By Jody Godoy

(Reuters) -A U.S. appeals court upheld Nasdaq’s board diversity rule on Wednesday, requiring companies listed on the exchange to have women and minority directors on their boards or explain why they do not.

In a lengthy opinion, the New Orleans-based 5th U.S. Circuit Court of Appeals rejected lawsuits seeking to block the rule by the National Center for Public Policy Research and the Alliance for Fair Board Recruitment, a group formed by conservative legal activist Edward Blum.

The SEC acted within its authority in approving the rule, and was allowed to consider the opinions of investors who said board diversity information was important to their investment decisions, the court said.

“This evidence is sufficient to support the SEC’s determination that regardless of whether investors think that board diversity is good or bad for companies, disclosure of information about board diversity would inform how investors behave in the market,” the panel wrote.

Blum called the ruling disappointing and said his group plans to appeal.

Lawsuits brought by another group founded by Blum led to the Supreme Court’s June ruling declaring unlawful the race-conscious student admissions policies used by Harvard University and the University of North Carolina.

He has since challenged programs aimed at increasing racial diversity in law and business.

A spokesperson for Nasdaq declined to comment.

The groups sued the U.S. Securities and Exchange Commission (SEC), which approved the rule in August 2021.

The rule requires companies to have one director who identifies as female, a member of an underrepresented racial or ethnic minority, or LGBTQ+ by the end of this year or explain why they do not. Companies would generally need two diverse directors to satisfy the rule by 2026.

Companies also have to disclose annually how board members identify in those categories, although the individuals can decline to answer.

The groups said the rule violates the U.S. Constitution’s prohibition of discriminatory laws and restraints on free speech. They argued that those restrictions on government extend to Nasdaq because the SEC could penalize the exchange if it does not enforce the rule.

The SEC and Nasdaq argued that the exchange is a private entity not bound by restrictions on government. They said the rule is not a quota but a disclosure requirement that provides standardized information on board diversity.

Several Republican state attorneys general had weighed in against the rule, while institutional investors and a coalition of Nasdaq-listed companies, among others, filed briefs in support.

The 5th Circuit said on Wednesday that while the government regulates Nasdaq, it did not create the exchange or appoint its leadership.

Three judges appointed by Democratic presidents comprised the panel that decided the case, a rarity for the 5th Circuit, where 12 of the 16 active judges were appointed by Republican presidents. The court has issued several high-profile rulings adverse to the Biden administration.

The case is Alliance For Fair Board Recruitment v. SEC, 5th U.S. Circuit Court of Appeals, No. 21-60626.

(Reporting by Jody Godoy in New York; editing by Mark Porter and Jonathan Oatis)

(Reuters) -Meta Platforms said on Wednesday it will roll out broadcast channels, a feature for public distribution of messages from individuals, to Facebook and Messenger.

Social media firms are bringing in more features to shore up engagement across apps in a highly competitive online environment.

The announcement comes as rival messaging app Telegram’s broadcast channels have assumed an outsized role in the conflict between Israel and Hamas, as the primary means that the Palestinian Islamist group uses to communicate with the world.

“We’re currently testing the ability for Pages to create broadcast channels and expect to roll this out in the coming weeks,” Meta said in a statement.

Meta expanded WhatsApp Channels to users in over 150 countries last month. The feature is also available on Instagram.

(Reporting by Jaspreet Singh in Bengaluru and Katie Paul in New York; Editing by Shailesh Kuber and Devika Syamnath)

By Lisa Richwine and Dawn Chmielewski

LOS ANGELES (Reuters) -Netflix raised subscription prices for some of its streaming plans in the United States, Britain and France on Wednesday as it shattered new customer expectations, sending its shares soaring 10%.

The company picked up nearly 9 million new customers around the globe, surpassing the 6 million consensus forecast of Wall Street analysts surveyed by LSEG.

Netflix credited the gains to its crackdown on password-sharing and a steady flow of new programming such as global hit “One Piece.”

The company raised the U.S. price of the premium ad-free plan by $3 per month to $22.99. The one-stream basic plan rose by $2 per month.

Investors welcomed the news, sending Netflix shares climbing more than 10% in after-hours trading to $382.99

The streaming video pioneer has been searching for ways to increase revenue as it nears market saturation in the United States and faces competition from Walt Disney, Warner Bros Discovery and others.

PP Foresight analyst Paolo Pescatore said the company’s third-quarter growth was a testament to its password crackdown and the opportunities for future growth as it moves into advertising.

“It is firing on all cylinders, with recent efforts all heading in the right direction,” he said.

GLOBAL PRICE HIKES

In Britain, Netflix increased the basic plan price by 1 pound to 7.99 pounds. In France, basic rose by 2 Euros to 10.99 Euros.

The price hikes were announced in a third quarter earnings report that showed the company’s global subscriber base reached 247 million at the end of September.

The company posted revenue of $8.542 billion, in line with analyst forecasts. Earnings-per-share came in at $3.73, ahead of Wall Street’s expectation of $3.49.

Netflix projected fourth quarter revenue of $8.69 billion fell slightly below the $8.77 billion forecast of analysts polled by LSEG.

Media companies like Netflix have been grappling with labor tensions in Hollywood. While film and television actors have ratified a new contract, actors remain on strike.

The work stoppages shut down Netflix productions such as “Stranger Things.” The company argues, however, that it has navigated the strikes better than competitors because many of its productions take place outside the United States.

The strikes prompted Netflix to revise its projections on content spending. The company estimated it would invest around $13 billion on content in 2023, assuming the studios reach a settlement with striking actors “in the near future.”

That was down from the $17 billion it expected to spend.

Netflix said it continued to dominate viewership even with the strikes. Netflix programming accounted for 8% of television screen time, second only to YouTube, the company said, citing Nielsen data.

(Reporting by Lisa Richwine; Editing by Aurora Ellis)

WASHINGTON (Reuters) – Ford Motor said on Wednesday it is recalling 35,000 Mustang Mach-E electric vehicles because high voltage battery main contactors may overheat resulting in a loss of driving power.

The new recall of 2021 and 2022 model year Mach-E vehicles with extended range followed an August investigation by the National Highway Traffic Safety Administration’s (NHTSA) into whether Ford’s June 2022 recall of 49,000 Mach-E vehicles properly addressed the issue.

The initial recall fix was to update the software. The new recall, which is limited to extended range vehicles, includes a replacement high voltage battery junction box.

NHTSA said in August that following the 2022 recall, Ford issued a service bulletin to replace the high voltage battery junction box and said owners that experienced loss of motive power after receiving the recall remedy had the part replaced.

Ford said Wednesday it was is aware of 107 instances of high voltage contactor over-heating that resulted in a loss of driving power after completion of the 2022 recall but said it is not aware of any crashes or injuries related to the issue.

(Reporting by David Shepardson; Editing by Aurora Ellis)

By Chibuike Oguh

NEW YORK (Reuters) – Several U.S. regional banks beat analysts third-quarter profit expectations on Wednesday as higher interest rates allowed them to charge more for loans, although rising loan loss provisions and deposit retention costs crimped margins.

Shares of several regional banks fell, including M&T Bank and US Bancorp.

Stronger net interest income (NII), the difference between what banks earn from lending and pay out on deposits, boosted profits at US Bancorp and M&T Bank Corp, allowing both lenders to beat Wall Street analyst estimates despite increasing provisions for potential loan losses.

A small-than-expected 16% drop in US Bancorp’s profit was cushioned by a nearly 11% growth in its NII to $4.2 billion, Credit loss provisions, however, jumped 42% to $515 million.

Aggressive Federal Reserve interest rate hikes to fight inflation have allowed many banks to make more on lending.

But higher rates have also forced lenders to pay more to retain deposits as customers hunt for higher yielding products. Uncertainty over the economic outlook is also causing lenders to set aside more cash to cushion loans that may go bad.

Regional banks remain a focus of investor scrutiny. Early this year, deposit runs toppled Silicon Valley Bank and two other lenders, sparking a rout in bank shares.

M&T Bank reported profits rose nearly 7% to $690 million, driven by a 6% NII growth to $1.8 billion. But its loan loss provisions grew by 30% to $150 million. Shares of M&T Bank fell 2.7% while US Bancorp was down 4%.

“Most of these banks are seeing increases to their charge-offs and they also seeing slightly higher credit problems that will continue to fester and they have to set aside reserves,” said Chris Marinac, director of equity research at Janney Montgomery Scott. However, he added that tightening credit conditions would continue to allow banks to charge more for loans.

“I think the businesses have a lot more staying power,” Marinac added.

The KBW regional banking index is down nearly 24% year-to-date, while the S&P regional bank has also dropped 33% in the same period.

Citizens Financial Group and First Horizon Corp both reported a decline in their third quarter profit weighed down by rising credit loss provisions and deposit costs.

Citizens’ deposit costs climbed 34 basis points over the prior quarter, allowing total deposits to remain flat at $178 billion. At First Horizon, deposit costs rose by 71 basis points, with deposits reaching $66.5 billion, up 8%.

Citizen Financial’s stock lost 5.4%, while First Horizon was up nearly 2%.

“The trick is going to be retaining those customers even if the Fed continues to raise rates,” Marinac said.

(Reporting by Chibuike Oguh in New York; Editing by Michelle Price and David Gregorio)

(Reuters) – Islamic Jihad, a Palestinian militant group that is an ally of Hamas and took part in the Oct. 7 attack on Israel from Gaza, has denied Israel’s accusations that it was behind a strike on a hospital in Gaza that killed hundreds of people.

Following are some facts about Islamic Jihad:

* Israelis and Palestinians have blamed each other for bombing of Al Ahli Arab Hospital in Gaza City late on Oct. 17. Israel said Islamic Jihad was responsible, saying a failed rocket launch by the group hit the hospital. Islamic Jihad denied this, saying it did not have any activity in or around Gaza City at that time.

* Founded in the late 1970s by Fathi Shiqaqi and Abdel-Aziz Odeh, Islamic Jihad gained support among Palestinians disillusioned with Yasser Arafat’s Palestine Liberation Organisation (PLO). Shiqaqi was assassinated in 1995 in Malta, apparently by Israeli agents.

* The group is sworn to destroying Israel and replacing it with an Islamic state spanning what was pre-1948 British Mandate Palestine, including the West Bank and Gaza, which Israel captured in the 1967 Middle East war.

* A recipient of Iranian funding and know-how estimated by Israel to be in the tens of millions of dollars annually, Islamic Jihad has foreign headquarters in Beirut and Damascus and its deployment in the Israeli-occupied West Bank, while more limited than in Gaza, has recently grown.

* Islamic Jihad has the second-biggest armed network in Gaza after that of the enclave’s governing militant group Hamas. Up-to-date figures on Islamic Jihad’s strength are difficult to come by, with 2021 estimates ranging from about 1,000 to several thousand gunmen, according to the CIA’s World Factbook. The group also has a significant arsenal of rockets, mortars and anti-tank missiles. Islamic Jihad does not disclose such information.

* Unlike Hamas, Islamic Jihad has not contested Palestinian parliamentary elections and appears to have no ambition to form a government in Gaza or the West Bank.

* Islamic Jihad is designated a terrorist group by Israel, the United States and European countries.

(This story has been refiled to remove repeated words in paragraph 7)

(Compiled by Reuters reporters; Editing by Edmund Blair)

By David Shepardson

WASHINGTON (Reuters) -Ford Motor Co said on Wednesday a proposal by President Joe Biden’s administration to hike vehicle fuel economy standards through 2032 threatens to cause “substantial economic hardship” for the No. 2 U.S. automaker.

Ford’s comments represent the latest attack by the auto industry on the National Highway Traffic Safety Administration’s proposal announced in July to increase vehicle fuel efficiency requirements by 2% per year for passenger cars and 4% per year for pickup trucks and SUVs from 2027 through 2032.

The agency made the proposal as Biden’s administration seeks to cut greenhouse gas emissions to combat climate change and to reduce fuel use. The proposal would result in a fleet-wide average fuel efficiency of 58 miles (93 km) per gallon. NHTSA is due to make a final decision by early next year.

In a filing with NHTSA during the public comment period for the proposed regulation, Ford cited NHTSA estimates that the automaker would face $1 billion in civil penalties through 2032 under these changes in the Corporate Average Fuel Economy (CAFE) program.

“This is alarming in and of itself, and threatens substantial economic hardship for Ford,” the company said of the estimated civil penalties, calling NHTSA’s proposal not feasible and adding that the plan does not provide a level playing field for all automakers.

“We see substantial risk of unprecedented civil penalties in the CAFE program,” Ford said.

The company called for cutting in half NHTSA’s proposed fuel efficiency hikes for SUVs and trucks, echoing the position taken on Monday by the American Automotive Policy Council, a group representing the Detroit Three automakers – Ford, General Motors and Stellantis unit Chrysler.

On Tuesday, electric car maker Tesla urged NHTSA to finalize much tougher fuel economy standards calling for increasing stringency for cars by 6% annually and 8% for trucks and SUVs. Tesla sells credits to other automakers to help them meet government vehicle emissions requirements. Higher CAFE credits could force automakers to buy more such credits to meet tougher requirements.

U.S. automakers previously said the fines would cost GM $6.5 billion, Stellantis $3 billion and Ford $1 billion, citing NHTSA’s projections and its $13.7 billion estimate for the industry as a whole.

In June, Reuters first reported that Stellantis and GM paid a total of $363 million in CAFE fines. Ford noted that it has never had to pay CAFE fines.

NHTSA last year reinstated sharp increases in penalties. The agency has said it is prohibited when making penalty projections from considering electric vehicles, and flexibilities like credit trading. It added that its proposal “is focused on saving Americans money at the gas pump and strengthening American energy independence.”

(Reporting by David Shepardson; Editing by Will Dunham)

Inflection AI Warns of AI Chatbots Interfering With US Elections

Election interference has always been a hot subject, and things are about to get out of hand as artificial intelligence chatbots become powerful. A slew of chatbots rolled out can answer questions, summarize text, and perform other tasks when prompted by users. Likewise, there are growing concerns that such tools could significantly impact how people vote in the upcoming US election.

Controlling Chatbots

Concerned by the threat that AI-powered chatbots could have in the upcoming US presidential election, Inflection AI has started coordinating with other startups to limit the tools’ role. The artificial intelligence startup co-founder Mustafa Suleyman says they will not allow their chatbot Pi to advocate for any political candidate.

Likewise, Suleyman has started a campaign urging other startups to prevent their chatbots from recommending political candidates, which could amount to election interference. Part of the push entails advising AI companies to avoid political commentary on AI products. Such actions could result in chatbots refraining from giving suggestions on who to vote for.

Inflection is a startup that has raised billions of dollars amid the artificial intelligence hype. The company boasts a star-studded list of investors led by Microsoft co-founder Bill Gates, former Google Chief Executive Officer Eric Schmidt, and Nvidia Corp.

It would not be the first time that companies with chatbots have programmed them to offer answers to some queries. For instance, most chatbots decline to answer questions that might result in a crime, for instance, providing answers on how to rob a bank or kidnap someone.

Musk AI Warning

The push to restrict chatbots’ role in the upcoming elections brings to light the ever-growing concerns about how powerful AI tools could become. More than 1,000 technology leaders and researchers led by Tesla CEO Elon Musk have urged AI labs to pause developing the most advanced systems. The warning comes on growing concerns that advanced AI tools could present profound risks to society and humanity far worse than election interference.

Some AI tools in the market have already been criticized for getting details wrong. Likewise, there are growing concerns that they could be used to spread misinformation that could cause significant dangers in addition to affecting how people vote, respond, and perform other tasks. Musk has been vocal in urging for the development of safety protocols for AI systems.

According to Musk, the development of robust AI systems should only proceed once it is determined that the tools will have a positive impact and that those humans will always be in control. In addition, the risks posed by the tools should be manageable. Failure to institute controls and safety protocols could result in AI systems that assume complete control of humanity.

While Musk has been one of the most prominent investors in the revolutionary technology that could enhance self-driving features in Tesla vehicles, he has also been wary of how powerful the technology could become. He is on record calling for a competitor to Microsoft’s Partnership with Open AI and Google’s relationship with DeepMind to ensure the two tech giants don’t manipulate the technology to the disadvantage of other industry players or humanity.

By Scott DiSavino

NEW YORK (Reuters) -Oil prices climbed about 2% to a two-week high on Wednesday on a bigger-than-expected U.S. storage draw and as rising tensions in the Middle East threaten to disrupt oil supplies from the region, with Iran calling for an oil embargo on Israel.

Brent futures rose $1.46, or 1.6%, to $91.36 a barrel by 10:38 a.m. EDT (1438 GMT), while U.S. West Texas Intermediate (WTI) crude rose $1.45, or 1.7%, to $88.11.

That put Brent on track for its highest close since Sept. 29 and WTI on track for its highest close since Oct 3. Earlier in the session both benchmarks rose more than $3 a barrel.

The U.S. Energy Information Administration (EIA) said energy firms pulled 4.5 million barrels of crude from stockpiles during the week ended Oct. 13. [EIA/S]

That was much higher than the 0.3 million barrel draw analysts forecast in a Reuters poll and in line with the 4.4 million barrel drop seen in data from the American Petroleum Institute (API), an industry group. [API/S]

It was also the fourth crude storage decline in five weeks and compares with a 1.7 million barrel draw during the same week last year and a five-year (2018-2022) average build of 2.5 million barrels for this time of year.

The decline included a drop of 0.8 million barrels at the Cushing storage facility in Oklahoma to its lowest level since October 2014, prompting concerns about the quality of oil remaining in the tanks and what happens if the amount of oil falls below minimum operating levels.

Cushing is the delivery point for U.S. oil futures on the New York Mercantile Exchange.

Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders. Biden arrived in Israel on Wednesday pledging solidarity with Israel in its war against Hamas, and backing Israel’s account that the hospital blast had been caused by militants.

“This turn of diplomatic fortunes again garners fear of conflict spread and therefore the leap in oil,” said John Evans of oil broker PVM.

In the Saudi city of Jeddah, Iranian Foreign Minister Hossein Amirabdollahian urged members of the Organisation of Islamic Cooperation to impose an oil embargo on Israel.

The Organization of the Petroleum Exporting Countries (OPEC) is not planning to take any immediate action on Iran’s call, four sources from the producer group told Reuters. Iran is an OPEC member.

(Reporting by Scott DiSavino in New York, Natalie Grover in London, Arathy Somesekhar in Houston and Muyu Xu in Singapore; editing by Louise Heavens, Kirsten Donovan)

By Natalie Grover

LONDON (Reuters) -Global oil benchmark Brent hit $93 a barrel on Wednesday as the risk of escalating conflict in the Middle East threatened to disrupt oil supplies from the region, with Iran calling for an oil embargo to be imposed on Israel.

Brent crude futures were up $1.33, or about 1.5%, to $91.23 a barrel at 1231 GMT. West Texas Intermediate crude (WTI) futures were up $1.28, or roughly 1.5%, at $87.94 a barrel.

Both benchmarks gained more than $3 to touch their highest levels in two weeks earlier in the session.

Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders. Biden arrived in Israel on Wednesday pledging solidarity in its war against Hamas, and backing its account that the Gaza hospital blast had been caused by militants.

“This turn of diplomatic fortunes again garners fear of conflict spread and therefore the leap in oil,” said John Evans of oil broker PVM.

Elsewhere in the Saudi city of Jeddah, Iranian Foreign Minister Hossein Amirabdollahian urged members of the Organisation of Islamic Cooperation to impose an oil embargo on Israel.

OPEC+ is not planning to take any immediate action on Iran’s call, two sources from the producer group told Reuters.

“A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel Hamas conflict expands and potentially draws in Iran directly,” added Vivek Dhar, an analyst at Commonwealth Bank of Australia.

Geopolitical tensions aside, other drivers are also supporting oil prices.

U.S. crude stocks fell by a much-steeper-than-expected 4.4 million barrels in the week ended Oct. 13, compared to the forecast of a 300,000 barrel fall, according to market sources citing American Petroleum Institute figures on Tuesday. [API/S]

Official U.S. government data is due later on Wednesday.

On the demand side, China’s economy grew faster-than- expected in the third quarter, official data on Wednesday showed, suggesting a recent flurry of policy measures is helping to bolster a tentative recovery.

Data also showed that the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier, as refiners increased run rates to cater for strong demand for transport fuel over the Golden Week holiday and improving manufacturing activity.

But analysts sounded caution on China’s economy, with the country’s real estate sector still in peril.

“The economic recovery is still in its infancy,” Moody’s Analytics economist Harry Murphy Cruise said.

Meanwhile, higher-than-expected September U.S. retail sales spurred expectations of another interest rate hike by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.

(Reporting by Natalie Grover, Arathy Somesekhar and Muyu Xu; editing by Lincoln Feast, Jason Neely, Elaine Hardcastle and Louise Heavens)