The daily business briefing: August 18, 2017
Washington turmoil and Fed concerns weigh on stocks, Mylan agrees to $465 million settlement over EpiPen allegations, and more
Stocks lose ground as Washington turmoil and slow-inflation concerns grow
U.S. stocks had their second worst day of the year on Thursday, with the Dow Jones Industrial Average falling 274 points, or 1.2 percent, and the S&P 500 and Nasdaq indexes losing nearly 2 percent. The tech industry's losses were led by Cisco Systems, which dropped by 4 percent after it said sales would fall in the current quarter. World stocks dropped for a second day on Friday. Investors were rattled as growing chaos surrounding the Trump White House dimmed the prospects of Trump's promised tax cuts. The Barcelona attack also reduced risk appetites, as did Federal Reserve minutes showing growing concern about slowing inflation, which some Fed leaders suggested might justify holding off on the central bank's plan to raise interest rates.
Mylan agrees to pay $465 million to settle EpiPen overbilling allegations
Mylan agreed Thursday to finalize a deal to pay $465 million to settle allegations that it overbilled Medicaid for its EpiPen emergency allergic reaction injectors. It was the drugmaker's second settlement with the Justice Department since 2009 over allegations that it overcharged for its medicines. A House panel in September brought in Mylan CEO Heather Bresch to testify about her skyrocketing salary and the soaring price for EpiPens, which rose from $94 per pair in 2007 to $608 last year. Bresch noted that the company had started offering a $300 generic version to ensure that everyone who needed the injectors could buy them.
3 charities move fundraisers from Mar-a-Lago
Three major charities canceled fundraisers at President Trump's Mar-a-Lago Club in Palm Beach on Thursday, in fallout against his business empire over his response to deadly violence at last weekend's white nationalist rally in Charlottesville. The American Cancer Society said it was moving an upcoming gala, citing its "values and commitment to diversity." The Cleveland Clinic, another longtime Mar-a-Lago customer, moved its winter fundraiser days after saying it would continue using the club. The American Friends of Magen David Adom, which raises money for Israel's Red Cross equivalent, also said it would move its 2018 gala. The head of the Palm Beach Chamber of Commerce, which counts Mar-a-Lago as a member, called the business "morally reprehensible" and predicted more charities would drop it.
Gap shares jump on better-than-expected sales
Gap shares shot up by nearly 6 percent in after-hours trading on Thursday after the clothing company reported quarterly results that beat analysts' expectations. Gap's same-store sales increased by 1 percent, rising for the third straight quarter, and Old Navy's same-store sales increased by 5 percent, beating forecasts of a 3.1 percent gain and helping the company raise its full-year profit forecast. The company's bottom line also got a lift from a reduction in discounts and better inventory management. Gap joined other apparel retailers, including Ralph Lauren and Urban Outfitters, that have been doing well as department stores struggle.
Fox CEO James Murdoch donates $1 million to Anti-Defamation League
21st Century Fox CEO James Murdoch wrote in a memo Thursday that President Trump's reaction to the violence at a white supremacist rally in Charlottesville last weekend should "concern all of us as Americans and free people," and said he and his wife Kathryn will donate $1 million to the Anti-Defamation League. Murdoch, whose father is media mogul Rupert Murdoch, said he was so distressed by the "acts of brutal terrorism and violence perpetrated by a racist mob" that he felt the need to comment. "I can't even believe I have to write this," he said. "Standing up to Nazis is essential; there are no good Nazis. Or Klansmen, or terrorists. Democrats, Republicans, and others must all agree on this, and it compromises nothing for them to do so."