P2JW028000-6-A00100-1--------XA CMYK Composite CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO TODAY IN PERSONAL JOURNAL Getty Images/iStockphoto NOW SHOWING AT THE GYM PLUS Tech Review: TVs to Buy for the Super Bowl WEDNESDAY, JANUARY 28, 2015 ~ VOL. CCLXV NO. 22 ****** DJIA 17387.21 g 291.49 1.6% NASDAQ 4681.50 g 1.9% i STOXX 600 368.70 g 1.0% 10-YR. TREAS. À 2/32 , yield 1.825% OIL $46.23 À $1.08 GOLD $1,291.70 À $12.30 The stronger dollar is slicing sales and profits at big American companies, prompting them to put renewed emphasis on cost cutting and cramping the broader U.S. economy. The currency effects are hitting a wide swath of corporate America—from consumer products giant Procter & Gamble Co. to technology stalwart Microsoft i T he strong dollar is hurting sales and profits at big U.S. companies, prompting them to cut costs and adding pressure on the broader economy. A1  The Dow tumbled 291.49 points to close at 17387.21 on disappointing corporate results and downbeat outlooks. C1 value or not keeping up with dollar-based costs. Even booming companies are contending with the currency fallout: Apple Inc. reported surging profits Tuesday, sparked by booming demand for its new bigger-screen iPhones, but it also pointed to the dollar as a drag on results. The pressure on American By Paul Ziobro, Josh Mitchell and Theo Francis Corp. to pharmaceuticals company Pfizer Inc. Those companies and others have expanded aggressively overseas in search of growth and now are finding that those sales are shrinking in firms from the dollar wasn’t a bolt from the blue. P&G, for instance, has been warning of impending damage for months. But the severity of the blow appears to have caught companies and investors by surprise. The Dow Jones Industrial Average plummeted 291 points, or 1.7%, to 17387, its steepest decline in three weeks. n Yahoo unveiled a plan to spin off tax-free its nearly $40 billion stake in Chinese e-commerce giant Alibaba. B1 n Currency broker FXCM was nearly felled by big bets by foreign customers who aren’t subject to U.S. caps. C1 n Treasury auctions of TARP investments in small banks have been a boon to a few savvy private investors, a report said. C1 By Benoît Faucon, Matt Bradley and Felicia Schwartz World-Wide n A hotel attack in Libya killed nine people, including an American, and stoked fears that Islamic State is spreading beyond the Mideast. A1 n A winter storm pounded the Northeast, dumping over 2 feet of snow in New England but falling short of predictions in other areas. A3 n Kurdish forces declared victory in the battle with Islamic State for the Syrian border city of Kobani. A8 n The Yemeni leader’s top aide was freed by militants, who called for talks among the nation’s clashing factions. A8 n EU leaders rebuked Russia over its actions in Ukraine and asked foreign ministers to work up fresh sanctions. A6 n The Obama administration dropped a plan to tax “529” college savings accounts after widespread criticism. A2 n The administration proposed eventually opening up the Atlantic to drilling but restricting Alaskan waters. A3 n A panel looking at ways to revamp U.S. military benefits is expected to call for a 401(k)type retirement system. A4 n Greece’s new premier unveiled a cabinet that includes an outspoken bailout critic as finance minister. A6 n A federal agent proposed using license-plate readers to scan vehicles near gun shows, a government email said. A4 n Obama visited Saudi Arabia to pay his respects to the family of the late king and meet with his successor. A9 CONTENTS Arts in Review.......... D3 Corporate News B2,3,6 Global Finance............ C3 Heard on the Street C12 Home & Digital...... D1,2 In the Markets........... C4 Opinion.................. A13-15 Property Report.. C6-8 Sports.......................... D5,6 Technology................... B4 U.S. News................. A2-4 Weather Watch........ B8 World News.......... A6-11 > s Copyright 2015 Dow Jones & Company. All Rights Reserved Deal Offers Model for Medicaid Expansion BY LOUISE RADNOFSKY AND ARIAN CAMPO-FLORES Indiana on Tuesday announced plans to expand Medicaid under the Affordable Care Act after securing concessions from the Obama administration that could pave the way for other Republican-led states to widen health coverage for lowincome residents. Gov. Mike Pence is the latest Republican to opt into the health law’s expansion of Medicaid despite his party’s opposition to the legislation. His move could prompt up to a half-dozen other GOP-led states to follow suit, including Florida, Tennessee and Alabama, by giving them a model to follow. Under Indiana’s agreement, the state can require some Medicaid enrollees to contribute toward their care. The expansion decision by Mr. Pence, who has been mentioned as a 2016 presidential candidate, is the latest example of how the GOP is trying to broaden its reach by appealing to lower earners. It also signals a growing willingness by the Obama administration to cut deals with states in order to expand insurance coverage under the 2010 health law after the Supreme Court hampered that effort. Twenty-seven other states have agreed to use federal dollars to expand Medicaid. “With this decision, our state can begin covering our uninsured working poor the Indiana way, based on personal responsibility,” Mr. Pence said Tuesday. As a result of the deal, about 350,000 Hoosiers could qualify for coverage that will begin as soon as Feb. 1. Indiana’s agreement marks the first time a state has been allowed to impose strict requirements on some Medicaid enrollees to pay a portion of their premiums, up to around $26 a Please turn to page A4 Composite i NOT FORGOTTEN: Igor Malitsky was one of about 300 survivors who visited the Nazi death camp Tuesday on the 70th anniversary of its liberation. A6 ‘SLOW-MOTION CRISIS’ Debt That Once Boosted Its Cities Now Burdens China BY LINGLING WEI AND BOB DAVIS WUHAN, China—A little over a year ago, a Chinese credit agency downgraded a governmentowned financing company in this dusty industrial city. Default—nearly unheard-of in China on government bonds—was a possibility, it said. But during discussions with lenders, city officials made sure Wuhan Urban Construction Investment & Development Corp. could keep borrowing, officials with knowledge of the matter say. The city during those discussions said it backed the finance firm, essentially guaranteeing the debt, and helped the company restructure its assets to entice investors to lend more. Borrowing by firms like Wuhan Urban is a big reason China’s debt load is expanding. The International Monetary Fund says China’s debt is growing more rapidly than debt in Japan, South Korea and the U.S. did before they tumbled into deep recessions. Local-government borrowing is responsible for one-fourth of the buildup in China’s overall domestic debt since 2008. Beijing in early December took a step to rein in rampant borrowing by local-government firms. China’s clearing agency for bonds surprised the market on Dec. 8 with new rules to prohibit investors from using low-grade debt to borrow cash. The order contributed to a selloff in mainland-Chinese securities ranging from government bonds to stocks, as investors sold liquid assets—including bonds from local-government financing companies—to raise cash. China’s markets have since rebounded but remained volatile. The price of a 1 billion yuan Wuhan Urban bond tumbled as much as 2% after that move while investors pushed up the bond’s yield to compensate Please turn to page A12 A group calling itself Islamic State-Tripoli Province claimed responsibility over Twitter for the attack Tuesday morning on the Corinthia Hotel, a seaside complex popular with foreign businessmen, diplomats and journalists. The apparent international nature of its authors and target makes Tuesday’s attack stand out from the usual violence afflicting the North African nation, which has seen almost continuous factional fighting since longtime leader Moammar Gadhafi was killed in a popular uprising in 2011. A posting Tuesday on a Twitter account thought to be connected to the central Islamic State organization in Syria and Iraq described two of the attackers as their own. That claim is difficult to authenticate, but if further evidence surfaces that the self-proclaimed caliphate played a role, the attack could point to a growing footprint for a group whose rapid advance has unsettled much of the Middle East and drawn U.S. forces back into Iraq. Among those killed Tuesday was an American security contractor, David Berry, employed by the Virginia-based security firm Team Crucible LLC. The 34year-old former marine sergeant, a native of Arizona, had been in Please turn to page A8  Hostage trade deadline set.... A8  Yemeni official is freed............. A8 Hollywood’s Bit Players Need To Stand Out Before They Can Blend In i i i Firm That Casts Extras Searches for All Types: Got a Forked Tongue? One Hand? You’re Hired BY ERICH SCHWARTZEL But Central Casting takes all kinds. More recently, the firm has BURBANK, Calif.—Jennifer cast Mongolian horse riders, JenBender walked straight out of Cen- nifer Lawrence’s body double and tral Casting on a recent Wednes- men with forked tongues. day morning and surveyed the “We wouldn’t have thought to crowd of would-be superstars. ask about that at orientation,” said Some had lined up Ms. Bender, a senior vice hours earlier, ready to president at the comjoin the 70,000 other expany. tras, or background acSince 1925, long betors, in the company’s fore “straight out of roster. Such characters central casting” enhave been used by Hollytered the American wood studios for devernacular, the Central cades to flesh out the Casting company has periphery in movies and fed wannabe actors— television shows. and those just looking Many surely hoped for work—into the Holthey’d follow the path Juliette B. Reiss lywood pipeline, bein costume of Central Casting alhind and around the ums like Brad Pitt (who real stars. Many spend early in his career played the only the occasional day on set, “guy at beach with drink” in miming conversations and filling 1987’s “Hunk”) or Ava Gardner out banal settings like restau(“girl in car lighting cigarette” in rants, offices and parks. Others Please turn to page A12 1942’s “This Time for Keeps”). ™ Industrial . P2JW028000-6-A00100-1--------XA n The FCC warned that it would prosecute businesses that block people from using personal Wi-Fi networks. B4 Alik Keplicz/Associated Press n DuPont warned 2015 results would take a hit from the strong dollar and weakness in its agricultural-seed unit. B5 n AT&T added 854,000 wireless customers last quarter as profits showed strain from competition. B3  Stocks tumble on earnings...... C1 An attack on a luxury hotel in Libya’s capital killed nine people, including an American, and stoked fears that the Islamic State militant group is expanding beyond the Middle East toward North Africa and Europe. n Caterpillar said net plunged 25%, hurt by falling commodity prices, and forecast a drop in 2015 sales and profit. B5 n Pfizer said the dollar’s strength and drug-patent losses contributed to a 52% drop in net and would hurt 2015 results. B5 Worse, the results were accompanied by fresh data Tuesday that suggests the fall in oil prices and the soaring dollar are rippling through the economy in unpredictable ways. U.S. businesses broadly cut capital spending in the final months of 2014, Please turn to the next page Libya Hit Shows Militants’ Ambitions Holocaust Survivors Mark Seven Decades of Life After Auschwitz n Apple’s quarterly profit surged 38% to $18 billion, beating even the most bullish forecasts, on sales of its higher-priced iPhones. B1 i YEN 117.87 Rising Currency Takes a Toll on Sales and Profits; Stocks Drop as Capital Spending Slows, Too Business & Finance i EURO $1.1382 Strong Dollar Squeezes U.S. Firms What’s News i NIKKEI 17768.30 À 1.7% HHHH $3.00 WSJ.com Fashion ™ MAGENTA BLACK CYAN YELLOW