Biden administration withdraws Covid vaccine mandate for businesses after losing Supreme Court case

The Biden administration is formally withdrawing its vaccine and testing mandate for businesses, after the Supreme Court blocked the requirements earlier this month.

The Occupational Safety and Health Administration on Tuesday said it is pulling the rules for businesses effective Wednesday, Jan. 26. The Supreme Court’s conservative majority, in a 6-3 decision, said OSHA had exceeded its authority.

“Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly,” the court wrote in an unsigned opinion.

Under the defunct rules, businesses with 100 or more employees had to ensure their employees were fully vaccinated, or submitted a negative Covid test weekly to enter the workplace. It would have covered some 80 million private-sector employees.

The Supreme Court’s decision was a major blow to President Joe Biden’s strategy to control the spread of the virus. Biden has called on businesses to voluntarily implement the requirements.

Labor Secretary Marty Walsh has vowed that OSHA will use its existing powers to protect workers from Covid. OSHA still has general authority to investigate and fine employers if they fail to maintain a safe workplace.

The U.S. reported a seven-day average of more than 731,000 new daily infections, an increase of 4% over last week, according to a CNBC analysis of data from Johns Hopkins University. Though new infections are plateauing, they have stalled at significantly higher levels than past waves.

OSHA on Tuesday said it will shift resources to focus on creating a permanent Covid safety standard for health-care workers. The agency issued temporary rules for the industry last summer, but it pulled them in December after missing a deadline to create a permanent safety standard.

OSHA issued the health-care rules under its emergency authority, which allows the agency to shortcut the normal process and issue a new safety standard if the Labor secretary identifies a grave danger to workers. However, OSHA must develop a permanent regulation in six months to replace the temporary rules, which it failed to do.

The health-care Covid safety standard required most facilities to provide personal protective equipment, install physical barriers in certain areas, clean and disinfect the workplace, and maintain proper ventilation among a number of other measures.

The AFL-CIO and National Nurses United, among other labor groups, have asked a federal appeals court to force OSHA to reinstate the safety rules for health-care workers. OSHA, in a court filing, said it was unable to finish a permanent rule for health-care workers because its resources were tied up preparing the business mandate.

Hospitals around the U.S. are grappling with a surge of patients infected by the highly contagious omicron variant. There are about 155,000 patients in U.S. hospitals with Covid, according to a seven-day average of Dept. of Health and Human Services data, higher than peak levels seen last winter but down 2.4% from one week ago.

Many hospitals are facing staffing shortages as health-care professional are forced to call out sick after getting infected with the omicron variant.

“Many places across the country are getting to the point where even their backup staff are getting sick,” Dr. Gillian Schmitz, president of the American College of Emergency Physicians, told CNBC earlier this month. “Pretty much the whole country right now is feeling this surge of cases that is impacting staffing.”

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GE and Raytheon Are In It for the Long Haul

Jet-engine makers are getting back to business, but they still need more long-haul flying.

Two of the largest U.S. aerospace suppliers had a rough day Tuesday after reporting fourth-quarter earnings that investors found disappointing. Shares in General Electric fell roughly 7% shortly after the market opened, while those in Raytheon Technologies RTX 0.36% —the parent of engine maker Pratt & Whitney and aerospace-parts supplier Collins Aerospace—lost about 1%. GE GE -6.94% emphasized how supply-chain bottlenecks are hurting sales ahead of its planned split into three units, one of which will be a stand-alone aviation company.

Yet commercial aerospace was actually a bright spot in both fourth-quarter reports. GE GE -6.94% said aviation revenues were up 4% relative to the same period of 2020, compared with a 3% drop overall, whereas Collins and Pratt reported increases of 13% and 14%, respectively. These are signs that the much-anticipated “aftermarket recovery” is gathering momentum.

Engine building—the most complex and highest-margin segment of the aviation industry—offers a lot of potential upside for investors who want to bet on the pandemic recovery. Manufacturers often sell their products at a loss, then claw back the money over many years through repairs and overhauls in the so-called aftermarket. In a crisis, airlines stop bringing planes to the shop, but then rapid rebounds usually follow as all the maintenance that was put on hold suddenly needs to happen.

Except that, this time, the recovery has fallen short of Wall Street analysts’ forecasts, figures by market-data firm Visible Alpha suggest, with revenues stuck at around 70% of 2019 levels. Beyond coronavirus variants such as Delta and Omicron, there were other factors that the market underestimated, such as old grounded jets creating an oversupply of engines with flight hours left.

Shop visits are finally accelerating. GE reported a big jump in spare parts used internally and shipped, and Raytheon expects sales at both its aerospace divisions to end the year more than 10% up. Collins is being aided further by numerous carriers reconfiguring their aircraft cabins to lure premium travelers back to the domestic market: Its aftermarket revenues were up a whopping 47% in the fourth quarter.

But investors should remain cautious. Yes, the engine-making business will continue to recover in 2022, but much of this might already be baked into stock prices.

The median forecast for Raytheon’s aftermarket revenues, for example, almost exactly tracks the recovery in airline capacity forecast by the International Air Transport Association, which pencils in a return to 2019 levels in 2024. For the projections to be proved correct, there needs to be a big jump in long-haul flights. The Massachusetts-based firm said Tuesday that 75% of its aftermarket improvement in 2021 came from narrow-body planes, whereas 80% of its 2022 outlook is based on the growth of long-haul international routes.

“Our forecast of the aftermarket really is dependent on a wide-body recovery,” Raytheon Chief Executive Greg Hayes told analysts.

The recovery projected by IATA, though, never quite seems to happen: Even as U.S. domestic seat capacity briefly rose above the 2019 level last year, international departures never exceeded 75% of the previous total. As long as Covid lingers, and possibly even beyond, investors may struggle to enjoy the roar of jet engines.

Write to Jon Sindreu at jon.sindreu@wsj.com

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Stocks making the biggest moves midday: American Express, General Electric, IBM and more

Scott Eells | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.

General Electric — Shares fell more than 6% after the company missed revenue estimates for the fiscal fourth quarter. The conglomerate reported 92 cents in adjusted earnings per share on $20.3 billion in revenue. Analysts surveyed by Refinitiv were looking for 85 cents on $21.53 billion of revenue. The company said supply chain issues weighed on its sales.

American Express — The credit card stock surged 8% after American Express beat estimates on the top and bottom lines for the fourth quarter. The payments company earned $2.18 per share on $12.15 billion in revenue. Analysts surveyed by Refinitiv were expecting $1.87 in earnings per share on $11.5 billion of revenue. American Express also said it expected revenue growth of 18% to 20% in 2022.

ARK Innovation — Shares of Cathie Wood’s flagship exchange-traded fund fell 5% in midday trading as growth names continued their downward spiral. Coinbase, one of the fund’s largest holdings, fell 2.5%. Tesla dropped more than 2% and Unity Software lost 5.8%. Exact Sciences and Twilio fell 5.6% each.

IBM — The software and services company’s stock climbed more than 2% following a better-than-expected quarterly report. IBM reported that its revenue climbed 6% in the fourth quarter, surpassing expectations. The company spun out its managed infrastructure services unit during the quarter into a publicly held company named Kyndryl.

PetMed Express – Shares of the pet products seller jumped about 5% despite a disappointing earnings report. PetMed Express reported quarterly profit of 21 cents per share, 9 cents shy of consensus estimates, according to Refinitiv. Its revenue also came below expectations.

Xerox — The digital printing company fell more than 5% in midday trading after missing Wall Street’s revenue forecast for its fourth-quarter earnings. Xerox made $1.78 billion in revenue, lower than he forecast $1.82 billion, according to Refinitiv. The company did, however, beat on earnings.

Allscripts Healthcare Solutions — Shares soared more than 14% after the company issued preliminary quarterly earnings and revenue results that topped Wall Street forecasts. The provider of physician practice management technology also announced a new $250 million share repurchase program. 

Johnson & Johnson – The vaccine maker gained 1.3% after the company reported quarterly earnings of $2.13 a share, which beat estimates by a penny. Revenue came in below analysts’ expectations, but Johnson & Johnson also gave an upbeat full-year forecast. 

Ericsson – The Swedish telecom equipment maker saw its shares jump more than 7% after it reported better-than-expected quarterly earnings. The company also said it benefitted from the accelerating rollout of global 5G networks.

— with reporting from Tanaya Macheel, Jesse Pound and Yun Li.

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Airbus to rent out its giant Beluga aircraft in bet on air cargo boom

An Airbus Beluga transport aircraft takes off from the Airbus plant in Hamburg-Finkenwerder.

Marcus Brandt | picture alliance | Getty Images

Airbus on Tuesday said it is renting out its giant Beluga aircraft to outside customers, a big bet on the air cargo market.

The whale-shaped planes are usually used to transport large aircraft parts for its planes like wings and fuselage sections between its factories in Europe. Under a new airline, Airbus Beluga Transport, the company plans to fly large cargo for space, oil and gas companies and militaries.

Air cargo has been a bright spot during the pandemic. Space on passenger jets plunged after airlines cut service due to weak demand for flights. Meanwhile, port snarls caused shipping delays, driving up prices — and demand — for faster shipping by air.

Airbus said the new plan will allow it to take advantage of the remaining 20 years of life that BelugaST have and will allow it to transport helicopters and engines fully assembled. Larger BelugaXL planes will take over the Beluga STs’ previous missions.

The aerospace giant, Boeing‘s chief rival, said it flew its first mission late last year delivering a helicopter from its manufacturing site in Marignane, France to Kobe, Japan.

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