Author: Reuters

By Siddharth Cavale

NEW YORK (Reuters) -Opening new stores is back in style – at some U.S. retail chains.

Executives at several major retailers in recent weeks have touted the chains’ efforts to gain market share by adding new locations. Target, for instance, is adding 300, Walmart, 150; Sam’s Club, 30; Bloomingdale’s, 15 and Bluemercury at least 30.

This new expansion marks a major change in strategy following years of store closures and warnings of a “retail apocalypse” caused by the rapid growth of online shopping, particularly during the pandemic.

Shoppers have continued to visit stores, even if just to pick up their online orders or have a Starbucks coffee. This has occurred even as some famous retail names have filed for bankruptcy protection, from J.C. Penney to Lord & Taylor to Bed Bath & Beyond.

Walmart and Target have hailed consumers’ fondness for store pickup and delivery services for driving visits and sales in their most recent results. Walmart said online order pickup and delivery offerings helped drive its traffic up 4%. Target said “Drive-up” was popular in recouping about 240 basis points of traffic in the holiday quarter versus the prior quarter.

Target said on Tuesday that it would open more than 300 predominantly full-size stores over the next decade, for instance. The Minneapolis-based chain plans to add more sections for food in the new stores, after generating $8 billion in additional sales from that category since 2019. Once developed, the new Target stores are expected to boost sales by $15 billion annually.

It also intends to remodel nearly 2,000 existing stores. The remodels will range from full-scale renovations to less dramatic upgrades, adding new light fixtures, Ulta Beauty areas within the Target stores, and building out backrooms to fulfill online orders through Target’s same-day delivery service.

The addition of big stores, most to be larger than the chain’s average stores of 120,000 square feet, is a departure from its recent strategy of opening small-box stores in urban locations, analyst Edward Yruma of Piper Sandler & Co noted at a Target investor meeting in New York following its holiday quarter results.

For instance, Target last year announced plans to open six new stores in New York City, many of them smaller in footprint than a regular big-box Target store.

Walmart has also pivoted its strategy. In 2015, the retailer said it would slow store openings to focus on building its e-commerce business to take on Amazon.com. It last opened a store in November 2021.

In January, however, it announced plans to build more than 150 new Supercenters and smaller-format Neighborhood markets over the next five years. This comes just a year after it said it would open 30 new Sam’s Clubs across the country, its first new openings for the chain since 2017. It is also remodeling 650 existing Walmart stores over the next 12 months.

Walmart, which generates more than $600 billion in annual sales, operates about 4,700 U.S. stores – most of them huge Supercenters selling everything from apples to shoes and TVs.

Macy’s is another retailer building new stores. The department store operator laid out plans to open several more luxury Bloomingdale’s and Bluemercury locations over the next three years. But it also said it will close 150 big Macy’s stores, including some flagships, to focus efforts on expanding these better-performing luxury brands.

(Reporting by Siddharth Cavale in New YorkEditing by Matthew Lewis)

By Sheila Dang

(Reuters) – Image creation tools powered by artificial intelligence from companies including OpenAI and Microsoft can be used to produce photos that could promote election or voting-related disinformation, despite each having policies against creating misleading content, researchers said in a report on Wednesday.

The Center for Countering Digital Hate (CCDH), a nonprofit that monitors online hate speech, used generative AI tools to create images of U.S. President Joe Biden laying in a hospital bed and election workers smashing voting machines, raising worries about falsehoods ahead of the U.S. presidential election in November.

“The potential for such AI-generated images to serve as ‘photo evidence’ could exacerbate the spread of false claims, posing a significant challenge to preserving the integrity of elections,” CCDH researchers said in the report.

CCDH tested OpenAI’s ChatGPT Plus, Microsoft’s Image Creator, Midjourney and Stability AI’s DreamStudio, which can each generate images from text prompts.

The report follows an announcement last month that OpenAI, Microsoft and Stability AI were among a group of 20 tech companies that signed an agreement to work together to prevent deceptive AI content from interfering with elections taking place globally this year. Midjourney was not among the initial group of signatories.

CCDH said the AI tools generated images in 41% of the researchers’ tests and were most susceptible to prompts that asked for photos depicting election fraud, such as voting ballots in the trash, rather than images of Biden or former U.S. President Donald Trump.

ChatGPT Plus and Image Creator were successful at blocking all prompts when asked for images of candidates, said the report.

However, Midjourney performed the worst out of all the tools, generating misleading images in 65% of the researchers’ tests, it said.

Some Midjourney images are available publicly to other users, and CCDH said there is evidence some people are already using the tool to create misleading political content. One successful prompt used by a Midjourney user was “donald trump getting arrested, high quality, paparazzi photo.”

In an email, Midjourney founder David Holz said “updates related specifically to the upcoming U.S. election are coming soon,” adding that images created last year were not representative of the research lab’s current moderation practices.

A Stability AI spokesperson said the startup updated its policies on Friday to prohibit “fraud or the creation or promotion of disinformation.”

An OpenAI spokesperson said the company was working to prevent abuse of its tools, while Microsoft did not respond to request for comment.

(Reporting by Sheila Dang in Dallas; Editing by Michael Perry)

By Sherin Elizabeth Varghese

(Reuters) – Gold stood tall near previous session’s record highs on Wednesday as markets expect Federal Reserve Chair Jerome Powell’s testimony later in the day to reveal clues on a potential June rate cut.

Spot gold was steady at $2,126.75 per ounce, as of 1107 GMT after hitting a historic high of $2,141.59 per ounce in the prior session. U.S. gold futures fell 0.3% to $2,135.20.

Bullion has powered to record highs in other major currencies as well.

Increasing expectations of interest rate cuts, which boost the appeal of non-yielding bullion, following weaker U.S. economic data recently, and fears of an imminent correction in stock markets have led to strong demand for alternative asset classes such as bitcoin and gold, said Commerzbank analyst Carsten Fritsch. [MKTS/GLOB]

Along with the bullion, the world’s largest cryptocurrency, bitcoin also touched a record high on Tuesday before retreating sharply.

Tuesday’s rally pushed spot gold’s 14-day relative strength index to 78, much above the ‘overbought’ levels at 70.

“We think the gold price has run too far in the short term and expect a correction. U.S. labor market data on Friday could put a damper on rate cut hopes,” Fritsch said.

Traders see a 69% chance for a June Fed rate cut.

Investors focus is also on Powell’s first day of semi-annual congressional testimony on the state of the U.S. economy amidst an environment of elevated interest rates.

“We expect Powell to suggest that rate cuts may be delayed but likely to start in 2024,” UBS said in a note.

“With a mid-year Fed rate cut as our base case, we forecast spot gold will rise to $2,250/oz by end-2024 alongside central bank buying, demand from China, and an expected revival in demand for gold exchange-traded funds.”

In other metals, spot silver rose 0.1% to $23.70. Platinum was up 0.9% to $888.38 per ounce, and palladium gained over 1% to $958.93.

(Reporting by Sherin Elizabeth Varghese and Swati Verma in Bengaluru)

By Foo Yun Chee

BRUSSELS (Reuters) – Apple has modified some of its proposals to comply with landmark EU tech rules after criticism from app developers, including dropping a demand that those who want to create alternative app marketplaces must have a stand-by letter of credit.

The company and five other tech giants have to comply by March 7 with the Digital Markets Act (DMA), which sets a out a list of dos and don’ts aimed at reining in their power and creating a level playing field for rivals and more choices for users.

Apple had in January announced proposals which allow software developers to distribute their apps to users in the European Union outside of Apple’s own App Store, as well as new fees and conditions.

The iPhone maker said one change will now allow developers to sign up to the new terms announced two months ago at the developer account level.

“We’ve removed the corporate entity requirement that the Addendum must be signed by each membership that controls, is controlled by, or is under control with another membership,” Apple said on its website late Tuesday.

It also created a one-time option for developers to terminate the Addendum under certain circumstances and switch back to Apple’s standard business terms for their EU apps.

Lastly, it scrapped a demand for a letter of credit from developers who want to create a rival app marketplace and introduced two eligibility criteria.

“A developer may operate an alternative app marketplace if their account has been in existence for two years and they have an established app business in the EU with more than 1 million First Annual Installs,” Apple said.

(Reporting by Foo Yun Chee; Editing by Jan Harvey)

By Michael Erman

NEW YORK (Reuters) -The U.S. government said on Tuesday it will accelerate Medicare and Medicaid payments to some hospitals hurt by a hack at insurer UnitedHealth’s technology unit Change Healthcare.

The cyberattack on Change, disclosed on Feb.21, was perpetrated by hackers who identified themselves as the “Blackcat” ransomware group and has had a knock-on effect on players across the U.S. healthcare system. Disruptions triggered by the attack have impacted electronic pharmacy refills and insurance transactions.

U.S. doctors’ group the American Medical Association (AMA) and the American Hospital Association (AHA) said the government support did not go far enough.

“The magnitude of this moment deserves the same level of urgency and leadership our government has deployed to any national event of this scale before it. The measures announced today do not do that and are not an adequate whole of government response,” Rick Pollack, President of the AHA said in an emailed statement.

The AMA said the moves do not protect individual physician practices and urged the Biden administration “to go above and beyond what has been put in place and include financial assistance such as advanced payments for physicians.”

The groups called on the Department of Health and Human Services (HHS) to make more widespread accelerated payments available – like those issued during the COVID-19 pandemic – amid cash flow concerns caused by an inability to submit claims and receive payments.

The Centers for Medicare & Medicaid Services (CMS), a division of the HHS, said hospitals may submit accelerated payment requests to the contractors who oversee their payments for individual consideration.

CMS also encouraged Medicare Advantage plans to offer advance funding to providers most affected by the hack at Change and asked contractors to relax various requirements for compliance with Medicare rules.

AHA’s Pollack wrote in a letter sent on Monday that the temporary assistance program put in place by UnitedHealth last week was “not even a band-aid” on the payment problems caused by the hack, and called the terms of the program “shockingly onerous.”

UnitedHealth did not immediately respond to a Reuters request for comment on the letter from AHA.

Change said last week it had enabled a new version of its ePrescribing service for all its customers, more than a week after it reported the hack.

(Reporting by Michael Erman in New York and Pratik Jain; Editing by Devika Syamnath, Alison Williams and Nia Williams)

By Simon Jessop, Isla Binnie and Ross Kerber

LONDON/NEW YORK/BOSTON (Reuters) -Four of the biggest U.S. banks are no longer signatories to the Equator Principles, an industry benchmark for assessing environmental and social risks in project-related finance, its website showed on Tuesday.

Set up by the banking industry in 2003, the principles help firms identify, assess and manage potentially adverse impacts created by large infrastructure and industrial projects.

Spokespeople for JPMorgan, Citi, Bank of America and Wells Fargo, all said their banks would continue to be informed by those principles.

The departures are the latest example of major financial services companies leaving corporate environmental initiatives since U.S. Republican politicians started suggesting participation could breach antitrust rules.

There are currently 10 principles for aspects of projects ranging from initial due diligence to grievance mechanisms.

Asked about their departures, Citi and Wells Fargo cited a restructuring by the organization.

“Wells Fargo’s due diligence process will incorporate consideration of the Equator Principles for project financing, where we deem appropriate,” the bank said in a statement sent by a representative.

A Citi representative said via e-mail that “Our commitment to implementing best practices in our evaluation of environmental and social risks in project-related finance transactions has not changed.”

A JPMorgan spokesperson said the bank had invested in environmental and social risk experts and in-house processes, meaning it was not necessary to maintain membership, although its in-house standards would stay aligned with the principles.

“While we may collaborate with coalitions or join organizations to further our goals, we always maintain our autonomy and are never bound by third-party dictates or approvals,” the spokesperson added.

Bank of America said in a statement that the objectives of the Equator Principles would stay in their risk policy framework, which refers to the bank’s “ability to make independent risk decisions about clients and transactions.”

A spokesperson for the Equator Principles declined to comment further.

Richard Brooks, climate finance director at environmental conservation nonprofit Stand.Earth, said the banks had moved to “abandon a bare minimum set of standards which banks themselves have set.”

(Reporting by Simon Jessop, Ross Kerber and Isla Binnie;Editing by Tommy Reggiori Wilkes, Jonathan Oatis and Aurora Ellis)

By David Shepardson and Michael Martina

WASHINGTON (Reuters) -A bipartisan group of U.S. lawmakers introduced legislation on Tuesday to give China’s ByteDance about six months to divest popular short video app TikTok or face a U.S. ban, seeking to tackle national security concerns about its Chinese ownership.

The bill is the first significant legislative move in nearly a year toward banning or forcing ByteDance to divest the popular app, after senate legislation to ban it stalled in Congress last year in the face of heavy lobbying by TikTok.

Mike Gallagher, the Republican chair of the House of Representatives’ select China committee and Representative Raja Krishnamoorthi, the top Democrat, are among more than a dozen lawmakers introducing the measure, which is expected to see an initial vote on Thursday.

“This is my message to TikTok: break up with the Chinese Communist Party or lose access to your American users,” Gallagher said. “America’s foremost adversary has no business controlling a dominant media platform in the United States.”

The bill would give ByteDance 165 days to divest TikTok, which is used by more than 170 million Americans, or make it unlawful for app stores run by Apple, Google and others to offer TikTok or provide web hosting services to apps controlled by ByteDance.

The bill would not authorize any enforcement against individual users of an affected app, however.

“This bill is an outright ban of TikTok, no matter how much the authors try to disguise it,” a company spokesperson said on Tuesday.

“This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform they rely on to grow and create jobs.”

A White House National Security Council spokesperson called the bill “an important and welcome step” adding that the Biden administration would work with Congress “to further strengthen this legislation and put it on the strongest possible legal footing.”

The administration has worked with lawmakers from both parties to counter threats of tech services operating in the United States that pose risks to Americans’ sensitive data and broader national security, the official added.

TikTok says it has not, and would not, share U.S. user data with the Chinese government.

The American Civil Liberties Union called the bill unconstitutional, saying lawmakers were “once again attempting to trade our First Amendment rights for cheap political points during an election year.”

The bill, which would required companion legislation in the Senate, will be considered at an Energy and Commerce Committee hearing on Thursday for a vote.

Rep. Cathy McMorris Rodgers, who chairs that committee, said the bill would “prevent foreign adversaries, such as China, from surveilling and manipulating the American people” via online applications such as TikTok.

Still, the popularity of the app could make it tough to get legislation approved in an election year. Last month, Democratic President Joe Biden’s re-election campaign joined TikTok.

The bill would give the president new powers to designate apps of concern posing national security risks and subject them to the risk of bans or curbs unless ownership was divested.

It would cover apps with more than a million annual active users and under control of a foreign adversary entity, the bill says.

Concerns about Chinese-owned TikTok sparked efforts in Congress last year to tackle the risks from the short video sharing app or potentially ban it. Late in 2022, Congress barred federal employees from using it on government devices.

Last year the administration backed legislation sponsored by Senator Mark Warner and more than two dozen senators to give it new powers to ban TikTok and other foreign-based technologies if they pose national security threats.

That bill has never been voted on.

The U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS) in March 2023 demanded that TikTok’s Chinese owners sell their shares, or face the possibility of the app being banned, Reuters and other news providers reported, but the administration has taken no action.

The new bill aims at bolstering the legal authority to address TikTok concerns. U.S. courts blocked an effort by previous President Donald Trump to ban TikTok in 2020.

Late in November, a U.S. judge blocked Montana’s first-of-its kind state ban on TikTok, saying it violated users’ free speech rights.

(Reporting by David Shepardson; Editing by Emelia Sithole-Matarise and Clarence Fernandez)

By Sinéad Carew and Bansari Mayur Kamdar

(Reuters) -Wall Street three major indexes all retreated more than 1% on Tuesday, with weakness in megacap growth companies such as Apple Inc and the chip sector weighing most on the Nasdaq ahead of this week’s crop of economic data and remarks from Federal Reserve Chair Jerome Powell.

Tuesday’s economic data was a mixed bag showing slower U.S. services industry growth in February as employment declined while a measure of new orders grew to a six-month high, signaling underlying strength in the sector.

The Purchasing Managers Index report on Tuesday confirmed continued economic growth despite 525 basis points worth of interest rate hikes from the Fed since March 2022.

Another survey showed new orders for U.S.-manufactured goods dropped more than expected in January.

Some strategists saw the technology sell-off on Tuesday as the result of profit taking for a sector which had recently rallied after rising 56% in 2023.

“Maybe some people are taking chips off the table, taking some profits in the high flying areas, in conjunction with what is probably justified nerves before Powell speaks and before we get the big slew of labor market data,” said Kevin Gordon, senior investment strategist at Charles Schwab.

Two reports helped to create a risk-off tone, said Craig Fehr, head of investment strategy at Edward Jones in St. Louis.

Apple shares finished down 2.8% after a research report showed iPhone sales in China fell 24% year-on-year in the first six weeks of 2024 as Apple faced increased competition from domestic rivals such as Huawei.

Also the chip sector was battered after Bloomberg News reported that Advanced Micro Devices hit a roadblock in its efforts to sell an artificial intelligence chip tailored for the Chinese market as Washington cracks down on advanced technology exports to Beijing.

Chip rivals fell in sympathy with the Philadelphia semiconductor index, which closed down 2%.

Fehr also attributed some of Tuesday’s weakness to recent rallies. The benchmark S&P 500 had hit a fresh intraday record high on Monday before closing slightly lower.

“It’s reasonable and even healthy to take some pit stops along the way. This market is, to a degree, stopping for a breather after what’s been a very sharp run higher,” he said.

The Dow Jones Industrial Average fell 404.64 points, or 1.04%, to 38,585.19. The S&P 500 lost 52.3 points, or 1.02%, at 5,078.65 and the Nasdaq Composite dropped 267.92 points, or 1.65%, to 15,939.59.

Eight of the 11 major S&P 500 industry indexes declined, with technology ending down 1.2% and consumer discretionary falling 1.3%. Energy, up 0.7%, was the biggest gainer followed by consumer staples, which rose 0.3%.

Along with Powell’s testimony before lawmakers on Wednesday and Thursday, investors are also anxiously awaiting more clues about interest rate policy from economic data, including the crucial non-farm payrolls report, due out on Friday.

The majority of traders see the first rate cut this year in June, as per CME Group’s FedWatch tool.

Among megacap technology stocks, Tesla shares sank 3.9% after its European Gigafactory near Berlin halted production following a suspected arson attack.

On the bright side, Target shares rallied 12% after the retailer forecast annual comparable sales largely above estimates, betting on same-day services, product launches and a new membership program to boost spending.

Microstrategy shares tumbled 21% after the bitcoin development company announced a private offering for $600 million in convertible senior notes, with proceeds to be used to buy bitcoin.

Declining issues outnumbered advancers on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.76-to-1 ratio favored decliners.

The S&P 500 posted 50 new 52-week highs and eight new lows; the Nasdaq Composite recorded 93 new highs and 113 new lows.

On U.S. exchanges 13.22 billion shares changed hands compared with the 11.99 billion average for the last 20 sessions.

(Reporting by Sinéad Carew in New York, Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Maju Samuel and Richard Chang)

By Sinéad Carew and Bansari Mayur Kamdar

(Reuters) -Wall Street indexes closed lower on Tuesday, with weakness in megacap growth companies such as Apple Inc and the chip sector weighing on the Nasdaq ahead of this week’s crop of economic data and remarks from Federal Reserve Chair Jerome Powell.

Tuesday’s economic data was a mixed bag showing slower U.S. services industry growth in February as employment declined while a measure of new orders grew to a six-month high, signaling underlying strength in the sector.

The Purchasing Managers Index report on Tuesday confirmed continued economic growth despite 525 basis points worth of interest rate hikes from the Fed since March 2022.

Another survey showed new orders for U.S.-manufactured goods dropped more than expected in January.

Some strategists saw the technology sell-off on Tuesday as the result of profit taking for a sector which had recently rallied after rising 56% in 2023.

“Maybe some people are taking chips off the table, taking some profits in the high flying areas, in conjunction with what is probably justified nerves before Powell speaks and before we get the big slew of labor market data,” said Kevin Gordon, senior investment strategist at Charles Schwab.

Two reports helped to create a risk-off tone, said Craig Fehr, head of investment strategy at Edward Jones in St. Louis.

Apple shares came under pressure after a research report showed iPhone sales in China fell 24% year-on-year in the first six weeks of 2024 as Apple faced increased competition from domestic rivals such as Huawei.

Also the chip sector was battered after a Bloomberg News report that Advanced Micro Devices hit a roadblock in its efforts to sell an AI chip tailored for the Chinese market as Washington cracks down on advanced technology exports to Beijing. Chip rivals fell in sympathy with the Philadelphia semiconductor index, under performing the broader market.

Fehr also attributed some of Tuesday’s weakness to recent rallies. The benchmark S&P 500 had hit a fresh intraday record high on Monday before closing slightly lower.

“It’s reasonable and even healthy to take some pit stops along the way. This market is, to a degree, stopping for a breather after what’s been a very sharp run higher,” he said.

The Dow Jones Industrial Average fell 404.51 points, or 1.04%, to 38,585.32, the S&P 500 lost 52.29 points, or 1.02%, to 5,078.66 and the Nasdaq Composite dropped 267.92 points, or 1.65%, to 15,939.59.

Along with Powell’s testimony before lawmakers on Wednesday and Thursday, investors are also anxiously awaiting more clues about interest rate policy from economic data, including the crucial non-farm payrolls report, due out on Friday.

The majority of traders see the first rate cut this year in June, as per CME Group’s FedWatch tool.

Among megacap technology stocks, Tesla shares sank after its European Gigafactory near Berlin halted production following a suspected arson attack.

On the bright side, Target shares rallied after the big-ticket retailer forecast annual comparable sales largely above estimates, betting on same-day services, product launches and a new membership program to boost spending.

Microstrategy shares tumbled after the bitcoin development company announced a private offering for $600 million in convertible senior notes, with proceeds to be used to buy bitcoin.

(Reporting by Sinéad Carew in New York, Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Maju Samuel and Richard Chang)

By Brendan Pierson

(Reuters) – The latest trial over claims that Johnson & Johnson’s talc products cause cancer ended in a mistrial on Tuesday, as a Florida state court jury said it could not agree on a verdict.

The lawsuit was brought by Bob Sugarman, who said that J&J’s talc-based baby powder led his wife to develop ovarian cancer and die from the disease.

J&J said in a statement after the mistrial that its baby powder “is safe, does not contain asbestos and does not cause cancer.”

A lawyer for Sugarman did not immediately respond to a request for comment.

J&J faces more than 50,000 lawsuits over talc, most by women with ovarian cancer, with a minority of the cases involving people with mesothelioma. The cases were on hold for about two years as J&J unsuccessfully tried to resolve them through bankruptcy.

(Reporting By Brendan Pierson in New York, Editing by Alexia Garamfalvi and Bill Berkrot)