Frustrated Dems lament damage from website bugs

WASHINGTON — Frustrated Democrats lamented Wednesday that persistent problems with new health care exchanges have inflicted damage on the public's perception of the already unpopular "Obamacare" — with some lawmakers insisting President Barack Obama should ensure those responsible lose their jobs.

Emerging from a closed-door briefing with health officials from the Obama administration, House Democrats appeared to have at least as many questions as answers about how and when the beleaguered website will be fixed. Although they resolved not to let setbacks with one aspect of the health law outshine the parts that are working, they griped that the shoddy website had given Republicans an opening to do just that.

"I think the president needs to man up, find out who was responsible and fire them," Rep. Richard Nolan, D-Minn., said after the briefing. He said Obama should tell Democrats when the problems will be fixed so they can prepare to move on. "You don't get many second chances to get a good first impression."

Nolan wasn't the only one.

"Somebody should be held accountable," said Rep. Xavier Becerra, D-Calif. "Absolutely."

The briefing with House Democrats came as the Obama administration is appealing to its allies in Congress, on Wall Street and across the country to stick with the health care law despite embarrassing problems that continue to crop up. On Wednesday, lawmakers heard from Gary Cohen and Julie Bataille, two high-level officials with the Centers for Medicare and Medicaid Services, a federal agency with major responsibility for the website where millions of Americans are expected to purchase insurance.

Democrats say they requested the briefing. A spokesman for House Speaker John Boehner, R-Ohio, said House Republicans were arranging to hold a similar briefing with health officials in the coming days.

Echoing Democratic leaders and even Obama himself, Democrats said it was unacceptable that the website's debut had been so flawed. But Rep. Rosa DeLauro, D-Conn., said it was critical Democrats not lose sight of the bigger picture and law's other benefits.

"It's regrettable. It can't be accepted. Gotta move on," DeLauro said.

Obama has turned to longtime adviser Jeffrey Zients, a veteran management consultant, to provide advice to help fix the system. And Obama has said he's instituted a "tech surge," bringing in leading technology talent to repair the painfully slow and often unresponsive website. But the administration has repeatedly declined to say how long that will take, raising questions about whether the full extent of the problems has been fully determined.

"They were reluctant to give a date — I don't blame them — on the fixes," said Rep. Janice Schakowsky, D-Ill. But they said the problems would be fixed in time for people to get enrolled by Jan. 1, the day that coverage through the exchanges begins.

The website's troubled debut was overshadowed by the partial government shutdown that started the same day the website went live. Last week, Obama and Democrats walked away from a no-holds-barred fight with Republicans over debt and spending with a remarkable degree of unity, made all the more prominent by the deep GOP divisions the standoff revealed.

The debt-and-spending crisis averted for now, the spotlight has shifted to Obama's health care law and the web-based exchanges, beset by malfunctions, where Americans are supposed to be able to shop for insurance. The intensified focus has increased the pressure on Democrats to distance themselves from Obama's handling of the website's rollout as both parties demand to know what went wrong and why.

As the administration races to fix the website, it's deploying the president and top officials to urge his supporters not to give up.

"By now you have probably heard that the website has not worked as smoothly as it was supposed to," Obama said Tuesday in a video message recorded for Organizing for America, a nonprofit group whose mission is to support Obama's agenda. "But we've got people working overtime in a tech surge to boost capacity and address the problems. And we are going to get it fixed."

The group has been organizing a multitude of events and social media campaigns around the health care law's implementation. OFA said those efforts will continue, but the group isn't adjusting its strategy in response to the website's issues.

Meanwhile, Vice President Joe Biden and top White House officials held a call with business leaders Tuesday about the health law and other issues. Business Forward, a trade group friendly to the White House, said the administration asked the group to invite leaders to hear directly from Biden.

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Associated Press writers Alan Fram and Laurie Kellman contributed to this report.

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Follow Josh Lederman at http://twitter.com/joshledermanAP

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176-year-old Fall River business closing

FALL RIVER, Mass. — A 176-year-old Fall River masonry supply business is shutting down, a victim of the changing face of the city.

Owner Winthrop Sanford says Building Materials Inc. will close for good on Oct. 31. It specializes in bricks, mortar and stone.

He tells the Herald News (http://bit.ly/163BFNE ) he has seen the business's demise coming for years, as the city's mills closed and retail customers moved to the suburbs.

He says there used to be 40 to 50 masons in the city. Now there are four or five.

The company was founded in 1837 and has been in Sanford's family since 1900.

At its height right after World War II, the company employed about 40 people. In the last decade it has had six to eight employees.

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Information from: The (Fall River, Mass.) Herald News, http://www.heraldnews.com

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FedEx expects increase in holiday deliveries

MEMPHIS, Tenn. — FedEx expects that holiday shoppers will be more nice than naughty this year, with shipments rising from 2012.

The company said Wednesday that it expects to carry more than 22 million shipments on the busiest day of the season, which it believes will be Monday, Dec. 2.

FedEx predicts that shipments in the first week of December will rise 13 percent over last year's peak week, to more than 85 million shipments, driven by online shopping and retailers stocking up on electronics, apparel and other goods.

The expected top day, Dec. 2, will be the first work day for many shoppers after the long Thanksgiving weekend. This is the first time that FedEx expects so-called "Cyber Monday" to be its busiest day of the season.

Last year, the company's heaviest load fell on Dec. 17, when it carried 19.9 million shipments. It also saw spikes of 19.6 million shipments on Cyber Monday and 19 million on Dec. 10.

If FedEx's forecast is correct, the 2013 peak day will be roughly double the volume of its busiest day just six years ago.

The National Retail Federation predicts that retail sales in November and December will rise 3.9 percent over last year to $602 million — $738 per shopper. It expects online sales to rise by 13 percent to 15 percent.

FedEx, United Parcel Service Co. and others will fight over all those deliveries. This week, FedEx rolled out a new service called One Rate, a flat-rate shipping option that it hopes will boost its share of the holiday-shipping business. This spring, it offered a service that allows residential recipients to schedule deliveries.

Memphis-based FedEx Corp. expects to hire slightly more than the 20,000 seasonal workers that it added last year.

In morning trading, FedEx shares fell $1.01 to $128.68.

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Ex-Utah Gov. Huntsman hosting weekly radio show

SALT LAKE CITY — Former Republican Utah Gov. Jon Huntsman, a 2012 presidential candidate, will be hosting a new weekly radio talk show on SiriusXM satellite radio aimed at promoting bipartisan politics.

Huntsman helped launch a similar program in May, but that show was monthly and Huntsman only served as an occasional host.

SiriusXM says in a statement that the company felt the monthly show was a success and decided to expand it to a weekly program with Huntsman.

The new venture, an hour-long program called "No Labels Radio with Jon Huntsman," will air on Saturdays, starting on Oct. 26.

Huntsman is a co-chair of a group of 87 members of Congress called No Labels, which calls for an end to dysfunctional politics and more problem-solving in Washington, D.C.

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ECB launches major review of banks

FRANKFURT, Germany — The European Central Bank is launching a review of 128 of the eurozone's biggest banks, a push to restore faith in the financial system — and lay the groundwork for growth — after similar studies fell short.

The review will be a key test of the ECB's credibility as it prepares to take over as the European Union's banking supervisor. Previous stress tests carried out in 2009 and 2011 by another agency with more limited powers, the European Banking Authority, cleared several banks that were in need of rescuing soon after.

Europe's slow progress in cleaning up the banks contrasts with the United States. There, officials moved early to make banks strengthen their financial buffers in the wake of the 2008 collapse of investment bank Lehman Brothers.

The ECB announced Wednesday that its review of the banks will begin next month and take a year. Working with national regulators, ECB officials will take a broad look at the banks' holdings and financial strength. In particular, they will look for hidden losses such as loans to businesses and real estate projects that are unlikely to be repaid.

ECB President Mario Draghi called it "an important step forward for Europe and for the future of the euro area economy."

The ECB's review will be followed by a stress test that would simulate bank losses in a sudden economic downturn or financial crisis, conducted along with the European Banking Authority.

The question is whether that stress test will be more credible than the previous ones.

Thomas Huertas, a partner in a unit of Ernst & Young, said they probably would because the ECB will have already reviewed the banks' balance sheets before conducting the test — something the EBA was not able to do before.

At the end, banks could be pushed to repair their finances by raising more capital or selling off risky holdings.

The issue is import for Europe's recovery because banks that are holding soured investments, such as bad loans, may be unable or unwilling to find cash to lend to businesses that need credit to expand their operations. They may also be asking for higher interest rates to lend, blunting the ECB's ability to stimulate the economy with lower borrowing costs.

The eurozone grew only 0.2 percent in the second quarter after contracting for six quarters and unemployment remains high at 12 percent.

The asset review and stress test need to be done before the ECB takes over as the European Union's banking supervisor next year. The single supervisor is part of a broader effort to strengthen the financial system and prevent a repeat of the debt problems afflicting countries such as Spain and Ireland, where bank bailouts hurt government finances.

Ignazio Angeloni, an ECB official, said the result would call for "repair where repair is necessary" and won't necessarily include a figure for raising new capital.

The ECB's job may be complicated by the fact that Europe does not yet have a single authority to restructure or shore up banks that review identifies as weak. European leaders are still debating how to set up such an authority. If banks cannot raise new capital from private investors, they could turn to their national authorities. Under some circumstances, the eurozone's bailout fund could be used, but the idea has faced stiff political resistance from governments.

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WellPoint's 3Q profit falls 5 pct, forecast climbs

INDIANAPOLIS — WellPoint Inc.'s third-quarter earnings fell 5 percent but still topped expectations, and the nation's second-largest health insurer said it raised its 2013 forecast despite added expenses from the health care overhaul.

The Blue Cross Blue Shield insurer said Wednesday its performance so far this year helped prompt it to raise its forecast for 2013 adjusted earnings to at least $8.40 per share. That's up from its previous forecast for at least $8 per share and well beyond the $8.26 per share average that analysts surveyed by FactSet expect.

Company executives told analysts they are doing this despite making sizeable investments to get ready for upcoming coverage expansions under the overhaul.

The law aims to provide health insurance coverage to millions of uninsured people, and it took a major step toward that goal on Oct. 1, when enrollment started for coverage that begins Jan. 1. The overhaul calls for an expansion of the state-federal Medicaid program and also provides income-based tax credits to help people buy coverage on health insurance exchanges that are set up in each state.

WellPoint is selling coverage on several of these exchanges. Chief Financial Officer Wayne DeVeydt said WellPoint has spent about $300 million to prepare for the exchanges, and they expect to spend $70 million to $100 million on marketing for coverage the insurer sells on them.

Analysts and investors expect the overhaul's coverage expansion to affect WellPoint more than other insurers because the company derives a large portion of its business from the individual market and through smaller employers who cover their workers. Investors haven't been sure how much business insurers like WellPoint will lose or gain because of these exchanges.

They'll have to wait a little longer to get clarity on that. Computer glitches tied to the largely online exchanges have frustrated consumers in many states as they have tried to shop around for coverage.

DeVeydt said the insurer has enrolled people through the exchanges, but they don't have a clear picture yet on how many because they haven't received all the paperwork for those customers.

Overall, WellPoint said it earned $656.2 million, or $2.16 per share, in the quarter that ended Sept. 30. That compares to $691.2 million, or $2.15 per share, last year, when the company had more shares outstanding. Earnings excluding one-time items totaled $2.10 per share.

Analysts expected, on average, earnings of $1.81 per share, according to FactSet.

Operating revenue, which excludes investment gains or losses, soared 17 percent to $17.73 billion and topped analyst expectations for $17.66 billion.

WellPoint shares fell 3.5 percent, or $3.13, to $85.32 in midday trading Wednesday, while the Standard & Poor's 500 index dropped less than 1 percent.

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FDA issues positive review for Gilead's hep C drug

WASHINGTON — The Food and Drug Administration issued a positive review Wednesday for a highly anticipated hepatitis C drug from Gilead Sciences, saying the pill cures more patients in less time than currently available treatments.

The agency posted its review of Gilead's sofosbuvir online ahead of a meeting Friday where government experts will vote on whether to recommend the drug's approval.

Between 3 million and 4 million people in the U.S. have hepatitis C, a blood-borne disease that causes liver damage and is blamed for 15,000 deaths a year. The drugs currently used to treat the virus cure about three-quarters of people and can take up to a year of treatment.

FDA said adding Gilead's sofosbuvir to the standard drug cocktail cured 90 percent of patients with the most common form of the virus in just 12 weeks.

The agency's reviewers state that the "shorter 12-week duration translates into a better tolerated side effect profile," adding that "no major safety issues associated with sofosbuvir have been identified to date."

Foster City, Calif.-based Gilead Sciences is one of a half-dozen companies working to develop more effective treatments for hepatitis C, and many analysts predict the company's drug will eventually outperform its competitors. The FDA is expected to make a decision on the drug by Dec. 8.

Drugmakers see hepatitis treatments as a potentially lucrative market because the disease is expected to grow into a major public health problem as the baby boom generation ages. People born between 1945 and 1965 are five times more likely to have the virus than people of other age groups, and the Centers for Disease Control and Prevention is urging all baby boomers to get tested for the disease. Many Americans contracted the virus by sharing needles or having sex with an infected person in their youth.

For most of the last 20 years, the standard treatment for hepatitis C has involved a grueling one-year regimen of pills and injections that causes flu-like symptoms and cures less than half of patients. Then in 2011, the FDA approved two new drugs from Merck and Vertex Pharmaceuticals that raised the cure rate to about 65 and 75 percent, respectively, when combined with the older treatments.

Gilead's once-a-day pill appears to push the cure rate even higher.

In a company study of 327 patients with the most common form of the disease, 90 percent of participants had undetectable levels of the virus after 12 weeks of treatment. The form of the disease studied in the trial accounts for about 75 percent of hepatitis C cases in the U.S.

Gilead's drug was not as effective in treating two less common forms of the disease that account for about 25 percent of cases in the U.S. Among those patients, sofosbuvir cured about 67 percent of patients who had not previously taken other hepatitis C drugs.

But even for those patients, the FDA says Gilead's drug represents an important step forward.

The company's approach used only pill-based medications — sofosbuvir and another antiviral drug — while excluding interferon, the injectable medication that is the backbone of standard treatment, which can cause nausea, diarrhea and other unpleasant side effects.

For patients with the less common subtypes of the disease, Gilead's approach "provides the first all-oral, interferon-free treatment, as well as a shorter treatment duration and improved safety profile," according to the FDA's review.

Gilead is racing against other drugmakers to develop the first all-pill approach to treating the most common form of hepatitis C, long viewed as the holy grail of treatments by drugmakers. Similar efforts are underway from Abbott Laboratories, Bristol-Myers Squibb Co., Vertex Pharmaceuticals and others.

Citi analyst Yaron Weber said the FDA's review was "overall favorable and may potentially lead to a broad label" for Gilead's drug. He predicts the drug could reach annual sales of $2.74 billion.

Pharmaceutical industry consulting firm Decision Resources estimates the total market for hepatitis C drugs will grow to more than $23 billion by 2018. Sales of the drugs are expected to decline to $17.5 billion by 2021 as more patients are cured of the virus.

Shares of Gilead Sciences Inc. rose 87 cents to $68.96 in midday trading.

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College price hikes appear to be moderating

WASHINGTON — There's some good news on college tuition. Yes, the cost has gone up — but not as much as in the past.

For in-state students at a four-year public college or university, published tuition and fees increased this year on average $247 to $8,893. That's a 2.9 percent increase — the smallest one-year increase in more than 30 years, the College Board said Wednesday in its annual report on college prices.

Out-of-state prices, as well as the costs to attend public two-year colleges and private institutions rose but they also avoided big spikes, said Sandy Baum, co-author of the report. These more moderate increases could lessen concern that an annual rapid growth in tuition prices is the new normal.

"It does seem that the spiral is moderating. Not turning around, not ending, but moderating," Baum said.

The average published cost for tuition and fees at a private college for the 2013-14 academic year was $30,094 — up $1,105. An out-of-state student at a public college or university faced an annual average price tag of $22,203, which is up $670. The average price tag for an in-state student to attend a two-year institution was much less at $3,264 — up $110.

Most students don't actually pay that, though. There are grants, tax credits and deductions that help ease the cost of going to college. About two-thirds of full-time students get grants, most from the federal government.

But, in the two years leading up to the 2012-2013 school year, the federal aid per full-time equivalent undergraduate student declined 9 percent, or about $325.

That means students have to foot more of the bill themselves.

"The rapid increases in college prices have slowed, however, student and families are paying more because grant aid is not keeping up," said David Coleman, president of the College Board.

While the average published price for tuition and fees for a private college is $30,094, the net price is $12,460 — up $530 from last year. The net price is what they actually pay after grants. There were years this decade that saw the net price going down, but it has gone up the last two years.

The average published in-state price for tuition and fees at a public four-year school is $8,893, but the average net price is about $3,120.

Molly Corbett Broad, president of the American Council on Education, in a statement called it "troubling" that overall grant aid is not keeping up with prices. Her organization represents the presidents of U.S. colleges and universities.

"Institutions are committed to holding down costs, but it is equally important for state and federal governments to play their part to make college affordable," she said.

The College Board is a not-for-profit membership group that promotes college access and owns the SAT exam.

The report spells out the large declines in state appropriations given to public institutions in recent years. These cuts have been blamed for rises in college costs. Other causes often cited range from the high cost of health care for employees to the demand by students for flashier campus amenities.

Among the other findings in the report:

— Adding in costs for room and board to live on campus, average annual published costs: At public, four-year universities, $18,391 for in-state students and $31,701 for out-of-state students; $40,917 for private colleges and universities; $10,730 for in-state students at public two year schools.

— The average published tuition and fees at for-profit institutions increased by $70 to $15,130 — an increase of less than 1 percent.

— New Hampshire and Vermont had the highest published in-state tuition and fees at both four-year and two-year institutions. Wyoming and Alaska had the lowest published in-state tuition and fees at a four-year institution, while California and New Mexico had the lowest in-state among two-year schools.

— In 2012-2013, $238.5 billion in financial aid was issued to undergraduate and graduate students in the forms of grants from all sources, Federal Work-Study, federal loans and federal tax credits and deductions. Also, students borrowed about $8.8 billion from private, state and institutional sources.

— About 60 percent of students who earned bachelor's degrees in 2011-2012 graduated with debt, borrowing a total of $26,500 on average.

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Online: http://www.collegeboard.org/

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Follow Kimberly Hefling at http://www.twitter.com/khefling

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China banking worries weigh on markets

LONDON — Worries over the Chinese banking sector weighed on markets Wednesday, a day after weak U.S. jobs data reinforced expectations that the Federal Reserve won't be reducing its monetary stimulus anytime soon.

Tuesday's news that the U.S. generated only 148,000 jobs in September, below the consensus among analysts for around 180,000, prompted stocks in Europe and the U.S. to rally. However, that momentum came to a grinding halt during the Asian trading session amid concerns over the bad loans that are being written off by China's largest banks.

"This has reignited fears over China's shadow banking system and whether the People's Bank of China will be forced to raise interest rates in order rein in it," said Craig Erlam, market analyst at Alpari. "If we do see a tightening of monetary policy, it could choke off the recovery being seen in the world's second largest economy, which in turn would impact growth globally."

In Europe, the FTSE 100 index of leading British shares fell 0.3 percent to close at 6,674.48 while Germany's DAX fell the same rate to 8,919.86. The CAC-40 in France shed 0.8 percent to 4,260.66.

In the U.S., the Dow Jones industrial average was down 0.5 percent at 15,394.73 while the broader S&P 500 index fell the same rate to 1,745.43.

A mixed bag of U.S. corporate earnings did little to alter the prevailing profit-taking mood. While Caterpillar's quarterly earnings plunged 44 percent and the company cut its outlook for the year again, Boeing's shares were well supported after beating analyst expectations.

A solid earnings season has been one reason why the S&P has hit a series of record highs, along with delayed expectations of when the Fed will begin "tapering" its stimulus.

Max Cohen, a trader at Spreadex, says earnings have beaten analyst estimates at 74 percent of the 141 companies of the S&P that have released their results so far, while 53 percent exceeded sales projections.

Elsewhere, the dollar consolidated, particularly against the euro, after falling back in the wake of the payrolls figures — the euro was flat at $1.3788, just shy of its near two-year high of $1.3793.

Earlier in Asia, China's Shanghai Composite Index fell 1.3 percent to 2,183.11 and Hong Kong's Hang Seng shed 1.4 percent to 23,999.95. Japan's Nikkei 225 tumbled 2 percent to 14,426.05 as the yen gained against the U.S. dollar, which can hurt sales and profits at Japanese exporters. Australia's S&P/ASX 200 fell 0.3 percent to 5,356.10.

Oil prices remained under pressure too, with the benchmark New York rate down $1.55 at $96.75 a barrel — near its lowest level since late June. Ample supplies, worries over the U.S. economy, and an easing of geopolitical tensions relating to Iran and Syria have weighed on oil prices in recent weeks.

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Starbucks to open 'tea bar' in New York City

NEW YORK — Starbucks is trying to make tea trendy, with plans to open its first "tea bar" in New York City.

The Seattle-based company says Teavana Fine Teas + Teavana Tea Bar will serve sweets and other food including flatbreads, salads and small plates ranging in price from about $3 to $15. Drink prices will range from $3 to $6, and include novelties such as a Spiced Mandarin Oolong tea and carbonated teas.

The menu of food and freshly made drinks is a switch for Teavana, a chain of about 300 stores that sell boxed and loose tea and accessories. Teavana stores are mainly in shopping malls, but Starbucks CEO Howard Schultz said he plans to expand the footprint to include more locations in urban areas. The company plans to add brewed tea and food to more Teavana stores.

The opening of the New York City store on Thursday comes after Starbucks bought Teavana last year. The company has said it plans to use the acquisition to make tea a bigger part of American culture, as it has with coffee.

Starbucks Corp., which has about 12,000 U.S. locations, has been on a strong financial run even in the weak economy, boosting its profits by raising prices, revamping food offerings and adding items such as pricey bottled juices. In its latest quarter, it said sales rose 9 percent at cafes open at least a year.

At a media event at the new Teavana store, Schultz said executives noticed that tea orders were among the fastest-growing drinks at Starbucks cafes. People are also more likely to order food when they buy iced tea.

Schultz said he expects the average purchase at the Teavana shop to be higher than at a Starbucks cafe, although it probably won't get as many customers. The store is also expected to do more business throughout the day, compared with the early morning rush at Starbucks stores.

Starbucks opened a similar tea shop last year near its headquarters under its Tazo brand. Next month, that store will be converted into a Teavana tea bar as well.

The idea of a tea shop isn't new, of course. Jenny Ko, a part owner of the Culture Tea Bar in New York's Harlem neighborhood, notes that they're more prevalent on the West Coast but that they've been popping up on the East Coast more recently as well.

Ko said she welcomes Starbucks' push into tea shops, even though the company has put many put many smaller coffee chains out of business. She said she thinks her tea shop has enough unique offerings to withstand the competition. Besides, she said Starbucks' push should lead to greater awareness about teas in general.

"That's how everyone got into coffee, after Starbucks opened," Ko said.

Already, Ko noted people are more knowledgeable about tea, with customers increasingly familiar with different varieties such as oolong and Darjeeling.

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Follow Candice Choi at www.twitter.com/candicechoi.

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