Retail trade group reduces annual sales forecast

NEW YORK — The nation's largest retail trade group is paring its annual sales forecast because of slower-than-expected growth during the first half of the year tied to winter storms and lingering economic woes.

The Washington-based National Retail Federation says Wednesday that it now expects retail sales will rise 3.6 percent this year to $3.2 trillion, instead of its original prediction of 4.1 percent released in early February.

The figures include sales in stores and online but exclude automotive sales and sales at gas stations and restaurants.

Retailers now are heading into the back-to-school shopping season, the second-largest shopping period behind the winter holidays.

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Agents get subsidized 'Obamacare' using fake IDs

WASHINGTON — Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law, congressional investigators said Wednesday.

The weak link seemed to be call centers that handled applications for frazzled consumers unable to get through online.

The nonpartisan Government Accountability Office told a House committee that its investigators were able to get subsidized health care under fake names in 11 out of 18 attempts — even after HealthCare.gov's much maligned online system flagged some applications as problematic.

The GAO is still paying premiums for the policies, even as the Obama administration attempts to verify phony documentation.

Those follow-up verification checks also appeared to need tightening; the GAO said parts of the fake documentation it submitted for two applications actually got through the process.

Nonetheless, GAO audits and investigations chief Seto Bagdoyan told the House Ways and Means Committee that the agency has not drawn any sweeping conclusions from what he called its "preliminary" findings. A full assessment will take several months.

In the real world, it may be difficult for fraud artists to profit from the nation's newest social program, since government health care subsidies are paid directly to insurance companies.

Still, GAO's report opened another line of attack for Republican lawmakers who have relentlessly tried to kill the 2010 Affordable Care Act. It raised questions about new sorts of flaws in the enrollment system, which experienced computer gridlock when it went live last fall. Ultimately, 8 million people managed to sign up for subsidized health care in federal and state exchanges that handled "Obamacare" enrollment.

GAO also testified that there's still a huge backlog of applications with data discrepancies, even though the administration has resolved some 600,000 cases.

Rep. Charles Boustany, R-La., said the findings point to more bungling by the Obama administration. "This is simply not a question of whether one likes the administration's health care law; it's a question of being good stewards of taxpayer dollars," he said.

Speaking for committee Democrats, Rep. John Lewis of Georgia said it's time for Republicans to stop trying to dismantle the health care law and instead start fixing problems. "We will not go back to a time when Americans did not have access to affordable health insurance," said Lewis.

The Obama administration is taking the report seriously.

"We are examining this report carefully and will work with GAO to identify additional strategies to strengthen our verification processes," said spokesman Aaron Albright. At least on paper, fraudsters risk prosecution and heavy fines.

The GAO said its investigators concocted fake identities using invalid Social Security numbers and falsely claiming citizenship or legal residence. In other cases, they made up income figures that would disqualify them from getting subsidies.

Among the findings:

—Contractors processing applications for the government told the GAO their role was not to ferret out potential fraud. "There is no provision to look for fraud, in the contract itself," said Bagdoyan.

—Five of six bogus phone applications went through successfully. The one exception involved an applicant who refused to provide a Social Security number.

—Six online applications were snagged by an identity checking system. But investigators just dialed a call center and all six were approved. That seemed to be an open pathway to coverage.

—The GAO also tried to check the reliability of counselors providing in-person assistance. In five out of six cases, investigators were unable to get help. In the final case, the counselor correctly told the undercover investigator that the agent's stated income would not qualify for subsidized coverage.

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China detains employees of suspect meat seller

BEIJING — Five employees of a company accused of selling expired beef and chicken to McDonald's, KFC and other restaurants in China were detained by police Wednesday after an official said illegal activity was an organized effort by the supplier.

China's food safety agency said on its website that its investigators found unspecified illegal activity by Husi Food Co. but gave no confirmation expired meat had been found or other details.

Some of the illegal conduct was an "arrangement organized by the company," the deputy director of the agency's Shanghai bureau, Gu Zhenghua, told the official Xinhua News Agency.

Those in criminal detention include Husi's quality manager, the Shanghai police department said on its microblog account. The one-sentence statement gave no details of possible charges or the employees' identities.

The scandal surrounding Husi, which is owned by OSI Group of Aurora, Illinois, has alarmed Chinese diners and disrupted operations for fast food chains.

It erupted Sunday when a Shanghai broadcaster, Dragon TV, reported that Husi repackaged old beef and chicken and put new expiration dates on them. It said they were sold to McDonald's, KFC and Pizza Hut restaurants.

Xinhua said the manager of Husi's quality department, Zhang Hui, told investigators "such meat had been produced under tacit approval of the company's senior managers." It said the company "has been conducting the malpractice for years."

An employee who answered the phone at the food agency office in Shanghai declined to give any additional details.

A woman who answered the phone at Husi's Shanghai headquarters said the company would not comment until the investigation was completed. She declined to give her name.

Restaurant operators that have withdrawn products made with meat from Husi include McDonald's Corp., KFC owner Yum Brands Inc., pizza chain Papa John's International Inc., Starbucks Corp., Burger King Corp. and Dicos, a Taiwanese-owned sandwich shop chain.

Yum, which also owns Pizza Hut, said in a statement Wednesday is was immediately ending "all procurement from OSI China," including from the plant in question. The company, based in Louisville, Kentucky, noted that OSI is not a major supplier for its restaurants in the country and that it has arranged for alternative suppliers to step in.

"We do not anticipate disruption to KFC restaurants. While there may be some temporary shortages of certain products at Pizza Huts, we expect this to be minimized and short-term," the company said.

Yum also said it reserves the right to "take any and all legal action against OSI Group" based on the results of the investigation.

During a conference call Tuesday to discuss its financial results, McDonald's Corp. CEO Don Thompson said the company felt a "bit deceived" about the plant in question. Thompson noted the company was no longer serving products from that plant.

If the allegations prove to be true, Thompson said the company would deal with the matter "effectively, swiftly and appropriately," although he didn't specify what that would entail.

The scare has also spread to Japan, where McDonald's said 20 percent of the meat for its chicken nuggets was supplied by Husi.

Product safety is unusually sensitive in China following scandals over the past decade in which infants, hospital patients and others have been killed or sickened by phony or adulterated milk powder, drugs and other goods.

Husi said in a statement earlier this week it was "appalled by the report" and believed it to be an "isolated event." It promised to cooperate with the investigation and to share the results with the public.

The State Food and Drug Administration's statement Wednesday said investigators seized 160 tons of raw material and 1,100 tons of finished products from Husi. The agency said earlier its investigation would extend to Husi facilities in Shanghai and five other provinces.

Foreign fast food brands are seen as more reliable than Chinese competitors, though local brands have made big improvements in quality.

KFC, China's biggest restaurant chain with more than 4,000 outlets and plans to open 700 more this year, was hit hard by a report in December 2013 that some poultry suppliers violated rules on drug use in chickens. Sales plunged and KFC overhauled quality controls, cutting ties with more than 1,000 small poultry suppliers.

___

Associated Press researchers Fu Ting in Shanghai and Yu Bing in Beijing contributed.

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Stocks open mostly lower following mixed earnings

NEW YORK — Stocks are mostly lower in early trading as traders look over a mixed batch of earnings reports.

Whirlpool, Ryder systems and Boeing all fell Wednesday morning after reporting their latest quarterly results.

Apple was slightly higher after its earnings report late Tuesday came in ahead of what investors were looking for. Apple sold 35.2 million iPhones in the latest quarter, 13 percent more than in the same period a year earlier.

The Standard & Poor's 500 index was little changed at 1,984 in the first few minutes of trading. The Dow Jones industrial average fell 27 points, or 0.2 percent, to 17,084 and the Nasdaq composite edged up 10 points, or 0.2 percent, to 4,466.

Falling stocks narrowly outpaced rising ones on the New York Stock Exchange.

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Md. state senator must drop Hershey-bar-like signs

BALTIMORE — A federal judge says a political candidate whose last name is Hershey must stop using campaign materials that mimic the look of the famous chocolate bar.

The judge ruled Thursday that Maryland state Sen. Stephen Hershey Jr. must stop using his dark brown signs with white lettering. The company filed a trademark infringement lawsuit in June.

Hershey argued his signs, with a background of the Maryland flag in brown, are different enough to be permissible.

Judge William Quarles disagreed and issued a preliminary injunction, suggesting the company is likely to win its lawsuit.

Hershey said in a statement that he will comply with the injunction. His office has said Hershey has been told his family tree intersects with that of company founder Milton S. Hershey, but they aren't close relatives.

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Writers Guild leaders sound alarm over Fox's Time Warner bid, pitch for funds

Leaders of the Writers Guild of America West, alarmed by Rupert Murdoch's $80 billion bid for Time Warner Inc., are pitching for funds from the 8,000 members of their guild.

The missive -- sent out by WGA West president Chris Keyser and negotiating committee co-chairs Billy Ray and Chip Johannessen -- asks for contributions the guild's political action committee, citing the prospect of diminished competition and fewer buyers for scripts.

"As writers, we face a landscape today that the founders of our Guild would hardly recognize," the trio said. "For decades, there were dozens of significant buyers in television and movies. Then Federal limits on mergers disappeared. FCC regulations requiring independent production in television were repealed."

The resulting consolidation led to networks and studios combining and independent production disappearing, the letter said, with fewer movies being made, fewer development deals, smaller TV staffs and lower quotes because the industry was suddenly in the hands of only six conglomerates -- with the WGA lacking a voice in Washington to protest.

"Now, those six conglomerates are threatening to swallow one another," the missive said. "Think of that. Between them, Fox and Time-Warner would control 40% of the industry's writing jobs. What happens if more consolidation follows? What happens if one mega-company ends up devouring them all?"

That's why the WGA West has a PAC, they noted, pointing to efforts to fight off mergers and champion net neutrality.

"Giving to the Guild PAC is vital to your future," the letter said. "The checks you write to your favorite Senate candidates cannot influence policy. But a powerful PAC, supporting candidates in the name of the WGA, gives us a fighting chance in the war against the corporate madness that threatens us all."

The letter noted that Keyser and showrunner Shawn Ryan had generated significant traction when they testified at recent Senate hearings on net neutrality.

"When our Guild speaks, Washington listens," it added. "But to make sure our voices are heard, we need power. Simply put, we need you. This, then, is our call to arms. In the industry as it exists today, writers no longer have the luxury of staying out of politics. Rather, more than ever, we need a voice in them."

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Madeline Amgott dead: Pioneering female TV news producer dies at 92

Madeline Amgott, who was one of the only women to produce TV news programming in the 1950s and '60s, died of lymphoma on Saturday in Manhattan. She was 92.

But Amgott's achievements went beyond just successfully penetrating a male-dominated arena. She produced what was likely the first network-affiliate news program independent of network resources: "The Big News," which aired on New York City's WABC in the early '60s.

Amgott also produced episodes of CBS newsmagazine "60 Minutes" and a children's version, "30 Minutes," which aired on Saturdays. She earned three Daytime Emmys for the latter program.

During the 1970s Amgott produced episodes of NBC's issues-oriented discussion series "Not for Women Only," hosted by Barbara Walters, among others.

She produced Bill Moyers' 1987 series "In Search of the Constitution" on PBS. She also produced segments of CBS' "Morning News."

Madeline Rochelle Barotz was born in the Bronx and graduated from Brooklyn College. She worked for the Washington bureau of the San Diego; later she moved back to New York and joined CBS News in 1955.

At CBS she helped devise a daytime news program aimed at women: "Calendar," hosted by Harry Reasoner, aired in the early '60s.

She left "Calendar" when there was an opening for a producer but she didn't get the job.But her subsequent job as a producer with WABC was perceived, the New. York Times said, "as a feminist breakthrough."

Amgott later helped oversee PR for the National Organization for Women when it was founded in 1966. In 2003 she produced a film about the artist Hans Hofmann for PBS.

She is survived by two sons, a daughter and a stepdaughter; six grandchildren; and a great-grandson.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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US stocks mixed as earnings reports roll in

NEW YORK — Stock indexes were mostly higher in late-morning trading Wednesday as investors weighed positive earnings in the technology sector against disappointing news out of aircraft giant Boeing and the appliance maker Whirlpool. Biotechnology stocks were among the biggest gainers.

KEEPING SCORE: The Dow Jones industrial average fell 10 points, or 0.1 percent, to 17,104 as of 11:21 a.m. Eastern. The Standard & Poor's 500 index rose four points, or 0.2 percent, to 1,988 and the Nasdaq composite rose 18 points, or 0.4 percent, to 4,474.

BIG TECH: Apple reported higher quarterly profits after the market closed Tuesday, topping analysts' estimates. Sales of iPads slipped, but iPhone shipments increased 13 percent over the same period a year earlier. Apple rose $2.82, or 3 percent, to $97.54.

NEED A REPAIR MAN: Appliance maker Whirlpool fell $1.25, or 1 percent, to $141.95 after the company's earnings came in well short of analysts' expectations. The company reported an adjusted profit of $2.62 per share compared with the $2.88 expected by analysts.

NO LIFT: Boeing fell $2.92, or 2 percent, to $126.83, the biggest decline in the Dow, after the aircraft maker reported revenue that didn't match analysts' expectations.

TURNING INWARD: Investors are focusing their attention on U.S. corporations this week, instead of the geopolitical turmoil in Israel and Ukraine. However, strategists say that with markets trading at near all-time highs, any bad news could be worrisome for U.S. stocks.

"Geopolitical flare-ups, European bank-related market jitters, today's stretched valuations and relatively low market volatility leave (the market) vulnerable to bad news," Blackrock's Chief Investment Strategist Russ Koesterich, wrote in a note to investors.

BIOTECH SOARS: Shares of Puma Biotechnology, a drug development company, shot up more than 275 percent Wednesday after the company disclosed positive trial results for an experimental breast cancer drug. Puma rose $165.80, or 281 percent, to $224.63. Biogen Idec rose $31.15, or 10 percent, to $334.74 after the company's quarterly results came in above investors' expectations.

BONDS AND OIL: Prices for U.S. government bonds rose. The yield on the 10-year Treasury note dipped to 2.46 percent from 2.47 percent late Tuesday. Benchmark U.S. crude oil rose 16 cents to $102.55 a barrel.

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Global stocks bolstered by US earnings, home sales

LONDON — Markets were steady Wednesday as the focus turned toward U.S. corporate earnings and as tensions between Russia and the West over the downing of a Malaysian jetliner in Ukraine eased.

In Europe, Britain's FTSE 100 closed flat at 6,798.15 while Germany's DAX added 0.2 percent to 9,753.56. France's CAC 40 also advanced 0.2 percent to 4,376.32.

In the U.S., the Dow Jones industrial average was down 0.1 percent at 17,101 while the broader S&P 500 index rose 0.3 percent to 1,989.

Markets have been volatile over the past week, partly because of heightened tensions between Russia and the West after a Malaysia Airlines jet was shot down over an area of eastern Ukraine controlled by pro-Russia separatists.

However, over the past couple of days there have been signs of more cooperation in the investigation of the crash. On Wednesday, the first bodies finally arrived in the Netherlands, the country that bore the heaviest toll in the crash that killed all 298 passengers and crew.

Earnings are slowly becoming more of a focus of attention. Among the features was Apple, whose stock spiked 1 percent after the company topped analysts' estimates in an after-hours statement Tuesday. However, appliance maker Whirlpool fell 5 percent after its earnings came in well short of expectations.

"So far over 70 percent of U.S. companies that have posted figures have beaten expectations, and any worries the market might have had that earnings multiples looked unsustainable are being eased," said Alastair McCaig, market analyst at IG.

Earlier in Asia, Hong Kong's Hang Seng finished 0.8 percent higher at 23,971.87 and Australia's S&P/ASX 200 rose 0.6 percent to 5,576.70. Stocks in mainland China and Southeast Asia also closed higher but Tokyo's Nikkei 225 shed 0.1 percent to 15,328.56.

Elsewhere in financial markets, the mood was subdued with the euro flat at $1.3468 and the dollar steady at 101.48 yen.

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Amazon Fire Phone panned as frustrating, gimmicky by reviewers

The first reviews of Amazon's Fire Phone are in, and the technorati are not impressed.

The poor critical reception signals that the e-commerce company will face even higher hurdles than previously expected in attempting to challenge Apple's iPhone, Samsung Electronics' Android smartphones and other incumbent players.

Reviewers cited the Fire Phone's limited battery life, absence of key apps, lack of features available in rival products, its ungainly industrial design, and the fact that it works only with AT&T.

In unveiling the smartphone, Amazon touted whizzy new features as delivering a new "immersive" smartphone experience. Those include Dynamic Perspective, a system that uses four cameras to detect where the user is looking to render 3D-like perspectives and gesture controls, and Firefly, which can identify some 100 million items, including songs, movies, TV shows and products (sold by Amazon) using different sensors.

But critics found the those gimmicky and not very practical. The phone's "big new features (were) less useful than I expected, and sometimes outright frustrating," wrote Re/code's Walt Mossberg. The Firefly auto-recognition was inconsistent, and navigating using Dynamic Perspective was more difficult than simply swiping the phone, he said.

In addition, the Amazon Fire Phone lacks some key functions both Apple and Samsung smarphones offer, including a fingerprint reader and integrated video calling, Mossberg noted. And while Amazon offers 185,000 apps for the Fire Phone, that's less than 20% of the apps that run on Apple and Android phones, and doesn't currently have apps such as YouTube and Google Maps.

The biggest problem with the Amazon Fire Phone was battery life, according to The Wall Street Journal's Geoffrey Fowler, who noted that like the iPhone the battery cannot be replaced.

"In the past five days, I couldn't once get the Fire's battery to last to day's end - a telephonic cardinal sin," he wrote. In a battery "torture test" streaming video over Wi-Fi with the screen at 50%, the Fire lasted just 6 hours and 40 minutes, 16% less than the Samsung Galaxy and 25% less than the iPhone, according to Fowler.

Other reviewers also found the smartphone's hardware performance wanting. "The quad-core Qualcomm Snapdragon 800 processor "struggles to respond, battery life sputters out quicker than I'd like, and the phone also throws off enough heat to melt a pat of butter," CNet's Jessica Dolcourt said.

Critics also took issue with the Amazon Fire Phone's design: "It's a study in ruthless efficiency, without regard for anything so immeasurably subjective as 'beauty,'" said The Verge's David Pierce, calling it "a dense black slab" that leaves the impression that the Fire Phone "was well-conceived but never quite perfected."

Not everyone completely hated the Fire Phone. The New York Times' Farhad Manjoo called it "uncommonly friendly and easy to use."

"As a bare-bones smartphone, it should prove especially attractive to people who find themselves overwhelmed by today's crop of do-it-all superphones," Manjoo wrote. "When you forget about its whiz-bang marketing, the Fire begins to stand out as something much more interesting: a phone for the rest of us."

The Fire Phone slated to start shipping July 25, exclusively through AT&T, in two configurations: a model with 32 GB of storage for $199.99 and a 64 GB model at $299.99 (both with a two-year contract). Without a contract, the phones are $649 and $749, respectively.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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