Euro zone turmoil and the return of Twinkies top our roundup of the days's top business stories.
U.S. Stocks Fall as Cyprus Thwarts International Bailout Conditions
U.S. stocks fell Tuesday after Cyprus’ parliament rejected a tax on bank deposits as a condition of an international bailout. Euro zone countries had said prior to the vote that they would withhold $12.89 billion in bailout loans unless depositors in Cyprus shared the cost of the rescue, The European Central Bank has threatened to end emergency lending assistance for the teetering Cypriot banks, Reuters reports. Cyprus banks will remain closed until Thursday. Lawmakers in Greece, Portugal, Ireland, Spain and Italy had repeatedly accepted unpopular austerity measures over the last three years to secure European aid. The overwhelming rejection of the bank deposits tax brought one of the smallest European states to the brink of financial meltdown.
Sweet! Twinkies on their Way Back into Stores
Twinkies, Ding Dongs and Ho Hos, along with Wonder Bread, are headed back into stores after a bankruptcy court judge approved Tuesday several sales of the signature brands that had been owned by bankrupted Hostess Brands Inc, Reuters reports. Buyout firms Apollo Global Management and Metropoulos & Co are paying $410 million for the iconic snack treats. Twinkies, Ho Hos, Ding Dongs and Donnettes, while Flowers Food Inc, which makes Tastykakes snacks, picked up most of Hostess's bread business, including its Wonder and Nature's Pride brands, for $360 million. Mexico's Grupo Bimbo S.A.B. de C.V., the world's largest bread maker bought the Beefsteak brand of bread for $31.9 million (that’s a lot of dough). Bimbo also owns Entenmann's cakes, Arnold bread and Thomas' English Muffins. Hostess filed for bankruptcy last year and blamed its bakers union’s strike for abandoning its plans to emerge from Chapter 11.
Government Cigarette Label Initiative Goes Up in Smoke
The U.S. government is extinguishing its legal battle over requiring cigarette packs to carry large and often disturbingly graphic warning labels. The Food and Drug Administration will instead create labels that communicate the dangers of smoking that will not rely on images of diseased lungs or a sewn-up smoker’s corpse. The government abandoned its plans to ask the U.S. Supreme Court to review an appeals court decision upholding a ruling that the requirement violated First Amendment free speech protections, The Associated Press reports The nine labels originally set to appear on store shelves last year would've represented the biggest change in cigarette packs in the U.S. in 25 years.
U.S. Infrastructure Earns Slightly Higher Marks, but Still Doesn’t Make the Grade
The nation’s roads, bridges, railways, ports and other infrastructure are in poor shape, though their condition is slightly better than it was four years ago, CNN Money reports. A report card released Tuesday by the American Society of Civil Engineers gave America’s infrastructure a grade of D+, an improvement from the D awarded in the last report issued in 2009. The engineering trade association estimates the U.S. needs $3.6 trillion in infrastructure improvements through 2020, but only $2 trillion is budgeted. Recent improvements resulted from $80 billion in infrastructure spending provided by the 2009 stimulus bill, and other federal and private spending.
Starbucks Heads to the Farm
As part of an ethical sourcing program, Starbucks Corp. has bought its first coffee farm and plans to use the facility to research a devastating leaf rust is spreading across Central America, Peru and Mexico, Reuters reports. The farm, on 600 acres in Costa Rica, will continue to harvest beans to be roasted and sold by Starbucks, which also plans to use the center to address the effects of climate change and create sustainable coffee crops. The effort is part of the company’s mission to source all of its coffee ethically by 2015.