar Hamlin during a Monday game has given rise to another series of unfounded claims about COVID vaccines, showing that vaccine misinformation remains a threat to public safety three years after the pandemic began, BBC News reported. In what has become a familiar pattern since vaccines became available about two years ago, several influential accounts used the event to spread anti-vaccination content. They included the Georgia congresswoman Marjorie Taylor Greene, who tweeted: “Before the COVID vaccines we didn’t see athletes dropping dead on the playing field like we do now… Time to investigate the COVID vaccines.” The idea that young, healthy athletes have never collapsed suddenly before COVID vaccines is easily disproved, said the BBC.

    • Hong Kong will start to reopen its border with mainland China on Sunday and allow tens of thousands of people to cross from each side every day without quarantine, the city’s leader said, as the AP reported. The city’s land and sea border checkpoints with the mainland have been largely closed for almost three years under China’s “zero-COVID” strategy, which has restricted entry to the country, isolated infected people and locked down areas with outbreaks. The reopening is expected to provide a much-needed boost to Hong Kong’s economy.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 662.4 million on Thursday, while the death toll rose above 7.5 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 101 million cases and 1,094,010 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 229.1 million people living in the U.S., equal to 69% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 47 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 15.1% of the overall population.

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  • Amazon confirms more than 18,000 layoffs, far more than originally expected

    Amazon confirms more than 18,000 layoffs, far more than originally expected

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    Amazon.com Inc.’s
    AMZN,
    -0.79%

    layoffs will affect more than 18,000 employees, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.

    The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.

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