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U.S. STOCKS LITTLE CHANGED AMID RENEWED TRADE TENSIONS

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DAILY MARKET REPORTS

  • Wall Street’s main indexes edged higher on Thursday as industrial stocks gained following three days of losses due to fears of trade war between China and the United States.
  • Trump’s decision to impose tariffs on steel and aluminum imports as well as on solar panels and washing machines has already sparked threats of retaliation from some trade partners.
  • Investors worry that more tariffs, along with aggressive responses from key U.S. allies such as the European Union, could crimp growth around the world and put a damper on earnings among U.S. conglomerates, manufacturers and other businesses—both of which had been crucial components to the rally’s upswing last year.
  • The markets found support from economic data that showed the number of Americans filing for unemployment benefits fell last week, pointing to strength in labor market.
  • Alibaba jumped nearly 3% on report that the Chinese e-commerce giant was planning to list in China.

US FINANCIAL MARKET

Sears reports lower-than-expected fall in comparable sales

  • Sears reported a smaller-than-expected decline in comparable-store sales in a surprise fourth-quarter earnings announcement.
  • Sears’ revenue fell 27.7 percent to $4.38 billion, as it operated fewer stores compared with a year earlier.
  • Sears said its comparable-store sales fell 15.6 percent in the quarter. Analysts on average had expected a 16.4 percent decline.
  • Sears reported a net income of $182 million in the fourth quarter, compared with a loss of $607 million a year earlier.
  • Results included a $470-million gain thanks to lower U.S. corporate tax rates.

Dollar General’s same-store sales beats estimates

  • Dollar General’s fourth-quarter comparable store sales beat Wall Street estimates, as customers spent more at its stores.
  • The discount retailer reported a 3.3% rise in same-store sales, above the 2.7-percent increased estimated by analysts on average.
  • Dollar General’s net sales rose to $6.13 billion in the quarter ended Feb. 2, from $6 billion a year earlier.
  • Net income rose to $712.2 million, from $414.2 million, benefiting from a $311 million gain due to changes in U.S. tax laws.

Toys ‘R’ Us Tells Workers It Will Likely Close All U.S. Stores

  • Toys ‘R’ Us told employees Wednesday the struggling big-box retailer will sell or close all its U.S. stores, a collapse that threatens up to 33,000 American jobs in the coming months.
  • The 70-year-old chain has more than 700 remaining U.S. locations, and would be one of the biggest retail liquidations since The Sports Authority filed for bankruptcy in 2016 with 14,500 workers and closed more than 460 stores.
  • Toys ‘R’ Us has struggled with more than $5 billion in debt from a leveraged buyout, while it also was squeezed by competition from Amazon.com as well as discount retailers such as Walmart.
  • The demise of Toys “R” Us poses a serious challenge to the $27 billion U.S. toy industry.

iHeartMedia Files for Bankruptcy, Reaches Restructuring Agreement in Principle

  • iHeartMedia, the company behind the biggest U.S. radio broadcaster, filed for bankruptcy protection after reaching an agreement in principle with investors over a balance-sheet restructuring, a decade after a private-equity-led buyout left the company laden with billions in debt.
  • iHeartMedia said in a statement the agreement in principle was with holders of more than $10 billion of its outstanding debt and its financial sponsors.
  • Despite sluggish sales and a steady loss of listeners to new platforms, the company had avoided bankruptcy for years by pushing out debt maturities through refinancing and swaps.
  • Over the past five years iHeartMedia has spent more on debt payments than it earns. With more than $8 billion in debt maturing next year, the company began talks with creditors on a deal to swap a big chunk of debt for some of its equity.

Wells Fargo faces sanctions for auto insurance payouts

  • U.S. regulators are preparing to sanction Wells Fargo for receiving commissions on auto insurance policies it helped force on more than half a million drivers, people with direct knowledge of the probes told Reuters.
  • In July, Wells Fargo blamed a third-party vendor for wrongly layering insurance policies on its auto borrowers. However, Wells Fargo did not explain that it received payouts when those policies were written.
  • The fact that Wells Fargo stood to profit from the insurance program will form the backbone of fresh sanctions against the bank.
  • Wells is investigating auto insurance abuses back to 2005 and estimates it will need to refund $145 million to borrowers, and adjust account balances by another $37 million, according to securities filings.

SEC Charges Theranos CEO Elizabeth Holmes With Fraud

  • Theranos Chief Executive Elizabeth Holmes, widely hailed as Silicon Valley’s first female billionaire startup founder, agreed to a settlement with federal regulators that strips her of voting control, bans her from being an officer or director of any public company for 10 years and requires her to pay a $500,000 penalty.
  • Regulators alleged they raised more than $700 million from investors while deceiving them about the capabilities of the company’s technology.
  • The SEC began investigating Theranos after The Wall Street Journal reported in October 2015 that the lab instrument developed as the linchpin of the company’s strategy handled just a small fraction of the tests sold to consumers.
  • Theranos was valued at more than $9 billion at the time and Ms. Holmes’s majority stake at more than half that.

Blue Apron to Sell Meal Kits in Stores to Buttress Sagging Deliveries

  • Blue Apron will try to give its struggling business a boost by selling meal kits in stores, acknowledging that its subscription-only model isn’t enough in the intensifying fight to fill people’s dinner plates.
  • One of the first meal-kit companies, Blue Apron has been losing customers amid increased competition and distribution problems.
  • The company reported 750,000 subscribers last month, down from a peak of over 1 million last year.
  • Its shares, down 46% so far this year, are trading around a fifth of their debut price of $10 last July.

Amazon’s internal numbers on Prime Video, revealed

  • Amazon.com’s top television shows drew more than 5 million people worldwide to its Prime shopping club by early 2017, according to company documents, revealing for the first time how the retailer’s bet on original video is paying off.
  • The documents also show that Amazon’s U.S. audience for all video programming on Prime, including films and TV shows it licenses from other companies, was about 26 million customers.
  • Video has grown to be one of Amazon’s biggest expenditures at $5 billion per year for original and licensed content.

Disney creates streaming video unit for digital future

  • Walt Disney said it had created a new unit for its streaming video and international businesses as the company retools its traditional media operation for a world rapidly embracing online video.
  • Kevin Mayer, the company’s chief strategy officer, was named chairman of the new division, which will oversee the upcoming ESPN+ digital offering and the launch of a family-oriented streaming service in late 2019.
  • The move, effective immediately, comes as Disney is in the process of purchasing film, TV and international businesses from Twenty-First Century Fox.
  • Disney expects to switch its financial reporting to reflect the new structure by the beginning of fiscal 2019, the company said.

FDA looks to set maximum nicotine level in cigarettes

  • The FDA has pushed forward with implementing a rule to set a maximum level of nicotine allowed in cigarettes.
  • The regulator is in the process of deciding how to adopt the change and at what level to limit the nicotine in products.
  • “We envision the potential circumstance where nicotine levels in cigarettes do not spur or sustain addiction for some portion of potential smokers,” the FDA said in its statement.

Walmart patents hint at future where its drones tend the farms

  • Walmart’s patent filings hint that it may see a future where farmers use its drones to not only spot crop problems but selectively apply chemicals or even disperse pollen to bring shoppers the freshest and cheapest food possible.
  • The retailer applied for six patents last year on drones that aim to prevent damage to crops, control pest attacks on farms and cross-pollinate plants, according to U.S. Patents and Trademark Office documents.
  • Groceries make up 56 percent of the company’s total revenue and Walmart may see drone technology as one way to get food from farms to store shelves faster and more cheaply to compete with Amazon.com.
  • Walmart has so far applied for 46 patents for using drone technology, mostly to facilitate its delivery and logistics operations, or for use within warehouses to do things such as track inventory.

Alexion’s rare blood disorder drug succeeds in late-stage study

  • Alexion Pharmaceuticals said its experimental drug, ALXN1210, met the main goal in a late-stage study in patients with a rare blood disorder.
  • The drug was being tested against the company’s flagship drug Soliris.

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US ECONOMY & POLITIC

U.S. Jobless Claims Fell Last Week

  • Initial jobless claims, a proxy for layoffs across the U.S., fell by 4,000 to a seasonally adjusted 226,000 in the week ended March 10, matching expectations of economists surveyed by The Wall Street Journal.
  • The four-week moving average, a steadier measure, fell by 750 to 221,500 last week.
  • The number of claims workers made for longer than a week rose by 4,000 to 1,879,000 in the week ended March 3.
  • Weekly jobless claims have held below 300,000 for about three years, the longest streak since 1970.

Senate Passes Bill Easing Banking Rules

  • Congress moved a step closer to relaxing the wave of crisis-era restrictions placed on the banking industry on Wednesday, with Senate approval of a bipartisan plan to ease rules for small and midsize banks.
  • Approved on a 67-31 vote, it seeks to cut red tape and relieve lenders from some of the most onerous rules put in place after the financial crisis, including restrictions meant to limit the damage firms could cause to the economy.
  • A core piece of the Senate bill could cut to 12 from 38 the number of banks subject to heightened Federal Reserve oversight by raising a key regulatory threshold to $250 billion in assets from the current $50 billion.
  • The legislation now moves to the House, where top Republicans say they want to add provisions to the bill.

Lawrence Kudlow to Become Trump’s White House Economic Adviser

  • Lawrence Kudlow, a conservative economic commentator whose career included jobs in the White House, Wall Street, radio and business television, will become one of President Donald Trump’s top economic advisers as director of the National Economic Council.
  • Mr. Kudlow, 70 years old, said he was offered the job after a series of recent phone conversations with the president in which the two discussed differences of opinion about trade, among other things.
  • The White House confirmed the appointment Wednesday afternoon.

Trump Takes Aim at Next Tariff Target: China

  • The Trump administration is putting together a package of anti-China measures, including tariffs on at least an annual $30 billion of Chinese imports, to pressure Beijing to end requirements that U.S. companies transfer technology to Chinese firms.
  • The measures, which are expected to be announced in the next week or two, arise from administration findings that China has violated U.S. intellectual property laws and has unfairly pressured U.S. companies to transfer technology.
  • The administration, according to the individuals involved, estimates the damage to U.S. companies from forced technology transfer at $30 billion annually.
  • The measures being considered include: tariffs of at least an annual $30 billion on a wide range of Chinese products, and strengthened restrictions on Chinese investment into the U.S.

Homebuilder confidence retreats amid potential ‘challenges’ to meeting demand

  • A monthly survey of builder sentiment dropped one point in March, and February’s reading was revised down also by one point.
  • The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) fell to 70, the lowest reading since last November.
  • The HMI is now one point lower than March 2017. Any reading above 50 is considered positive sentiment.

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EUROPE & WORLD

China Tech Titan Alibaba Plans Stock-Market Homecoming

  • Technology giant Alibaba is working on a plan to list on a stock exchange in its home market, China, according to people familiar with the matter, more than three years after its blockbuster initial public offering in New York.
  • A secondary listing in China could happen as soon as this summer if the country’s securities rules are changed to allow listings of foreign companies.
  • Chinese regulators want large homegrown companies and promising startups to participate in its capital markets, giving retail investors an opportunity to tap into the wealth generated by successful companies, among other goals.

Russia Promises Retaliatory Measures Against U.K. Coming Soon

  • Russia’s foreign minister warned Thursday that Moscow would soon retaliate against London’s decision to expel 23 Russian diplomats, as the confrontation over the poisoning of a former Russian double agent looked ready to spiral into tit-for-tat measures.
  • British authorities say Russia is culpable for the attempted murder of Sergei Skripal and his daughter with a nerve agent once produced in the Soviet Union in a Salisbury, England shopping center.
  • Sergei Lavrov, the top Russian diplomat, said Moscow’s move to respond to U.K. Prime Minister Theresa May’s announcement of punitive measures the day before would come through official channels before being publicly announced.

Audi expects tough year amid model changes

  • Audi expects a difficult year as the launch of over 20 redesigned and new models could hurt deliveries, after declining sales of high-end models and further costs from an emissions scandal kept profitability below that of Mercedes-Benz and BMW.
  • Volkswagen’s main profit engine will introduce a new model every three weeks this year, including the redesigned A6 saloon, the all-new Q8 sport-utility vehicle (SUV) and the battery-powered e-tron SUV, it said on Thursday.

BlackBerry extends CEO John Chen contract to 2023

  • BlackBerry, has extended the contract of Executive Chairman and Chief Executive John Chen by five years through November 2023, the Canadian company announced.
  • Chen joined BlackBerry in November 2013, charged with breathing life into struggling smartphone maker.

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TODAY in HISTORY

  • Christopher Columbus returned to Spain after his first visit to the Western Hemisphere. (1493)
  • Maine became the 23rd state. (1820)
  • Nicholas II, the last czar of Russia, is forced to abdicate his throne. (1917)
  • Scientists reported the discovery of Sedna, the most distant object in the solar system. (2004)

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