By Raphael Satter

WASHINGTON (Reuters) – State-backed hackers from Russia, China, and Iran have been using tools from Microsoft-backed OpenAI to hone their skills and trick their targets, according to a report published on Wednesday.

Microsoft said in its report it had tracked hacking groups affiliated with Russian military intelligence, Iran’s Revolutionary Guard, and the Chinese and North Korean governments as they tried to perfect their hacking campaigns using large language models. Those computer programs, often called artificial intelligence, draw on massive amounts of text to generate human-sounding responses.

The company announced the find as it rolled out a blanket ban on state-backed hacking groups using its AI products.

“Independent of whether there’s any violation of the law or any violation of terms of service, we just don’t want those actors that we’ve identified – that we track and know are threat actors of various kinds – we don’t want them to have access to this technology,” Microsoft Vice President for Customer Security Tom Burt told Reuters in an interview ahead of the report’s release.

Russian, North Korean and Iranian diplomatic officials didn’t immediately return messages seeking comment on the allegations.

China’s U.S. embassy spokesperson Liu Pengyu said it opposed “groundless smears and accusations against China” and advocated for the “safe, reliable and controllable” deployment of AI technology to “enhance the common well-being of all mankind.”

The allegation that state-backed hackers have been caught using AI tools to help boost their spying capabilities is likely to underline concerns about the rapid proliferation of the technology and its potential for abuse. Senior cybersecurity officials in the West have been warning since last year that rogue actors were abusing such tools, although specifics have, until now, been thin on the ground.

“This is one of the first, if not the first, instances of a AI company coming out and discussing publicly how cybersecurity threat actors use AI technologies,” said Bob Rotsted, who leads cybersecurity threat intelligence at OpenAI.

OpenAI and Microsoft described the hackers’ use of their AI tools as “early-stage” and “incremental.” Burt said neither had seen cyber spies make any breakthroughs.

“We really saw them just using this technology like any other user,” he said.

The report described hacking groups using the large language models differently.

Hackers alleged to working on behalf of Russia military spy agency, widely known as the GRU, used the models to research “various satellite and radar technologies that may pertain to conventional military operations in Ukraine,” Microsoft said.

Microsoft said North Korean hackers used the models to generate content “that would likely be for use in spear-phishing campaigns” against regional experts. Iranian hackers also leaned on the models to write more convincing emails, Microsoft said, at one point using them to draft a message attempting to lure “prominent feminists” to a booby trapped website.

The software giant said Chinese state-backed hackers were also experimenting with large language models, for example to ask questions about rival intelligence agencies, cybersecurity issues, and “notable individuals.”

Neither Burt nor Rotsted would be drawn on the volume of activity or how many accounts had been suspended. And Burt defended the zero-tolerance ban on hacking groups – which doesn’t extend to Microsoft offerings such as its search engine, Bing – by pointing to the novelty of AI and the concern over its deployment.

“This technology is both new and incredibly powerful,” he said.

(Reporting by Raphael Satter; Additional reporting by Christopher Bing in Washington and Michelle Nichols at the United Nations)

By Samrhitha A

(Reuters) – Lyft shares surged more than 21% on Wednesday before the bell after the ride-hailing company said cost cuts would help it generate positive free cash flow for the first time in 2024 and posted market-beating quarterly profit.

Its results were overshadowed by an error on a key margin metric in the earnings statement that led to a 67% surge in its shares before a clarification from Chief Financial Officer Erin Brewer in a conference call with analysts.

“Since the error relates to a forecast, it’s likely that liability under securities regulations will not attach unless it can be proved that it was made with knowledge that it was wrong or with some intent to mislead,” said Bobby Reddy, Professor of Corporate Law and Governance at the University of Cambridge.

Analysts said the surge could have included significant short covering from hedge funds. Lyft had short interest of $566.1 million, or 13.1% of its free float shares, as of Feb. 12, according to data and analytics firm Ortex.

Still, the stock jump set Lyft on course to add roughly $1 billion to its market value, based on its share price of $14.70, if premarket gains held.

CEO David Risher’s push for aggressive restructuring has helped the company cut total costs last year by 12% compared with a 28% increase in expenses in 2022.

“David Risher took over as CEO less than a year ago, and he’s clearly changed gears at the company, cutting costs sharply while still maintaining market share,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Lyft was trading at 20.27 times its 12-month forward earnings estimates compared with Uber’s 49.75.

Shares of rival Uber were also up more than 2%.

(Reporting by Samrhitha Arunasalam and Medha Singh in Bengaluru; Editing by Arun Koyyur)

By Shivansh Tiwary and Rajesh Kumar Singh

(Reuters) -Shares of JetBlue Airways surged on Tuesday after activist investor Carl Icahn said he took a stake of nearly 10% in the low-cost carrier.

JetBlue’s shares were up 14.7% in late morning after Icahn said his company had been in discussion with the airline about possible board representation.

Icahn, in a filing, called shares of JetBlue undervalued, saying the airline represented an attractive investment opportunity. He has made a career out of buying companies he sees as undervalued. The JetBlue purchase is one of his first big moves in 2024.

“We are always open to constructive dialogue with our investors,” JetBlue said on Tuesday.

Analysts at Deutsche Bank said Icahn’s investment in the U.S. airline industry reinforces their view that the sector will likely undergo more restructuring beyond previously announced mergers.

JetBlue’s earnings have been under pressure due to higher operating costs and uneven travel demand. Its new CEO, Joanna Geraghty, has vowed “aggressive action” to return the airline to profitability.

As part of the plan, JetBlue has deferred about $2.5 billion in planned aircraft capital expenditure and is also planning to cut costs through buyouts to employees in corporate, airports, and customer support functions.

It is also trying to drive its ancillary revenue in a bid to generate an extra $300 million in revenue this year.

The company’s $3.8 billion deal to acquire Spirit Airlines, however, has been a bigger concern for some analysts.

The deal was blocked by a U.S. judge last month, but both airlines have asked for an expedited appeal. A U.S. appeals court will hear arguments in June.

When Spirit originally accepted JetBlue’s acquisition offer, the market value of its equity was $3.8 billion. Its enterprise value, inclusive of its outstanding debt at the time, was $7.6 billion. Since then, the company’s market capitalization has fallen to about $735 million.

If JetBlue is able to complete the deal with new debt to fund the original transaction, its debt-to-EBITDA ratio will increase to 12 times or more at the end this year, up from 9 times at the end of 2023, according to Moody’s investor service.

JetBlue’s annual interest burden will also increase to about $620 million from about $375 million in 2023, Moody’s said.

In a regulatory filing on Monday, JetBlue acknowledged that its indebtedness following the merger will be substantially higher and could increase borrowing costs. Yet the company last month said the merger agreement remained in effect.

JetBlue’s stock has gained 36% since the merger ruling.

Icahn has built his reputation over the years as a corporate raider and activist shareholder, pressuring companies make changes to their business strategies and boost their stocks.

(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in BengaluruEditing by Sriraj Kalluvila and Matthew Lewis)

(Reuters) – China’s BYD Co Ltd will set up a new electric vehicle (EV) factory in Mexico, Nikkei reported on Wednesday, citing the company’s Mexico head, as the EV maker aims to establish an export hub to the United States.

BYD, known for its cheaper models and a more varied lineup, recently overtook its biggest rival Tesla Inc to become the world’s top EV maker in terms of sales.

According to the Nikkei report, BYD has launched a feasibility study for the Mexican plant and is currently negotiating with officials over terms, including the factory’s location.

While BYD has its sales concentrated in China, it also aims to expand globally and is building new plants overseas in addition to expanding Chinese exports.

Mexico’s massive automaking sector, populated by many of the industry’s top global players, is tightly integrated with the U.S. industry.

“Overseas production is indispensable for an international brand”, BYD Mexico country manager Zhou Zou told Nikkei.

The carmaker’s Mexico office declined to comment.

Major U.S. automakers have warned that Chinese cars could spell doom for their own prospects, among them Elon Musk’s Tesla.

Last month, Tesla’s chief executive predicted that Chinese automakers will “demolish” global rivals without trade barriers.

Musk’s view is echoed by a leading advocacy group.

“The introduction of cheap Chinese autos – which are so inexpensive because they are backed with the power and funding of the Chinese government – to the American market could end up being an extinction-level event for the U.S. auto sector,” according to a forthcoming report by the group Alliance for American Manufacturing.

In Latin America, BYD plans to spend 3 billion reais ($620 million) on a new industrial complex in northeastern Brazil.

The three plant complex will be built in northeastern Bahia state, on land formerly occupied by a Ford plant that closed in 2021.

($1 = 4.9510 reais)

(This story has been corrected to fix the name of the report quoted from Alliance of Automotive Innovation to Alliance for American Manufacturing, in paragraph 11)

(Reporting by Sameer Manekar in Bengaluru; Additional reporting by David Shepardson; Editing by Shweta Agarwal and Sam Holmes)

MEXICO CITY (Reuters) -Mexican antitrust regulator Cofece said on Tuesday it had identified “possible barriers” to competition in the e-commerce market, with Amazon and Mercado Libre together controlling more than 85% of transactions and sales.

In a preliminary report shared in the official gazette, Cofece said strong networks between users’ groups limit new entrants to the market and pose a “practically insurmountable challenge for the expansion of the smaller players.”

Smaller retailers face high investments for the technological tools, operating inventories and advertising needed to compete with these giants, it said, adding that this is exacerbated by the clustering of both buyers and sellers around one marketplace, or “singlehoming.”

Smaller participants meanwhile “exert insufficient competitive pressure on Amazon and Mercado Libre,” the Mexican regulator stated, because they lack the number of buyers and sellers needed to compete.

Cofece recommended that the government orders the two retail giants to implement a program of “corrective measures” within six months. Those include greater transparency for service providers and splitting off streaming services from marketplace membership.

Amazon did not immediately respond to a request for comment.

In a statement issued late on Tuesday, Mercado Libre said it was analyzing Cofece’s preliminary report, which it described as the start of the process, and pledged its cooperation.

It stressed that even if Cofece’s governing board eventually issues a formal resolution, it would not involve any economic sanctions since no investigation into monopolistic practices has been launched.

U.S. behemoth Amazon entered Mexico in 2013 and launched its marketplace there two years later. Mercado Libre, its South American counterpart, entered Latin America’s second-largest economy in 1999 and has been expanding its financial service offerings.

($1 = 17.1977 Mexican pesos)

(Reporting by Raul Cortes; Editing by Sharon Singleton, Emelia Sithole-Matarise an Jacqueline Wong)

By Johann M Cherian, Ankika Biswas and Carolina Mandl

(Reuters) -Wall Street’s main indexes ended sharply lower on Tuesday after a higher-than-expected consumer inflation reading pushed back market expectations of imminent interest rate cuts, driving U.S. Treasury yields higher.

A Labor Department report showed U.S. consumer prices increased above forecasts in January amid a surge in the cost of shelter.

“Equities are in retreat mode following a still inflationary CPI report,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “The higher for longer inflation is a setback for the Federal Reserve.”

Markets have rallied this year on bets that the Fed would start trimming rates in May. The S&P 500 closed above 5,000 for the first time on Friday. The Dow is also trading near a record-high level, and on Monday the Nasdaq briefly surpassed its record closing high from November 2021.

After the release of the inflation data, bets by traders for a rate reduction in May of at least 25 basis points dropped to 36.1%, from about 58% before the data, while expectations for June stood at 74.3%, the CME FedWatch tool showed.

Rate-sensitive megacaps like Microsoft, Alphabet, Amazon.com and Meta Platforms fell, as yields on U.S. Treasury notes across the board spiked to two-month highs. [US/]

Most chip stocks such as Micron Technology, Qualcomm and Broadcom also dropped, sending the Philadelphia SE Semiconductor index down.

Real estate, consumer discretionary utilities led losses among the 11 major S&P 500 sector indexes, with real estate falling to an over two-month low.

The small-cap Russell 2000 index also fell.

“Many Federal Reserve governors have come out in the last couple of weeks and given various indications that the cuts expected by the market in the first half of the year may have been premature. Now the CPI data are certainly reaffirming that picture,” said Bob Elliott, chief investment officer at Unlimited Funds.

The latest data comes on the heels of a modest revision to inflation in the last quarter of 2023 that left investors briefly relieved on the trajectory of inflation.

The Cboe volatility index, a market fear gauge, hit its highest level since November.

According to preliminary data, the S&P 500 lost 68.14 points, or 1.36%, to end at 4,953.70 points, while the Nasdaq Composite lost 282.64 points, or 1.77%, to 15,659.91. The Dow Jones Industrial Average fell 522.05 points, or 1.35%, to 38,275.33.

Among top movers, JetBlue Airways soared after activist investor Carl Icahn reported a 9.91% stake, adding that the carrier’s stock is “undervalued.”

Arista Networks shares fell after the cloud solutions provider forecast current-quarter adjusted gross margin below expectations, while Marriott International lost ground after the hotel operator forecast annual profit below Street expectations.

Shares of software firm Cadence Design Systems dropped following a bleak quarterly sales forecast, while toymaker Hasbro lost after a steeper-than-expected drop in holiday-quarter sales and profit.

Tripadvisor stock jumped as the online travel agency formed a special committee to evaluate deal proposals.

(Reporting by Carolina Mandl in New York and Johann M Cherian and Ankika Biswas in BengaluruAdditional reporting by Medha Singh Editing by Maju Samuel and Matthew Lewis)

By Johann M Cherian, Ankika Biswas and Carolina Mandl

(Reuters) -Wall Street’s main indexes tumbled on Tuesday after a higher-than-expected consumer inflation reading pushed back market expectations of imminent interest rate cuts, driving U.S. Treasury yields higher.

A Labor Department report showed U.S. consumer prices increased above forecasts in January amid a surge in the cost of shelter.

“Many Federal Reserve governors have come out in the last couple of weeks and given various indications that the cuts expected by the market in the first half of the year may have been premature. Now the CPI data are certainly reaffirming that picture,” said Bob Elliott, chief investment officer at Unlimited Funds.

Markets have rallied this year on bets that the Fed would start trimming rates in May. The S&P 500 closed above 5,000 for the first time on Friday. The Dow is also trading at a record-high level, and on Monday the Nasdaq briefly surpassed its record closing high from November 2021.

After the release of the inflation data, bets by traders for a rate reduction in May of at least 25 basis points dropped to 38%, from about 58% before the data, while expectations for June stood at 75%, the CME FedWatch tool showed.

Rate-sensitive megacaps like Microsoft, Alphabet, Amazon.com and Meta Platforms lost between 0.8% and 2.1%, as yields on U.S. Treasury notes across the board spiked to two-month highs. [US/]

Most chip stocks such as Micron Technology, Qualcomm and Broadcom dropped between 1.7% and 4.8%, sending the Philadelphia SE Semiconductor index down 2.2%.

Real estate and utilities led losses among the 11 major S&P 500 sector indexes, with real estate falling to an over two-month low.

The small-cap Russell 2000 index also shed 3.2%, on track for its worst day in nearly a year.

“Today, market sentiment is getting a reality check and you just cannot escape the fact that the Fed may have to be more cautious,” said Lara Rhame, chief U.S. economist at FS Investments.

The latest data comes on the heels of a modest revision to inflation in the last quarter of 2023 that left investors briefly relieved on the trajectory of inflation.

The Cboe volatility index, a market fear gauge, hit its highest level since November.

At 1:51 p.m. EST, the Dow Jones Industrial Average fell 594.28 points, or 1.53%, to 38,203.1, the S&P 500 lost 73.41 points, or 1.46%, to 4,948.43 and the Nasdaq Composite lost 277.76 points, or 1.74%, to 15,664.78.

Among top movers, JetBlue Airways jumped 19.4% after activist investor Carl Icahn reported a 9.91% stake, adding that the carrier’s stock is “undervalued.”

Arista Networks shed 4.2% after the cloud solutions provider forecast current-quarter adjusted gross margin below expectations, while Marriott International lost 6.4% after the hotel operator forecast annual profit below Street expectations.

Software firm Cadence Design Systems dropped 4.4% following a bleak quarterly sales forecast, while toymaker Hasbro lost 2.7% after a steeper-than-expected drop in holiday-quarter sales and profit.

Tripadvisor jumped 14% as the online travel agency formed a special committee to evaluate deal proposals.

Declining issues outnumbered advancers for a 9.6-to-1 ratio on the NYSE and a 4.6-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and 6 new lows while the Nasdaq recorded 38 new highs and 96 new lows

(Reporting by Carolina Mandl in New York and Johann M Cherian and Ankika Biswas in BengaluruAdditional reporting by Medha Singh Editing by Maju Samuel and Matthew Lewis)

It’s tax time.

As one of life’s two certainties, tax season can be the most, well… taxing.

These days, far too many of us are unwilling to do our own taxes, so we leave it up to trusted tax professionals. That way we don’t make mistakes with filing status, dependents, capital gains, or making dangerous assumptions. Many of us also forget human error can be costly. Even the smallest error can lead to expensive tax bills and a possible visit from the “friendly” IRS. 

H&R Block (HRB)

HRB is a non-brainer with tax season.

Every year around this time, HRB rockets higher. We saw it happen just about every year. Not only can you make money from its potential appreciation this time of year, but you can also collect its yield of 2.67%.  Helping, analysts at Barrington recently raised its price target to $55 from $48 a share, with an outperform rating. 

According to TheFly.com, the firm cites the company’s current valuation, “secure” dividend yielding 2.7% and “aggressive” share repurchase program for the Outperform rating.

Intuit (INTU)

There’s also Intuit (INTU), whose TurboTax is popular with taxpayers.

At $656 a share, it’s another one that typically runs around this time of the year. While it’s just a bit overbought at current prices, it’s still being bid higher on tax season. 

Better, earnings have been solid. In its most recent quarter, the company posted Q1 2024 adjusted earnings per share of $2.47, beating estimates by a solid 49 cents. Revenue climbed 15% Y/Y to $3B, also beating expectations by $120M. Moreover, INTU’s FQ1 adjusted operating income soared 45% Y/Y to $960M, as noted by Seeking Alpha.

Oppenheimer just raised its price target on INTU to $678 from $610 a share. KeyBanc analyst Josh Beck raised the firm’s price target on Intuit to $700 from $670 and keeps an Overweight rating. And Citi raised its price target to $700 from $651, with a buy rating. 

MEXICO CITY (Reuters) – Mexican antitrust regulator Cofece on Tuesday said it had identified “possible barriers” to competition in the e-commerce market, with Amazon and Mercado Libre together controlling more than 85% of transactions and sales.

In a preliminary report shared in the official gazette, Cofece said strong networks between users’ groups limit new entrants and pose a “practically insurmountable challenge for the expansion of the smaller players.”

Smaller retailers face high investments for the technological tools, operating inventories and advertising needed to compete with these giants, it said, adding that this is exacerbated by the clustering of both buyers and sellers around one marketplace, or “singlehoming”.

Smaller participants meanwhile “exert insufficient competitive pressure on Amazon and Mercado Libre,” Cofece said, because they lack the number of buyers and sellers needed to compete.

Cofece recommended that the government orders the two retail giants to implement a program of “corrective measures” within six months. Those include greater transparency for service providers and splitting off streaming services from marketplace membership.

Amazon and Mercado Libre did not immediately respond to Reuters’ requests for comment.

U.S. behemoth Amazon entered Mexico in 2013 and launched its marketplace there two years later. Mercado Libre, its South American counterpart, entered Latin America’s second-largest economy in 1999 and has been expanding its financial services offerings.

($1 = 17.1977 Mexican pesos)

(Reporting by Raul Cortes; Editing by Anthony Esposito, Sharon Singleton and Emelia Sithole-Matarise)

By Christian Kraemer

BERLIN (Reuters) – Germany’s federal government will significantly reduce its forecast for growth in the German economy to just 0.2% in a report due to be released next week, according to a source with knowledge of the matter.

Factors contributing toward the depressed figure — down from October’s forecast of 1.3% — included low growth in the global economy and a German constitutional court ruling that blew a hole in the country’s budget, according to the source.

The gloomy prospects for Germany’s economy in 2024 come after the country’s GDP shrank by 0.3% in 2023 under the pressure of high inflation, rising interest rates and a weak global economy.

German business association BDI issued a similarly low forecast in mid-January for growth of 0.3%, warning that the economy was at a “standstill”.

An economy ministry spokesperson said they could not comment on the numbers, adding the government would provide comment when the official report was published.

Germany’s finance minister Christian Lindner said on Sunday that the coalition government planned to present a concept to strengthen Germany’s position as an industrial location this spring, after multiple warnings from both him and Economy Minister Robert Habeck that the country was losing its competitiveness on a global scale.

(Reporting by Christian Kraemer, Writing by Victoria Waldersee; Editing by Lisa Shumaker)