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Earnings reports drive stocks higher; Warren Buffett confirms who will succeed him as CEO |

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Wall St. logs gains on strong earnings

NEW YORK — Health care and energy companies helped push stocks higher May 3, as Wall Street kicked off the first trading day in May with more gains after a four-month winning streak.

The S&P 500 rose 0.3 percent. Industrial and financial stocks also helped lift the market. Falling technology and communication stocks, and companies that rely on consumer spending, kept the market’s gains in check. Treasury yields were mixed.

Investors welcomed new economic data indicating the economy is strengthening. They also continued to focus on the latest batch of corporate earnings reports, which have been mostly encouraging and have helped fuel optimism about a solid economic recovery this year.

“In terms of earnings, we’re in a good place,” said Hilary Kramer, chief investment officer for Kramer Capital Research. “The good news is that we’re getting excellent guidance from these companies.”

Berkshire exec to succeed Warren Buffett

OMAHA, Neb. — Greg Abel will succeed billionaire Warren Buffett as Berkshire Hathaway CEO.

Buffett confirmed the succession plan Monday to CNBC after Berkshire vice chairman Charlie Munger let slip the plan during during the company’s annual meeting on Saturday. 

The 90-year-old Buffett told CNBC that if anything happened to him, Abel, who currently oversees all of Berkshire’s non-insurance companies, would be the one to take the top post. Buffett said that if for some reason Abel couldn’t do the job, then Ajit Jain, who Berkshire’s insurance units, would become CEO.

Buffett has said he has no plans to retire. In the past, he had declined to name the next CEO except to say that one of Berkshire’s managers would take the job. Buffett has said he wants this successor to have a long tenure leading the conglomerate. Abel is 59.

Web pioneers AOL, Yahoo sold for $5B

NEW YORK — AOL and Yahoo are being sold again, this time to a private equity firm.

Wireless company Verizon will sell Verizon Media, which consists of the once-pioneering tech platforms, to Apollo Global Management in a $5 billion deal.

Verizon said May 3 that it will keep a 10 percent stake in the new company, which will be called Yahoo.

Yahoo at the end of the last century was the face of the internet, preceding the behemoth tech platforms to follow, such as Google and Facebook. And AOL was the portal, bringing almost everyone who logged on during the internet’s earliest days.

Verizon spent about $9 billion buying AOL and Yahoo over two years starting in 2015, hoping to jump-start a digital media business that would compete with Google and Facebook. It didn’t work — those brands were already fading The year after buying Yahoo, Verizon wrote down the value of the combined operation, called “Oath,” by roughly the value of the $4.5 billion it had spent on Yahoo.

Verizon has been shedding media assets as it refocuses on wireless, spending billions on licensing the airwaves needed for the next generation of faster mobile service, called 5G.

Fed chief sees need to help neediest

WASHINGTON — Federal Reserve chairman Jerome Powell says the economic outlook has “clearly brightened” in the United States, but the recovery remains too uneven with lower income groups lagging behind.

In a May 3 speech, Powell cited a number of reasons that U.S. growth prospects have brightened including rising vaccination levels, increased government support and more business re-openings nationwide.

But he added that the economic downturn has not fallen evenly on all Americans and that those least able to bear the burden have been the hardest hit. Powell said the Fed was focused on these long-standing disparities because they weigh on the country’s productive capacity.

Apple’s app store trial getting started

SAN RAMON, Calif. — Apple’s lucrative app store was alternately portrayed as a price-gouging monopoly and a hub of world-changing innovation during the preamble to a trial that may reshape the technological landscape.

The contrasting portraits were drawn on Monday as lawyers for Apple and its foe, Epic Games, outlined their cases in an Oakland, Calif., federal court.

While Apple depicted its app store as an invaluable service beloved by consumers and developers alike, Epic Games attacked it as a breakthrough idea that has morphed into an instrument of financial exploitation that illegally locks out competition.

The trial revolves around the 15 percent to 30 percent commissions that Apple collects on in-app purchases.

Intel to invest $3.5B in N.M. chip plant

RIO RANCHO, N.M. — Intel will be investing $3.5 billion in its New Mexico plant to manufacture what executives said Monday will fuel “a new era of innovation” and advanced computing as demands increase for the microchips used in nearly all modern devices.

Multibillion-dollar expansions also are underway at the company’s sites in Arizona, Oregon, Ireland and Israel.

Almost every aspect of life today depends on technology, and the demand for more manufacturing and advanced packaging systems for microchips is more critical than ever as more people are working from home and as many parts of education and communication have gone virtual, said Keyvan Esfarjani, Intel’s senior vice president for manufacturing and operations.

Factory activity in US slowed in April

WASHINGTON — Growth in U.S. manufacturing slowed in April partly due to a snarled global supply chain after hitting a 37-year high in March.

The Institute for Supply Management, a trade group of purchasing managers, said Monday that its index of manufacturing activity fell last month to a reading of 60.7. That was down from a March reading of 64.7, which had been the highest level since December 1983.

Any reading above 50 indicates manufacturing is expanding. April was the 11th consecutive month manufacturing has grown after contracting in April 2020, when the country was struggling to deal with the shutdowns caused by a global pandemic.

The slowdown in April reflected a number of problems facing U.S. factories including disruptions in supply chains for critical components such as computer chips.

Construction spending up less than expected

SILVER SPRING, Md. — U.S. construction spending bounced back in March following a February beset by frigid cold and winter storms across large swaths of the country.

However, spending on construction projects rose just 0.2% in March, the Commerce Department said Monday, significantly less than the 1.7% jump economists had expected. That comes even as February’s decline was revised downward, as was January’s.

Still,. through the first three months of the year, total construction spending of $328.3 billion is 4.5% ahead of where it was last year.

Private construction continued to grow, up 0.7% from the previous month, with residential construction up 1.7%.

Private spending on construction of single-family homes rose 2% while spending on apartments and other multi-family units declined 0.3%.

Spending on government construction projects fell again as state and local governments remain cautious as falling tax revenues due to the pandemic cut into their budgets. Public project spending fell 1.5% in March, with spending on schools and other educational facilities down 2% and highway and road construction spending declining 2.2%.

Housing has continued to be one of the strongest segments of the economy. In separate reports last month, sales of new homes boomed in March according to Commerce, as did construction of new homes.

Sales of new homes surged 20.7% in March to the highest level since 2006, the government said. Also in March, builders began construction on new homes and apartments at the fastest pace since June 2006 during the last housing boom, the Commerce Department reported in April.

When Buffett is gone, Abel will take over at Berkshire

OMAHA, Neb. (AP) — Vice Chairman Greg Abel will succeed billionaire Warren Buffett as Berkshire Hathaway CEO, according to a report.

Buffett confirmed the succession plan Monday to CNBC after Berkshire Vice Chairman Charlie Munger let slip the plan during during the company’s annual meeting on Saturday. Buffett did not immediately respond Monday to questions from The Associated Press about the plan.

The 90-year-old Buffett told CNBC that if anything happened to him, Abel would be the one to take the top post. He also said that Vice Chairman Ajit Jain would succeed Abel, who currently oversees all of Berkshire’s non-insurance companies while Jain oversees Geico and all of Berkshire’s other insurance units.

During an exchange at the annual meeting about the importance of protecting Berkshire’s culture in the future Buffett said Berkshire’s extremely decentralized operating model won’t work unless the company has the right culture.

Munger responded: “But we do, and Greg will keep the culture.”

Buffett has said he has no plans to retire.

Berkshire has long planned to split Buffett’s job into three parts when he is gone: a CEO to oversee capital allocation and Berkshire’s operations, investment managers to handle Berkshire’s stock portfolio and a separate board chairman.

In the past, Buffett has declined to name the next CEO except to say that one of Berkshire’s managers would take the job, but Abel was seen as a likely candidate.

Buffett has named two investment managers who already help manage the portfolio and said that his oldest son, Howard Buffett, who already serves on Berkshire’s board, is likely to become the company’s next chairman.

Warehouse fire is being fed by wood pellets at Georgia port

BRUNSWICK, Ga. (AP) — Firefighters in coastal Georgia are battling a large fire that ignited inside a warehouse filled with wood pellets.

The blaze erupted Sunday night at the Port of Brunswick, about 70 miles (112 kilometers) south of Savannah. News outlets report the warehouse is larger than a city block, and firefighters from several surrounding counties were called in to help as flames and smoke filled the sky in downtown Brunswick.

Crews continued to douse the smoldering warehouse Monday morning. There were no immediate reports of injuries.

The blaze was likely the result of spontaneous combustion from heat built up inside the huge pile of wood pellets, Glynn County Emergency Management director Alex Eaton told The Brunswick News.

Officials said the warehouse is owned by a biofuels company that sells the wood pellets as fuel for European power plants. The burned warehouse was built in 2016 to replace two buildings destroyed by a previous wood-pellet fire in July 2015.

HCA sells 4 Ga. hospitals for $950M

ATLANTA — One of Georgia’s largest hospital systems is seeking to get getting bigger, buying two hospitals in Macon, one in Cartersville and one in Snellville for $950 million.

Piedmont Healthcare announced the purchase Monday from HCA Healthcare. The move would give Piedmont 15 acute care hospitals statewide, as it jockeys with other major health systems for size and market power.

If regulators approve, Piedmont would buy 310-bed Eastside Medical Center in Snellville, 310-bed Coliseum Medical Centers and 103-bed Coliseum Northside in Macon, and 119-bed Cartersville Medical Center. The deal also includes two inpatient psychiatric hospitals, one in Macon and one in Snellville.

The companies said they hope to complete the transaction by July 31.

HCA, based in Nashville, Tennessee, said in a statement that “these facilities were not able to fully benefit from a broader HCA Healthcare presence in their areas,” a recognition of continuing hospital mergers that help big systems to bargain for better payment terms with insurers.

Piedmont will also become a partner in a joint venture for 12 urgent and family care clinics.

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