Walgreens parent replaces GE on Dow
General Electric Co., its stock gutted as management struggled with a slump that wiped $120 billion from its value, suffered a crowning ignominy Tuesday as overseers of the Dow Jones industrial average kicked the company out of the stock gauge it has inhabited for more than a century.
The one-time industrial powerhouse will be replaced by Walgreens Boots Alliance Inc., the Deerfield, Ill.-based drugstore chain created in a 2014 merger. The change will take effect before the open of trading June 26. Down 26 percent, GE is the worst performer in the Dow in 2018, as it was last year.
"It was an issue not of if, but when," said Quincy Krosby, the chief market strategist at Prudential Financial Inc. "The GE that was dominant in the Dow in the '70s and '80s is no longer the same GE."
The change means the last original Dow member has finally been removed from the benchmark formed in 1896, with GE joining the likes of Distilling & Cattle Feeding, National Lead and U.S. Rubber. GE briefly left the index, but has been in it continuously since 1907.
-- Bloomberg News
May housing starts up 5% over April's
WASHINGTON -- A surge of construction in the Midwest drove U.S. housing starts up 5 percent in May from the previous month.
The Commerce Department said Tuesday that housing starts rose to a seasonally adjusted annual rate of 1.35 million, the strongest pace since July 2007. All of May's construction gains came from a 62 percent jump in the Midwest, while building slumped in the Northeast, South and West. Home construction can be volatile on a monthly basis, so May's gains may be a blip rather than a trend.
The solid job market has helped to boost demand for new homes. Housing starts have risen 11 percent so far this year, with gains for both single family houses and apartment buildings. Permits to build tumbled 4.6 percent in May, but permits are running 8.9 percent higher year-to-date.
Still, builders are concerned that tariffs announced by President Donald Trump that could affect steel, aluminum and lumber would make construction much more expensive, possibly limiting how many properties are built.
-- The Associated Press
FedEx's 4Q gain grows 10% to $1.13B
MEMPHIS -- Higher rates, steady business fueled by economic growth and tax benefits helped FedEx Corp. boost fourth-quarter profit 10 percent to $1.13 billion.
The quarter that ended May 31 was the last in FedEx's fiscal year. The Memphis company forecast earnings in the coming fiscal year of between $17 and $17.60 per share, roughly in line with analysts' forecast of $17.48 per share.
CEO Fred Smith said Tuesday that he is optimistic the company will increase earnings, cash flow and profit margins. On a conference call with analysts, however, he warned against protectionist trade policies, which he said have been shown to hurt economic growth.
FedEx and some industrial companies have seen their stocks sell off recently as trade tension grows between the U.S. and China. So far, however, a company official said, FedEx has not seen shippers change their activity because of looming tariffs.
Revenue rose 10 percent to $17.31 billion, also topping analysts' forecasts. Nine analysts surveyed by Zacks expected $17.19 billion.
-- The Associated Press
VW board picks interim chief for Audi
Volkswagen AG picked Bram Schot as interim chief at its Audi unit, taking nearly two days to decide after the surprise arrest of longtime leader Rupert Stadler over his role in the diesel-emissions scandal.
The decision elevates an executive so far untainted by the slow-motion scandal that continues to burn almost three years after the company admitted to rigging emissions tests.
Audi accepted a request by Stadler, who remains in custody pending questioning, "to release him from his duties," according to a statement Tuesday.
Volkswagen had stood by Stadler, even as allegations over his role in the scandal started to build within weeks of it becoming public in September 2015. Leading to his arrest was an intercepted phone conversation that led prosecutors to conclude he tried to influence witnesses, a person familiar with the situation said earlier.
-- Bloomberg News
Land deal ties Zinke family, Halliburton
HELENA, Mont. -- Records show U.S. Interior Secretary Ryan Zinke's family is involved in a land deal with the head of an energy-services giant that does business with the Interior Department.
Politico first reported the Zinkes' dealings with Halliburton Chairman David Lesar involving a commercial development in Zinke's hometown of Whitefish, Mont.
A charitable foundation created by Zinke and run by his wife, Lola, is allowing a company co-owned by Lesar and his family to use a portion of its land as a parking lot for the development.
Zinke spokesman Heather Swift didn't have immediate comment. Zinke told Politico that he's no longer involved with the foundation.
-- The Associated Press
Iran rejects OPEC bid for oil-output deal
Iran put itself on a collision course with Saudi Arabia at this week's OPEC meeting, rejecting a potential compromise that would see a small oil-production increase to appease energy consumers.
"I don't believe in this meeting we can reach an agreement," Bijan Namdar Zanganeh, the Iranian oil minister, told reporters upon his arrival in Vienna, suggesting the gathering on Friday may end without a deal for the first time since 2011.
The OPEC battle will reverberate through the oil market, where prices have gyrated in recent days, and affect energy stocks and the currencies of major petroleum exporters from Brazil to Nigeria.
Oil prices have surged nearly 75 percent to almost $80 a barrel since OPEC and allies such as Russia, Kazakhstan and Mexico agreed to cut production by 1.8 million barrels a day in late 2016.
-- Bloomberg News
Business on 06/20/2018