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Business news in brief


E. coli sickens Costco shoppers

Costco Wholesale Corp.'s rotisserie chicken salad was linked to an E. coli outbreak in seven states, sickening at least 19 people, according to the Centers for Disease Control and Prevention. The outbreak has sent five people to the hospital, with two of them developing hemolytic uremic syndrome, a type of kidney failure, the CDC said in a statement Tuesday. There have been no deaths reported, the agency said. The people who fell ill lived in California, Colorado, Missouri, Montana, Utah, Virginia and Washington. - Bloomberg News

Bank profits hit $40.4 billion

U.S. banks earned $40.4 billion in profits for the third quarter, a 5.1 percent increase from a year earlier, the Federal Deposit Insurance Corp. said. Lower non-interest expenses were the main reason for the higher earnings in the three-month period that ended Sept. 30, the FDIC said in its quarterly report on industry performance. Reductions in costs tied to litigation outweighed weaknesses in operating revenue at large banks, the agency said. Loan portfolios grew and the quality of banks' assets improved, FDIC Chairman Martin Gruenberg said in a statement. - Bloomberg News

Coke science exec leaving

Coca-Cola Co. executive Rhona Applebaum, the beverage giant's chief science and health officer, is leaving the company after it was criticized for funding an anti-obesity group. Applebaum has "made the decision to retire" and a transition is under way, the Atlanta-based company said. The executive was involved in a controversy over Coca-Cola's relationship with the Global Energy Balance Network, a nonprofit working to fight obesity. Emails showed Coke had been "instrumental" in shaping the group's message, with Applebaum helping manage the relationship. The close ties raised concerns that Coca-Cola would use the group to deflect criticism about its role in the U.S. obesity epidemic. Chief executive officer Muhtar Kent said that the company would be more transparent about its activities. - Bloomberg News

GDP increases in third quarter

The U.S. economy grew at a faster pace over the summer than initially estimated, a positive sign that could help convince Federal Reserve policymakers to raise a key interest rate next month. Total economic output, also known as gross domestic product, increased at a 2.1 percent annual rate from July through September, the Commerce Department said. The figure was up from the initial estimate of 1.5 percent annual growth in the quarter, which had reflected a sharp cutback by businesses on their inventories in the face of a global economic slowdown. The economy grew at a 3.9 percent annual rate in the second quarter. - Los Angeles Times

Icahn targets Xerox for growth

Carl Icahn, the billionaire activist investor, said he amassed a 7.13 percent stake in Xerox Corp., and intends to hold discussions with management and the board. The move makes Icahn the second-biggest shareholder after Vanguard Group with an 8.4 percent stake. Icahn will speak with Xerox leadership over "improving operational performance and pursuing strategic alternatives, as well as the possibility of board representation," according to a regulatory filing Monday. He views Xerox shares, which have declined 22 percent this year, as undervalued. Icahn often targets companies that are considering strategic changes. Xerox last month announced it was conducting a broad-based review of structural options for the company's business portfolio and capital allocation. CEO Ursula Burns said in October that Xerox is considering everything other than selling the company. - Bloomberg News

Uber drivers want mileage pay

The latest demand from Uber Technologies Inc. drivers in California suing to be treated like employees seeks 571/2 cents for every mile logged. Whether the drivers can pursue pay for mileage on their own vehicles going back to 2009 is up for debate in a San Francisco court hearing set for this week, as the dispute over driver status moves toward a June trial. If drivers who have gotten nothing so far from the company are allowed to seek reimbursement, Uber's potential exposure would increase sharply, possibly by hundreds of millions of dollars, according to legal experts. The judge will also consider whether to add more drivers to the class-action, which threatens to upend the ride-share company's business model and cut into its $50 billion company valuation. - Bloomberg News

Bank examiners get closer look

The Federal Reserve said it's setting tougher standards for examiners of large U.S. banks, following criticism by lawmakers that the agency has been captured by the lenders it supervises. A review initiated in November 2014 found "inconsistent practices" among Fed regional banks, the agency said in a statement. In response, a centralized Fed committee called the Large Institution Supervision Coordinating Committee will oversee new minimum operating and documentation standards for all oversight activities. - Bloomberg News

CEO: Rolls-Royce best intact

Rolls-Royce Holdings Plc CEO Warren East said a review begun when he took over in July has concluded that the engine maker is better off retaining its current focus, resisting investor calls for a break up, and rejecting arguments for re-entering the narrow-body market. About 60 percent of Rolls' non-aerospace revenue comes from businesses with good competitive positions, East said in an investor briefing. - Bloomberg News