The Recap: Businesses get a year to meet health mandate

July 6, 2013

The Obama administration will not penalize businesses that do not provide health insurance in 2014. Instead, it will delay until 2015 enforcement of a major Affordable Care Act requirement that all employers with more than 50 full-time employees provide coverage to their workers or pay a steep fine. ¶ The administration said it would postpone the provision after hearing significant concerns from employers about downsizing their workforce or cutting workers’ hours to dodge the mandate. With the delay, the White House sidesteps those challenges — for now. ¶ It is the second significant interruption for the Affordable Care Act, following a one-year delay on key functions of the small business insurance marketplaces. Together, the moves could draw criticism that the administration will not be able to put into effect its signature legislative accomplishment on schedule.

Business

Wall Street rewarded Rupert Murdoch’s move to create a separate entertainment company, giving 21st Century Fox one of the richest valuations — $68 billion — in the media sector on its first day of trading. Investors had waited for Murdoch to split News Corp., giving its cable, movie and equity stakes in pay-TV assets their own spotlight away from the publishing division. Shares of the new News Corp., which includes publishing assets such as the Wall Street Journal and HarperCollins, lost 3 percent, or a half-billion dollars, from their opening price, for a market value of $8.5 billion.

Prudential Financial is contesting a U.S. finding that it poses a potential risk to the financial system, becoming the first company to challenge the tag that brings additional regulatory oversight. The leaders of American International Group and General Electric’s finance unit each said that they will not contest their status as systemically important financial institutions (SIFI).

Citigroup agreed to pay mortgage-finance giant Fannie Mae $968 million to resolve claims on 3.7 million home loans that have either soured or may go bad.

Google took questions from U.S. lawmakers on how its new Glass headset will work within its privacy standards.

Profitable U.S. companies paid taxes at a 12.6 percent rate in 2010, less than half the statutory rate of 35 percent, the government reported.

HSBC will pay a record $1.9 billion penalty, approved by a federal judge, to settle accusations that the British bank helped Mexican drug traffickers, Iran, Libya and others under U.S. suspicion or sanction move money around the world. The settlement, announced in December, is the largest penalty ever imposed on a bank.

Eike Batista, not long ago Brazil’s richest man, has resigned as chairman of energy company MPX Energia after it was forced to call off a planned IPO, the company said. MPX is part of Batista’s EBX Group, a conglomerate that also includes logistics and mining firms. MPX’s board of directors approved a capital increase of $356 million at $2.96 per share. It said the increase replaced the planned IPO “after market conditions substantially worsened in the last few weeks.”

Scott London, a former senior partner with the accounting firm KPMG whose clients included Herbalife and Skechers USA, pleaded guilty before a federal judge to securities fraud arising from his involvement in insider trading.

Former FBI director Louis J. Freeh was appointed to investigate alleged misconduct regarding BP’s multibillion-dollar settlement fund, including actions by a lawyer who helped run it. The attorney allegedly received a portion of settlement proceeds for claims he had referred to a law firm before he started working on the settlement program.

Fifty-five hospitals in 21 states agreed to pay $34 million to the U.S. government to settle allegations that they used more expensive inpatient procedures rather than outpatient spinal surgeries to get bigger payments from Medicare, the Justice Department said.

Boeing delivered more planes than Airbus during the first half of this year. Boeing has delivered 306 jetliners so far, including 17 787s, which had been grounded with battery problems earlier this year. Airbus has delivered 295 civilian planes this year.

Automakers reported higher sales in June, driven by demand for pickup trucks, small cars and crossovers.

Deals

The FCC reportedly approved the merger of Sprint Nextel and SoftBank. The approval was the last hurdle in the Japanese company’s drawn-out battle to take control of the No. 3 U.S. wireless provider. SoftBank’s $21.6 billion deal to buy 78 percent of Sprint would mark the largest-ever overseas acquisition by a Japanese company.

Tribune said it reached a deal to buy Local TV Holdings’ 19 TV stations for $2.73 billion in cash, significantly boosting its television business as it looks to sell its newspaper operations.

Economy

The Federal Reserve ordered banks to set aside more capital as a cushion against losses, and it plans to ratchet up standards further in the months ahead.

The International Monetary Fund pressed Italy to do more about “unacceptably high” unemployment, especially among young people and women, and urged it to bring back an unpopular property tax whose return could threaten the survival of Premier Enrico Letta’s coalition government.

Germany and Spain signed a deal under which Berlin will provide about $1 billion to ease a credit crunch for small and medium-size Spanish companies.

Oil prices slipped toward $105 a barrel on Thursday after Egypt’s army ousted its president, helping to ease concerns over the threat of supply disruption in the Middle East. The Suez Canal, a vital waterway for oil shipments, was not affected by the recent unrest, but analysts said real and threatened supply disruptions in regions including the Middle East, which pumps a third of the world’s oil, would support prices.

Canada’s banks are considering a plan to make Toronto the first North American trading hub for China’s yuan, joining a global race for a share of trading in the currency of the world’s second-largest economy.

Average U.S. fixed-rate mortgages fell to 4.29 percent, down from 4.46 percent the week before, the highest in two years and a full point more than a month ago. The average on the 15-year mortgage fell to 3.39 percent, down from 3.50 percent — the highest since August 2011.

U.S. manufacturing activity grew in June behind a pickup in new orders, exports and production. The Institute for Supply Management said its index of factory activity increased to 50.9 in June. That’s up from 49 in May, which was the lowest reading in four years. A reading above 50 suggests growth.

Washington

Across-the-board federal spending cuts have reduced benefits for the long-term jobless by nearly 15 percent.

Transitions

Douglas C. Engelbart, a computer science visionary who was credited with inventing the mouse, the now-ubiquitous device that first allowed consumers to navigate virtual desktops with clicks and taps, died at 88.

Theodore H. Reed, who turned the National Zoo into an international destination, most notably through the acquisition of two Chinese giant pandas, died at 90.

Games publisher Zynga replaced chief executive Mark Pincus with Don Mattrick, who headed Microsoft’s critical Xbox business.

— From The Post and news services

195,000
U.S. jobs added in June

Job creation for the month was significantly stronger than it seemed in April and May. On the news, bonds endured an epic sell-off Friday morning, enough to drive longer-term government borrowing costs to their highest level since the summer of 2011. The jobless rate stayed at 7.6 percent, while hourly earnings in the year ended in June advanced by the most since July 2011.

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