Judge rules for GM in ignition switch claims
General Motors persuaded the U.S. federal judge who oversees nationwide litigation over defective ignition switches to narrow claims by owners who said their vehicles lost value because of the defect, which has been linked to 124 deaths.
In a decision late Tuesday afternoon, U.S. District Judge Jesse Furman said owners in three “bellwether” states — California, Missouri and Texas — could not seek damages based on the difference in value between what they paid for their defective vehicles and what the vehicles were really worth.
He said the owners’ failure to show the fair market value of their vehicles, despite testimony from an expert witness, created an “absence of evidence on an essential element” of their claims, making it impossible for a jury to assess damages.
GM spokesman David Caldwell said the automaker was pleased with the decision.
It is a defeat for owners who said they suffered economic losses from buying vehicles they thought were defect-free, only to see the ignition switch problem hurt GM’s brand, reputation and ultimately resale values. Steve Berman, a lawyer for the owners, said he may ask Furman to reconsider the decision and was confident he could address the judge’s concerns in cases from other states.
GM has recalled more than 2.6 million vehicles since 2014 over ignition switches that could cause engines to stall and prevent air bags from deploying.
NYT warns of declines in digital advertising
The New York Times Co. fell short of Wall Street estimates for revenue Wednesday and warned of declines in digital advertising for the rest of the year, sending its shares down 12 percent.
The outlook overshadowed a better-than-expected second-quarter profit, helped by the newspaper’s efforts to make money from digital subscribers to counter a relentless decline in readership of its broadsheets.
“We expect the second half of 2019 to be somewhat more challenging for digital advertising than the first half, with this year’s revenue coming against our large gains in the third and fourth quarters of 2018,” chief executive Mark Thompson said in a statement.
The Times added 197,000 digital-only subscribers in the quarter, pushing total subscriptions to 3.78 million. Total revenue rose 5 percent to $436.3 million, missing analysts’ average estimate of $438.7 million, according to IBES data from Refinitiv.
U.S. consumer debt rose less than forecast in June as Americans whittled away at their credit-card balances following a big bump in the previous month. Total credit rose $14.6 billion, the least in three months and undershooting the median estimate of economists after a revised $17.8 billion increase in May, Federal Reserve figures showed Wednesday. The June advance was entirely due to the biggest increase in nonrevolving credit this year.
CVS Health swung back to a profit in the second quarter, thanks to an influx of health insurance revenue, and the company raised its 2019 forecast beyond Wall Street expectations. Shares of the drugstore chain and pharmacy benefit manager outpaced the broader market in Wednesday trading after the company detailed its better-than-expected quarterly performance. Total revenue climbed over 35 percent to $63.43 billion in the three-month period that ended June 30, helped by a $17 billion contribution from a new health benefits segment. CVS Health completed a roughly $69 billion acquisition of the insurer Aetna last November.
Home prices slipped in some of the costliest U.S. markets in the second quarter, a sign that would-be buyers are sitting out the competition for a scarcity of affordable properties. The median price for a previously owned single-family house increased 4.3 percent from a year earlier to $279,600, the National Association of Realtors said in a report Wednesday. Prices climbed in 162 of 178 metropolitan areas measured. The high-cost regions of San Jose, San Francisco and Honolulu were among those where prices fell.
A company founded by the woman who created Duke's Mayonnaise has filed a lawsuit claiming its former vice president of sales stole recipes to help a competitor. News outlets report Duke Foods filed the lawsuit in Greenville County, S.C., against Wyatt Howard. The lawsuit says Howard was fired May 31. He is accused in the lawsuit of sending recipe and pricing information to his personal email when he was fired. The lawsuit claims he then shared the information with Paris, Tenn.-based Knott's Fine Foods. The recipe for Duke's Mayonnaise was sold to C.F. Sauer Co. in 1929. Howard is accused of stealing recipes for other spreads.
10 a.m.: Commerce Department releases wholesale trade inventories for June.
10 a.m.: Freddie Mac, the mortgage company, releases weekly mortgage rates.