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TOKYO (AP) — Asian stock markets were down slightly in subdued trading Tuesday amid anticipation the U.S. Federal Reserve may raise interest rates in June.
KEEPING SCORE: Japan’s benchmark Nikkei 225 slipped 0.5 percent in early trading to 16,566.23 as the yen continued to strengthen, putting a dampener on export issues. Australia’s S&P/ASX 200 was virtually unchanged, inching down less than 0.1 percent at 5,318.00. South Korea’s Kospi edged down 0.4 percent to 1,947.41. Hong Kong’s Hang Seng fell 0.2 percent to 19,765.32 while the Shanghai Composite index slid 0.5 percent to 2,830.13.
WALL STREET: The Dow Jones industrial average fell 8.01 points, or 0.05 percent, to 17,492.93. The Standard & Poor’s 500 index fell 4.28 points, or 0.2 percent, to 2,048.04, and the Nasdaq composite lost 3.78 points, or 0.1 percent, to 4,765.78.
WAITING ON THE FED: Investors are seeking clues on whether the U.S. Federal Reserve will raise interest rates next month. That would depend on the assessment as to the resilience of the U.S. economy, which in effect impacts global growth. Several members of the Federal Reserve will be making speeches this week, which may give insight on what Fed policymakers might do at their meeting in June.
THE QUOTE: “Fed’s rhetoric keeps rate hike in summer live,” Cynthia Jane Kalasopatan, of Mizuho Bank’s Singapore Treasury Division, wrote in an email to subscribers. “The rate hike is viewed as necessary as inflation is expected to rise on wage pressures.”
ENERGY: Benchmark U.S. crude shed 15 cents to $47.93 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 23 cents to $48.12 a barrel in London.
CURRENCIES: The dollar fell to 109.25 yen from 109.81 yen and the euro fell to $1.1213 from $1.1239.
AP Business Writer Ken Sweet contributed to this report.
Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama
Her work can be found at http://bigstory.ap.org/content/yuri-kageyama
NEW YORK (AP) — Tribune Publishing rejected a second takeover bid from USA Today owner Gannett, but did say Monday that it was open to further talks.
Gannett last week raised its per-share bid for the owner of the Los Angeles Times, Chicago Tribune and other newspapers to $15, from $12.25. Gannett, based in McLean, Virginia, put the total value of the revised offer at about $864 million, which includes some $385 million in debt.
The Chicago publisher called the offer inadequate, but on Monday it revealed that it would sell 4.7 million shares to a California entrepreneur for $70.5 million, which on a per-share basis is exactly what Gannett is offering.
The stake was taken by Nant Capital, which was founded by Patrick Soon-Shiong, a surgeon and businessman. Nant is now Tribune Publishing’s second-largest shareholder and Soon-Shiong will become vice chairman of the board.
Gannett Co. said Monday that it will determine whether to continue its pursuit of Tribune Publishing after that company’s June 2 stockholder’s annual meeting, where it has urged Tribune shareholders to reject the proposed slate of board nominees.
The rejection Monday arrived three days after Gannett sent an excoriating letter to Tribune shareholders questioning the motives of the company board and Michael W. Ferro Jr., the publisher’s non-executive chairman.
Tribune Publishing Co. did, however, invite Gannett to create non-disclosure agreement so that the companies could determine whether a deal could be reached that would benefit everyone.
Gannett’s attempts to acquire Tribune Publishing follow a recent shake-up at the company.
In February, Ferro Jr. made a $44.4 million cash investment in the Tribune through his Merrick Media. At the time, Ferro owned a sizeable stake in Tribune’s crosstown rival, the Chicago Sun-Times. He later said that he would donate the Sun-Times stake to a charitable trust to avoid the appearance of a conflict of interest.
Shares of Tribune Publishing tumbled $2.14, or 15 percent, to close Monday at $12.09.
Gannett’s shares slipped 38 cents, or 2.4 percent, to $15.74.
ALBUQUERQUE, N.M. (AP) — New Mexico on Monday became the first state to sue the federal government and the owners of two mines over the release of 3 million gallons of toxic wastewater from a closed Colorado gold mine, seeking tens of millions of dollars for environmental and economic damage caused by the spill.
The federal lawsuit says the environmental effects of the 2015 spill in which a bright-yellow plume of arsenic, lead and other heavy metals fouled rivers in three Western states were far worse than claimed by the U.S. Environmental Protection Agency.
New Mexico wants to be paid back for its immediate response to the disaster and receive funding for long-term monitoring, lost revenue and a marketing campaign to undo the stigma left behind by the Gold King Mine spill.
“The liability is crystal clear. The facts speak for themselves, and EPA for whatever reason is unwilling to resolve this outside of court,” New Mexico Environment Secretary Ryan Flynn told The Associated Press.
The lawsuit came days after New Mexico Attorney General Hector Balderas fired off warning letters to the EPA and the state of Colorado over the response to the spill.
Balderas said it has had a devastating effect on communities, and the federal agency should be held to the same standards it would impose on private interests accused of polluting.
“Remediation and compensation dollars have been far too minimal for these very special agricultural and cultural communities who depend on this precious water source for irrigation and drinking water,” Balderas said. “They must be properly compensated and there must be appropriate independent monitoring to prevent future dangers to public health and the economy.”
The EPA has a practice of not commenting on pending litigation but reiterated Monday that it takes responsibility for the cleanup and has been working to reimburse states and tribes for costs related to monitoring plans.
The agency also is doing its own monitoring of the Animas and San Juan rivers.
An EPA contractor triggered the spill. The wastewater made its way into the two rivers, setting off a major response by government agencies and private groups.
During the spill, water utilities shut down intake valves and farmers stopped drawing from the rivers as the yellow plume moved downstream.
The EPA said water quality quickly returned to pre-spill levels, but New Mexico officials and others warn about heavy metals collecting in the sediment and getting stirred up each time rain or snowmelt results in runoff.
The state Environment Department received numerous calls just last week about the discoloration of the Animas River following a round of storms, Flynn said.
A notice sent this month to the EPA outlined the damage and argued that heavy metals in the Animas and San Juan rivers remain at levels that present unacceptable risks to health and the environment.
Attorneys for New Mexico argue that the spill was preventable and that the EPA had been warned about a potential blowout nearly a year before the incident.
The state also contends its offers to lead a regional long-term monitoring project to better understand the damage and the prospects of future contamination have been repeatedly rebuffed by the EPA.
The agency offered $2 million to states and tribes affected by the spill for monitoring, but New Mexico officials say that’s only a fraction of the more than $6 million that would be needed for adequate monitoring in the state.
New Mexico also estimates the spill is costing the state $130 million in lost income taxes, fees and revenue. Officials have pointed to reduced tourism, fishing and land use throughout the region.
A merger between Bayer and Monsanto would put together two giant chemical makers, one focused on plants and another that also makes products for people and animals. Here’s a look at their products, which have more than $65 billion in total annual revenue.
Bayer AG, based in Leverkusen, Germany, sells a broad range of products beyond its nearly 120-year-old aspirin, including prescription and over-the-counter medicines for people, vaccines and drugs for pets and livestock, and seeds and chemicals for farmers and home gardeners.
Bayer is a leader in birth control and hemophilia treatments. Its medicines include contraceptives pills Yasmin, Yasminelle and Yaz; Mirena and Skyla intrauterine devices; Essure, a permanent contraceptive that blocks the fallopian tubes; hemophilia treatments Kogenate and Kovaltry; cancer drugs Nexavar, Stivarga and Xofigo; antibiotics Avelox and Cipro, erectile dysfunction pill Levitra, Betaseron for multiple sclerosis, Desonate for eczema in babies, and Adempas for high blood pressure in lungs. With U.S. partners, Bayer jointly markets Eylea, an injected drug for vision-destroying macular degeneration, and Xarelto, the top seller among new drugs for preventing heart attacks and strokes.
Bayer is No. 2 globally in sales of nonprescription drugs and other health products. Besides its iconic aspirin, those include Aleve pain reliever, One A Day, Flintstones and other vitamin brands; Alka-Seltzer and Rennie for heartburn and upset stomach, laxatives MiraLax and Phillips’ Colon Health, cold sore treatment Campho-Phenique, Skinoren for acne in women, Canesten for vaginal yeast and other fungal infections, eczema cream Advantan, nonprescription Claritin allergy pills, Afrin decongestant spray, Coppertone sun care products and Dr. Scholl’s foot care items.
PET AND LIVESTOCK MEDICINES
Bayer sells Advantage and Advantix, a line of topical flea and tick protection for dogs and cats, plus shampoos and defoggers; Seresto, flea-and-tick collars for dogs and cats; antibiotic Baytril for cats, dogs and farm animals; quellin, a prescription pain and inflammation drug for dogs; Drontal and Profender for killing worms in dogs and cats; Veraflox, for treating skin, wound and some internal infections in dogs and cats, and Zelnate, an immune-system stimulator for fighting respiratory disease in cattle.
These include Bayer Advanced and Natria home garden products to control weeds, pests and flower and vegetable diseases, plus numerous farm products, including Liberty herbicide and a related treatment to protect crops, Corvus herbicide, Poncho and Votivo biological insecticide and fungicide seed treatments, and new insecticide Sivanto, which helps protect beneficial insects such as pollinators.
Monsanto Co., based in St. Louis, has dominated the market for genetically enhanced seeds for more than a decade, particularly in the U.S., where everything from corn flakes to soda and beef are often produced from crops that use technology first developed by Monsanto.
Monsanto makes biotech-enhanced seeds, for corn, soybeans, cotton and other agricultural staples. These yield-boosting seeds are designed to resist insects and tolerate herbicides, allowing famers to wipe out weeds without harming crops. Some of the company’s best-selling products, including corn seeds, feature extra traits to help crops weather droughts.
The company also sells conventional seeds for tomatoes, carrots and onions.
Monsanto sells herbicides for killing weeds on farms, golf courses, gardens and other green spaces. Its chief product is decades-old weed killer Roundup. It dominated Monsanto’s business when it primarily sold chemicals, and remains a multi-billion-dollar seller annually, though sales have declined in recent quarters due to generic competition and safety concerns of European authorities.
Monsanto also licenses traits of its genetically modified seeds to other companies for sale under their own brands.
Follow AP Medical Writer Linda A. Johnson at https://twitter.com/lindaj_onpharma
The IRS has been so slow to adapt to the rapidly emerging peer-to-peer economy that billions of dollars in taxable income a year are probably going unreported every year, according to a study being delivered to Congress this week.
More than 2.5 million Americans earned income via on-demand platforms like Airbnb Inc., Etsy Inc. and Lyft Inc. in 2014, and the companies generated an estimated $15 billion in revenues. But the companies don’t withhold taxes on the income they pay to people who provide services or sell items via their platforms.
The companies are required to notify the IRS of that income -- and send service providers a 1099-K form of their yearly earnings to file with their tax returns -- only if they earn at least $20,000 and have 200 or more transactions in a year. The rule applies only to companies that get paid by credit card.
A study by researchers at American University has found that more than two-thirds of those who earned income from the platform economy never received a statement of their earnings. The study, which surveyed 40,000 members of the National Association of the Self Employed, found that many people who earn income on the platforms are confused about when, whether or how to report their earnings on their tax returns.
Because much of the income earned in the platform economy is never reported to the IRS by the companies, it’s likely adding to the $194 billion per year that the IRS estimates the Treasury loses each year due to misreported individual business income.
“These issues should be addressed -- not only because millions of American taxpayers are needlessly burdened trying to comply with an antiquated, outdated tax system -- but also because inaction has very real implications on Treasury and IRS’ ability to fairly and efficiently collect taxes,” said the report, written by Caroline Bruckner, managing director of the Kogod Tax Policy Center at American University. Bruckner is scheduled to testify about the report Tuesday before the House Small Business Committee.
The study said that IRS officials were notified two years ago that the $20,000 per year threshold was likely to mean that much of the income earned on the platforms would go unreported. At the time, the study said, the IRS promised to provide new guidance to help clarify matters and ensure that income was reported. But no new guidance has been released, and the study warns that with the number of platform economy workers expect to grow to 7 million by 2020, the potential loss in tax revenue is likely to be substantial.
Bruce Friedland, an IRS spokesman, said the agency expects to issue guidance on the issue in the near future.
The study suggested that the IRS release clearer guidelines for companies below the $20,000 threshold for filing 1099Ks to ease confusion and encourage a uniform response by the platform-based companies. Etsy, Airbnb and Lyft all inform service providers that they only report income if the $20,000 and 200 transaction threshold is reached, the study noted, but Uber sends every one of its drivers a 1099K and reports their income to the IRS, regardless of income earned.
The study said the current system ill-serves the millions of people who earn income from the platforms, by exposing them to possible audit and penalties for misreporting their income.
“At best, these small business owners are shortchanged when filing their taxes,” the study said. “at worst, they fail to file altogether.”
LONDON (AP) — The Latest on developments in global financial markets (all times local):
European stock markets are largely trading in narrow ranges as further evidence emerged of an economic slowdown across the 19-country eurozone.
Financial information company Markit said Monday that its initial reading of the composite purchasing managers’ index — a broad gauge of business activity across the services and manufacturing sectors — fell to a 16-month low of 52.9 points in May from April’s 53.0. Anything above 50 indicates expansion.
Stephen Brown, European economist at Capital Economics, says the small monthly fall adds to the evidence that second-quarter growth is “unlikely to repeat” the first-quarter’s strong 0.5 percent gain.
That kept a lid on Europe’s main markets, with Germany’s DAX up 0.4 percent at 9,959 while France’s CAC-40 fell 0.1 percent to 4,350. Britain’s FTSE 100 index was flat at 6,156.
HANOI, Vietnam (AP) — Eager to banish lingering shadows of the Vietnam War, President Barack Obama lifted the U.S. embargo on selling arms to America’s former enemy Monday and made the case for a more trusting and prosperous relationship going forward. Activists said the president was being too quick to gloss over serious human rights abuses in his push to establish warmer ties.
After spending his first day in Vietnam shuttling among meetings with different government leaders, Obama will spend the next two days speaking directly to the Vietnamese people and meeting with civil society groups and young entrepreneurs. It’s all part of his effort to “upgrade” the U.S. relationship with an emerging economic power in Southeast Asia and a nation that the U.S. also hopes can serve as a counterweight to Chinese aggression in the region.
Tracing the arc of the U.S.-Vietnamese relationship through cooperation, conflict, “painful separation” and a long reconciliation, Obama marveled during a news conference with the Vietnamese president that “if you consider where we have been and where we are now, the transformation in the relations between our two countries is remarkable.”
President Tran Dai Quang said later at a lavish state luncheon that he was grateful for the American people’s efforts to put an end to “an unhappy chapter in the two countries’ history,” referring to the 1965-1975 U.S. war with Vietnam’s communists, who now run the country.
The conflict killed 57,000 American military personnel and as many as 2 million Vietnamese military and civilians.
Quang added, though, that “the wounds of the war have not been fully healed in both countries.”
Still, Quang said, both sides are determined to have a more cooperative relationship.
That mindset was evident in the friendly crowds that lined the streets as Obama’s motorcade zigzagged around Hanoi on Monday. And when Obama emerged from a tiny Vietnamese restaurant after a $6 dinner with CNN personality Anthony Bourdain, the president shook hands with members of the squealing crowd and waved as if he really didn’t want to get back in the limousine.
Obama was to address the Vietnamese people on Tuesday morning. A White House official said the president would use his address to stress the importance of having a “constructive dialogue” even when the two nations disagree — including on human rights.
But that is unlikely to mollify activists, who said the president had given up his best leverage for pressing Vietnam to improve its rights record by lifting the arms embargo.
Duy Hoang, U.S.-based spokesman for Viet Tan, a pro-democracy party that is banned inside Vietnam, said that until Vietnam makes progress on human rights, the U.S. should not sell it military gear that could be used against the population.
“The U.S. should also reiterate the message that closer security cooperation is to bolster Vietnam’s external security and that the proper role of the Vietnamese military is to protect the nation, not the current political regime,” Hoang said by e-mail.
Veterans were split. Bernard Edelman, deputy director of government affairs for the Vietnam Veterans of America, cited the good cooperation surrounding efforts to account for troops still missing in action.
“The war’s over,” he said, noting his group hasn’t taken an official position.
But Steve Rylant of Loveland, Colorado, who served at Ubon Air Base in Thailand during the Vietnam war, said he was “offended.”
Asked if there would come a better time for lifting the embargo, Rylant said, “For me, there’s never a time. ... It’s just really difficult for us to try and agree to any kind of a thing like this with Vietnam, I guess.”
Obama said there had been “modest progress on some of the areas that we’ve identified as a concern.” He added that the 12-nation trans-Pacific trade deal that he’s pushing could help prompt Vietnam to implement a series of labor reforms “that could end up being extraordinarily significant.”
For Vietnam, lifting the arms embargo was a psychological boost. The United States partially lifted the ban in 2014, but Vietnam pushed for full access as it tries to deal with China’s land reclamation and military construction in nearby seas.
It was unclear whether striking the ban would quickly result in an increase in arms sales. Obama said that each deal would be reviewed case by case, and evaluated based on the equipment’s potential use. But he said he no longer believed a ban based on “ideological” differences was necessary. He added that the U.S. would “continue to speak out on behalf of human rights we believe are universal.”
Vietnam holds about 100 political prisoners and there have been more detentions this year, some in the past week. In March, seven bloggers and activists were sentenced for “abusing democratic freedoms” and “spreading anti-state propaganda.” Hanoi says that only lawbreakers are punished.
Associated Press writers Foster Klug in Hanoi, Tammy Webber in Chicago, Dan Elliott in Denver and Matthew Pennington in Washington contributed to this report.
Follow Nancy Benac on Twitter at http://www.twitter.com/nbenac
LONDON (AP) — Stock markets were choppy Monday after a meeting of the developed world’s central bankers and finance ministers failed to yield fresh ideas for spurring economic growth.
KEEPING SCORE: In Europe, the main indexes pushed lower following early gains. France’s CAC-40 index was down 0.7 percent at 4,323 while Germany’s DAX fell 0.6 percent to 9,854. The FTSE 100 index of leading British shares was 0.2 percent lower at 6,144. Wall Street was poised for a flat opening with Dow futures and the broader S&P 500 futures steady.
GLOBAL GROWTH: The weekend meeting of the Group of Seven top industrial economies ended without agreement on a plan to revive global growth. Finance ministers stressed the importance of varying action for each country but U.S. Treasury Secretary Jacob Lew urged his Japanese counterpart, Taro Aso, to refrain from devaluing the yen to boost the country’s exports. Figures Monday showed Japanese exports measured by value fell 10.1 percent in April from a year earlier, a worsening from March’s 6.8 percent decline.
ANALYST TAKE: “Confidence towards the global economy was already fragile, and the disappointing G-7 meeting that concluded without a proposal to renewing global growth may have rekindled a wave of jitters,” said FXTM research analyst Lukman Otunuga.
EUROZONE LOSING STEAM: European shares were further hobbled by further evidence of an economic slowdown across the 19-country eurozone. Financial information company Markit said Monday that its initial reading of the composite purchasing managers’ index — a broad gauge of business activity across the services and manufacturing sectors — fell to a 16-month low of 52.9 points in May from April’s 53.0. Anything above 50 indicates expansion.
ASIA’S DAY: Tokyo’s Nikkei 225 shed 0.5 percent to 16,654.60 and Sydney’s S&P-ASX 200 retreated 0.6 percent to 5,318.90. Hong Kong’s Hang Seng declined 0.2 percent to 19,809.03. Benchmarks in Thailand and New Zealand also fell. The Shanghai Composite Index gained 0.6 percent to 2,843.65 and Seoul’s Kospi added 0.4 percent to 1,955.25.
ENERGY: Benchmark U.S. crude shed 58 cents to $47.83 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, lost 52 cents to $48.20 per barrel in London.
CURRENCIES: The euro was down 0.1 percent at $1.1210 while the dollar fell 0.6 percent to 109.41 yen.