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U.S. House will investigate baby formula shortage

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© Reuters. FILE PHOTO: Empty shelves show a shortage of baby formula at a CVS store in San Antonio, Texas, U.S. May 10, 2022. REUTERS/Kaylee Greenlee Beal

By Doina Chiacu

WASHINGTON (Reuters) -The U.S. House Oversight Committee said on Friday it plans to investigate the four largest manufacturers of baby formula and seek answers on how to ramp up production amid a nationwide shortage.

“The infant formula shortage is a crisis for American families,” the committee said in a Twitter (NYSE:TWTR) post.

U.S. Representative Carolyn Maloney, who leads the committee, sent letters seeking information to Abbott Nutrition, Mead Johnson Nutrition, Nestle USA and Perrigo, ABC News reported.

“The national formula shortage poses a threat to the health and economic security of infants and families in communities across the country – particularly those with less income who have historically experienced health inequities, including food insecurity,” the letter said.

The investigation, which will look at potential price gouging among other issues, is the latest move in Washington to address the shortage.

Abbott Laboratories (NYSE:ABT) in February recalled some baby formulas, including certain Similac products, made at the plant in Sturgis, Michigan, after complaints about bacterial infections in infants who had consumed the products.

Formula shortages have been compounded by supply-chain snags and historic inflation, leaving about 40% of baby formula products out of stock nationwide, according to data firm Datasembly.

Less than half of babies born in the United States were exclusively breast-fed through their first three months, according to the Centers for Disease Control and Prevention 2020 Breastfeeding Report Card.

U.S. President Joe Biden met on Thursday with executives from infant formula manufacturers and retailers, pressing them to do everything possible to get families access.

Some manufacturers have been ramping up production for weeks and officials are also focusing on how to get formula on store shelves faster, said Brian Deese, director of the White House National Economic Council.

The retailers told Biden their top ask is more flexibility on the types of formula they can sell, while consumers need more flexibility on the types they can buy, particularly through the WIC program for low-income families, Deese told CNN.

The nutrition program for Women, Infants and Children is a federal assistance scheme administered by U.S. states.

About half of infant formula nationwide – a roughly $4 billion market – is purchased by participants using WIC benefits, the White House said, and rules set by individual states have a big effect on the availability and distribution of infant formula.

The White House on Friday will reissue guidance, first given in February after the Abbott recall, for states to be flexible in allowing WIC benefits to be used on a wider variety of products, Deese said.

The Food and Drug Administration will announce new steps in the coming days on importing certain infant formula products, the White House said on Thursday, and Biden has asked the Federal Trade Commission to probe reports of predatory conduct such as price gouging.

Deese would not speculate on how long the shortages might last.

“All of these steps together will make progress. It’s not going to solve itself in a day or week,” he said.

Two other House of Representatives committees have announced hearings on the shortage.

Stock Markets

Plotkin’s Melvin Capital to Wind Down – Report

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© Reuters Plotkin’s Melvin Capital to Wind Down – Report

Gabe Plotkin’s Melvin Capital Management, a hedge fund that lost billions after its bearish wagers were caught up in a Reddit-fueled rally of buying stocks including GameStop (NYSE:GME), announced its plans to wind down funds and return cash to investors, Bloomberg News reported.

Plotkin wrote to investors about his decision to step away from managing external capital, noting they have not been able to deliver the returns investors should expect.

“The past 17 months has been an incredibly trying time for the firm and you, our investors,” Plotkin wrote to investors. “I have given everything I could, but more recently that has not been enough to deliver the returns you should expect. I now recognize that I need to step away from managing external capital.”

By Davit Kirakosyan

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Chevron, Schlumberger withdraw request for California carbon-capture permit

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© Reuters. FILE PHOTO: The logo of Chevron Corp is seen in its booth at Gastech, the world’s biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai

2/2

By Liz Hampton and Sabrina Valle

(Reuters) – Top U.S. energy companies Chevron (NYSE:CVX) and Schlumberger (NYSE:SLB) have withdrawn an application to capture carbon dioxide emissions and store them deep underground in central California, spokespeople said on Wednesday, putting the clean-energy project on hold after U.S. environmental regulators questioned it.

Burying industrial gases has become a focus for energy companies seeking to show investors they are willing to reduce emissions and help fight climate change. Their permit was one of more than a dozen filed with the U.S. Environmental Protection Agency (EPA), which requested the application be withdrawn.

In a March 25 letter, the EPA said the application was “substantially incomplete,” citing changes to the application and the failure to supply financial assurances.

The companies had formed a venture to revive an idled biomass-fueled power plant and generate “carbon negative power” in Mendota, near Fresno, California. The project included an underground carbon sequestration site and would remove about 300,000 tons of carbon dioxide a year.

“The EPA did the right thing by hitting the brakes on the Mendota carbon capture project,” said Victoria Bogdan Tejeda, an attorney for the Center for Biological Diversity. “Carbon capture is risky, expensive, and incompatible with environmental justice.”

Chevron and Schlumberger said they elected to withdraw the permit application and the group would continue “to gather and evaluate project information.”

“The team remains committed to developing lower carbon solutions and doing so in an environmentally and socially responsible manner,” spokespeople said.

Separately, Chevron on Wednesday said it was launching a carbon-capture and storage project in the San Joaquin Valley aimed at reducing emissions from its own operations in California.

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Synopsys Shares Up 4% Following Q2 Beat, Upbeat Guidance

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© Reuters. Synopsys Shares Up 4% Following Q2 Beat, Upbeat Guidance

Synopsys (NASDAQ:SNPS) shares were trading more than 4% higher after-hours following Q2 results, with EPS of $2.50 coming in better than the consensus estimate of $2.37. Revenue was $1.28 billion, compared to the consensus estimate of $1.26 billion.

The company expects Q3 non-GAAP EPS in the range of $2.01- $2.06 and revenue in the range of $1.21 billion – 1.24 billion. This is better than the consensus of $1.61 and $1.14 billion, respectively.

For the full 2022-year, the company expects EPS in the range of $8.63 – $8.70 and revenue in the range of $5 billion – $5.05 billion. This compares favorably to the consensus of $7.90 and $4.81 billion, respectively.

Shares of Synopsys were down 26% year-to-date going into the results.

By Davit Kirakosyan

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