The daily business briefing: August 19, 2022
The Biden administration moves toward shifting COVID shot costs to insurers, Bed Bath & Beyond shares dive after activist investor sells stake, and more
Biden administration prepares to shift COVID treatment costs to insurers
The Biden administration is preparing to stop paying for COVID-19 shots and treatments as cases drop and pandemic funding runs low, The Wall Street Journal reported Thursday. The Biden and Trump administrations always planned to shift control and responsibility for coverage to the health-care industry, said Dawn O'Connell, assistant U.S. health secretary for preparedness and response. "We've known at some point we'd need to move over into the commercial market, and we're approaching that time now." The transition could take months. The Department of Health and Human Services has scheduled an Aug. 30 planning session that will include drugmakers, pharmacies, and state public health officials.
Bed Bath & Beyond shares plummet after activist investor dumps stake
Bed Bath & Beyond shares plunged 45 percent in extended trading Thursday after a securities filing indicated that activist investor Ryan Cohen had completed the sale of his nearly 10 percent stake in the company. The shares fell 20 percent in Thursday's regular trading. Cohen, who co-founded pet-supply company Chewy and is chair of GameStop, purchased more than seven million Bed Bath & Beyond shares and call options earlier this year. The filing indicated that his RC Ventures had dumped its stake Tuesday and Wednesday at $18.68 to $29.22 per share. Cohen bought at about $15.34 per share. Bed Bath & Beyond shares have surged more than 250 percent in the past month as meme investors on Reddit drove up its price.
CEO who set workers' minimum salary at $70,000 steps down
Gravity Payments CEO Dan Price, who made headlines in 2015 for slashing his $1 million salary and setting a $70,000 minimum salary for his workers, has resigned from the credit card processing firm after being accused of trying to kiss a woman against her will. Price, who founded the company in college, said he is stepping down to focus on fighting the allegations, which he denies. The New York Times detailed several additional sexual misconduct allegations on Thursday. "My No. 1 priority is for our employees to work for the best company in the world, but my presence has become a distraction here," he wrote in an email to staff.
Home sales fall as housing markets slips into recession
Existing-homes sales fell nearly 6 percent in July compared to June, and 20 percent compared to the same month a year ago, the National Association of Realtors reported Thursday. Sales fell to a seasonally adjusted annualized rate of 4.81 million units, the slowest pace since November 2015, except for the brief dive when the coronavirus pandemic hit. "In terms of economic impact we are surely in a housing recession because builders are not building," said Lawrence Yun, chief economist for the Realtors. "However, are homeowners in a recession? Absolutely not. Homeowners are still very comfortable financially." The July sales figures reflect closings on contracts likely signed in May and June, when rates on 30-year fixed-rate mortgages spiked above 6 percent.
Stock futures fall after Fed official's hawkish comments
U.S. stock futures fell early Friday as expectations of more Federal Reserve rate hikes pushed up Treasury yields, dragging down technology stocks sensitive to higher borrowing costs. Futures tied to the Dow Jones Industrial Average were down 0.6 percent at 6:30 a.m. ET. S&P 500 and Nasdaq futures were down 0.8 percent and 0.9 percent, respectively. The Dow rose 0.1 percent on Thursday. The S&P 500 and the tech-heavy Nasdaq gained 0.2 percent. No major economic data is due Friday. Analysts said investors were likely to continue digesting Thursday's hawkish remarks from St. Louis Fed President James Bullard, who told The Wall Street Journal he would "lean toward" a third straight 75-basis-point interest rate hike at the central bank's next meeting in September.