AmEx and Wal-Mart team up and other top business news stories of the day.
AmEx Teams with Wal-Mart
Bluebird, a new prepaid card from Wal-Mart Stores and American Express, will give customers another alternative to checking accounts and debit cards, the companies said in a press launch yesterday reported by CNN Money. Bluebird can be used anywhere an American Express card is accepted, and can also function as an ATM card. The card waives monthly, annual and overdraft fees, and requires no minimum account balance, though some ATM fees will apply. Bluebird customers can make deposits and pay bills via their smartphones, and can have paychecks deposited directly to the account.
The announcement drove down prices of a competing prepaid card service called Green Dot, which saw its shares fall 17 percent to $10.56 yesterday, according to CNN Money. In the second quarter of the year, Green Dot drew 62 percent of its revenue from products sold at Wal-Mart.
Stocks Falter on Economic Concerns
U.S. stock markets faltered yesterday as investors anticipated weak corporate earnings, Bloomberg News reports, while the both the Euro and Chinese stocks slid on concerns over the Eurozone debt crisis and slowing growth in Asia, Bloomberg News reports.
The World Bank yesterday predicted growth in East Asia will hit an 11-year low of 7.2 percent this year. Meanwhile, Alcoa Inc. will be among the first corporations to announce third-quarter earnings today and European officials will continue meeting in Luxembourg to discuss Spain’s budget woes. According to Bloomberg forecasts, earnings at S&P 500 companies are expected to be 1.7 percent lower for the third quarter, the first drop since 2009.
UnitedHealth Makes a $4.9 Billion Move into Brazil
UnitedHealth Group Inc. yesterday announced plans to buy a controlling share of the largest health insurer and hospital operator in Brazil, Reuters reports. The $4.9 billion deal is one of the largest overseas acquisitions by a U.S. managed care company, Reuters said.
UnitedHealth projects the Brazilian healthcare market will grow twice as fast as that in the U.S., Reuters said. Following the announcement, Amil Participacoes SA shares rose 14 percent on the Sao Paolo exchange, while United Health gained 0.9 percent to $57.65 on the NYSE.
Marathon Purchases BP Texas City Refinery
Marathon Petroleum Corp will become the fourth-largest U.S. refiner after striking a deal to buy BP Plc.'s Texas City refinery and related infrastructure for up to $2.5 billion. The movie will give it a bigger potential slice of the refined product exports market. The Texas City refinery yields 451,000 barrels a day and is the fifth largest in the country. The agreement also contains a provision to pay up to $700 million more over six years, depending on the refinery's profitability. In 2005, the refinery was the site of a blast that killed 15 workers, injured 180, and cost BP more than $3 billion to settle lawsuits and pay fines.
Congressional Report Raises Security Concerns on Chinese Firms
A congressional panel is warning that Chinese telecom firms Huawei and ZTE pose a security threat to the US, according to a House Intelligence Committee investigation, the BBC reports. The two firms should be barred from any U.S. mergers and acquisitions after failing to ease fears about their association with China’s government and military, the report states. The firms are among the world's biggest makers of networking equipment. Huawei denounced the allegations as “dangerous political distractions” while ZTE issued a statement insisting its equipment met all U.S. standards and posed no threat. The report concludes that “China has the means, opportunity and motive to use telecommunications companies for malicious purposes.”
Toyota Steers Its Hybrid Cars Onto HSN
Move over Estefan and cubic zirconia. Toyota made HSN history Sunday when it became the first automaker to pitch its cars on the home shoppers network. Toyota used three one-hour programming blocks to drive sales of its hybrid cars. Toyota officials said the automaker received more requests for product information after the first hour than they had expected to get all day, Reuters reports. While not able to sell the cars on the air, Toyota generated traffic by encouraging viewers to call instead to get free coffee mugs and to qualify for $1,000 certificates for free gas or HSN shopping credit if they go through with a car purchase.