Malaysian Airliner Crash Sends Stocks Tumbling

* Malaysian Airliner downed in Ukraine war zone, 295 dead

* Morgan Stanley profit more than doubles, beats estimates

* Microsoft to cut up to 18,000 jobs, 14 percent of workforce

* Dow off 0.5 pct; S&P 500 down 0.7 pct; Nasdaq off 0.9 pct (Updates to afternoon)

By Angela Moon

NEW YORK, July 17 (Reuters) - U.S. stocks fell on Thursday in volatile trading on news that a Malaysian Airlines passenger jet crashed near the Ukraine-Russia border, after the United States and European Union imposed sanctions on Russia.

Investors sold equities in a move to avoid risk because of conflicting reports about the reason why the plane went down. A New York Stock Exchange floor trader, who spoke on condition of anonymity, cited reports that the plane might been shot down.

"What's happening in the market is what you'd expect, a risk reversal. Stocks fall a bit, gold rises a bit, energy prices are still high, the volatility index spikes," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

The CBOE Volatility index surged 17.6 percent to 12.94 and was on track to post its biggest daily percentage gain in at least three months. Spot gold rose 1.4 percent to above $1,315 an ounce and U.S. crude shot up 1.8 percent to $103.03 a barrel.

The Dow Jones industrial average fell 89.26 points or 0.52 percent, to 17,048.94. The S&P 500 lost 14.37 points or 0.73 percent, to 1,967.20. The Nasdaq Composite dropped 40.89 points or 0.92 percent, to 4,385.08.

The major U.S. stock indexes opened modestly lower following news of fresh U.S. and European Union sanctions on Russia. Stronger-than-expected earnings, however, helped curb the declines.


By late morning, stocks slid to session lows after news that a Malaysian airliner was brought down over eastern Ukraine on Thursday. The crash killed all 295 people aboard and sharply increased the stakes in a conflict between Kiev and pro-Moscow rebels in which Russia and the West back opposing sides.

Ukraine accused "terrorists" - militants fighting to unite eastern Ukraine with Russia - of shooting down the Malaysia Airlines Boeing 777 with a heavy Soviet-era ground-to-air missile as it flew from Amsterdam to Kuala Lumpur.

"If there's an escalation here and we go to Tier Three sanctions, think about the economic effect it has on Russia and its trading partners," Hogan said. "If sanctions become harsh enough and have enough economic impact on Russia, it could drag the core of Europe into a recession. That's the economic possibility."

The iShares China Large Cap ETF slipped 1.1 percent. The NYSE Arca airline index was down 1.6 percent.

The U.S. sanctions, which were announced late on Wednesday, hit some of Russia's biggest companies while the EU sanctions were aimed at Russian companies that help destabilize Ukraine and will block new loans to Russia through two multilateral lenders. The Market Vectors Russia ETF lost 6.4 percent.

Equities had been holding near the unchanged mark earlier in the session, largely on the back of solid earnings from companies such as Morgan Stanley, down 0.2 percent at $32.44, and UnitedHealth, up 2.4 percent at $85.77.

Microsoft shares rose 1.3 percent to $44.64 after the company said it would cut up to 18,000 jobs, or about 14 percent of its workforce, resulting in pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters.

Data on manufacturing and the labor market indicated that the U.S. economy was improving, although the housing market remains weak. The PHLX housing index fell 1.6 percent.

S&P 500 companies' profits are expected to grow 4.9 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3 percent. (Reporting by Angela Moon; Editing by Jan Paschal)

Big Tobacco Merger Is A Desperate Bid To Corner Black Smokers

The cigarette industry, like many of its customers, is gasping for air. And now it's turning more than ever to racial targeting to survive.

Reynolds American, the No. 2 U.S. tobacco maker after Altria, on Tuesday announced a deal to buy No. 3 cigarette maker Lorillard for about $25 billion. It would be the latest, and one of the biggest, in a string of mergers in reaction to regulatory crackdowns and the long decline of smoking.

At first, it seemed the big prize in the deal would be Lorillard's popular e-cigarette brand Blu eCigs. The "vaping" trend, if it continues, could extend the lifespan of companies whose main products are now colloquially known as “cancer sticks.”

But Reynolds has agreed to sell Blu to British rival Imperial Tobacco to stave off antitrust regulators. That suggests the real gem is something else: Lorillard's menthol cigarette brand, Newport, which is marketed heavily to African-Americans.

Two spokeswomen for Reynolds did not immediately return calls for comment.

Newport sales accounted for 12.2 percent of the total U.S. cigarette market last year, compared with 8.1 percent each for Reynolds' top brands, Camel and Pall Mall, according to market research firm Euromonitor International.

Newport sales have helped Lorillard's share of the total cigarette market grow steadily, from 10.6 percent to 13.2 percent between 2009 and 2012. During that time, Reynolds' share of the market has shrunk.

Reynolds CEO Susan Cameron flagged her interest in Newport after announcing the deal, telling CNBC that "Newport actually has been on a true growth trajectory, and over three decades it has continued to grow in market share.”

It's a rare success story for the industry. Just one in five adults in the U.S. smokes, according to a 2012 Gallup poll. That is down from 45 percent in the 1950s, and smoking has been declining steadily for decades.

Reynolds has long known it had a shrinking customer base: A Reynolds executive once infamously told a New York Times columnist that the only people who smoked were “the poor, the young, the black and the stupid.”

Two decades later, Reynolds is banking on the continued loyalty of that third demographic to anchor profits.

Beginning in the 1970s, Newport marketed heavily to a black audience, and years of targeted advertising are still paying off. In 2012, Newport was the leading brand of cigarettes among nearly 74 percent of black youths aged 12 to 17 and almost 79 percent of black young adults aged 18 to 25, according to the Campaign for Tobacco-Free Kids.

“They’re really in a sweet spot of the industry,” Philip Gorham, a senior equity analyst at Morningstar, said of Newport. “It has a very specific demographic, it’s highly popular among African-American smokers.”

One danger for Reynolds -- beyond antitrust regulators stopping the merger -- is that the U.S. Food and Drug Administration could ban menthol flavor.

The FDA has already banned other candy flavors, but hasn't yet decided whether to ban menthol. The agency is "currently considering" comments, data and research on the issue submitted in July 2013, spokeswoman Jennifer Haliski told The Huffington Post, and there's no deadline for the FDA to act.

"FDA will not prejudge any potential regulatory action nor comment on the timing of possible regulatory actions," Haliski wrote in an email. She declined to comment on the Reynolds-Lorillard merger.

Gorham said such a ban is unlikely. Regulators might restrict the marketing of menthol cigarettes, but politicians are unlikely to take on the industry’s muscular lobby for the sake of one demographic, Gorham said.

"I don’t think politicians have the appetite to ban menthol,” said Gorham. “But if I’m wrong, and menthol gets banned, that’s an absolutely horrific outcome for Reynolds.”

Even then, cigarette companies will likely keep adapting, as they always have -- by merging, selling new products and expanding to new markets.

“It's hardly disappeared, it's just that rich people aren't smoking anymore," Robert Proctor, a Stanford professor who has chronicled the history of the tobacco industry in his book Golden Holocaust: Origins of the Cigarette Catastrophe and the Case For Abolition, told HuffPost. “This business is going downhill eventually, but they still sell 6 trillion cigarettes worldwide."

At This Rate, Women Won't Make As Much As Men For At Least 75 Years

Working women likely won’t have pay equality with men in their lifetimes. Neither will their daughters.

That’s one of the many depressing findings in a report out Monday from Oxfam on the state of gender equality around the world. If the gap between men's and women's earnings keeps closing at its current, agonizingly slow rate, women won’t earn equal pay for equal work for another 75 years, the report found.

Worldwide, the gender gap in education has been closing, but gaps in pay, employment and political participation have stagnated and in some cases even widened, Oxfam found. In the U.S., progress in closing the pay gap has stagnated in recent years after decades of steadily narrowing, according to a March analysis by the Institute for Women's Policy Research.

There are many reasons why closing the pay gap is happening so slowly. For one, out-and-out discrimination still plays a role. And in many countries, including the U.S., women tend to be concentrated in low-wage industries or in undervalued sectors like health care and education.

But one of the biggest reasons for the persistent gap, according to Oxfam, is that women are more likely than men to do unpaid care work like taking care of children or the elderly. That makes it harder for them to join the paid labor force. Women around the world basically donate two to five hours of unpaid work per day, on average, to the global economy, according to Oxfam.

As a result of all that time spent working for free, women are more likely to be employed part-time or in precarious or unprotected jobs like domestic work, Oxfam found.

“Because women are less likely to be employed in full-time positions they are often discriminated against in the workplace and given the crummiest jobs," said Shawna Wakefield, the head of gender policy at Oxfam, who wrote the report.

One thing that could help is for policy makers to start thinking of unpaid care work as having a broad economic benefit, instead of just as a "women's issue." And they should: Such work, if recognized, would boost gross domestic product by 9 percent in the U.S. alone, according to Oxfam.

"Unpaid care work is what sustains families, what sustains communities and what sustains economies," Wakefield said. "It's basically a subsidy for the economy that's not recognized."

Thinking about unpaid care work in this way might encourage policy makers to find ways to stop punishing women who do it. Maybe they'd make it easier for women to do such work and get well-paid work, too.

10 Brands That Will Disappear In 2015: 24/7 Wall St.

Each year, 24/7 Wall St. identifies 10 American brands that we predict will disappear before the end of the next year. This year’s list reflects the fact that mergers and acquisitions are at unprecedented levels. While some of the companies on this list may disappear because they continue to be at the bottom of their industry due to weak products and management, many may disappear because they are doing so well.

Retail continues to be one of the sectors with several troubled companies that may have to be sold to survive. The 24/7 Wall St. list includes Lululemon Athletica Inc. (NASDAQ: LULU) and Aeropostale Inc. (NYSE: ARO). Both specialty retailers are in highly competitive spaces. While Lululemon is battling Gap’s aggressive move into the yoga pants space, Aeropostale’s teen line of branded clothes is losing out to low-cost, fashion-forward brands like Forever 21 and H&M.

Click here to see the 10 brands that will disappear in 2015

The consolidation of the broadband industry may also cause some companies to disappear. Time Warner Cable Inc. (NYSE: TWC) will likely be sold to Comcast Corp. (NASDAQ: CMCSA). DirecTV (NYSE: DTV) will likely be bought by AT&T Inc. (NYSE: T). These transactions are part of a much larger movement to become the exclusive providers of entertainment to American homes.

While telecom companies interested in increasing market share have the option to install a fiber network to take market share from cable, that comes at a great cost. Merger trends in the industry indicate it may be better to buy than to build. Comcast and AT&T certainly believe so. Having a larger market share could also allow these companies greater price leverage with content providers like Netflix and premium cable channels.

Adoption of mobile and the massive size of some of Web 2.0 companies has also contributed to the list. Zynga Inc. (NASDAQ: ZNGA) was well positioned when it was able to market Farmville to Facebook’s users. But it is doing poorly after failing to come up with another hit, moving slowly on mobile and losing its special relationship with the social networking giant.

While Shutterfly Inc. (NASDAQ: SFLY) makes a tidy profit selling photos for greeting cards and calendars, it is also up against free photo sharing services such as Instagram and Facebook Inc. (NASDAQ: FB). The photo printing site is currently looking for a buyer.

A number of the biggest food packaging companies are also in the market. Russell Stover is the third largest chocolate company in America. However, third place is miles behind the leaders, particularly Hershey Co. (NYSE: HSY). Stover’s management has decided to give up operating on its own and has put itself on the market.

Hillshire Brands Co. (NYSE: HSH) will also almost certainly be sold this year. It has already signed an agreement with Tyson Foods Inc. (NYSE: TSN). But Tyson did not get the prize without an expensive fight with Pilgrim’s Pride Corp. (NYSE: PPC), which gives a sense of the value of food companies to their rivals.

In 2012, we predicted that Research In Motion would disappear. Last year, the company changed its name to BlackBerry Ltd. (NASDAQ: BBRY). The company is on the list again this year under the new name. The company continues to be in serious trouble after being wildly successful for many years.

Reviewing last year’s list, we have had some winners and some bad calls. We called Nook and Leap Wireless correctly. Last month, Barnes & Noble announced it would spin off its Nook e-reader as sales continue to plunge. Leap Wireless was acquired by AT&T late last year.

We have yet to be proven right — or wrong — about the balance of the list. Revenues for Martha Stewart Living and Road & Track magazines continue to be weak, but they also remain in the business. Sales of Mitsubishi and Volvo are among the lowest in the auto industry, but you can still buy their cars. Similarly, LivingSocial continues to offer deals, WNBA to sell tickets and Olympus to make cameras. While these calls haven’t proven right yet, we have until the end of the year.

After five years of making predictions, we are proud of our record. Out of the 49 companies that have made our list, 24 have disappeared. Given that these brands were chosen from a universe of thousands, we think it’s an impressive record.

We continue to use the same methodology in deciding which brands will disappear. The major criteria include:

Declining sales and losses;
Disclosures by the parent of the brand that it might go out of business;
Rising costs that are unlikely to be recouped through higher prices;
Companies that are sold;
Companies that go into bankruptcy;
Companies that have lost the great majority of their customers; and
Operations with withering market share.
Each brand on the list suffers from one or more of these problems. Each of the 10 will be gone, based on our definitions, within 18 months.

This is 24/7 Wall St.’s 10 brands that will disappear in 2014.

 10 Brands That Will Disappear in 2015 of  

• It is not hard to identify when the fortunes of the women’s athletic apparel company changed. On March 18, 2013, Lululemon recalled a large portion of its yoga pants because they were too sheer and as a result too revealing. The problems did not end there and resulted in management changes, revenue drop offs and a collapse of its share price. The fallout cost CEO Christine Day her job in June 2013. Founder and Chairman Chip Wilson announced that he would step down in December of last year. Wilson has since returned as the potential leader of a buyout to take the company private. Wilson believes he can find a private equity backer. He will likely be able to buy Lululemon at a discount price, at least based on what its shares traded for at their peak. Lululemon’s last quarterly financial statement shows the extent of the company’s troubles. Revenue at the previously fast growing company was up only slightly to $385 million from $346 million in the same period a year ago. However, net income collapsed from $47 million to $19 million. The stock is down 50% from its peak set at the start of June 2013. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HVms45e Follow us: @247wallst on Twitter | 247wallst on Facebook

• AT&T’s plan to buy satellite TV giant DirecTV is an example of a broadband carrier trying to extend its reach into American households. AT&T’s U-verse fiber to the home broadband and TV product has only been modestly successful. It has 5.7 million customers to DirecTV’s 38 million. The $49 billion deal has to clear federal regulation. Some members of Congress have sharply questioned AT&T’s management about the consumer benefits. While the two companies argued their marriage will lower consumers’ costs, some consumer groups believe that prices will go up and the new company will be able to control access to popular programming like NFL games. AT&T has reason to fight for the deal and make sure it closes. Its attempted bid to add wireless broadband capacity via a buyout of T-Mobile was blocked by the government. Beyond that, increasing customers by more than six times makes the business case for the deal even more compelling. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HVyhzke Follow us: @247wallst on Twitter | 247wallst on Facebook

• Hillshire Brands, which markets Ball Park hot dogs and Jimmy Dean sausages, the top-selling products in their categories, has been on the radar of several food packagers. The company reached an agreement to buy Pinnacle Foods in May for $4.23 billion. But the agreement sparked interest in Hillshire and triggered a bidding war for the company among the largest food packagers in the country, Tyson Foods and Pilgrim’s Pride. Hillshire accepted Tyson’s final offer of $8.5 billion including debt, a nearly $1 billion premium over Pilgrim’s offer and a 50% premium over its share price prior to the bidding war. To close the Tyson deal, Hillshire had to terminate the Pinnacle agreement. Tyson expects the Hillshire buyout to close before the end of its fiscal year, but that does not mean the fight is over. Pilgrim’s Pride may not go away and might still offer a higher bid. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HW5ACHR Follow us: @247wallst on Twitter | 247wallst on Facebook

• Zynga can be considered the single greatest social media failure among recent IPOs. The leading provider of games on Facebook has been unable to match the success of Farmville, its first hit. Facebook also ended its relationship with the gaming company in 2012, effectively limiting Zynga’s access to the social network’s 1 billion users and making it harder for the company to promote its games. The company moved slowly into the mobile platform, and after it failed to create big hits of its own, it acquired popular titles such as Draw Something and Words With Friends. But new rivals like King Digital, maker of popular mobile game Candy Crush, continue to crowd the market. Similarly, traditional game companies like Electronic Arts have also begun to migrate their titles to mobile devices, challenging the social gaming company’s position. The question is whether Zynga has enough demand for its products to support it as an independent public company. The company reported daily active users in the first quarter of 2014 were down nearly 50% to 28 million, compared to 52 million in the first quarter of 2013. Zynga lost $61 million in the first quarter of the year, against a profit of $4 million in the same period a year ago. Since early March, Zynga stock has dropped 45%, which while indicative of its troubles, also makes it a more attractive takeover target. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HWGiHrY Follow us: @247wallst on Twitter | 247wallst on Facebook

• Alaska Air Group Inc. (NYSE: ALK) is one of the few remaining independent airlines in the United States that is not owned by one of the four larger carriers. Even larger airlines have been acquired: Northwest was bought by Delta, Continental merged with United and U.S. Airways joined with American Airlines. The recent consolidations in the industry have been successful, leading to significant cost cuts. Alaska Air, with its profits and customer service reputation, is the last real prize left. There has been speculation that Delta might buy Alaska Air for its West Coast routes. The rumors have pushed Alaska Air shares higher. Alaska Air is particularly strong in the busiest West Coast markets, especially in Salt Lake City, Los Angeles and Seattle. It has also begun to challenge carriers in East Coast markets, including several cities in Florida. Revenue and net income have risen steadily over the past five years. And Alaska Air often ranks highest in customer satisfaction among traditional carriers. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HWPbKVl Follow us: @247wallst on Twitter | 247wallst on Facebook

• Russell Stover is on the auction block. The third largest candy maker in America may sell for as much as $1 billion. Though once publicly traded, the company known for its boxes of assorted chocolates, is now privately held. One of the rumored buyers is Hershey, which would use the acquisition to further increase the size of its chocolate business. With a market cap of $21.6 billion and revenue of $7.1 billion, Hershey would not have much trouble swallowing up Stover. According to estimates, Stover makes around $600 million in revenue with 10% operating margins. However, the list of possible buyers is much longer than that. Large multinational food companies have shown an interest in chocolate companies. Kraft paid about $20.6 billion for Cadbury in 2010. Mars, which owns M&Ms and Milky Way, could also be interested. International food giant Nestlé would also almost certainly take a look at Stover. As is often the case in auctions, private equity companies will consider Stover to see whether they can get a better return than current management. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HWW7Xrl Follow us: @247wallst on Twitter | 247wallst on Facebook

• Shutterfly is a Web 1.0 business in a social media world. While it continues to dominate the online photo printing industry, the emergence of free sharing and online storage sites such as Instagram, Facebook and Dropbox has compromised the company’s future ability to attract customers. Many of these services are optimized or native to mobile, where Shutterfly falls short. Shutterfly had a modest 2.55 million customers in the first quarter of 2014, compared to 2.25 million the same quarter last year. Even though revenue rose 22% year over year to more than $783 million, it remains a small business. While Facebook does not generate revenue directly from this service, its users uploaded 350 million photos a day last year. Shutterfly shares fell 18% over the past 12 months, against an almost 20% gain in the S&P 500. But with shares down it has become an attractive acquisition target in the online sharing or storage business with limited exposure to paying customers for printed photos, cards or calendars. The deal frenzy in the tech space has public companies such as Amazon and Apple, which have huge cash hordes, looking for new complementary businesses. The company has retained an investment bank to look for a buyer. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HWgDg74 Follow us: @247wallst on Twitter | 247wallst on Facebook

• Time Warner Cable accepted an offer from Comcast for $45.2 billion at the beginning of this year. The acquisition would create the largest cable company in the United States with a combined total of 30 million subscribers. The deal is valuable because there is very little market overlap. Many, however, oppose it, including wireless carriers, online video providers like Netflix, and consumer advocacy groups that believe the combination will create a monopoly and result in higher rates. The single biggest hurdle to the deal is federal government approval. The Justice Department and Federal Trade Commission will lead the government’s assessment of the deal. Some members of Congress have also expressed doubts about whether the transaction would be fair to consumers. In 2011, the Justice Department blocked a similar deal involving AT&T’s buyout of T-Mobile because of antitrust concerns. The deal would be one in a series of anticipated mega-mergers that would leave wired and wireless broadband in fewer hands. The market has speculated for some time that Sprint will buy out T-Mobile to better compete with industry leaders AT&T and Verizon. Most experts believe Time Warner Cable will be gone by the end of 2014. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HWnTfJa Follow us: @247wallst on Twitter | 247wallst on Facebook

• BlackBerry is about to run out of its nine lives. As recently as 2008, BlackBerry, then operating as Research In Motion, had 19.5% of the global smartphone market. However, following Apple’s introduction of the iPhone in 2007 and Google’s release of the Android mobile operating system in 2008, that figure fell to less than 1% by late 2013. Despite the fanfare surrounding the release of two new phones last year, sales of the Z10 and Q10 were abysmal. At the end of last year, BlackBerry outsourced its hardware to Foxconn to focus on its software offerings. The company has positioned its QNX platform as the most secure operating system for mobile communication, and it is now a leading OS in the auto and health care industries. While these are attractive businesses for potential buyers, they are inadequate on their own to make the company viable. Revenue has continued its multiyear slide, confirming the belief that BlackBerry cannot survive on its own. In the most recently reported quarter, revenue dropped to $966 million from $3.1 billion in the same quarter the year before. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HX1b84w Follow us: @247wallst on Twitter | 247wallst on Facebook

• Aeropostale competes with Abercrombie & Fitch and American Eagle Outfitters. Like those competitors, Aeropostale makes and markets inexpensive, casual clothes for teenagers, which it sells through company stores. The entire category is in trouble because teens are choosing inexpensive fashion-forward retailers like Forever 21 and H&M over branded apparel. Out of the three largest teen-retailers, Aeropostale is in the most trouble. In the most recently reported quarter, revenue fell 12% to $396 million from the same period last year. Same-store sales were off 13%. The retailer’s loss also widened to $77 million from $12 million in the same period a year earlier. The company’s stock price plunged by more than 85% in the past five years. The company ended its first quarter with only $24.5 million in cash, its lowest since 2000, according to Cowen and Co. analyst John Kernan. Following the first quarter’s results, the company announced that it had secured $150 million in financing from private equity firm Sycamore Partners, which is expected to keep it afloat at least until the end of the year. Read more: 10 Brands That Will Disappear in 2015 - AT&T (NYSE:T) - 24/7 Wall St. http://247wallst.com/special-report/2014/07/08/10-brands-that-will-disappear-in-2015/#ixzz37HX6jvZB Follow us: @247wallst on Twitter | 247wallst on Facebook

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Amazon Sued For Making It Way Too Easy For Kids To Spend Money

A federal agency just filed a lawsuit against Amazon for letting children make purchases too easily on mobile devices without their parents' approval.

In a complaint filed Thursday, the Federal Trade Commission alleged that the retailing giant has unlawfully charged customers millions of dollars for kids' "in-app purchases" -- buying digital knickknacks while playing games or using apps on devices like Kindle Fire tablets -- that were made without their parents' or the account holders' knowledge.

"In total, parents and other Amazon account holders have suffered significant monetary injury, with thousands of consumers complaining about unauthorized in-app charges by their children, and many consumers reporting up to hundreds of dollars in such charges," the lawsuit, filed in the U.S. District Court for the Western District of Washington, contends.

The FTC said that the price of such purchases ranged from 99 cents to $99.99 each.

According to the complaint, making a purchase while playing a game or using an app was as easy as simply closing a pop-up window that had appeared, which allowed children, sometimes too young to even read, to amass charges on their parents' accounts.

"In many instances, parents have complained that their children could not or did not understand that their activities while playing the app could result in charges that cost real money," the lawsuit says. "Amazon has received thousands of complaints related to unauthorized in-app charges by children in these and other games, amounting to millions of dollars of charges."

In January, Apple settled a similar complaint with the FTC, agreeing to refund at least $32.5 million to customers who incurred unauthorized charges.

The FTC wants Amazon not only to refund parents and other customers who've had unauthorized charges made to their accounts, but also to require "informed consent" from parents before kids can make these types of purchases.

Asked to elaborate on the meaning of "informed consent" during a conference call with reporters Thursday afternoon, Jessica Rich, consumer protection director at the FTC, said, "You need to do it in a way that a kid couldn't easily just tap the phone and incur charges."

According to the lawsuit, customers started complaining to Amazon only weeks after the company began allowing in-app purchases in November 2011. The FTC contends that Amazon knew this was an issue, with one Amazon employee commenting in December 2011 that permitting these types of charges without a password was "clearly causing problems for a large percentage of our customers."

Amazon has since made some changes to in-app purchasing -- requiring a person to enter a password for charges over $20 or before some charges kick in -- but according to the FTC, it wasn't until last month that the company began to require "informed consent for in-app charges on its newer mobile devices."

According to the lawsuit, Amazon receives 30 percent of the revenue from purchases made within apps.

The company would not comment on the lawsuit itself and referred to a statement it made in a letter last week to the FTC, in which it called news of the impending complaint "deeply disappointing."

"We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn't want we refunded those purchases," wrote Andrew DeVore, vice president and associate general counsel at Amazon. "[O]ur experience at launch was responsible, customer-focused, and lawful, including prominent notice of in-app purchasing, effective parental controls, real-time notice of every in-app purchase, and world-class customer service."

The FTC lawsuit comes about a week after the agency filed suit against T-Mobile for allegedly placing hidden charges in customers' bills.

"Companies need to get consumers' consent before placing charges on their bills," Rich said in prepared remarks during the press call. "This principle applies to companies of all types, from brick-and-mortar businesses to mobile app stores. And it applies to charges of all kinds, from purchases of physical goods to charges for the virtual items at issue in today's action."

You Can Now Valet Park Your Citi Bike In The East Village

The hardship of finding a vacant spot to park bike share bicycles is proving maddeningly difficult for some New Yorkers -- so much so, the city is now experimenting with free valet bike parking at one of its most popular docking locations.

The pilot program, which officially kicked off on Monday, will post at least two Citi Bike employees at the system's 7th Street and Avenue A location in the East Village every weeknight from 7 p.m. to 11 p.m. -- easily one of Citi Bike's most hectic periods.

The staffers will carry away bikes on tricycles and guide bikes to newly open spaces, freeing riders of the all-too-grueling task of finding their own, AM New York explains.

"The valet bike parking is something I think provides a sense of reassurance," Citi Bike spokesperson Dani Simons told AM.

Valet service follows persistent complaints from Citi Bike users, who have long criticized the hugely popular bike-sharing program for its operational faults -- with a lack of available docking spots among the chief complaints.

The trial also comes amidst reports that Citi Bike, although popular with New York City residents, is struggling financially and might even need a corporate overhaul.

The valet service will last through Labor Day.

Almost Anyone Can Have A Marijuana Business In Colorado Starting Today

Want to get in on the Colorado green rush? If you're a resident of the state, you finally can.

Starting Tuesday, for the first time, any adult Colorado resident can apply for a retail marijuana business license.

This marks a significant shift in the state's groundbreaking recreational marijuana laws, which first went into effect exactly six months ago on Jan. 1. Since then, only owners of medical marijuana businesses who were in "good standing" with the state have been allowed to apply for retail marijuana licenses. Now, any adult who has established residency in the state can apply for a marijuana business license.

"This is an obvious next step in the development of this legal industry," Mason Tvert, communications director at the Marijuana Policy Project and a key backer of Amendment 64, the measure that legalized marijuana for adult use in Colorado in 2012, told The Huffington Post. "New craft breweries and distilleries are frequently being established here in Colorado, and this is really no different. Existing marijuana businesses are demonstrating a commitment to following the laws and making this system work, and we expect new businesses to do the same. Colorado has demonstrated that regulating marijuana works."

The Denver Post's John Ingold first reported that as of mid-June, nearly 300 people had filed notices that they intend to apply for a retail marijuana license. It remains unclear how many of the applicants intend to start cultivation companies, how many are interested in opening storefronts and how many want to explore other aspects of the retail marijuana industry.

Natriece Bryant, spokeswoman for the Colorado Department of Revenue's Marijuana Enforcement Division -- the agency charged with regulating the state's burgeoning industry -- told HuffPost that a handful of applicants, including one for a retail marijuana cultivation business and two for retail marijuana testing facilities, have already moved on to the next stage of the approval process.

But before you start packing your bags to move to the Centennial State with dreams of making marijuana millions, keep in mind that many of Colorado's cities and counties still have either outright bans on retail marijuana shops or moratoriums on new shops opening up. The state's second largest city by population, Colorado Springs, is among the cities with blanket bans, while Denver, home to the majority of the state's operative retail marijuana dispensaries, has a moratorium on new pot businesses until 2016.

On the other hand, certain cities and counties that have opposed medical marijuana in the past are now signaling their interest in retail marijuana shops. The city of Aurora, which banned medical marijuana dispensaries in 2010, has opted in on recreational marijuana shops and is accepting business applications, though it has capped the total number of shops at 24.

"We have the advantage of waiting and seeing how other cities have handled both retail and medical," said Jason Batchelor, Aurora's finance director, to Denver's Fox affiliate back in March.

It's unknown what effect Tuesday's policy change will have on the state's existing marijuana industry.

"I'm a little nervous and concerned about the changes that are coming," said Toni Fox, owner of 3D Cannabis Center in Denver, to HuffPost. "Not from a retail storefront side of the business, but from the large stand-alone cultivators that are now allowed to apply for licensing to grow come October 1. Most of us retail shop owners are producing enough cannabis that we do not need to wholesale any product. Where is all this new unassigned retail cannabis going to go?"

"It's very concerning to not only myself but others who see the writing on the walls," Fox continued. "I think the wholesale and retail prices will come down considerably at most stores and that there will still be an extremely excessive amount of harvested cannabis available and unneeded. Where will it go?"

The state's medical and recreational marijuana dispensaries have together raked in over $200 million in revenue between Jan. 1 and April 30 of this year, according to state tax data. Despite the novelty and popularity of recreational marijuana in the state, medical marijuana continues to vastly outsell recreational. As of April, medical marijuana shops had brought in more than $130 million in revenue for 2014, versus about $70 million for recreational. That is likely due to several factors, including the contrast between the state's long-established medical marijuana industry and its still-nascent recreational marijuana industry, as well as the varying rates at which medical and recreational marijuana are taxed.

While medical marijuana is subject to state and local jurisdictional taxes, recreational marijuana has an additional 15 percent excise tax -- the revenue from which will fund public school construction -- as well as a 10 percent special sales tax on retail sales to fund marijuana regulation in the state.

If approved, the new businesses will begin to open around the state on October 1.

Supreme Court Rules In Hobby Lobby Case, Dealing Blow To Birth Control Coverage

A divided Supreme Court ruled 5-4 on Monday that closely held corporations cannot be required to provide contraception coverage for their employees.

In an opinion authored by Justice Samuel Alito, the court ruled in Burwell v. Hobby Lobby Stores and Conestoga Wood Specialties v. Burwell that the Obama administration has failed to show that the contraception mandate contained in the Affordable Care Act is the "least restrictive means of advancing its interest" in providing birth control at no cost to women.

"Any suggestion that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law," Alito wrote, adding that by requiring religious corporations to cover contraception, "the HHS mandate demands that they engage in conduct that seriously violates their religious beliefs."

The Affordable Care Act contains a provision requiring most employers to cover the full range of contraception in their health care plans at no cost to their female employees. The Obama administration had granted an exemption for churches and accommodations for religious hospitals, schools and nonprofits, but for-profit companies were required to comply with the coverage rule or pay fines.

Hobby Lobby, a Christian-owned craft supply chain store, and Conestoga Wood Specialties Store, a Pennsylvania wood manufacturer owned by a family of Mennonites, challenged the contraception mandate on the grounds that it violates their religious freedom by requiring them to pay for methods of contraception they find morally objectionable. The owners of those companies believe some forms of birth control -- emergency contraception and intrauterine devices -- are forms of abortion because they could prevent a fertilized egg from implanting in the uterus.

Monday's opinion was written narrowly so as only to apply to the contraception mandate, not to religious employers who object to other medical services, like blood transfusions or vaccines.

Justices Ruth Bader Ginsburg filed a dissenting opinion joined by Justice Sonia Sotomayor and mostly joined by Justices Elena Kagan and Stephen Breyer. Ginsburg warned in her dissent that the decision was not as narrow as it claimed to be. "In a decision of startling breadth, the Court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs," Ginsburg wrote.

Ginsburg argued that the government has a "compelling interest" in providing no-cost birth control to women. "Those interests are concrete, specific, and demonstrated by a wealth of empirical evidence," she wrote. "To recapitulate, the mandated contraception coverage enables women to avoid the health problems unintended pregnancies may visit on them and their children."

"President Obama believes that women should make personal health care decisions for themselves rather than their bosses deciding for them. Today’s decision jeopardizes the health of women that are employed by these companies."

"We will, of course, respect the Supreme Court ruling," White House press secretary Josh Earnest said Monday, adding that the administration will "consider the range of options available to the president."

Earnest also called on Congress to make sure the women affected still have contraception coverage. "Congress needs to take action to solve this problem that has been created," he said.

At oral arguments in March, the women Supreme Court justices grilled Hobby Lobby's lawyer, former Solicitor General Paul D. Clement, about whether a for-profit company can be considered a religious organization, exempt from certain federal laws, if a majority of its employees hold different beliefs than the company's owners. Justices Sotomayor and Kagan asked whether companies like Hobby Lobby should be allowed to refuse to cover procedures like blood transfusions and vaccines, or to ask for exemptions to things like anti-discrimination and minimum wage laws, if they had religious objections to those policies.

"Everything would be piecemeal, nothing would be uniform," Kagan warned.

But some of the court's conservative-leaning justices asked why the Obama administration had granted religious accommodations to any organizations if the contraception mandate was so critical to public health. "It must have been because the health care coverage was not that important," said Justice Anthony Kennedy, who was generally considered to be the swing vote.

In his concurring opinion, Kennedy said the decision "does not have the breadth and sweep ascribed to it by the respectful and powerful dissent." He said because there is already a mechanism in place to provide a religious accommodation to some organizations, adding another accommodation would not be a significant burden on the government

"In these cases, it is the Court's understanding that an accommodation may be made to the employers without imposition of a whole new program or burden on the government," Kennedy wrote. "As the Court makes clear, this is not a case where it can be established that it is difficult to accommodate the government's interest, and in fact the mechanism for doing so is already in place.

Ginsburg's dissent said that Congress had never intended to allow for-profit corporations to get religious-based exemptions, arguing that if it had, "a clarion statement to that effect likely would have been made in the legislation."

Cecile Richards, president of the Planned Parenthood Action Fund, called the decision a blow to women's reproductive health.

“Today, the Supreme Court ruled against American women and families, giving bosses the right to discriminate against women and deny their employees access to birth control coverage," Richards said in a statement. "This is a deeply disappointing and troubling ruling that will prevent some women, especially those working hourly-wage jobs and struggling to make ends meet, from getting birth control."

Read the opinion here.

Burwell v. Hobby Lobby

Sabrina Siddiqui contributed reporting.