Business Highlights: Startups at CES, Southwest’s reputation

January 5, 2023 GMT

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CES startups face cautious investors amid economic woes

LAS VEGAS (AP) — More than a thousand startups are showcasing their products at the annual CES tech show in Las Vegas, hoping to create some buzz around their gadgets and capture the eyes of investors who can help their businesses grow. But amid the slew of layoffs in the tech industry and an economic landscape battered with high inflation and interest rates, many are slated to be met with cautious investors looking for products that can deliver quick returns. And so far - it seems startups are taking note. Analysts say the event this year has somewhat of a muted tone compared to prior shows, when many companies routinely unveiled pie-in-the-sky projects that never saw the light of day.

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Southwest starts on reputation repair after cancellations

DALLAS (AP) — With its flights running on a roughly normal schedule, Southwest Airlines is now turning its attention to repairing its damaged reputation after it canceled 15,000 flights around Christmas and left holiday travelers stranded. The disruptions started with a winter storm and snowballed when Southwest’s ancient crew-scheduling technology failed. Southwest on Tuesday told customers whose flights were canceled or significantly delayed over the holidays that they would get 25,000 frequent-flyer points on top of refunds and reimbursement for unexpected costs like hotels and meals. But that may not be enough to lure back embittered customers.

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Bed Bath & Beyond warns about bankruptcy as sales slump

NEW YORK (AP) — Beleaguered Bed Bath & Beyond is warning it may need to file for bankruptcy as struggles to attract shoppers. The Union, New Jersey-based home goods chain said Thursday that it’s looking at options including restructuring its business in bankruptcy. It acknowledged that even those efforts may not be successful. Its stock plunged 30%. The company’s assessment came as its dismal performance continued through the holiday season with sales down by roughly a third from a year earlier while losses widened over the same period.

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FTC proposes rule that would ban noncompete clauses

WASHINGTON (AP) — The Federal Trade Commission is proposing a rule that would prevent employers from imposing noncompete clauses for workers. The clauses prohibit employees from joining a competitor, typically for a period of time, after they leave a company. The proposed rule released Thursday follows an executive order signed by President Joe Biden in 2021 targeting what he labeled anticompetitive practices in technology, health care and other parts of the economy. The order included a call for banning or limiting noncompete agreements to help boost wages. Opponents of the ban say noncompete clauses have encouraged companies to promote workers and invest in training, especially in a tight labor market.

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Another hot reading on job market sends Wall Street lower

NEW YORK (AP) — Stocks fell broadly on Wall Street and Treasury yields rose after another hot reading on the job market raised worries that the Federal Reserve will need to continue inflicting pain on the economy to fight inflation. The S&P 500 fell 1.2% Thursday. The Dow Jones Industrial Average fell 1% and the the Nasdaq lost 1.5%. The pullback came after payroll company ADP reported a bigger-than-expected increase in jobs at private companies last month. The continued strength in the job market makes the Fed’s job of reining in inflation more difficult by putting upward pressure on wages.

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Average long-term US mortgage rates inch up to 6.48%

WASHINGTON (AP) — The average long-term U.S. mortgage rate rose for the second straight week following six weeks of declines that had given prospective homebuyers a glimmer of hope. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched up to 6.48% this week from 6.42% last week. A year ago the average rate was 3.22%, less than half of the current average rate. The average long-term rate reached a two-decade high of 7.08% in late October and again in early November as the Federal Reserve continued to crank up its key lending rate.

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Biden signs bill to ease costs for prisoner calls to family

WASHINGTON (AP) — President Joe Biden has signed into law a bill aimed at easing the cost for prisoners to call family and friends. The legislation clarifies that the Federal Communications Commission can set limits for fees on audio and video calls inside corrections facilities. Phone calls from prisons and jails are a lifeline for those incarcerated. But the cost varies widely and can be a financial drain on families already struggling to make ends meet with an adult behind bars. The FCC must still go through the rule-making process before the changes can be officially made.

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Peloton to pay $19M in fines over dangerous treadmill defect

NEW YORK (AP) — Exercise equipment maker Peloton Interactive has agreed to pay roughly $19 million in fines related to its delay in reporting a defect for its treadmills that caused one death and multiple injuries, the federal consumer watchdog said Thursday. The Consumer Product Safety Commission said that the fine resolves the agency’s charges that Peloton knowingly failed to immediately report to the agency, as required by law, that its Tread+ treadmill contained a defect that could create a substantial product hazard and created an “unreasonable risk of serious injury to consumers.″ The civil penalty also settles charges that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act.

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The S&P 500 dropped 44.87 points, or 1.2%, to 3,808.10. The Dow Jones Industrial Average fell 339.69 points, or 1%, to 32,930.08. The Nasdaq lost 153.52 points, or 1.5%, to 10,305.24. The Russell 2000 index of smaller companies retreated 19.35 points, or 1.1%, to 1,753.19.