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U.S. CDC closes investigation on Abbott’s infant formula

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© Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid/File Photo

(Reuters) – The U.S. Centers for Disease Control and Prevention (CDC) has closed its investigation on Abbott Laboratories (NYSE:ABT)’ infant formula, with no additional cases of infections, according to a notice on the U.S. Food and Drug Administration website.

The agencies were investigating bacterial infections caused by the infant formula manufactured at Abbott’s Sturgis facility in Michigan.

Stock Markets

Wall Street ends lower as Tesla falls, while energy rallies

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© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 12, 2022. REUTERS/Brendan McDermid/File Photo

By Amruta Khandekar and Noel Randewich

(Reuters) – Wall Street ended lower on Monday, with energy stocks rallying and Tesla (NASDAQ:TSLA) and other growth stocks losing ground after downbeat Chinese economic data added to worries about a global slowdown and rising interest rates.

China’s economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter.

However, energy stocks got a lift from optimism that China would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas.

The S&P 500 energy index rallied to a 2014 intra-day high, and it was the strongest performer among 11 sector indexes.

Investors questioned whether a strong day on Wall Street last Friday might signal the end of a recent sell-off that has left the S&P 500 down about 16% from its record high close in January.

“After the big rally on Friday, people are looking around and asking whether it feels sustainable,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky. “Does it feel like the momentum thrust you would see coming off of a low, or is there still more of a capitulation to be worked out?”

Many of Wall Street’s megacap growth stocks were lower, with Amazon (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL) losing ground and weighing on the S&P 500 and Nasdaq.

Twitter (NYSE:TWTR) extended losses after Bloomberg reported that Elon Musk said a deal to buy the social media company at a lower price than his previously agreed $44 billion was “not out of the question.”

Tesla, which Musk leads, also fell.

The S&P 500 healthcare sector index rose, lifted by a jump in Eli Lilly & Co (NYSE:LLY) after the drugmaker won U.S. approval for tirzepatide, to treat adults with type 2 diabetes.

Investors have been worried that aggressive interest rate hikes by the U.S. Federal Reserve to combat decades-high inflation could tip the economy into a recession, with the conflict in Ukraine, supply chain snarls and the pandemic-related lockdowns in China exacerbating the economic troubles.

Data on Monday showed factory activity in New York state slumped in May for the third time this year amid a collapse in new orders and shipments.

Traders are now pricing a near 86% chance of a 50-basis-point hike by the Fed in June.

According to preliminary data, the S&P 500 lost 15.24 points, or 0.38%, to end at 4,008.65 points, while the Nasdaq Composite lost 140.81 points, or 1.19%, to 11,664.19. The Dow Jones Industrial Average rose 39.07 points, or 0.12%, to 32,235.73.

Investors are focused on retail sales data due on Tuesday, following worrying inflation and consumer sentiment data last week.

Retailers including Walmart (NYSE:WMT) Inc, Home Depot (NYSE:HD) and Target Corp (NYSE:TGT) are due to report their quarterly results this week.

Spirit Airlines (NYSE:SAVE) rallied after JetBlue Airways (NASDAQ:JBLU) launched a hostile takeover bid for the discount carrier. JetBlue shares slipped, while shares of rival bidder Frontier Group gained.

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Take-Two Earnings Miss, Revenue Beats In Q4

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© Reuters. Take-Two Earnings Miss, Revenue Beats In Q4

Investing.com – Take-Two (NASDAQ:TTWO) reported on Monday fourth quarter earnings that missed analysts’ forecasts and revenue that topped expectations.

Take-Two announced earnings per share of $0.95 on revenue of $930M. Analysts polled by Investing.com anticipated EPS of $1.01 on revenue of $883.34M.

Take-Two shares are down 38.04% from the beginning of the year, still down 43.77% from its 52 week high of $195.82 set on November 5, 2021. They are under-performing the S&P 500 which is down 15.86% from the start of the year.

Take-Two shares gained 1.92% in after-hours trade following the report.

Take-Two follows other major Communication Services sector earnings this month

Take-Two’s report follows an earnings missed by Alphabet C on April 26, who reported EPS of $24.62 on revenue of $68.01B, compared to forecasts EPS of $25.59 on revenue of $68.06B.

Meta Platforms had beat expectations on April 27 with first quarter EPS of $2.72 on revenue of $27.91B, compared to forecast for EPS of $2.56 on revenue of $28.28B.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar

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Explainer-What happened with Abbott baby formula that worsened a U.S. shortage?

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© Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid/File Photo

(Reuters) – Abbott Laboratories (NYSE:ABT), the biggest U.S. supplier of powder infant formula including Similac, initiated a recall and closed its Sturgis, Michigan, manufacturing plant earlier this year after reports of serious bacterial infections in four infants.

The recall and shutdown has worsened a baby formula shortage among multiple manufacturers that began with pandemic supply chain issues.

Here are some details about what has happened:

WHEN DID THE PLANT CLOSE?

Production at an Abbott plant in Sturgis, Michigan, has been halted since February as the company works to rectify issues raised https://www.fda.gov/media/157073/download by federal inspectors.

WHY DID ABBOTT INITIATE A RECALL AND PLANT SHUTDOWN?

Consumers reported four infants who were sick, including three with Cronobacter sakazakii infections and one with Salmonella newport, and had been fed formula products made at the Sturgis plant. A fourth infant with cronobacter sakazakii was later added to the investigation by the U.S. Centers for Disease and Control Prevention.

Cronobacter sakazakii can cause life threatening sepsis infections or meningitis and may have contributed to the death of two of the infants, the U.S. Food & Drug Administration has said https://www.fda.gov/food/outbreaks-foodborne-illness/fda-investigation-cronobacter-infections-powdered-infant-formula-february-2022. It continues to investigate the four Cronobacter cases.

WHAT WAS RECALLED?

The recall began in mid-February with dozens of types of Similac, Alimentum and EleCare powdered formulas. A specialty liquid formula called Similac PM 60/40 was added to the recall at the end of February.

DID THE FDA OR CDC FIND A LINK?

Abbott says https://www.abbott.com/corpnewsroom/nutrition-health-and-wellness/abbott-update-on-powder-formula-recall.html there is no evidence to link its formulas to these illnesses. The FDA and the CDC have not disclosed any information that connects the illnesses and the plant.

The U.S. Food & Drug Administration and Abbott tested environmental and product samples at the plant. They found five environmental samples containing Cronobacter sakazakii which Abbott says were in non-product contact areas of the plant. The product samples tested negative.

The CDC analyzed clinical samples from two of the infants and did not find a genetic match to the environmental strains found at the plant. It also said the bacteria from the patient samples were not closely related to one another.

WHEN WILL THE ABBOTT PLANT RESUME PRODUCTION?

Two experts Reuters spoke to expect the plant to resume production within two weeks. Peter Pitts, a former FDA head and President of the non-profit Center for Medicine in the Public Interest, said the issues were not mechanical and that Abbott and the FDA have been working to restart the plant for months.

Abbott has said it can open two weeks after it gets the go-ahead from the FDA. FDA Commissioner Robert Califf told NBC News on Monday it was “quite likely” there could be movement soon to reopen the facility.

Abbott has imported millions of cans of infant formulas from its Ireland facility to help with the U.S. shortage. The recall affected formula shipped to other countries, including Israel.

HOW LONG WILL IT TAKE FOR THE SHORTAGE TO SUBSIDE?

The shortages may last another two to four months even as lawmakers and the White House try to increase supplies. Abbott has said it will take six to eight weeks to get formula on shelves after the facility restarts.

U.S. food safety lawyer Bill Marler said even if the products are back in the market in the next two weeks there’s still going to be a shortage for 30-60 days. “That’s going to be difficult.”

WHAT CAUSED THE SHORTAGE?

The shortage began in 2020 as consumers stockpiled due to COVID-19 lockdowns. Formula makers ramped up production but then cut back in 2021 as demand slowed. Global shipping logjams have also prevented retailers from promptly restocking shelves.

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