Stocks Extend Gains; CVS Calls 2019 ‘A Year Of Transition’ After Aetna Buyout

Stocks end listless session up modestly

NEW YORK - Wall Street capped another day of listless trading Wednesday with a slight gain, extending the market's winning streak to a third day.

Financial, materials and industrial companies accounted for much of the gain, outweighing losses in health care and real estate stocks as investors reviewed the latest batch of company earnings reports.

Stock indexes spent much of the day wavering between small gains and losses as traders waited for signs of progress in the latest round of trade talks between the U.S. and China.

"Investors are a bit concerned that we might indeed be slipping into an earnings recession," said Sam Stovall, chief investment strategist at CFRA. "They're really sitting on pins and needles as it relates to the trade talks."

Despite the solid profit growth in the last quarter, investors are cautious about business conditions going forward as signs of weakness in the global economy emerge. Europe and China have both reported slower growth.

Uncertainty over the costly trade dispute between the world's largest economies has clouded the outlook for company profits this year.

The Trump administration was set Thursday to resume high-level talks with Chinese officials after two days of preliminary talks by lower-level officials.

CVS long-term care unit a drag

NEW YORK - CVS Health beat fourth-quarter earnings forecasts, but a struggling long-term care business took a $2.2-billion bite out of the company's performance and its initial 2019 forecast was weaker than expected.

CEO Larry Merlo said in a prepared statement that 2019 would be "a year of transition" as the company integrates the health insurer Aetna, which it purchased in a roughly $69 billion deal last year. A federal judge is still evaluating the acquisition.

CVS Health expects adjusted earnings to range between $6.68 and $6.88 this year. That's well short of the per-share earnings of $7.35 that Wall Street had been anticipating, according to a survey of industry analysts by FactSet.

CVS Health runs more than 9,900 retail locations and processes over a billion prescriptions annually as a pharmacy benefit manager.

The company also runs a business that provides services to long-term care facilities, and CVS Health booked a $2.2 billion charge from that in the quarter. It said that business struggled with operational problems and the bankruptcy of a significant customer.

CVS was forced to adjust after that segment's updated budget showed "significant additional deterioration" in its projected results for this year compared with an analysis done several months ago.

The heavy charge led to a $421,000 loss for the company in the quarter.

Samsung phone different, but pricy

SAN FRANCISCO - Samsung unveiled a highly anticipated smartphone with a foldable screen in an attempt to break the innovation funk that has beset the smartphone market.

But it's far from clear that consumers will embrace a device that retails for almost $2,000, or that it will provide the creative catalyst the smartphone market needs. The Galaxy Fold, announced Wednesday, will sell for $1,980 when it is released April 26.

Consumers willing to pay that hefty price will get a device that can unfold like a wallet. It can work like a traditional smartphone with a 4.6-inch screen or morph into something more like a mini-tablet with a 7.3-inch screen.

When fully unfolded, the device will be able to simultaneously run three different apps on the screen. The Galaxy Fold will also boast six cameras: three in the back, two on the inside and one on the front.

"Get ready for the dawn of a new era," declared DJ Koh, who oversees Samsung's smartphone division. The new phone, he said, "answers skeptics who said everything has already been done."

Google device has undisclosed mic

SAN FRANCISCO - Google says it forgot to mention that it included a microphone in a security product it began selling in 2017, but blames the omission on an error.

When the company's Nest Secure home alarm system hit the market, its product information didn't mention a microphone.

As recently as January, the product specs for the system's Nest Guard hub, which controls home-alarm sensors, still didn't include any indication of a microphone.

Then, earlier in February, Google noted that its voice assistant feature would be available on the Nest Guard.

Google said in a statement that the microphone wasn't intended to be a secret and should have been disclosed.

The company said people have to specifically turn on the microphone for it to be listening.

Lawyer for Nissan ex-boss speaks out

TOKYO - The newly appointed star defender for former Nissan chairman Carlos Ghosn says he believes the case against his client does "not meet international standards."

Junichiro Hironaka also said Wednesday that he believed Ghosn's trial on charges of falsifying financial reporting and breach of trust might not begin until after the summer.

Hironaka said the defense team was still working out its strategy. That could mean months more of detention for Ghosn, a former South Carolina-based tire executive at Michelin North America who headed Nissan for almost two decades before his arrest on Nov. 19.

Hironaka refused to say if Ghosn will try, for a third time, to gain release on bail. He said he viewed the case as a chance to improve Japan's legal system and human rights.

Walmart UK grocery deal is in doubt

LONDON - British regulators say the proposed supermarkets merger between Sainsbury's and Walmart's Asda unit would push up prices and reduce quality for shoppers, casting doubt on a deal that would create the country's biggest grocery chain.

The Competition and Markets Authority, in a preliminary report, said Wednesday it would be "difficult for the companies to address the concerns it has identified" and that a significant number of stores would probably need to be sold before it gains approval.

Stuart McIntosh, chairman of the independent inquiry, says "shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the UK."

Sainsbury's said it would continue to make its case to regulators who "misunderstand how people shop in the U.K. today."