Defense contractor Northrop Grumman (NYSE: NOC ) today clarified the status of a proposed $1.3 billion deal to sell Euro Hawk unmanned aerial vehicles to the German government.
In a telephone interview, Northrop Director of Communications Tim Paynter said media reports describing Germany's cancellation of the contract are inaccurate. Regarding reports that the company refused to share technical data needed by German regulators to approve the drone system for flight in civilian airspace over Germany, Paynter countered that Northrop granted the German government "unlimited access" to more than 4,000 documents.
Additionally, reports of the death of the deal may have been greatly exaggerated. According to Paynter, Northrop has not yet received official notification from the German government that it is canceling the Euro Hawk program. Indeed, Northrop is still "working with the German government ... to define a path forward for the program," and the program is expected to come up for official discussion at a meeting of the Bundestag Defence Committee on June 5.
Euro Hawk is an unarmed surveillance drone derived largely from Northrop's RQ-4 Global Hawk HALE UAS -- an acronym denoting a "high-altitude, long-endurance unmanned aerial system." Based on the Block 20 Global Hawk configuration, the Euro Hawk measures 131 feet wingtip to wingtip, is 48 feet long and 15 feet tall. It flies at altitudes as high as 60,000 feet and can remain airborne longer than 30 hours before needing to refuel.
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Jae C. Hong/AP WASHINGTON -- Average U.S. mortgage rates fell for the third straight week, making it more affordable to borrow to buy a home. Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan fell to 4.12 percent from 4.19 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, also declined to 3.3 percent from 3.36 percent. The 30-year rate is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve appears set at the end of this month to end its monthly bond purchases, which are intended to keep long-term borrowing rates low. Yet Fed officials have indicated that they will continue to hold shorter-term rates at near-zero levels until there are signs of rising inflation. Fed actions often influence the yield on the 10-year Treasury note, which affects mortgage rates. The 10-year note was trading at 2.32 percent at midday Thursday, down sharply from 2.41 percent a week earlier. Mortgage rates are falling as the housing market has cooled off. Average price growth has slowed, rising just 6.4 percent in August compared with a year ago, according to real estate data provider CoreLogic (CLGX). That's down from annual average gains of as much as 12 percent toward the end of last year. Similarly, sales of existing homes also declined in August. Fewer investors bought properties, and first-time buyers have yet to return to the market, according to the National Association of Realtors. Sales of new homes shot up in August, yet it remains below historic averages, according to Commerce Department data.
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Stallergenes/APOralair, a grass pollen tablet, is among a new generation of allergy treatments. TRENTON, N.J. -- For decades, seasonal allergy sufferers had two therapy options to ease the misery of hay fever. They could swallow pills or squirt nasal sprays every day for brief reprieves from the sneezing and itchy eyes. Or they could get allergy shots for years to gradually reduce their immune system's over-reaction. Now patients can try another type of therapy to train their immune system, new once-a-day tablets that dissolve quickly under the tongue and steadily raise tolerance to grass or ragweed pollen, much like the shots. "It's been several decades since the last big breakthrough," Cleveland Clinic allergy specialist Dr. Rachel Szekely said. The downside: The pills must be started a few months before the grass or ragweed pollen season. That means it's too late for people with grass allergies, but the time is now for ragweed allergy sufferers. The Food and Drug Administration in April approved two tablets from Merck, Grastek for grass pollen and Ragwitek for ragweed, plus a grass pollen tablet called Oralair from Stallergenes. The tablets could become popular with people who dislike pills that can make them drowsy or don't provide enough relief. They'll likely appeal even more to patients with severe allergies who fear needles or can't make frequent trips to the allergist, key reasons that only about 5 percent of U.S. patients who would benefit from allergy shots get them. Meanwhile, new treatments for other types of allergies, including to peanuts and eggs, are in various stages of testing and could turn out to be big advances. Drugmaker Merck & Co. (MRK) has a tablet for house dust mite allergies in final patient testing that could hit the market in two or three years, and it's considering other therapies. France's Stallergenes is testing a tablet for birch tree allergies and, with partner Shionogi & Co. in Japan, tablets for allergies to dust mites and Japanese cedar pollen. Britain's Circassia has a cat allergy treatment in final testing and six others in earlier testing. A handful of companies also are looking at possible new ways to administer immunotherapy, including drops under the tongue, capsules and skin patches, said Fort Lauderdale, Florida, allergist Dr. Linda Cox, former president of the American Academy of Allergy, Asthma and Immunology. The new tablets aren't right for everyone, particularly patients with allergies to multiple substances, Szekely cautioned. That was the case with one of her patients, 10-year-old Samantha Marshall of Mentor, Ohio, who has been getting allergy shots since last fall. "She's not loving them," said her mother, Rachel, who recently asked Szekely about switching to the tablets. Szekely explained that shots are more effective because Rachel is also allergic to weeds and dust mites, and the shots she receives are a customized mix of extracts to all those substances. The tablets are also pricey: Merck, based in Whitehouse Station, New Jersey, is charging about $8.25 a daily tablet and Stallergenes about $10. Insurers are expected to cover most of the cost, as they usually do with allergy shots. Those generally cost only $15 to $25 a visit without insurance, because they're given by a nurse. Allergy tablets are less likely to trigger a dangerous allergic reaction than shots, which have been used for a century, Cox said. In Merck's testing, about 5 percent of patients experienced tingling, itching or swelling in the mouth or tongue, said Dr. Sean Curtis, Merck's head of respiratory and immunology research. Less than 1 percent had serious reactions, nearly all after the first dose. Longtime hay fever sufferer Kim Steen of Sidman, Pennsylvania, participated in one of Merck's studies last year. "After the second, maybe third week, I started noticing a difference in the symptoms," said the 41-year-old contracts administrator. "It was pretty significant, not feeling like you have a cold all the time." Prevalence of hay fever in the U.S. has declined slightly since 2000, according to National Center for Health Statistics data. In 2012, about 17.6 million adults, or 7.5 percent, reported having hay fever, as did about 6.6 million children, or 9 percent. Millions more don't see a doctor and get by with nonprescription medicines like Benadryl or Claritin. Treatment can be tricky because of body chemistry differences and the complexity of the immune system, which is still poorly understood. "You can't just have one size fits all," Szekely said. For people with mild hay fever, inexpensive pills that suppress immune chemicals called histamines work well. Allegra, Benadryl, Claritin and Zyrtec are available without prescription, often competing with store brands. Other patients fare better on prescription pills or nasal sprays. But for patients with severe allergies, those aren't enough. They suffer -- though hardly in silence -- or try allergy shots. Rarely, the shots cause systemic allergic reactions, from hives and itching to dangerous airway narrowing, because small amounts of allergen circulate in the bloodstream. That's why patients must be observed by a nurse for a half-hour after each shot. With the new tablets, as they dissolve, the grass extract inside drains into lymph nodes in the neck, which produce protective antibodies against the effects of pollen that's inhaled or gets in the mouth. Since the extract is unlikely to enter their blood, patients need only be watched the first time, then can take the pills at home. Typically, patients get allergy shots of gradually increasing dosage two or three times a week initially, then once a week for up to nine months, then monthly. After three years, at least two-thirds have minimal symptoms, while most of the rest have reduced symptoms. With the tablets, patients start at the top dose, at least three months before allergy season, and continue through the season or even year-round. The grass pollen tablets aren't likely to take off until next spring, although Stallergenes' U.S. marketing partner, Greer Laboratories of Lenoir, North Carolina, made Oralair available and began promoting it to allergy specialists in May. Merck has followed study participants through three years of treatment and then two years after that, when patients still reported significantly reduced symptoms. But Cox, the Florida allergist, expects that benefit to last at least eight years after treatment ends, nearly as long as with allergy shots. It won't be clear whether the tablets will be a hit with patients or big moneymakers for their manufacturers until next spring, when patients and more doctors will be familiar with them.
Richard Drew/AP NEW YORK -- The U.S. stock market is rigged in favor of high-speed electronic trading firms, which use their advantages to extract billions from investors, according to Michael Lewis, author of a new book on the topic, "Flash Boys: A Wall Street Revolt." High-frequency trading is a practice carried out by many banks and proprietary trading firms using sophisticated computer programs to send gobs of orders into the market, executing a small portion of them when opportunities arise to capitalize on price imbalances, or to make markets. HFT makes up more than half of all U.S. trading volume. The trading methods and technology that make HFT possible are all legal, and the stock exchanges HFT firms trade on are highly regulated. But Lewis said these firms are using their speed advantage to profit at the expense of other market participants to the tune of tens of billions of dollars. "They are able to identify your desire to buy shares in Microsoft (MSFT) and buy them in front of you and sell them back to you at a higher price," Lewis, whose book is available Monday, said Sunday on the "60 Minutes" television program. "This speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds," said Lewis, whose books include "The Big Short" and "Moneyball." Those milliseconds can be valuable, making it possible to send around 10,000 orders in the blink of an eye. Darting in and out of trades, HFT firms make just fractions of a penny per trade, but the sheer speed and volume of their trading activity allows those that are successful to make significant profits. Proponents of HFT argue that the presence of such firms makes it easier for all market participants to find buyers and sellers for their trades, and that the speed at which HFT firms can detect and take advantage of pricing imbalances between different markets and assets leads to smaller bid-ask spreads. But Brad Katsuyama, former head trader in New York for the Royal Bank of Canada and a major figure in Lewis's book, said he was finding that when he would send a large stock order to the market, it would only be partially filled, and then he would have to pay a higher price for the rest of the order. With the help of new hire Ronan Ryan, Katsuyama realized that his orders traveled along fiber optic lines and hit the closest exchange first, where high frequency traders would get a glimpse, and then use their speed advantage to beat him to the other 12 U.S. public exchanges and 45 private trading venues. HFT algorithms could then buy the shares Katsuyama wanted, and then sell them to him at a slightly higher price. Katsuyama and Ryan created a system in which RBC would send its orders first to the exchange that was the furthest away, and last to the exchange that was closest, with the goal of arriving at all places nearly simultaneously, cutting out HFT. "Essentially, our fill rates went to 100 percent. We couldn't believe it when we actually figured it out," Katsuyama told "60 Minutes." Katsuyama said he decided to start a new trading platform, called IEX, for the Investors' Exchange, employing similar tactics to those he used at RBC. "It almost felt like a sense of obligation to say we found a problem that is affecting millions and millions of people -- people are blindly losing money they didn't even know they were entitled to. It's a hole in the bottom of the bucket," he said. IEX has attracted the investment of David Einhorn, the billionaire owner of hedge fund Greenlight Capital, and an endorsement from Goldman Sachs (GS). The investors in IEX are fund companies and individuals, not banks. "We are selling trust, we are selling transparency, and to think that trust is actually a differentiator in a service business, is actually a crazy thought, right?" said Katsuyama. Earlier this month, New York state's Attorney General Eric Schneiderman said he believes U.S. stock exchanges and other platforms provide HFT firms with unfair advantages. Exchanges allow trading firms to place computer servers inside the exchange's data centers so that the firms can see the data as soon as possible. The practice, called co-location, is regulated and available to anyone who wants to pay for it. Schneiderman has begun meeting with the U.S. exchanges, which include IntercontinentalExchange Group's (ICE) New York Stock Exchange, Nasdaq OMX Group's (NDAQ) main bourse, and four platforms run by BATS Global Markets, on possible reforms, a source close to the situation told Reuters. A ban on HFT is unlikely, as U.S. regulators would be loath to put policies in place that could lead to a less liquid market, Robert Greifeld, chief executive officer of Nasdaq, said Thursday.
Bloomberg News