France wants to delay EU-U.S. trade talks

A U.S.-EU free trade deal would deliver an economic windfall for both economies but French President Francois Hollande has been angered by allegations of U.S. snooping and wants the talks delayed.

LONDON (CNNMoney)

A government spokesperson said France was looking to delay the talks by roughly two weeks after a German newspaper reported that the U.S. government conducted surveillance on European states and institutions.

But the European Commission, which will lead the negotiations for the EU, said the talks would go ahead as planned despite concerns about potential snooping.

"Whilst the beginning of EU-U.S. trade negotiation should not be affected, the EU side will make it clear that for such a comprehensive and ambitious negotiation to succeed, there needs to be confidence, transparency and clarity among the negotiating partners," it said in a statement.

A spokesperson for the German government echoed this sentiment.

Negotiations are due to begin Monday on a transatlantic trade and investment pact that has the potential to add about $420 billion a year to the global economy.

German news magazine Der Spiegel reported Sunday that classified leaks from former National Security Agency contractor Edward Snowden detailed how the NSA bugged EU offices in Washington and New York, as well as conducted an "electronic eavesdropping operation" that tapped into an EU building in Brussels.

President Obama said Tuesday he needed more information on the specific programs cited in the report but made clear such spying was commonplace.

"I guarantee you that in European capitals, there are people who are interested in, if not what I had for breakfast, at least what my talking points might be should I end up meeting with their leaders," Obama said. "That is how intelligence services operate."

The European Commission will sweep its offices for electronic listening devices and other security breaches, a spokeswoman said Monday.

Related: U.S. curbs Bangladesh trade privileges

A comprehensive EU-U.S. trade deal would be the biggest of its kind and could add $160 billion to annual European income, $125 billion to U.S. income and $133 billion to other economies.

Together, the U.S. and EU account for about half of global economic output, and trade some $1 trillion in goods and services each year, supporting about 13 million jobs on both sides of the Atlantic.

A free trade deal could create as many as two million new jobs at a time when southern Europe is blighted by record unemployment and the U.S. is struggling to create enough new positions to bring its own jobless rate down significantly.

Plans to announce the start of negotiations were nearly derailed last month when France insisted that movies and music be excluded from the discussions, fearing U.S. media could overrun French-language products.

EU officials hammered out a compromise, which takes the audio-visual services industry off the table for now but lets the European Commission seek to broaden its negotiating mandate once talks are underway.

But the spat shows how tricky the talks will be. Other thorny topics are likely to include agriculture, aviation and public sector contracts.

--CNN's Laura Richardson contributed to this report from Paris.

First Published: July 3, 2013: 9:24 AM ET

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Delay in Obamacare - what you need to know

NEW YORK (CNNMoney)

When the Affordable Care Act was passed in 2010, it required that companies with 50-plus full-timers start providing them coverage in 2014 -- or face penalties.

That changed on Tuesday. In a blog post, the U.S. Treasury Department explained that the government needs time to simplify reporting requirements, and businesses need breathing room to adapt to the changes.

"This provides vital breathing room. I think businesses are relieved there's more time to get this right," said James A. Klein, president of the American Benefits Council, an employer benefits advocacy group.

Here's what businesses and workers need to know.

Who's affected?

A relatively small share of the country's businesses fall under Obamacare's employer rules, and most of those that do already provide insurance. That might sound surprising, because the biggest Obamacare myth spouted by opponents is that it will crush small business.

The vast majority of the nation's businesses, 97% of them, are too small to be affected.

What's more, most larger employers already provide insurance anyway. Of the nation's 6.5 million workplaces, only about 70,000 -- a little more than 1% -- must actually start providing insurance.

Then why does this matter?

The mandate affects most of the nation's workers. According to the latest Census data, close to 80 million people work at firms that must provide insurance. Though most of them are offered insurance, that still leaves millions who will have to wait another year.

Has the mandate already affected businesses?

It has impacted those businesses that intend to dodge Obamacare by cutting worker hours. The employer mandate kicks in at 50 full-timers, and the law counts anyone who works at least 30 hours a week as full-time.

That's given rise to the "29ers" phenomenon, in which business owners reduce workers' hours from full-time to 29 hours per week. This has been especially prevalent in the franchising and restaurant industries, where shift hours are frequently swapped.

There's no telling whether the mandate has already impacted hiring, though. Mark Zandi, chief economist at Moody's Analytics, said hiring data has yet to show significant changes as a result of Obamacare.

What about the rest of Obamacare?

The Treasury said the latest change doesn't affect the individual mandate, which requires that most taxpayers buy insurance or pay a government fine.

In similar fashion, Treasury said the timeline hasn't changed for the implementation of individual and small business exchanges -- separate marketplaces where people and business owners can shop for insurance at the state level.

But there are doubts.

"This is just the beginning. The employer mandate is a cornerstone of the entire Obamacare exchange system," said Timothy Finnell, president of the Group Benefits health consulting in Memphis, Tenn.

As originally planned, only those who don't receive affordable coverage at work can receive federal subsidies while shopping for insurance on the individual exchanges. But now that employers don't have to abide by Obamacare reporting requirements, Finnell fears the government will have no way to verify whether someone is incorrectly getting subsidies.

"There are going to be people who get a subsidy and end up costing taxpayers a whole lot more than anticipated," he said.

First Published: July 3, 2013: 10:53 AM ET

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Smartwatches shouldn't look like watches

Sony's Smartwatch 2 has a fatal flaw: It still looks like a watch.

NEW YORK (CNNMoney)

This year's iteration boasts a waterproof housing, a few extra pixels in a slightly larger display, and NFC (near-field communication) functionality, but the basic concept is unchanged from the last generation. Sony (SNE) expects us to interact with its smartwatches as though they were dumbed-down smartphones.

It's an idea that will immediately resonate with the masses. It triggers those childhood sci-fi fantasies. But it's also certain to frustrate and confuse, because it's not how wearable tech should be implemented.

We've seen demos of flexible touchpanels and contextually aware components, but we're still hung up on trying to mount tiny, self-contained displays on a technologically inert band.

Just as early tablets were hell-bent on trying to wholly replicate the function of a desktop PC, most current smartwatches are caught up trying to mimic the UX and UI of a smartphone. That's an ugly solution.

Consider Apple (AAPL, Fortune 500)'s patent application for a smartwatch-type device, or the recent product concept sketched out by Frog Design: their hypothetical products bear little resemblance to a conventional watch. These are just rough, early ideas, but they at least offer insight into how some of the world's best tech companies and designers are thinking about this space.

The concepts have information displayed across the wrist in non-traditional but potentially more efficient manners. They recognize that there's a better way to convey data than working within the confines of a small rectangle.

Corporate partnerships notwithstanding, there's a good reason why Apple CEO Tim Cook publicly professed his love for his Nike+ FuelBand fitness tracker: It's not trying to be a watch. It's not pretending to be a watch. It wants to be new.

The FuelBand hasn't realized its full potential by a long shot. It's extremely limited. But you can better envision the future possibilities of a device that looks and behaves like a FuelBand than you can with these devices that mimic watches.

If our smartwatches can help us determine whether or not we need to pull out our phones to field a call or email, that's exciting. If they can predict our next activity and give us all the contextual information we need -- navigation, weather and so on -- that's exciting. If they can collect ambient data on us and our surroundings (our vitals, location, any nearby friends) and relay that back to our phones, to our Internet of things, to the rest of the world -- that's exciting.

But if we can do all of this without wanting to chuck the gizmo out a window, that's what will make them great.

I recently struck up a conversation with an industrial designer who lamented the expectation that smartwatches have to look and function like smartphones on our wrists. In reality, they just need to effortlessly deliver important information at the moments we actually need it.

We don't need to directly interact with Twitter and Facebook (FB) from our wrists. We don't need to watch YouTube videos, either. And if we're going to take up that space on our wrist, the whole band might as well be put to good use.

That basic sentiment is something that Google (GOOG, Fortune 500) has correctly latched onto with Glass. Instead of giving users unfettered access to the entire Web, Google crafted a very specific experience that only offers access to the most essential information. The point isn't to replace your smartphone or computer. It's to avoid having to use them when you don't absolutely need to.

Just like the phone functionality isn't the primary feature of smartphones these days, timekeeping will hardly be the main reason to wear a smartwatch, or whatever we end up calling them. By trying to fit all these exciting new ideas into an antiquated analog, we're ultimately limiting the imaginative possibilities of these devices.

First Published: July 3, 2013: 12:03 PM ET

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Health care stocks pull back

Shares of hospital operators sold-off Wednesday on delay in health care reform.

NEW YORK (CNNMoney)

Investors had been betting that hospital operators and insurance companies would benefit from an increase in the number of insured workers under the law, widely known as Obamacare.

Shares of Tenet Healthcare (THC, Fortune 500), which operates hospitals and outpatient centers in 11 states, fell 4% Wednesday.

Investors also punished shares of HCA Holdings (HCA, Fortune 500), LifePointHospitals (LPNT), Community Health Systems (CYH, Fortune 500) and Health Management Associates. (HMA, Fortune 500)

The iShares Dow Jones U.S. Health Care Provider Index Fund (IHF) , which includes drug stocks like Johnson & Johnson (JNJ, Fortune 500) and Pfizer (PFE, Fortune 500), was down1%.

Shares of major health insurance companies also pulled back. UnitedHealth (UNH, Fortune 500), Humana (HUM, Fortune 500)and Aetna (AET, Fortune 500) were all down about 0.5%.

The Treasury Department said Tuesday it will delay a provision in the law that requires businesses to provide their workers with health insurance or face fines.

The decision came after businesses complained about the complexity of the law's reporting requirement, which applies to firms with more than 50 full-time employees that don't already provide coverage.

Critics say the law will cause small businesses to cut back on full-time workers and hire more part-timers to avoid penalties. But the delay is not expected to have a major impact on profits for big insurance companies.

Related: Delay in Obamacare - what you need to know

"I don't think this is a game changer for the industry," said Les Funtleyder, a health care strategist at Poliwogg, a New York-based investment firm.

Funtleyder said the provision was seen as a "marginal positive" for insurance companies, although the decision to delay raises questions about what other aspects of the law may be changed.

"There's probably some uncertainty discount being built into the stocks," he said.

Funtleyder said industry analysts are more concerned about the implementation of federal health insurance exchanges, which are supposed to take effect Oct. 1.

While a few state-run exchanges are moving forward, he said federally managed exchanges in about 30 states appear to be behind schedule.

"A lot of people are wondering if that will be delayed," said Funtleyder.

First Published: July 3, 2013: 12:25 PM ET

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U.S. stocks shake off global worries

Click chart for more markets data.

NEW YORK (CNNMoney)

After bouncing around the breakeven for most of the day, stocks rallied into the early 1 p.m. ET close.

The Dow Jones industrial average, the S&P 500 and the Nasdaq ended up between 0.1 % and 0.3%.

Renewed political instability in Europe, violent clashes in Egypt and concerns about rising oil prices caused global markets to falter.

Oil prices topped $100 a barrel, the highest levels in more than a year, on fears that problems in Egypt could spread beyond its borders.

But economic numbers gave investors some reason for optimism. Jobs numbers were mostly better than expected, yet a weak manufacturing report raised concerns about economic growth.

U.S. markets will be closed Thursday in observance of Independence Day.

Click here for more on stocks, bonds, currencies and commodities

Preview to jobs Friday: Investors liked what the saw in the job numbers, mostly from the ADP's monthly figure on private-sector payrolls. These figures came in above expectations. First-time unemployment claims came in slightly below forecasts.

Still, investors are waiting for the big jobs numbers due out Friday. Economists surveyed by CNNMoney predict the U.S. economy added 155,000 jobs and the unemployment rate fell to 7.5% in June.

Related: Business hiring picks up

Europe... again?: Worries over the health of peripheral European countries once again caused global concerns.

Major European stock markets closed 1.3% lower, as investors worried that political turmoil in Portugal could re-ignite the region's debt crisis and a credit rating downgrade hit European banks. Asian markets also ended with losses.

"Portuguese political pandemonium continues today as austerity fatigue has led to the resignation of several key ministers and we could now be looking at the possibility of early elections," said Lee McDarby, head of corporate and institutional treasury dealing at Investec Bank.

Related: Investors still on edge: Fear & Greed in fear

Portugal's 10-year government bond yields hit 8% and the country's benchmark stock index shed more than 6% Wednesday after the finance minister stepped down and the foreign minister announced his resignation. Portuguese opposition parties are calling for an early election, though Prime Minister Pedro Passos Coelho insists he will not resign.

Credit rating agency Standard & Poor's downgraded three European banks -- Credit Suisse (CS), Deutsche Bank (DB) and Barclays (BCS) --- citing worries over the size of their investment banking portfolios and the impact of new regulations. Shares of Credit Suisse and Deutsche Bank closed lower, while shares of Barclays ended up.

The Obamacare fallout: The Obama administration's decision to delay implementing some parts of health care reform hit hospital stocks Wednesday. Shares of Tenet Healthcare (THC, Fortune 500), HCA Holdings (HCA, Fortune 500), Community Health Systems (CYH, Fortune 500) and Health Management Associates (HMA, Fortune 500) dropped between 2% and 4%.

First Published: July 3, 2013: 9:43 AM ET

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Lululemon sued for see-through yoga pants

A class action lawsuit targets Lululemon for concealing the cost of its see-through pants.

NEW YORK (CNNMoney)

The lawsuit, filed in U.S. District Court for the Southern District of New York, seeks to recover investors' damages from the 17% stock price plunge on June 10, when the company announced first-quarter results and Chief Executive Christine Day left the company.

In March, Lululemon recalled black yoga pants that were unintentionally see-through. The stock initially fell 6% on the news, but rose 24% during April and May, when the lawsuit alleges the company made positive statements despite knowing there were serious issues, including discussions to replace Day as CEO.

The suit says that between March and June, executives at Lululemon (LULU) failed to disclose "quality defects in the Luon yoga pants ... [which] "resulted in part from Lululemon's efforts to cut costs in order to raise profit margins to the detriment of product quality and brand reputation."

Related: Lululemon's fake CEO job posting gets 160 applications

The class action suit is open for more investors to join in.

"The lawsuit is generating a lot of interest and we've heard from a lot of investors ... seeking to join the lawsuit," said David Rosenfeld of Robbins Geller Rudman & Dowd. He declined to say how many investors have already signed on.

Lululemon did not return calls from CNNMoney.

Related: Lululemon's department CEO: 'My values include discretion'

The recalled pants, which the lawsuit described as "very thin" and "overly translucent," amounted to 17% of all women's pants sold in Lululemon stores. Sheree Waters, chief product officer for the Vancouver-based yoga retailer, stepped down in April. The debacle cost the company between $12 million to $17 million, according to estimates from earlier this year. The stock has fallen 13% overall this year.

First Published: July 3, 2013: 12:02 PM ET

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Egypt unrest pushes oil prices above $100

Click chart for more on oil and other commodities

NEW YORK (CNNMoney)

U.S. oil prices rose as high as $102.18, the highest they've been in over a year, before settling at $101.24 a barrel, 1.7% higher.

While oil production from Egypt is negligible, the country controls the Suez Canal and pipeline, which move about 4 million barrels of oil per day.

Plus, the country is one of the largest and most powerful in the Middle East and North Africa -- home to about a third of the world's oil production.

With Egypt on the verge of a meltdown, fears of supply disruptions will likely drive oil prices higher.

"It's anyone's guess as to how high crude oil can go when crisis erupts in the Middle East," said analysts at Lido Isle Investors. "We believe this is a key breakout move and would not be surprised to see crude head higher from here."

Protesters in Egypt have been demanding the country's democratically elected Islamist president, Mohamed Morsy, step down, saying he has not governed the country in an inclusive manor. On Wednesday evening, the Egyptian military said Morsy was no longer president.

Egypt's military deposed the country's first democratically elected president, installing the head of the country's highest court as an interim leader, the country's top general announced.

The protests are the largest the county has seen since the 2011 uprising that ousted longtime dictator Hosni Mubarak.

Related: Eight states raise their gas tax

Health officials have counted the bodies of 23 people who died when Morsy's angry opponents met head-on overnight with his supporters at Cairo University.

Hundreds more left the clashes with bruises and other injuries, state-funded Al-Ahram news reported, after rocks, Molotov cocktails and bullets flew.

While the turmoil has thus far been contained within Egypt, the conflict between the Muslim Brotherhood and the Egyptian military "could spur other Islamist actions against allies of the military, including several Arab producing nations allied with the United States," according to ClearView Energy Partners.

Oil prices have risen about 16% in the last two months. Traders cite an improving economy, rising demand for crude oil from refiners in the United States, and the easing of supply bottleneck problems in the middle of the country as other reasons for the price run up.

First Published: July 3, 2013: 9:28 AM ET

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Don't let gadgets devour the family budget

Help your child figure out how much to save for a gadget that's not in the family budget.

(Money Magazine)

Living in a digital world sure gets expensive.

The average American home has more than twice as many Internet-connected devices as people, the NPD Group reports. And annual household spending on electronics last year was up 36% over 2011, to $1,312, the Consumer Electronics Association says.

Here's how to keep your clan tech-happy without going broke:

Swap home upgrades

You know waiting until a wireless contract is up significantly cuts the cost of a new mobile device. But you might not know that most carriers let you exchange upgrades within a family plan, which is ideal for when your teen cracks his screen or one of you needs a specific new feature (like point-by-point audio navigation). Applying another family member's upgrade -- assuming the person is happy to keep his or her phone -- helps you avoid paying full price.

Related: Best advice now for saving and spending

How it works: You renew the contract and get the phone, but don't activate it, says Dan Ackerman of tech site CNET. Then simply ask the carrier to have the cell connected to another line.

Opt for the next best

While early adopters pay a premium, those who buy older versions are rewarded. The newest iPad sets you back $499, for example, but the earlier one costs $399. Going back two generations on a device saves more, and can make sense if you don't need the latest bells and whistles.

Prefer the current model? Buy it refurbished.

"Refurbished tech products often provide big savings with little compromise," says Rick Broida, who writes for PC World. (A fixed-up version of the newest iPad sells at a 10% discount.)

Devices are quality tested; phones usually get new batteries. Most companies even offer some kind of warranty.

One caveat: Avoid refurb TVs, says Ackerman, as they may require costly repairs.

Put old models to good use

After you replace a device, pass the older model to one of your kids. Or trade it in: Amazon, Target, Best Buy, Apple, and Gazelle.com all have buy-back programs. You can get cash or, in some cases, credit for your electronics (sometimes the latter is worth more, notes Ackerman).

Related: Best deals on tech

For a Samsung Galaxy S3 in good shape, you could recoup $150, almost enough for a new one.

Hand over the tab

When your child is desperate for a gadget that's not in the budget, help her figure out how much she needs to save in order to buy it herself, says Neale Godfrey, head of financial literacy firm Green-Street Commons.

Ultimately, the child gets what she wants, along with the satisfaction of having earned it. And you don't end up holding the bill.

First Published: July 3, 2013: 4:06 PM ET

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China probes baby milk price fixing

Before a crackdown by Hong Kong authorities, infant formula was taken over the border to Shenzhen in large quantities. Strict limits are now enforced.

HONG KONG (CNNMoney)

The National Development and Reform Commission investigation, first reported by state media, is said to target companies including Mead Johnson Nutrition, Danone (DANOY), Abbot Laboratories (ABT, Fortune 500), Nestle (NSRGF) and Biostime (BTSDF).

"Based on the evidence obtained, these companies are involved in price control with distributors and retailers, aimed at excluding fair market competition," an anonymous NDRC official told state media. The NDRC is China's central economic planning agency.

China's demand for foreign-produced formula has been growing since 2008, when melamine-tainted infant formula led to six deaths and caused hundreds of thousands of other children to fall ill.

At least one of the foreign companies under investigation, Nestle-owned Wyeth Nutrition, has already agreed to lower prices.

"Wyeth Nutrition has been actively cooperating with NDRC in its investigation of infant formula manufacturers' pricing practices in China, and it is committed to continuing to cooperate with NDRC in its investigations," Wyeth spokesman Bob Cao said in a statement.

As a result of the investigation, Cao said the company had assessed its pricing practices and decided to "improve certain sales and marketing practices."

The company will lower prices by an average of 11% through 2014, while certain product prices will be slashed by a maximum of 20%. Prices on any new products will not be increased over the next year.

Other companies contacted Thursday did not immediately return requests for comment. State media reports made no mention of fines or other possible sanctions for companies found to have fixed prices.

Related story: China draining world baby milk supply

Chinese families, fearful of tainted formula, have been scouring the globe for milk they perceive to be safer. The rush has created shortages as far afield as the U.K.

Major supermarkets in the U.K. including market leaders Tesco (TESO) and Sainsbury's began restricting purchases of formula in April in an effort to prevent private exports to China.

The rationing in U.K. stores followed shortages reported earlier this year in some Australian shops. Customers had been buying formula in bulk and either sending it to their family and friends in China, or selling it online for a profit.

Hong Kong has also introduced baby milk restrictions at its border. Travelers cannot leave with more than more than 4 pounds of formula, and several people have been arrested for smuggling more than their allotted quantity.

First Published: July 4, 2013: 5:28 AM ET

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Europe's central banks step up dovish talk

Mario Draghi said the ECB had a "downward bias" on interest rates, taking the unprecedented step of issuing guidance on future policy as rising bond yields threaten the European economy.

LONDON (CNNMoney)

In a significant break with previous practice, the European Central Bank and Bank of England gave investors much more insight into future policy and warned about the possible impact of a rise in market interest rates -- triggered by higher yields on U.S. Treasuries after the Federal Reserve said it could begin to tighten policy later this year.

"The governing council expects the key ECB interest rates to remain at present or lower levels for an extended period of time," ECB President Mario Draghi said at a news conference. The bank decided to keep rates at a record low of 0.5%.

Recent survey data have pointed to a stabilization in the recession-hit eurozone economy and accelerating growth in the U.K., but Draghi said the risks were tilted to the downside. He joined new Bank of England Governor Mark Carney in warning about tighter global money-market conditions.

Draghi said the bank's governing council made a unanimous decision to issue forward guidance with the aim of signaling a "downward bias" in interest rates for the foreseeable future. The ECB will adjust its guidance as the medium-term outlook for inflation, growth and credit flows changes, he said.

While this may be a pale imitation of the Fed's approach of linking policy to a specific target for unemployment or inflation, it represents a major shift for the ECB, which had refused to issue guidance in its 15-year history.

"Like Mark Carney's Bank of England earlier today, the ECB wants to signal to markets that monetary tightening is further away than some implied market expectations would suggest," said Holger Schmieding, chief economist at Berenberg.

Investors cheered the dovish talk, sending European shares sharply higher and the euro and pound lower against the dollar. Sentiment was also helped by signs that Portuguese politicians are trying to prevent a government collapse.

Related: Fed officials in damage control mode

The Bank of England earlier kept its interest rates at a record low of 0.5%, and its asset purchase program at £375 billion.

Economists had played down expectations of any dramatic changes at the bank under Carney's new leadership this month, saying markets would probably have to wait until August, when the bank could begin to issue forward guidance on interest rates along the lines of the Fed.

Recent business surveys suggest the U.K. economy may have grown by as much as 0.6% in the second quarter. That's double the rate seen in the first three months of the year, when it managed to avoid a triple-dip recession. House prices have also been on the rise.

But analysts have warned that the economy is still far from the "escape velocity" Carney has been hired to help deliver.

Household finances are still squeezed by falling disposable incomes and government austerity measures, and loans to business and individuals are still choked. Turmoil in the eurozone remains a risk for U.K. exporters.

Related: Investors dumping bonds

IHS Global Insight chief economist Howard Archer said the bank's decision to issue a statement signaled a significant shift towards providing forward guidance on monetary policy.

"Amid increased global financial market turmoil, the monetary policy committee likely felt it was a good move to make it clear at an early stage that any tightening in UK monetary policy is a considerable way off," he said.

First Published: July 4, 2013: 8:19 AM ET

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