Stocks give up an early gain and turn lower

NEW YORK — The stock market continued its recent pattern of one step forward, one step back.

After starting the day higher following an encouraging report on orders for manufactured goods, stocks drifted lower in afternoon trading Wednesday and gave up their gains from a day earlier. Facebook led the technology sector lower as investors gave the company's latest acquisition the thumbs-down.

The Standard & Poor's 500 index fell the most in two weeks and is now flat for the year. Investors are waiting for a catalyst that will either push the market higher or cause a sustained sell-off. Many anticipate that the stock market will resume its upward trajectory later in the year as the economy strengthens following an unusually harsh winter.

"We're going through this back and forth, I would call it a consolidation phase, digesting the huge gains we've had," said David Lafferty, chief market strategist at Natixis Global Asset Management. "Most of the movement in stocks will tend to be in the latter half of the year."

The S&P 500 fell 13.06 points, or 0.7 percent, to 1,852.56. The index is up 0.2 percent for the year, after rising almost 30 percent in 2013.

The Dow Jones industrial average lost 98.89 points, or 0.6 percent, to 16,268.99. The technology-heavy Nasdaq composite fell more than the other indexes, giving up 60.69 points, or 1.4 percent, to 4,173.58.

Facebook was one of the biggest losers.

The social media network slumped $4.51, or 6.9 percent, to $60.38 after announcing a $2 billion acquisition of virtual reality company Oculus late Monday. It was Facebook's second big acquisition in as many months. Last month the company announced that it would pay $19 billion for messaging startup WhatsApp.

Investors may be questioning whether the returns on those investments will ultimately justify the big outlays, said Lawrence Creatura, a portfolio manager at Federated Investors.

Another loser in the technology sector was King Digital Entertainment.

The online games company, which makes the popular "Candy Crush Saga," slumped on its first day of trading. The company raised $499.5 million in an initial public offering. The company's stock fell $3.50, or 15.6 percent, to $19 on its first day of trading.

The stock market opened higher after a report showed that orders to U.S. factories for long-lasting manufactured goods rose in February by the largest amount since November, 2.2 percent. Demand for airplanes and automobiles drove the gains, according to the Commerce Department report. Last month's rise in durable goods orders followed a 1.3 percent drop in January.

"The bigger issue right now is whether or not growth in the United States is going to reaccelerate as the year goes on," Paul Karos, portfolio manager at Whitebox mutual funds. "We are assuming a bounce back after this weak first quarter."

Health care companies bucked the downward trend and were the only industry sector to rise. The sector is rebounding after getting caught up in a brief sell-off of biotechnology stocks on Friday and Monday. Biotech companies slumped after lawmakers raised concerns about the prices of some drugs.

Tenet Healthcare rose $2.03, or 5.2 percent, to $40.93. Quest Diagnostic rose $3.05, or 5.6 percent, to $57.99. Hospitals and medical device companies are attractive because they have steady revenue streams.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.69 percent from 2.75 percent from late Tuesday. The price of crude oil rose $1.07, or 1.1 percent, to $100.26 a barrel. Gold fell $8, or 0.6 percent, to settle at $1,303.40 an ounce.

Among other stocks making big moves:

— International Game Technology fell $1.23, or 8.3 percent, to $13.62 after the company lowered its annual profit forecast, saying North American gambling revenue has declined more steeply than it expected. Its international business is being hurt by weakening currencies and other problems.

— Discount retailer Five Below shot higher after its quarterly profit and sales beat analysts' expectations. The stock jumped $4.34, or 11 percent, to $42.34.

— Citigroup fell $2.66, or 5.3 percent, to $47.50 in after-hours trading after the Federal Reserve turned down the bank's plan to spend $6.4 billion buying back its own stock and increasing its quarterly dividend from 1 cent to 5 cents.

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Chicago firm moves toward suit over Malaysia plane

CHICAGO — Court documents that often precede a lawsuit have been filed by a U.S. law firm on behalf of a relative of a passenger on missing Malaysia Airlines Flight 370.

The filing in Chicago asks a judge to order Malaysia Airlines and Chicago-based Boeing Co. to turn over documents related to the possible "negligence" caused the Boeing 777 to crash, including any documentation about the chances of "fatal depressurization" in the cockpit.

"Additional pleadings will be filed in the next few days against other potential defendants who are designers and manufacturers of the component parts that may have failed in the aircraft," Chicago-based Ribbeck Law Chartered attorney Monica Kelly said in a statement. The documents filed Tuesday in Cook County Circuit Court seek to preserve evidence.

They were filed on behalf of Januari Siregar, who the law firm says is a relative of Indonesian-born passenger Firman Chandra Siregar. The filings were not clear about their exact relationship.

Kelly said lawyers are asking a judge to order Boeing to provide the names of companies that manufactured the locator beacon, the electric components, batteries and fire alarm systems, the emergency oxygen generators and those who last inspected the aircraft's fuselage. The law firm is also seeking from Malaysian Airlines the identities of people with information about the training of the crew; their physical and psychological evaluations; and the security practices of the airline.

Boeing spokesman John Dern declined comment. Phone and email messages were left for airline officials Wednesday.

In its corporate self-portrait, Ribbeck Law boasts of its success at obtaining compensation for the families of victims of aviation disasters. The National Transportation Safety Board complained after the crash landing of Asiana Flight 214 in San Francisco last year that some attorneys may have violated a U.S. law barring uninvited solicitation of air disaster victims in the first 45 days after an accident.

The NTSB pointed specifically at Ribbeck Law, reporting the firm to Illinois' Attorney Registration and Disciplinary Commission. It was unclear Wednesday if the agency took any action on the complaint.

At the time, Kelly said the firm legally and ethically obtained its clients related to the crash and that all initiated contact with the firm, which is representing 83 passengers of the Asiana flight.

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Millions could get extra time for health sign-ups

WASHINGTON — Millions of Americans could get extra time to enroll for taxpayer-subsidized coverage this year under President Barack Obama's health care law. That would let the administration boost sign-ups and aid Democrats under attack over the program's troubles.

The Health and Human Services Department Wednesday posted two documents that outline "special enrollment periods" for broad groups of people trying to access the new online health insurance markets.

Those who've started an application, but weren't able to finish before the March 31 open enrollment deadline, would get a limited amount of time to sign up for coverage that would take effect May 1.

Additionally, people with 10 general categories of "special" circumstances would also get extra time to apply — up to 60 days. Categories include natural disasters, system errors related to immigration status, computer error messages due to technical difficulties, family situations involving domestic abuse, and other sorts of problems.

"We won't close the door on those who tried to get covered and were not able to do so through no fault of their own," Julie Bataille, communications director for the health care rollout, told reporters.

She deflected repeated questions on whether there is a hard deadline beyond which the administration won't take applications.

Special enrollment periods are allowed under the health law, and standard for workplace insurance. But they are mainly used to accommodate changes in life circumstances, such as marriage, divorce, the birth of a child or job loss.

The latest tweaks to health overhaul rules drew immediate scorn from Republicans committed to repealing "Obamacare."

"The administration has now handed out so many waivers, special favors and exemptions to help Democrats out politically ... it's basically become the legal equivalent of Swiss cheese," said Senate Minority Leader Mitch McConnell, R-Ky.

The administration announcement added to a perception of disarray that has dogged the health care overhaul from its early days. It also raised concerns about the potential for another round of technology problems like the ones that paralyzed HealthCare.gov after its Oct. 1 launch.

Several factors seemed to be involved:

— Concern about turning away millions of people belatedly trying to enroll this week. A recent Kaiser Family Foundation poll found that 6 in 10 uninsured people were unaware of the March 31 enrollment deadline, and half said they didn't plan to get coverage. It can take several visits to the website to finish an application, even without technical glitches.

— Millions of consumers may still be getting tangled up in the complicated enrollment process. The administration's own numbers show that only about half of the people deemed eligible to enroll through March 1 actually went all the way through to signing up. More than 4 million people either abandoned their applications or may still be trying to muddle through.

— Obama himself has been leading a last-minute drive to persuade Hispanics to sign up. The nation's largest minority — with the highest uninsured rate of any race or ethnic group — has been on the sidelines and risks being left behind. Traffic on the Spanish-language sign-up site is up markedly, more than 200,000 visits from Sunday through midday Wednesday — half again as many during the same period a week earlier.

The White House is scrambling to meet a goal of 6 million sign-ups for subsidized private health insurance for people who don't have coverage on the job. HealthCare.gov got 1.2 million visits Tuesday, and officials say the site is holding up well under the added demand.

"Since the traffic started to climb, we have seen only minor issues, all of which have been addressed rapidly," said Kurt DelBene, a tech executive brought in to oversee the website.

Independent testing by Detroit-based Compuware has found that HealthCare.gov runs slowly when compared to other health insurance industry websites.

Officials said the grace period for people who've started applications by March 31 will be available on the honor system.

"It is important to recognize that this is an official federal application," said Bataille. "Most people are truthful when applying for these benefits."

How long the extension will last seems to depend on individual circumstances. HHS said it will process paper applications received by April 7. Those applying online may have more time, until April 15, the same as the tax filing deadline. People who are due tax refunds may be willing to put some of that money toward health care premiums.

The sign-up extension and the special enrollment periods follow other delays, most significantly of the law's requirements that medium- to large-sized businesses provide coverage or face fines.

Republicans are making repeal of the health care law their rallying cry in the fall congressional elections. If the various extensions succeed in boosting enrollment, that would help Democratic candidates, including politically vulnerable senators who voted for the law's passage in 2010.

The next open enrollment period isn't until Nov. 15, after the elections. Providing an option for sign-ups prior to that could give Democrats a rebuttal during the height of the campaign season that focuses on their efforts to fix the law's problems, rather than scrapping it.

The White House had signaled last week that a grace period of some sort was in the works. Officials compare it to the Election Day practice of allowing people to vote if they are in line when the polls close.

The administration's actions primarily affect the 36 states where the federal government is taking the lead on sign-ups. But the 14 states running their own websites are likely to follow, since some had been pressing for an extension on account of their own technical problems.

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Online:

Extension for those 'in line' — http://tinyurl.com/ojpku33

Special enrollment periods — http://tinyurl.com/ofjn3sc

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Women: J&J trashed records in product injury suits

TRENTON, N.J. — Lawyers and advocates for women alleging Johnson & Johnson products injured them urged the U.S. Justice Department on Wednesday to investigate their claims the health care giant deliberately destroyed many documents critical to their lawsuits.

Corporate Action Network, a nonprofit group seeking to hold businesses accountable for their actions, said that it's written to Attorney General Eric Holder to look into whether J&J, based in New Brunswick, N.J., and CEO Alex Gorsky committed the crimes of obstructing justice and destroying records in a federal probe.

"Hundreds of thousands of women continue to suffer ongoing, severe harm," from J&J's pelvic mesh implants, network spokeswoman Levana Layendecker said during a call with reporters. "I hope Johnson & Johnson is held accountable for their failure to warn."

The implants are widely used to hike up sagging pelvic organs, common in older women and those who've had children — and often the cause of embarrassing bladder leaks when they laugh, sneeze or lift something heavy. More than 22,000 women suing J&J blame its implants for crippling pain, infections and bleeding.

Last month, U.S. District Court Judge Cheryl Eifert in southern West Virginia, who is handling most of the implant lawsuits, concluded J&J destroyed thousands of documents regarding development of its pelvic mesh implants, but said there was no proof that was done intentionally. The documents would include reports on patient testing of the mesh implants and could show whether participants suffered serious complications.

Jane Akre, founder of an online network for pelvic mesh implant "survivors," said Johnson & Johnson was aware of possible harm and didn't warn the public.

"Evidence we've presented at trial showed they knew these implants would cause complications and they just didn't care. Many women are now disabled and they can't leave their beds, they're in so much pain," she said during the conference call.

"Women have killed themselves because the pain eclipses childbirth pain, it's that bad," Akre said in an interview.

Matthew Johnson, a spokesman for Johnson & Johnson's Ethicon unit, which makes the implants, said in a statement that the company "acted appropriately and responsibly in the research, development and marketing of our pelvic mesh products," which he said are considered a "gold standard" treatment.

"Ethicon has engaged in extensive efforts to preserve and produce evidence in the pelvic mesh (federal litigation) which has led to the production of millions of pages of documents to date. In the context of Ethicon's substantial document production, the inadvertent loss of certain, limited documents has not prejudiced plaintiffs in their ability to pursue their claims," he added.

Sagging pelvic organs were fixed with traditional surgery until the late 1990s, when J&J launched the first pelvic mesh implants, a twist on a similar product long used to repair hernias. The pelvic implants, which function like a sling attached to bones to lift fallen organs back up, were billed as more effective than just stitching organs into place. Six other companies then launched rival products.

Women soon began complaining of complications so severe they can't work, need strong painkillers around the clock and now find intercourse unbearably painful. That's because the mesh, similar to a window screen, over time can dig into the exterior tissue of the vagina or bladder, causing a sensation some have likened to having barbed wire twisting inside your body.

Attorneys have been advertising heavily for potential plaintiffs in recent years, and the litigation has grown into possibly the largest mass medical injury case in the country.

Plaintiff Linda Dotson of Loudon, Tenn., told reporters that after having mesh implanted in two areas of her pelvis in 2006, she quickly developed a dangerous blood clot and then suffered hemorrhaging, severe pain, unexplained fevers, fatigue and other flu-like symptoms. She had to have a couple of surgeries to remove much of the mesh, took antibiotics for months and still suffers.

Justice Department spokeswoman Allison Price said the department is reviewing the group's letter.

Corporate Action Network said it plans to bring injured patients to speak at J&J's annual shareholder meeting on April 24.

The group also alleges that J&J has harmed other patients, particularly women, with faulty hip implants — which the company has since taken off the market amid a crush of lawsuits — and with baby and beauty products containing undisclosed toxic ingredients. Under pressure from multiple consumer and environmental groups for the past several years, J&J has begun reformulating those shampoos, skin care and other personal care products with safer ingredients.

Johnson & Johnson, the world's biggest maker of health care products, has run afoul of the federal government previously.

It's operating under an agreement requiring it to make major upgrades to three medicine factories responsible for dozens of product recalls since 2009 for problems including drugs with the wrong level of active ingredient and liquid medicines with tiny metal or glass shavings in them.

Separately, after the Justice Department joined three whistleblower lawsuits alleging Johnson & Johnson marketed some of its powerful prescription drugs for unapproved uses, the company last November paid federal and state fines of more than $2.2 billion. It also entered a five-year agreement with the government to change the way it does business, particularly disclosing more information about its research and marketing practices.

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Follow Linda A. Johnson at http://twitter.com/LindaJ_onPharma

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Dish, DirecTV shares rise on reported merger talk

LOS ANGELES — Shares of satellite TV companies Dish and DirecTV surged in midday trading Wednesday after a report said that Dish Chairman Charlie Ergen had contacted DirecTV CEO Mike White about merging.

Bloomberg News reported Ergen initiated the discussion in response to Comcast Corp.'s pending $45 billion acquisition of Time Warner Cable Inc., which was announced last month. The news service cited several unnamed sources.

Dish Network Corp. spokesman Bob Toevs declined to comment. DirecTV spokesman Robert Mercer said the company doesn't comment on speculation.

The companies last tried to merge more than a decade ago, but the Federal Communications Commission killed the deal in 2002 because it would eliminate competition. While Ergen has long supported the two companies coming together, White has been less vocal about the matter.

White told an investors conference earlier this month, however, that the video industry has changed in the last decade, gotten more competitive because of the entry of telecommunications companies, and expects it to change more in the next five years.

Dish shares rose $3.67, or 6.3 percent, to $62.09, while DirecTV shares rose $4.17, or 5.7 percent, to $77.34.

Dish is based in Englewood, Colo., and DirecTV is based in El Segundo, Calif.

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Asian stocks muted, European markets gain

MANILA, Philippines — Asian stock markets were muted Tuesday with little news to excite investors, but European shares and U.S. futures were mostly higher.

In early European trading, Britain's FTSE 100 was up 0.8 percent at 6,571.0 and Germany's DAX rose 0.8 percent at 9,258.50. France's CAC-40 climbed 0.9 percent at 4,314.48.

Futures augured slightly higher opening on Wall Street, with S&P 500 futures up 0.1 percent at 1,851.90. Dow Jones industrial futures edged up 0.1 percent to 16,224.

Japan's Nikkei 225 closed 0.4 percent lower at 14,423.19. Hong Kong's Hang Seng fell 0.5 percent to 21,732.32 while China's Shanghai Composite rose 0.5 percent at 2,067.31.

Benchmarks fell in Australia, South Korea, and most of Southeast Asia and were up in Taiwan, New Zealand and Malaysia.

"The general mood is somewhat expectant of stimulus measures coming out of China," said Dariusz Kowalczyk of Credit Agricole in Hong Kong. "But there's no data in the region of a sort of first tier nature and therefore we are not seeing major market moves."

Expectations China might announce stimulus spending were boosted Monday by a survey of factory purchasing managers that showed Chinese manufacturing contracted in March.

Benchmark oil for May delivery was up 24 cents to $99.84 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 14 cents to close at $99.60 on Monday.

In currencies, the euro fell to $1.3835 from $1.3836 late Monday in New York. The dollar fell to 102.16 yen from 102.25 yen.

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Friendly’s puts it on the line

Friendly's CEO John Maguire — promising a friendlier, cleaner and tastier dining experience — said he's so confident of recent improvements to the struggling 79-year-old restaurant chain he's offering customers a free meal if they're not satisfied.

The Wilbraham company rolled out its "Great Memories Guarantee" in the Boston area last week to lure back customers with the promise that Friendly's has upped its game and is now living up to its name. The offer launches chain-wide on April 29.

"We heard loud and clear that our people were not that friendly, our food was mediocre and our restaurants were dirty," said Maguire, who was hired in April 2012. "We've been on a relentless mission to really improve our guest experience. We believe we've made enough progress to put our money where our mouth is."

Friendly's has updated its menu with items such as steel-cut oatmeal, Greek yogurt, spinach salad and turkey tips. It's returned to using fresh, never-frozen burgers and haddock for its Fishamajigs, and real ice cream rather than soft-serve in its Fribbles.

The chain has remodeled 45 of its 350 locations with modern touches such as high-top tables, free Wi-Fi and updated music. It's also developing employees more, Maguire said.

"Things are going well," said Maguire, who wouldn't quantify the progress.

Friendly's risk-free guarantee is a strong one, said food industry consultant Ron Paul. Though most eateries will comp some portion of an unhappy customer's bill, nobody else is advertising it, he said. "But I think they have to advertise the food. Why is it a better place to get a burger? Menu is most important."

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Group eyes lower teen minimum wage

Staring down proposals to raise the state's minimum hourly wage from $8 to $10.50 or $11, the Retailers Association of Massachusetts is targeting a state law that gives hourly retail workers overtime on Sundays, and angling for a lower teen minimum wage.

The overtime mandate — a political trade-off for the state to relax its "blue laws" in 1980 and let stores open on Sundays — is discriminatory, according to RAM president Jon Hurst.

"No other employer group has to pay that except for retailers," Hurst said. "We would say that a minimum wage increase is ill-timed given the economic pressures, but we understand that it's going to pass, so we're just trying to mitigate it."

Hurst hopes to get the law repealed or scaled back, for example, by exempting retailers from overtime for new employees once the minimum wage is raised.

"It was necessary in those days in order to get volunteers to work on Sundays," he said, noting that's not the case today.

RAM also will push anew for a teen wage that's lower than the minimum wage. "Most states allow a slightly lower minimum wage for teenagers," Hurst said. "We literally have 50 percent less teens employed versus 15 years ago in Massachusetts."

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Gov. Patrick: $25M for 335 new Mass. housing units

BOSTON — Gov. Deval Patrick is set to announce more than $25 million in funding to help create more than 335 units of housing for veterans, the homeless and very low-income families as the state works to reduce the number of homeless families living in hotels.

Patrick planned to make the announcement Tuesday during a stop at the site of a future veterans' housing project in Haverhill.

With the anticipated announcement, Patrick says his administration has made good on his promise to create 1,000 new units of permanent, supportive housing a year ahead of schedule.

Supportive housing is designed to help individuals and families who are homeless or facing homelessness, or who are institutionalized or at-risk of institutionalization. It can include access to child care services, job training and mental-health care. It is also intended for people with disabilities and the elderly.

Patrick is also set to award more than 200 new housing vouchers on Tuesday.

The vouchers are part of the Massachusetts Rental Voucher Program and let homeless families move into existing housing developments with long-term affordability restrictions.

The nonprofit agencies that own the properties provide the families with programs they say help the families avoid falling back into a cycle of homelessness and emergency shelters, with the ultimate goal of reaching self-sufficiency.

Those services include job training, financial security, counseling, child care, addiction treatment and adult education and GED training.

The 16 projects being unveiled Tuesday include a 70-unit development for veterans including supportive services for elderly homeless veterans in Bedford, a 40-unit single-room occupancy project in Boston's Bay Village neighborhood, the rehabilitation of an existing building in Worcester into 15 single-room occupancy units, and 16 one-bedroom units for the disabled in the McKnight neighborhood of Springfield that will also serve as replacement housing for a property destroyed during the 2011 tornado.

In 2008, Patrick set the ambitious goal of virtually eliminating family homelessness in five years by better detecting when families were on the verge of falling into homelessness — and then move in swiftly with aid and support.

Five years later, record numbers of homeless families were straining the state's shelter system.

In January, about 2,000 families were forced to find temporary housing in dozens of hotels and motels across the state and approximately an equal number staying in family shelters.

Activists point to a number of reasons for the surge in homelessness, from the yearslong economic downturn to a pullback in federal aid to Massachusetts' status as a "right to shelter" place, meaning the state is obligated to find a place to stay for all those who are homeless.

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Walgreen fiscal 2Q profit drops less than 1 pct

Walgreen's fiscal second quarter earnings slipped compared with last year, as a slowdown in generic drug introductions and bad weather contributed to a performance that missed Wall Street's profit expectations.

The drugstore chain and its competitors have been helped in recent quarters by an influx of generic drugs. These cheaper alternatives to branded medicines squeeze sales but help profitability because they come with a wider margin between the cost for the pharmacy to purchase the drugs and the reimbursement it receives.

But that benefit has waned as the flood of new generic drugs seen in recent years has slowed. Walgreen Co. said Tuesday that its revenue managed to grow 5 percent in its fiscal quarter despite that challenge, severe weather that tends to keep customers away from its stores and a comparison to last year's more-severe flu season, which generated more business.

Overall, the nation's largest drugstore chain earned $754 million, or 78 cents per share, in the quarter that ended Feb. 28. That's down from $756 million, or 79 cents per share, a year ago. Adjusted earnings were 91 cents per share.

Analysts expected 93 cents per share, according to FactSet.

Its revenue rose to $19.61 billion from $18.65 billion a year ago and matched Wall Street expectations.

The Deerfield, Ill., company also said it plans to close 76 stores in the second half of its fiscal year "to optimize the company's asset base." That represents a small slice of its total of 8,210 and a big shift from its previous growth strategy, which focused on opening locations to maximize convenience for its customers.

Walgreen shares rose $2.09, or 3.3 percent, to $66.40 in premarket trading about 45 minutes before markets opened Tuesday and after the company reported its quarterly results. The stock started 2014 strong, hitting an all-time high price of $69.84 at the end of last month before retreating. Shares were up 12 percent so far this year, as of Monday's close.

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