Tag Archives: HECA

U.S. court rejects J&J bankruptcy strategy for thousands of talc lawsuits

Jan 30 (Reuters) – A U.S. appeals court on Monday shot down Johnson & Johnson’s (JNJ.N) attempt to offload tens of thousands of lawsuits over its talc products into bankruptcy court. The ruling marked the first major repudiation of an emerging legal strategy with the potential to upend U.S. corporate liability law.

J&J is among four major companies that have filed so-called Texas two-step bankruptcies to avoid potentially massive lawsuit exposure. The tactic involves creating a subsidiary to absorb the liabilities and to immediately file for Chapter 11.

The court ruled the healthcare conglomerate improperly placed its subsidiary into bankruptcy even though it faced no financial distress. J&J’s two-step sought to halt more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer. The appeals court ruling revives those lawsuits.

Reuters last year detailed the secret planning of Texas two-steps by Johnson & Johnson and other major firms in a series of reports exploring corporate attempts to evade lawsuits through bankruptcies.

Monday’s decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia dismissed the bankruptcy filed by the J&J subsidiary in 2021. Before the filing, J&J had faced costs of $3.5 billion in verdicts and settlements.

J&J shares closed down 3.7% – the biggest one-day percentage decline in two years. The company said in a statement that it would challenge the ruling and that its talc products are safe.

Plaintiffs attorneys and some legal experts have argued the two-step could set a dangerous precedent, providing a blueprint for any corporation to easily avoid undesirable litigation. The appeals court decision could force companies considering the strategy to more carefully consider its risks, two legal experts said.

“It is a push back on the notion that any company anywhere can use the same tactic to get rid of their mass tort liability,” said Lindsey Simon, a professor at University of Georgia School of Law.

Bankruptcy filings typically suspend litigation in trial courts, forcing plaintiffs into often time-consuming settlement negotiations while leaving them unable to pursue their cases in the courts where they originally sued.

The 3rd Circuit ruling does not directly impact three other Texas two-step bankruptcies, filed by subsidiaries of Koch Industries-owned Georgia Pacific, global construction giant Saint-Gobain(SGOB.PA), and Trane Technologies (2IS.F). Those cases fall under the jurisdiction of the 4th Circuit appeals court. 3M (MMM.N) attempted a similar maneuver, which is currently pending in the 7th Circuit.

Those companies did not comment on the 3rd Circuit ruling or did not immediately respond to inquiries. All have previously defended the bankruptcies as the best way to fairly compensate claimants. Plaintiffs’ attorneys have countered that the Texas two-step is an improper manipulation of the bankruptcy system. The strategy uses a Texas law to split an existing company in two, creating the new subsidiary meant to shoulder the lawsuits.

New Jersey-based Johnson & Johnson, valued at more than $400 billion, said its subsidiary’s bankruptcy was initiated in good faith. J&J initially pledged $2 billion to the subsidiary to resolve talc claims and entered into an agreement to fund an eventual settlement approved by a bankruptcy judge.

“Resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders,” J&J said.

A three-judge panel on the appeals court rejected J&J’s argument, finding the company’s subsidiary, LTL Management, was created solely to file for Chapter 11 protection but had no legitimate need for it. Only a debtor in financial distress can seek bankruptcy, the panel ruled. The judges pointed out that J&J assured that it would give LTL plenty of money to pay talc claimants.

“Good intentions – such as to protect the J&J brand or comprehensively resolve litigation – do not suffice alone,” the judges said in a 56-page opinion. “LTL, at the time of its filing, was highly solvent with access to cash to meet comfortably its liabilities.”

‘PROJECT PLATO’

The decision could force J&J to fight talc lawsuits for years in trial courts. The company has a mixed record fighting the suits so far. While the firm was hit with major judgments in some cases before filing bankruptcy, more than 1,500 talc lawsuits have been dismissed and the majority of cases that have gone to trial have resulted in verdicts favoring J&J, judgments for the company on appeal, or mistrials, according to its subsidiary’s court filings.

A December 2018 Reuters investigation revealed that J&J officials knew for decades about tests showing that the company’s talc sometimes contained traces of carcinogenic asbestos but kept that information from regulators and the public. J&J has said its talc does not contain asbestos and does not cause cancer.

Facing unrelenting litigation, J&J enlisted law firm Jones Day, which had helped other companies execute Texas two-step bankruptcies to address asbestos-related lawsuits.

J&J’s effort, as Reuters reported last year, was internally dubbed “Project Plato,” and employees working on it signed confidentiality agreements. A company lawyer warned them to tell no one, including their spouses, about the plan.

Jones Day did not immediately respond to a request for comment.

The Texas two-step has garnered criticism from Democratic lawmakers in Washington, and inspired proposed legislation that would severely restrict the practice.

Senator Sheldon Whitehouse, a Democrat from Rhode Island, cheered Monday’s appeals court decision. Whitehouse chaired the first congressional hearing scrutinizing two-step bankruptcies in February of last year.

“Bankruptcy is meant to give honest debtors in unfortunate circumstances a fresh start,” he said, not to allow “large, highly profitable corporations” to avoid accountability for wrongdoing with a legal “shell game.”

Reporting by Tom Hals in Wilmington, Delaware; Mike Spector in New York; and Dan Levine in San Francisco; additional reporting by Dietrich Knauth and Chuck Mikolajczak in New York; editing by Bill Berkrot and Brian Thevenot

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Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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U.S. CDC still looking at potential stroke risk from Pfizer bivalent COVID shot

Jan 26 (Reuters) – New data from one U.S. Centers for Disease Control and Prevention (CDC) database shows a possible stroke risk link for older adults who received an updated Pfizer (PFE.N)/BioNTech (22UAy.DE) COVID-19 booster shot, but the signal is weaker than what the agency had flagged earlier in January, health officials said on Thursday.

U.S. Food and Drug Administration officials said they had not detected a link between the shots and strokes in two other safety monitoring databases.

The new data was presented at a meeting of outside experts that advise the FDA on vaccine policy.

Earlier this month, U.S. health officials said they had detected the possible link to ischemic strokes in people over age 65 who received the newer booster shots in its Vaccine Safety Datalink (VSD) database. They said at the time it was very unlikely to represent a true clinical risk.

Dr. Nicola Klein of healthcare company Kaiser Permanente, which maintains VSD data for the CDC, said the rate of strokes observed in the database had slowed in recent weeks, but the signal was still statistically significant, meaning likely not by chance.

Most of the confirmed cases had also received a flu vaccine at the same time, which might be a factor, she said.

FDA scientist Richard Forshee said the agency plans to study whether there is any increased risk of stroke from receiving the two shots at the same time.

Both agencies still recommend older adults receive the booster shots, now tailored to target Omicron variants as well as the original coronavirus.

Dr. Walid Gellad, professor of medicine at University of Pittsburgh, said the issue required further investigation.

“Sometimes signals are not clear,” Gellad said in an email. “It makes sense to look into it more, and it doesn’t make sense to change practice given the known benefits (of getting the booster) in this age group.”

(This story has been corrected to fix the name to Nicola from Nicole in paragraph 5)

Reporting by Michael Erman; Editing by Bill Berkrot

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Wall Street totters after mixed earnings, trade halt glitch

  • SEC investigating NYSE opening bell glitch
  • 3M slides on downbeat Q1 forecast
  • J&J falls on sales warning; GE down on weak profit view
  • Microsoft to report quarterly earnings after market close
  • Indexes: Dow up 0.18%, S&P 500 off 0.13%, Nasdaq down 0.25%

NEW YORK, Jan 24 (Reuters) – Wall Street was mixed on Tuesday as a raft of mixed earnings took some wind out of the sails of the recent rally.

The session got off to an rocky start, as a spate of NYSE-listed stocks were halted at the opening bell due to an apparent technical glitch, which caused initial price confusion and prompted an investigation by the U.S. Securities and Exchange Commission (SEC).

More than 80 stocks were affected by the glitch, which caused wide swings in opening prices in stocks, including Walmart Inc (WMT.N) and Nike Inc (NKE.N).

“It looks like NYSE got on it real early,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “Now they’re trying to determine what opening trade prices were.”

“Everyone involved in trade settlements is going to have a long day today.”

All three indexes sputtered near the starting line, with little apparent momentum in either direction.

Fourth quarter earnings season is in full swing, with 72 of the companies in the S&P 500 having reported. Of those, 65% have beaten consensus, just a hair below the 66% long-term average, according to Refinitiv.

On aggregate, analysts now expect S&P 500 earnings 2.9% below the year-ago quarter, down from the 1.6% year-on-year decline seen on Jan. 1, per Refinitiv.

“Earnings don’t make a bull or bear case for the market yet, but there’s an anxiousness among investors to be long when the Fed is done raising rates,” Sroka added. “We’re hitting a ramp in the earnings cycle, and by next week we’ll have a lot more information on the direction of the market.”

Economic data showed shallower-than-expected contraction in the manufacturing and services sector in the first weeks of the year, suggesting that the Federal Reserve’s restrictive interest rates are dampening demand.

The Dow Jones Industrial Average (.DJI) rose 60.69 points, or 0.18%, to 33,690.25, the S&P 500 (.SPX) lost 5.36 points, or 0.13%, to 4,014.45 and the Nasdaq Composite (.IXIC) dropped 28.39 points, or 0.25%, to 11,336.03.

Among the 11 major sectors of the S&P 500, industrials was down the most.

Intercontinental Exchange Inc (ICE.N), owner of the New York Stock Exchange, dropped 2.5% as SEC investigators searched for the cause of Tuesday’s opening bell confusion.

Alphabet Inc (GOOGL.O) shares dipped 1.8% after the Justice Department filed a lawsuit against Google for abusing its dominance of the digital advertising business.

Johnson & Johnson’s (JNJ.N) profit guidance came in above analyst expectations. Even so, its stock softened 0.3%.

Industrial conglomerates 3M Co (MMM.N) and General Electric Co (GE.N) both provided underwhelming forward guidance due to inflationary headwinds.

3M’s shares were off 5.1% while General Electric’s were modestly lower.

Aerospace/defense companies Lockheed Martin Corp (LMT.N) and Raytheon Technologies Corp (RTX.N) were a study in contrasts, with the former issuing a disappointing profit forecast and the latter beating estimates on solid travel demand.

Lockheed Martin and Raytheon were up 1.5% and 2.5%, respectively.

Railroad operator Union Pacific Corp missed profit estimates as labor shortages and severe weather delayed shipments. Its shares shed 2.7%.

Microsoft Corp (MSFT.O) is due to report after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored decliners.

The S&P 500 posted 27 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 69 new highs and 21 new lows.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru; Editing by Aurora Ellis

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WHO urges ‘immediate action’ after cough syrup deaths

LONDON, Jan 23 (Reuters) – The World Health Organization has called for “immediate and concerted action” to protect children from contaminated medicines after a spate of child deaths linked to cough syrups last year.

In 2022, more than 300 children – mainly aged under 5 – in Gambia, Indonesia and Uzbekistan died of acute kidney injury, in deaths that were associated with contaminated medicines, the WHO said in a statement on Monday.

The medicines, over-the-counter cough syrups, had high levels of diethylene glycol and ethylene glycol.

“These contaminants are toxic chemicals used as industrial solvents and antifreeze agents that can be fatal even taken in small amounts, and should never be found in medicines,” the WHO said.

As well as the countries above, the WHO told Reuters on Monday that the Philippines, Timor Leste, Senegal and Cambodia may potentially be impacted because they may have the medicines on sale. It called for action across its 194 member states to prevent more deaths.

“Since these are not isolated incidents, WHO calls on various key stakeholders engaged in the medical supply chain to take immediate and coordinated action,” WHO said.

The WHO has already sent specific product alerts in October and earlier this month, asking for the medicines to be removed from the shelves, for cough syrups made by India’s Maiden Pharmaceuticals and Marion Biotech, which are linked with deaths in Gambia and Uzbekistan respectively.

It also issued a warning last year for cough syrups made by four Indonesian manufacturers, PT Yarindo Farmatama, PT Universal Pharmaceutical, PT Konimex and PT AFI Pharma, that were sold domestically.

The companies involved have either denied that their products have been contaminated or declined to comment while investigations are ongoing.

The WHO reiterated its call for the products flagged above to be removed from circulation, and called more widely for countries to ensure that any medicines for sale are approved by competent authorities. It also asked governments and regulators to assign resources to inspect manufacturers, increase market surveillance and take action where required.

It called on manufacturers to only buy raw ingredients from qualified suppliers, test their products more thoroughly and keep records of the process. Suppliers and distributors should check for signs of falsification and only distribute or sell medicines authorised for use, the WHO added.

Reporting by Jennifer Rigby; Editing by Mark Heinrich and Christina Fincher

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New suppliers race to plug in to electric car market

WOKING, England, Jan 23 (Reuters) – The global auto industry has committed $1.2 trillion to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to grab contracts providing everything from battery packs to motors and inverters.

Startups specialising in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts. Carmakers design platforms to last a decade, so high-volume models can generate large revenues for years.

The next generation of EVs is due to hit around 2025 and many carmakers have sought help plugging gaps in their expertise, providing a window of opportunity for new suppliers.

“We’ve gone back to the days of Henry Ford where everyone is asking ‘how do you make these things work properly?’,” says Nick Fry, CEO of F1 engineering and technology firm McLaren Applied.

“That’s a huge opportunity for companies like us.”

Bought from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for EVs. An inverter helps control the flow of electricity to and from the battery pack.

The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lb) and can extend an EV’s range by over 7%. Fry says McLaren Applied is working with around 20 carmakers and suppliers, and the inverter will appear in high-volume luxury EV models starting January 2025.

Mass-market carmakers often prefer to develop EV components in-house and own the technology themselves. After years of pandemic-related parts shortages, they are wary of over-reliance on suppliers.

“We just can’t afford to be reliant on third parties making those investments for us,” said Tim Slatter, head of Ford (F.N) in Britain.

Traditional suppliers, such as German heavyweights Bosch and Continental (CONG.DE), are also investing heavily in EVs and other technologies to stay ahead in a fast-changing industry.

But smaller companies say there are still opportunities, particularly with low-volume manufacturers that cannot afford huge EV investments, or luxury and high-performance carmakers seeking an edge.

Croatia’s Rimac, an electric hypercar maker part-owned by Germany’s Porsche AG (P911_p.DE) that also supplies battery systems and powertrain components to other automakers, says an undisclosed German carmaker will use a Rimac battery system in a high-performance model – with annual production of around 40,000 units – starting this year, with more signed up.

“We need to be 20%, 30% better than what they can do and then they work with us,” CEO Mate Rimac says. “If they can make a 100-kilowatt hour battery pack, we must make a 130-kilowatt pack in the same dimensions for the same cost.”

NO TIME TO LOSE

Some suppliers like Cambridge, Massachusetts-based Actnano have had long relationships with EV pioneer Tesla (TSLA.O). Actnano has developed a coating that protects EV parts from condensation and its business has spread to advanced driver-assistance systems (ADAS), as well as other carmakers including Volvo (VOLCARb.ST), Ford, BMW (BMWG.DE) and Porsche.

California-based startup CelLink has developed an entirely automated, flat and easy-to-install “flex harness”, instead of a wire harness to group and guide cables in a vehicle. CEO Kevin Coakley would not identify customers but said CelLink’s harnesses had been installed in around a million EVs. Only Tesla has that scale.

Coakley said CelLink was working with U.S. and European carmakers, and with a European battery maker on battery wiring.

Others are focused on low-volume manufacturers, like UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make themselves.

“Currently it costs just too much to electrify, which is why you see some manufacturers delaying their electrification launch,” CEO James Eaton said.

Since 1971, Swindon Powertrain has developed powerful motorsports engines. But it has now also developed battery packs, electric powertrains, e-axles and is working with around 20 customers, including carmakers and an electric vertical take-off and landing (eVTOL) aircraft maker.

“I realized if we don’t embrace this, we’re going to end up working for museums,” said managing director Raphael Caille.

But time may be running out.

Mate Rimac says major carmakers scrambled in the last three years to roll out EVs and now have strategies largely in place.

“For those who haven’t signed projects, I’m not sure how long the window of opportunity will remain open,” he said.

($1 = 0.8226 pounds)

Reporting by Nick Carey
Editing by Mark Potter

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Chinese pray for health in Lunar New Year as COVID death toll rises

BEIJING, Jan 22 (Reuters) – China rang in the Lunar New Year on Sunday with its people praying for health after three years of stress and financial hardship under the pandemic, as officials reported almost 13,000 new deaths caused by the virus between January 13 and 19.

Queues stretched for about one kilometre (a half-mile) outside the iconic Lama temple in Beijing, which had been repeatedly shut before COVID-19 restrictions ended in early December, with thousands of people waiting for their turn to pray for their loved ones.

One Beijing resident said she wished the year of the rabbit will bring “health to everyone”.

“I think this wave of the pandemic is gone,” said the 57-year-old, who only gave her last name, Fang. “I didn’t get the virus, but my husband and everyone in my family did. I still think it’s important to protect ourselves.”

Earlier, officials reported almost 13,000 deaths related to COVID in hospitals between January 13 and 19, adding to the nearly 60,000 in the month or so before that. Chinese health experts say the wave of infections across the country has already peaked.

The death toll update, from China’s Center for Disease Control and Prevention, comes amid doubts over Beijing’s data transparency and remains extremely low by global standards.

Hospitals and funeral homes were overwhelmed after China abandoned the world’s strictest regime of COVID controls and mass testing on Dec. 7 in an abrupt policy U-turn, which followed historic protests against the curbs.

The death count reported by Chinese authorities excludes those who died at home, and some doctors have said they are discouraged from putting COVID on death certificates.

China on Jan. 14 reported nearly 60,000 COVID-related deaths in hospitals between Dec. 8 and Jan. 12, a huge increase from the 5,000-plus deaths reported previously over the entire pandemic period.

Spending by funeral homes on items from body bags to cremation ovens has risen in many provinces, documents show, one of several indications of COVID’s deadly impact in China.

Some health experts expect that more than one million people will die from the disease in China this year, with British-based health data firm Airfinity forecasting COVID fatalities could hit 36,000 a day this week.

As millions of migrant workers return home for Lunar New Year celebrations, health experts are particularly concerned about people living in China’s vast countryside, where medical facilities are poor compared with those in the affluent coastal areas.

About 110 million railway passenger trips are estimated to have been made during Jan. 7-21, the first 15 days of the 40-day Lunar New Year travel rush, up 28% year-on-year, People’s Daily, the Communist Party’s official newspaper, reported.

A total of 26.23 million trips were made on the Lunar New Year eve via railway, highway, ships and airplanes, half the pre-pandemic levels, but up 50.8% from last year, state-run CCTV reported.

The mass movement of people during the holiday period may spread the pandemic, boosting infections in some areas, but a second COVID wave is unlikely in the near term, Wu Zunyou, chief epidemiologist at the China Center for Disease Control and Prevention, said on Saturday on the Weibo social media platform.

The possibility of a big COVID rebound in China over the next two or three months is remote as 80% of people have been infected, Wu said.

After China re-opened its borders on Jan. 8, some Chinese also booked trips abroad. Asia’s tourist hotspots have been bracing for the return of Chinese tourists, who spent $255 billion a year globally before the pandemic.

“Because of the pandemic, we hadn’t been out of China for three years,” said tourist and business owner Kiki Hu, 28, in Krabi on Thailand’s southwest coast. “Now that we can leave and come here for holiday, I feel so happy and emotional”.

Additional reporting by Beijing newsroom; Writing by Marius Zaharia
Editing by Shri Navaratnam

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Wall St stumbles after weak data, hawkish Fed comments

  • Fed’s Bullard, Mester back rate increases
  • U.S. retail sales drop in December
  • Indexes down: Dow 1.28%, S&P 1.07%, Nasdaq 0.78%

Jan 18 (Reuters) – Wall Street’s main indexes fell on Wednesday after weak economic data and hawkish comments from Federal Reserve officials sparked worries that the central bank may not pause interest rate hikes any time soon.

Before the market opened, U.S. economic data showed retail sales and producer prices declined more than expected in December. Also production at U.S. factories fell more than expected in December and output in the prior month was weaker than previously thought.

With Wall Street’s major averages showing gains so far for 2023, Sam Stovall, chief investment strategist at CFRA research, said some investors saw the week data as an opportunity to take profits while others worried about the prospects for a recession.

“The market was overbought. Today’s economic data served as a trigger to initiate a profit taking spell and the groups with most profits to take have been the ones that have done best last year,” said Stovall.

By 2:14PM ET, the Dow Jones Industrial Average (.DJI) fell 434.27 points, or 1.28%, to 33,476.58, the S&P 500 (.SPX) lost 42.57 points, or 1.07%, to 3,948.4 and the Nasdaq Composite (.IXIC) dropped 87.02 points, or 0.78%, to 11,008.10.

The weakest sectors on the day are the defensive consumer staples (.SPLRCD), down more than 2%, and utilities (.SPLRCU), which was last down 1.8%.

The benchmark S&P and the blue-chip Dow were both on track for their second straight day of losses, while the Nasdaq, if it ends lower, would snap a seven-day winning streak.

U.S. stocks had started 2023 on a strong footing, with the S&P having closed up almost 4% year-to-date on Tuesday, on hopes that a moderation in inflationary pressures could give the Fed cover to dial down the size of its interest rate hikes.

Roughly halfway through January, the S&P was up 2.7% for the month so far while the Nasdaq was up more than 5% and the Dow, the best performer of the three for 2022, was up 0.9%.

Earlier, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester stressed on the need to raise rates beyond 5% to bring inflation to heel.

The Fed commentary also highlighted the disparity between the U.S. central bank’s estimate of its terminal rate and market expectations, which were of the rate peaking at 4.88% by June. Traders are now betting on a 25-basis point rate hike in February.

“This market is very hopeful that we’re going to get a soft landing and every time you have hawkish comments from the Fed, it feels you’re not going to get that,” Dennis Dick, trader at Triple D Trading.

Investors are also focused on the fourth-quarter earnings season as a window into how corporate America is doing against the backdrop of higher interest rates.

Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.6% for the quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.

IBM Corp (IBM.N) was down 2.6% after Morgan Stanley downgraded the company’s shares to “equal weight” from “overweight”.

Early gainers Microsoft Corp (MSFT.O) and Tesla Inc (TSLA.O) erased gains by late afternoon trading with Microsoft down 1.2% and Tesla off 2.7%.

Moderna Inc (MRNA.O) rose 3.6% after reporting data which demonstrated the effectiveness of its respiratory syncytial virus (RSV) vaccine.

PNC Financial Services Group Inc (PNC.N) was down 5.4% after the company missed estimates for fourth-quarter profit.

Declining issues outnumbered advancing ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored decliners.

The S&P 500 posted 9 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 71 new highs and 14 new lows.

Reporting by Sinéad Carew in New York, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Shubham Batra; Editing by Shounak Dasgupta and David Gregorio

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Millions of Chinese workers on the move ahead of Friday travel peak

  • Half a million people now crossing China’s borders per day
  • China now open to world – state leader tells World Economic Forum
  • Medical workers rush to vaccinate elderly

BEIJING, Jan 18 (Reuters) – Millions of urban workers were on the move across China on Wednesday ahead of the expected Friday peak of its Lunar New Year mass migration, as China’s leaders looked to get its COVID-battered economy moving.

Unfettered when officials last month ended three years of some of the world’s tightest COVID-19 restrictions, workers streamed into railway stations and airports to head to smaller towns and rural homes, sparking fears of a broadening virus outbreak.

Economists are scrutinising the holiday season, known as the Spring Festival, for glimmers of rebounding consumption across the world’s second largest economy after new GDP data on Tuesday confirmed a sharp economic slowdown in China.

While some analysts expect that recovery to be slow, China’s Vice-Premier Liu He declared to the World Economic Forum in Switzerland on Tuesday that China was open to the world after three years of pandemic isolation.

National Immigration Administration officials said that, on average, half a million people had been moved in or out of China per day since its borders opened on Jan. 8, state media reported.

But as workers flood out of megacities, such as Shanghai, where officials say the virus has peaked, many are heading to towns and villages where unvaccinated elderly have yet to be exposed to COVID and health care systems are less equipped.

LARGE ROLLING SUITCASES, BOXES OF GIFTS

As the COVID surge intensified, some were putting the virus out of their mind as they headed for the departure gates.

Travellers bustled through railway stations and subways in Beijing and Shanghai, many ferrying large wheeled suitcases and boxes stuffed with food and gifts.

“I used to be a little worried (about the COVID-19 epidemic),” said migrant worker Jiang Zhiguang, waiting among the crowds at Shanghai’s Hongqiao Railway Station.

“Now it doesn’t matter anymore. Now it’s okay if you get infected. You’ll just be sick for two days only,” Jiang, aged 30, told Reuters.

The infection rate in the southern city of Guangzhou, capital of China’s most populous province, has now passed 85%, local health officials announced on Wednesday.

In more isolated areas, state medical workers are this week going door-to-door in some outlying villages to vaccinate the elderly, with the official Xinhua news agency describing the effort on Tuesday as the “last mile”.

Clinics in rural villages and towns are now being fitted with oxygenators, and medical vehicles have also been deployed to isolated areas.

While authorities confirmed on Saturday a huge increase in deaths – announcing that nearly 60,000 people with COVID had died in hospitals between Dec. 8 and Jan. 12 – state media reported that heath officials were not yet ready to give the World Health Organization (WHO) the extra data it is now seeking.

Specifically, the U.N. agency wants information on so-called excess mortality – the number of all deaths beyond the norm during a crisis, the WHO said in a statement to Reuters on Tuesday.

The Global Times, a nationalistic tabloid published by the official People’s Daily, quoted Chinese experts saying the China Center for Disease Control and Prevention was already monitoring such data, but it would take time before it could be released.

Doctors in both public and private hospitals were being actively discouraged from attributing deaths to COVID, Reuters reported on Tuesday.

Reporting By Bernard Orr in Beijing and Beijing and Shanghai newsrooms; Additional reporting By Xihao Jiang in Shanghai; Writing By Greg Torode; Editing by Michael Perry

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In China, doctors say they are discouraged from citing COVID on death certificates

BEIJING, Jan 17 (Reuters) – During a busy shift at the height of Beijing’s COVID wave, a physician at a private hospital saw a printed notice in the emergency department: doctors should “try not to” write COVID-induced respiratory failure on death certificates.

Instead, if the deceased had an underlying disease, that should be named as the main cause of death, according to the notice, a copy of which was seen by Reuters.

If doctors believe that the death was caused solely by COVID-19 pneumonia, they must report to their superiors, who will arrange for two levels of “expert consultations” before a COVID death is confirmed, it said.

Six doctors at public hospitals across China told Reuters they had either received similar oral instructions discouraging them from attributing deaths to COVID or were aware that their hospitals had such policies.

Some relatives of people who have died with COVID say the disease did not appear on their death certificates, and some patients have reported not being tested for coronavirus despite arriving with respiratory symptoms.

“We have stopped classifying COVID deaths since the reopening in December,” said a doctor at a large public hospital in Shanghai. “It is pointless to do that because almost everyone is positive.”

Such directives have led to criticism by global health experts and the World Health Organization that China has drastically underreported COVID deaths as the coronavirus runs rampant in the country, which abandoned its strict “zero-COVID” regime in December.

On Saturday, officials said 60,000 people with COVID-19 had died in hospitals since China’s policy U-turn, a roughly ten-fold increase from previously reported figures, but still short of expectations of international experts, who have said China could see more than a million COVID-related deaths this year.

China’s Center for Disease Control (CDC) and National Health Commission (NHC) did not immediately respond to Reuters’ requests for comment.

The doctors in this article declined to be named because they are not permitted to speak to the media.

Several said they were told such guidance came from “the government”, though none knew from which department, a common situation in China when politically sensitive instructions are disseminated.

Three other doctors at public hospitals in different cities said they were unaware of any such guidance.

One of them, a senior emergency room doctor in Shandong province, said doctors were issuing death certificates based on the actual cause of death, but “how to categorise” those deaths is up to the hospitals or local officials.

‘LOOKS LOW’

Since the start of the pandemic, which first emerged three years ago in its central city of Wuhan, China has drawn heavy criticism for not being transparent over the virus – an accusation it has repeatedly rejected.

Before Saturday, China was reporting five or fewer COVID deaths per day. Of the nearly 60,000 COVID-related fatalities since Dec. 8 it announced on Saturday since, fewer than 10% were caused by respiratory failure because of COVID. The rest resulted from a combination of COVID and other diseases, Jiao Yahui, head of the Bureau of Medical Administration under the National Health Commission (NHC), said on Saturday.

Michael Baker, a public health scholar at the University of Otago in New Zealand, said the updated death toll still “looks low” compared with the high level of infection in China.

“Most countries are finding that most deaths from COVID are caused directly by the infection rather than by a combination of COVID and other diseases,” he said. “By contrast, reported deaths in China are mainly (90%) a combination of COVID and other infections, which also suggests that deaths directly from COVID infection are under-reported in China.”

Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations in New York, said it was unclear whether the new data accurately reflected actual fatalities, in part because the numbers include only deaths in hospitals.

The World Health Organization (WHO) on Monday recommended that China monitor excess mortality to gain a fuller picture of the impact of the surge in COVID.

Excess mortality is when the number of deaths for a given period is higher than it should be relative to historical averages.

TESTING ENDS

Seven people told Reuters that COVID was not mentioned on the death certificates of their recently deceased relatives, although the relatives had either tested positive for the virus or displayed COVID-like symptoms.

Social media has been full of similar reports.

When a Beijing resident surnamed Yao brought his COVID-positive 87-year-old aunt to a large public hospital late last month with breathing problems, doctors did not ask whether she had the virus and did not mention COVID, Yao said.

“The hospital was full of patients, all in their 80s or 90s, and doctors had no time to talk to anyone,” Yao said, adding that everyone seemed to have similar COVID-like symptoms.

Patients, including his aunt, were rigorously tested, although not for COVID, before being told they had pneumonia. But the hospital told him it had run out of medicine, so they could only go home.

Ten days later she recovered.

Medical staff at public hospitals in several cities in China said PCR testing, which under “zero COVID” was a near daily requirement for large parts of the population, has now been all but abandoned.

Taking the focus off testing may be the best way to maximise resources when hospitals have been overwhelmed, two experts told Reuters.

Ben Cowling, an epidemiologist at Hong Kong University, said almost all patients with acute respiratory problems would have COVID: “Since antivirals are in very short supply, I don’t think laboratory testing will make much difference to case management.”

‘BE CAUTIOUS’

A senior doctor in the eastern city of Ningbo said physicians there were told to be “cautious” about saying someone had died of COVID, but if they did wish to do so they would need to get approval.

No other disease required the same level of “caution” for entry on a death certificate, he said.

The doctor at a large public hospital in Shanghai said that weekly death rates since the recent COVID wave were three or four times higher than normal for this time of year. Most had more than one illness, but COVID worsened their conditions, she said.

“On the death certificate we fill in one main cause of death, and two to three sub-causes of death, so we basically leave out COVID,” she said.

“There’s no other way but for us to follow the orders given by the hospital, which come from the government. I am too unimportant to make any decision,” she said.

Reporting by Martin Quin Pollard in Beijing and Engen Tham in Shanghai. Additional reporting by Brenda Goh in Shanghai and the Hong Kong, Shanghai and Beijing Newsrooms; Editing by Tony Munroe and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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S&P 500 ends at highest in month, indexes gain for week as earnings kick off

  • JPMorgan, Wells Fargo shares jump
  • U.S. consumers’ inflation expectations ease – survey
  • Tesla falls after price cuts on electric vehicles
  • Indexes: Dow up 0.3%, S&P 500 up 0.4%, Nasdaq up 0.7%

NEW YORK, Jan 13 (Reuters) – The S&P 500 and Nasdaq finished at their highest levels in a month on Friday, with shares of JPMorgan Chase and other banks rising following their quarterly results, which kicked off the earnings season.

All three major indexes also registered strong gains for the week, leaving the S&P 500 up 4.2% so far in 2023, and the Cboe Volatility index (.VIX) – Wall Street’s fear gauge – closed at a one-year low.

On Friday, financials (.SPSY) were among sectors that gave the S&P 500 the most support.

JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) beat quarterly earnings estimates, while Wells Fargo & Co (WFC.N) and Citigroup Inc (C.N) fell short of quarterly profit estimates.

But shares of all four firms rose, along with the S&P 500 banks index (.SPXBK), which ended up 1.6%. JPMorgan shares climbed 2.5%.

Still, Wall Street’s biggest banks stockpiled more rainy-day funds to prepare for a possible recession and reported weak investment banking results while showing caution about forecasting income growth. They said higher rates helped to boost profits.

Strategists said investors will be watching for further guidance from company executives in the coming weeks.

“This has shifted the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“Even though the earnings were basically OK, people are just kind of stepping back, and you’re going to see a wait-and-see attitude with stocks” as investors hear more from company executives.

Year-over-year earnings from S&P 500 companies are expected to have declined 2.2% for the quarter, according to Refinitiv data.

Also giving some support to the market Friday, the University of Michigan’s survey showed an improvement in U.S. consumer sentiment, with the one-year inflation outlook falling in January to the lowest level since the spring of 2021.

The Dow Jones Industrial Average (.DJI) rose 112.64 points, or 0.33%, to 34,302.61, the S&P 500 (.SPX) gained 15.92 points, or 0.40%, to 3,999.09 and the Nasdaq Composite (.IXIC) added 78.05 points, or 0.71%, to 11,079.16.

The S&P 500 closed at its highest level since Dec. 13, while the Nasdaq closed at its highest level since Dec. 14.

For the week, the S&P 500 gained 2.7% and the Dow rose 2%. The Nasdaq increased 4.8% in its biggest weekly percentage gain since Nov. 11.

The U.S. stock market will be closed Monday for the Martin Luther King Jr. Day holiday.

Thursday’s Consumer Price Index and other recent data have bolstered hopes that a sustained downward trend in inflation could give the Federal Reserve room to dial back on its interest rate hikes.

Money market participants now see a 91.6% chance the Fed will hike the benchmark rate by 25 basis points in February.

Among the day’s decliners, Tesla (TSLA.O) shares fell 0.9% after it slashed prices on its electric vehicles in the United States and Europe by as much as 20% after missing 2022 deliveries estimates.

In other earnings news, UnitedHealth Group Inc (UNH.N) shares rose after it beat Wall Street expectations for fourth-quarter profit but the stock ended down on the day.

Shares of Delta Air Lines Inc (DAL.N) dropped 3.5% as the company forecast first-quarter profit below expectations.

Volume on U.S. exchanges was 10.77 billion shares, compared with the 10.81 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 105 new highs and 8 new lows.

Additional reporting by Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Subhranshu Sahu, Shounak Dasgupta and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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