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S&P 500 closes the book on its steepest first-half slide since 1970

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2022. REUTERS/Brendan McDermid

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  • U.S. May consumer spending rises moderately; inflation stays hot
  • Nasdaq notches biggest-ever Jan-June percentage drop
  • Indexes down: Dow 0.82%, S&P 0.88%, Nasdaq 1.33%

NEW YORK, June 30 (Reuters) – Wall Street ended lower on Thursday, crossing the finish line of a grim month and quarter, a dismal coda to the S&P 500’s worst first half in more than half a century.

All three major U.S. stock indexes finished the month and the second quarter in negative territory, with the S&P 500 notching its steepest first-half percentage drop since 1970.

The Nasdaq had its largest-ever January-June percentage drop, while the Dow suffered its biggest first-half percentage plunge since 1962.

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All three indexes posted their second straight quarterly declines. The last time that happened was in 2015 for the S&P and the Dow, and 2016 for the Nasdaq.

The year began with spiking cases of COVID-19 due to the Omicron variant. Then came Russia’s invasion of Ukraine, decades-high inflation and aggressive interest rate hikes from the Federal Reserve, which have stoked fears of a possible recession. read more

“All year it’s been a tug-of-war between inflation and slowing growth, balancing tightening financial conditions to address inflation concerns but trying to avoid outright panic,” said Paul Kim, chief executive officer at Simplify ETFs in New York. “I think we are more than likely already in a recession and right now the only question is how harsh will the recession be?”

“I think it’s very unlikely that we’ll see a soft landing,” Kim added.

Economic data released on Thursday did little to allay those fears. Disposable income inched lower, consumer spending decelerated, inflation remained hot and jobless claims inched higher. read more

“We’ve started to see a slowdown in consumer spending,” Said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “And it seems that inflation is taking its toll on the average consumer and that translates to corporate earnings which is what ultimately drives the stock market.”

The graphic below shows year-on-year growth of core inflation indicators, all of which suggest that while a peak appears to have been reached in March, they all continue to soar well above the Fed’s average annual 2% target:

The Dow Jones Industrial Average (.DJI) fell 253.88 points, or 0.82%, to 30,775.43, the S&P 500 (.SPX) lost 33.45 points, or 0.88%, to 3,785.38 and the Nasdaq Composite (.IXIC) dropped 149.16 points, or 1.33%, to 11,028.74.

Eight of the 11 major S&P sectors ended down, with utilities (.SPLRCU) leading the gainers and energy (.SPNY) notching the largest percentage drop.

But energy was to only major sector to post a year-to-date gain, aided by crude prices spiking over supply concerns due to Russia-Ukraine conflict.

The major stock indexes lost ground in June, with the S&P 500 logging its largest June percentage decline since the financial crisis.

Second-quarter reporting season begins in several weeks, and 130 of the companies in the S&P 500 have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.

Worries over inflation dampening consumer demand and threatening profit margins will have market participants listening closely to forward guidance.

Walgreens Boots Alliance Inc (WBA.O) fell 7.3% as its quarterly profit plunged 76%, hurt by its opioid settlement with Florida and a decrease in U.S. pharmacy sales on waning demand for COVID-19 vaccinations. read more

Declining issues outnumbered advancing ones on the NYSE by a 1.75-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 42 new lows; the Nasdaq Composite recorded 17 new highs and 367 new lows.

Volume on U.S. exchanges was 12.58 billion shares, compared with the 12.86 billion average over the last 20 trading days.

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Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Editing by David Gregorio

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Wall Street falls as S&P suffers biggest quarterly drop in two years

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2022. REUTERS/Brendan McDermid

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  • Consumer spending rose less than expected in February
  • Energy sector heads toward its best quarter ever
  • Walgreens falls after earnings

NEW YORK, March 31 (Reuters) – U.S. stocks closed out the first quarter on a down note on Thursday with its biggest quarterly decline in two years as concerns persisted about the continuing conflict in Ukraine and its inflationary effect on prices and the Federal Reserve’s response.

While optimism about a possible peace deal between Ukraine and Russia helped lift stocks earlier in the week, hopes quickly evaporated and Russia’s President Vladimir Putin threatened on Thursday to halt contracts supplying Europe with a third of its gas unless they are paid in rubles as Ukraine prepared for more attacks. read more

The United States imposed new Russia-related sanctions, and U.S. President Joe Biden launched the largest release ever from the country’s emergency oil reserve and challenged oil companies to drill more in a bid to lower gasoline prices that have soared during the war in Ukraine. read more

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Stock prices have been sensitive to any signs of progress toward a peace pact between Russia and Ukraine. Already-high U.S. inflation has intensified with surging commodity prices such as oil and metals since the war began.

As prices increase, the Fed becomes increasingly likely to become more aggressive in raising interest rates to combat inflation, potentially curbing economic growth.

Data on Thursday showed consumer prices barely rose in February as pricing pressures intensified, while personal consumption expenditures (PCE) excluding food and energy rose by 0.4%, in line with expectations. read more

“The PCE number came out today, which is the Fed’s preferred number, and although that was right on target, it was higher than it was last month, and the sense is it is going to continue to go higher, therefore you are seeing some weakness,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

“That only solidifies (Fed Chair) Jay Powell and the Fed’s position to be more aggressive so there are going to be multiple 50 basis point hikes.”

According to preliminary data, the S&P 500 (.SPX) lost 70.15 points, or 1.52%, to end at 4,532.30 points, while the Nasdaq Composite (.IXIC) lost 222.77 points, or 1.54%, to 14,219.50. The Dow Jones Industrial Average (.DJI) fell 535.80 points, or 1.52%, to 34,693.01.

While the S&P did suffer worst quarter since the COVID-19 pandemic was in full swing in the United States in 2020, stocks have rebounded somewhat in March, notching a gain of more than 4%.

Investors will look toward Friday’s jobs report for more confirmation of labor market strength and insight into the possible path of monetary policy by the U.S. central bank.

Nearly all of the 11 major S&P sectors were lower, with financials (.SPSY) and communication services (.SPLRCL) among the weakest during the session.

Energy (.SPNY), easily the best performing sector so far this year with a gain of about 39%, slipped as oil prices dropped on Biden’s announcement while OPEC+ stuck to its existing output deal. The sector secured its biggest quarterly climb on record with the advance. read more

Drugstore chain Walgreens Boots Alliance (WBA.O) slumped after the company kept its 2022 forecast for low-single digit earnings growth unchanged. read more

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Reporting by Chuck Mikolajczak; editing by Jonathan Oatis

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WHO sees more evidence that Omicron causes milder symptoms

  • WHO sees some ‘decoupling’ of COVID-19 cases and deaths
  • Raising global vaccine rates will reduce Omicron’s impact
  • Calls for global coordination on vaccine development

GENEVA, Jan 4 (Reuters) – More evidence is emerging that the Omicron coronavirus variant is affecting the upper respiratory tract, causing milder symptoms than previous variants and resulting in a “decoupling” in some places between soaring case numbers and low death rates, a World Health Organization official said on Tuesday.

“We are seeing more and more studies pointing out that Omicron is infecting the upper part of the body. Unlike other ones, the lungs who would be causing severe pneumonia,” WHO Incident Manager Abdi Mahamud told Geneva-based journalists.

“It can be a good news, but we really require more studies to prove that.”

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Since the heavily mutated variant was first detected in November, WHO data shows it has spread quickly and emerged in at least 128 countries, presenting dilemmas for many nations and people seeking to reboot their economies and lives after nearly two years of COVID-related disruptions.

However, while case numbers have surged to all-time records, the hospitalisation and death rates are often lower than at other phases in the pandemic.

“What we are seeing now is….the decoupling between the cases and the deaths,” he said.

His remarks on the reduced risks of severe disease chime with other data, including a study from South Africa, which was one of the first countries where Omicron was detected.

However, Mahamud also sounded a note of caution, calling South Africa an “outlier” since it has a young population, among other factors.

And he warned that Omicron’s high transmissibility meant it would become dominant within weeks in many places, posing a threat to medical systems in countries where a high proportion of the population remains unvaccinated.

VACCINATION, NOT VACCINES, ARE THE CHALLENGE

While Omicron seemed to be slipping past antibodies, evidence was emerging that COVID-19 vaccines still provided some protection, by eliciting a second pillar of the immune response from T-cells, Mahamud said.

“Our prediction is protection against severe hospitalization and death (from Omicron) will be maintained,” he said, saying this also applied to vaccines developed by Sinopharm and Sinovac that are used in China, where Omicron cases remain very low.

“The challenge has not been the vaccine but the vaccination and reaching those vulnerable populations.”

Asked about whether an Omicron-specific vaccine was needed, Mahamud said it was too early to say but voiced doubts and stressed that the decision required global coordination and should not be left to manufacturers to decide alone.

“You may go ahead with Omicron and put all your eggs in that basket and a new variant that is more transmissible or more immune-evasive may appear,” he said, adding that a WHO technical group had held recent meetings on vaccine composition.

The best way to reduce the impact of the variant would be to meet the WHO’s goal of vaccinating 70% of the population in each country by July, rather than offer third and fourth doses in some countries, he said.

As case numbers due to Omicron have soared, some countries, including the United States, have cut down isolation or quarantine periods in a bid to allow asymptomatic people to return to work or school.

Mahamud said that leaders should decide based on the strength of the local epidemic, saying Western countries with very high case numbers might consider trimming isolation periods to keep basic services functioning.

However, places that have largely shut it out would do better to maintain the full 14-day quarantine period.

“If your numbers are very small, you better be invested in keeping that number very, very low.”

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Reporting by Emma Farge and Mrinalika Roy in Bangalore; Editing by Andrew Cawthorne and Alex Richardson

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U.S. boosters surge to all-time high on Omicron fears

A nurses fills up syringes for patients as they receive their coronavirus disease (COVID-19) booster vaccination during a Pfizer-BioNTech vaccination clinic in Southfield, Michigan, U.S., September 29, 2021. REUTERS/Emily Elconin

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WASHINGTON, Dec 7 (Reuters) – Americans are lining up for booster doses of COVID-19 vaccines at a record pace, with concerns about the newly-detected Omicron coronavirus variant spurring millions to get shots, the U.S. government said on Tuesday.

Just under a million people a day received booster doses of one of the three authorized vaccines last week, the highest rate since U.S. regulators gave the nod to additional shots for some adults in September, government data shows.

“In the last week, we’ve gotten nearly 7 million people a booster; that’s a million booster shots in arms a day. And that’s more people getting a booster shot per day than ever before,” White House COVID-19 response coordinator Jeff Zients said on Tuesday. Around 55% of people aged 65 and older who are eligible for a booster have received one, he added.

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All in all the United States administered 12.5 million vaccines in the last week, Zients said at a White House briefing, its highest rate since May.

U.S. regulators expanded eligibility for vaccine booster shots to all adults in mid-November. read more

Around 47 million people in the United states have now received a booster shot, U.S. Centers for Disease Control and Prevention data shows, almost a quarter of all fully vaccinated adults in the country.

Close to 10 million of those people have gotten the extra shots since the Thanksgiving holiday, when South Africa reported it had found the highly mutated Omicron variant, which triggered global alarm of a surge in infections.

The surge represents a 12.5% increase compared to the boosting rate before the holiday.

News of the variant, people’s desire to be reunited with family over the winter holiday season and public health messaging have pushed the demand for boosters, said infectious disease expert Dr. William Schaffner.

“I’m certainly encouraged and if that rate continues, I will be very, very pleased,” said Schaffner, medical director of the National Foundation for Infectious Diseases.

“For a while the acceptance of the boosters was happening very slowly. But there seems to be some acceleration and I’m exhilarated about the acceleration.”

Boosters are a key part of President Joe Biden’s Omicron response plan. The White House is working with local authorities and pharmacies to meet growing demand, Zients said.

CVS Health Corp (CVS.N)has enough vaccine supply to meet high demand and is hiring more employees to administer doses, said spokesperson Matt Blanchette. The pharmacy chain has also increased available appointments across its locations.

“We’ve seen a significant spike in demand over the past two weeks due to multiple factors including the holidays, authorization of boosters for all and pediatric populations, and increased variant news,” said Erin Loverher, a Walgreens Boots Alliance Inc (WBA.O) spokesperson.

Preliminary evidence indicates that the variant likely has a higher degree of transmissibility but is less severe, top U.S. infectious disease expert Anthony Fauci said on Tuesday.

Although more data is needed, early cases of Omicron seem to require fewer hospitalizations and patients are less likely to need oxygen, Fauci told reporters at the White House briefing.

More data is expected next week, Fauci said, but it will take a few weeks to reach any definitive conclusions.

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Reporting by Ahmed Aboulenein in Washington and Michael Erman in New Jersey; Additional Reporting by Susan Heavey; Editing by Sonya Hepinstall and David Gregorio

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Six U.S. states do not join $26 bln opioid settlements with distributors, J&J

Aug 23 (Reuters) – At least six U.S. states, including Georgia, did not fully sign on to a proposed $26 billion settlement with three drug distributors and Johnson & Johnson (JNJ.N), which have been accused of fueling the nation’s opioid epidemic, according to the states’ attorneys general.

States had until Saturday to decide whether to support the $21 billion proposed settlement with McKesson Corp (MCK.N), AmerisourceBergen Corp (ABC.N) and Cardinal Health Inc (CAH.N) and a separate $5 billion agreement with J&J.

But in a sign that talks were continuing despite the passing of the deadline, Georgia – the most populous hold-out state – on Monday indicated it could wind up backing the agreement.

“We have not rejected the deal, but we have not joined because at the present time joining the national settlements does not guarantee the best outcome for Georgia and its counties, cities and citizens,” said an emailed statement from the office of the attorney general, Christopher Carr. “We remain active in representing Georgia throughout negotiations, and we’re going to continue to get input from Georgia stakeholders.”

The state will litigate its claims if needed, the statement said.

New Mexico, Oklahoma, Washington and West Virginia also declined to join the deals, their state attorneys general said. New Hampshire agreed to the settlement with distributors but not the J&J agreement.

The complex settlement formula envisions at least 44 states participating, but ultimately the companies get to decide whether a “critical mass” has joined and whether to finalize the deal.

The size of the settlement is based on the number of participating states. Those that decline to join will instead seek a larger recovery by continuing to fight the defendants in the courts. The companies have already paid hundreds of millions in verdicts and other settlements.

The deal, which was unveiled by 14 state attorneys general on July 21, aims to resolve more than 3,000 lawsuits accusing the distributors of ignoring red flags that pain pills were being diverted into communities for illicit uses and that J&J played down the risks of opioid addiction.

The money would go toward funding treatment and other services.

The companies deny wrongdoing, saying the drugs were approved by the U.S. Food and Drug Administration and that responsibility for ballooning painkiller sales lies with others, including doctors and regulators.

McKesson said the companies have until Sept. 4 to determine if there is sufficient support for the agreements and said that process is ongoing. Cardinal Health and AmerisourceBergen declined to comment and J&J did not immediately respond to a request for comment.

The support of two other states, Nevada and Alabama, also appeared to be in doubt, according to sources familiar with the situation.

Nevada’s attorney general declined to comment and the Alabama attorney general did not respond to a request for comment.

The participation of states is tied closely to that of their local governments, which brought the majority of the lawsuits. Cities and counties within participating states would have through Jan. 2 to sign on. Ultimately, $10.7 billion of the settlement money is tied to the extent to which localities participate.

North Carolina Attorney General Josh Stein, a lead negotiator, last month said he expected “well north” of 40 states to join.

Reporting by Nate Raymond in Boston and Tom Hals in Wilmington, Delaware;
Editing by Noeleen Walder and Karishma Singh

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As Delta spreads, some travelers double up on COVID-19 vaccine in U.S.

WASHINGTON, Aug 16 (Reuters) – Alison Toni felt lucky to get Sinovac’s COVID-19 vaccine in Chile earlier this year. A month later, she was in Minnesota getting vaccinated again.

Toni, an American living in Chile, was visiting her parents in Minneapolis in April when she got her first Pfizer shot at a CVS pharmacy. She traveled back for the second dose in June. She did not disclose being previously vaccinated.

“They didn’t ask, and I didn’t tell,” said Toni, 55. She took that step after reading that China’s Sinovac vaccine had a lower efficacy than the Pfizer Inc shot, developed with German partner BioNTech, and the Moderna Inc shot, both widely available in the United States. She also consulted with her doctor beforehand.

Toni is among the group of people coming from abroad who have been vaccinated a second time, or plan to do so, in the United States.

Their reasons range from concerns that the vaccines immediately available to them were not effective enough, fears that they require extra protection against the fast-spreading Delta variant, or a need to meet specific requirements for work or travel. Some are seeking medical advice, others are relying on their own research.

A few countries are also beginning to offer a third booster dose to their citizens based on evidence that the initial protection from vaccines wanes over time, or that an extra shot may help prevent infection against Delta, particularly for older people or those with weak immune systems.

Public health officials have not determined if booster doses are needed for the general population, and there is not yet much data on the relative risks and benefits of complete revaccination.

“It is probably more than is needed,” said Jason Gallagher, an infectious diseases expert at Temple University’s School of Pharmacy. “A fourth dose is probably a waste; a third dose is probably unnecessary for a lot of people.”

The World Health Organization (WHO) has urged countries to hold off on boosters while many people worldwide wait to receive their first doses.

Thirty-six-year-old Chilean engineer Ricardo Dayne, who first received Sinovac’s vaccine at home in April got his first Pfizer shot in New York in June.

“Everyone was also talking about the need to have a booster, so I decided to have it.”

‘PROCESS NEEDS TO BE FIXED’

The U.S. Food and Drug Administration (FDA) last week authorized a third vaccine dose for immunocompromised people. Government health officials have estimated that would apply to less than 3% of the adult U.S. population, but have said that eventually, boosters may be required more broadly.

In the meantime, a surplus of vaccines in the United States, along with a decentralized healthcare system, has made it easier for people to show up at pharmacies and vaccination centers for extra doses. The U.S. Centers for Disease Control and Prevention estimates that over 1.2 million Americans have already received at least one extra dose following their initial inoculation.

When asked about travelers doubling up on vaccines, Moderna told Reuters its vaccine is not authorized for this purpose and J&J directed Reuters to the FDA and CDC. Pfizer did not immediately respond to a request for comment.

A CVS Health Corp spokesperson said the company’s policy is to turn away patients who have been fully vaccinated at one of its pharmacies, or who disclose that they have been fully vaccinated elsewhere. A Walgreens spokesperson said its pharmacies ask patients if they have been vaccinated during the appointment process and have alerts in place to check.

Graduate student Jing Wu, 22, said he had no choice. Wu received the Sinovac vaccine in December while in China before moving to the United States to attend Princeton University.

He heard Princeton was planning to require proof of an FDA-approved vaccine. The university’s health service urged him to get vaccinated again and said it would be safe.

He was not reassured.

“I was nervous and stressed about it, but in April I got vaccinated (again),” he said, this time with the Johnson & Johnson shot.

Princeton announced the policy on April 20 but later decided to accept any WHO-approved vaccine, including Sinovac. The university’s health website still states that “there is no known harm from taking additional” vaccines.

The university did not respond to requests for comment.

“If I knew back then the Chinese vaccine would be enough, I wouldn’t have done it,” Wu said.

The United States is developing a plan to require nearly all foreign visitors be fully vaccinated, potentially creating similar issues for many people inoculated with vaccines not approved by the FDA.

Britain and the European Union’s lists of approved vaccines do not include shots made in Russia or China, which have been used in many countries.

Governments should standardize their definition of fully vaccinated to include shots that may not be approved in their countries, but which are still effective, said Dr Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security.

“This whole process needs to be fixed, otherwise, as we get more vaccines and more people traveling, this will only happen more,” Adalja said.

Reporting by Ahmed Aboulenein; Additional reporting by Aislinn Laing in Santiago, Carl O’Donnell and Michael Erman in New York; Editing by Michele Gershberg and Aurora Ellis

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U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J – sources

A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake

July 19 (Reuters) – U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp (MCK.N), Cardinal Health Inc (CAH.N) and AmerisourceBergen Corp (ABC.N) would pay a combined $21 billion, while Johnson & Johnson (JNJ.N) would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement pricetag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs’ attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on “rumor and speculation.” They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths. read more

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc (MCDG.MU) now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively. read more

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities. read more

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers – Endo International Plc (ENDP.O), Teva Pharmaceutical Industries Ltd (TEVA.TA) and AbbVie Inc’s (ABBV.N) Allergan unit.

Reporting by Nate Raymond in Boston; Editing by Sandra Maler, Bill Berkot and Cynthia Osterman

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