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Stocks Jump After a Wild Day: Live Market Updates Stocks Surge as Biden Leads Super Tuesday Results: Live Market Updates
(about 2 hours later)
Shares on Wall Street rose on Wednesday, bouncing back from a steep drop the day before that had been fueled by concerns over the worldwide coronavirus outbreak. Shares on Wall Street rose on Wednesday, bouncing back from a steep drop the day before, as investors responded to Joseph R. Biden’s strong showing in the Democratic party’s primaries on Tuesday.
From Tokyo to New York, financial markets have been on a roller coaster for the past two weeks as investors grapple with the potential damage that the coronavirus could inflict on the global economy, as fractured supply chains, travel bans imposed by companies and governments, and the disruption of daily life take their toll. Though the spreading coronavirus and its impact on global economic growth has dominated financial headlines for the past two weeks, Wall Street has also worried about Biden’s rival, Senator Bernie Sanders. Mr. Sanders plans to take on banks and tax stock and bond trades, and aims to eliminate most private health insurance as part of a single-payer health care plan.
After falling nearly 3 percent on Tuesday, the S&P 500 was up more than 1 percent Wednesday morning. Shares in Europe were also higher, while markets in Asia had been mixed as traders there looked for more signals on how global leaders would respond. Healthcare stocks led the gains on Wednesday, rising more than 5 percent. Shares of insurers like UnitedHealth Group and Anthem Health were each up more than 10 percent.
In the United States, the rosier outlook might partly reflect Wall Street’s appraisal of the Super Tuesday primary election results, which revived Joseph R. Biden Jr.’s campaign against Senator Bernie Sanders, whose plans to take on banks and tax stock and bond trades have worried many in the financial community. “The strong result by Joe Biden in the democratic primaries last night are a significant positive development for the market,” Marko Kolanovic, a strategist at JPMorgan Chase wrote in a note to clients. “It likely removes the possibility of a far left candidate — a risk that was rattling markets last week.”
The most obvious indication of this was a spike in shares of health care companies. Mr. Sanders aims to eliminate most private health insurance as part of a single-payer health care plan. Shares of the insurer UnitedHealth Group were up more than 12 percent. The S&P 500 gained more than 3 percent by Wednesday afternoon, recovering its losses from the day before.
Still, any gains on Wall Street these days are susceptible to more bad news on the coronavirus front. Financial markets have been on a roller coaster for the past two weeks as investors grapple with the potential economic damage of fractured supply chains, travel bans imposed by companies and governments, and the disruption of daily life take their toll.
There is little clarity about how long it will take governments and health officials to contain the virus, leading to a gloomy prognosis for global economic growth.There is little clarity about how long it will take governments and health officials to contain the virus, leading to a gloomy prognosis for global economic growth.
On Tuesday, the Federal Reserve validated those concerns by announcing an emergency cut in interest rates, only a few hours after leaders of the world’s largest economy said they would refrain from concrete action. The Fed’s move spooked investors rather than calm them and stocks fell nearly 3 percent on Tuesday.
Representatives of the airline, hotel, retail and travel industry warned that an overreaction to the spreading coronavirus could slow the economy in a news conference at the U.S. Chamber of Commerce in Washington on Wednesday.
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On Tuesday, the Federal Reserve validated those concerns by announcing an emergency cut in interest rates, only a few hours after leaders of the world’s largest economy said they would refrain from concrete action. Many industries are facing the prospect of falling revenues as more Americans choose to curtail their exposure to stores, airports and other public spaces.
On Wednesday in Europe, the FTSE 100 index in Britain was 1.4 percent higher. The DAX in Germany gained 1.1 percent, while the CAC 40 index in France was up 1.2 percent. “Our message is very simple,” said Thomas Donohue, the chief executive officer of the chamber. “Be safe, if you don’t feel well, stay home. Otherwise, let’s go to work.”
In Tokyo, the Nikkei 225 index ended 0.1 percent higher, and Hong Kong’s Hang Seng Index finished 0.2 percent lower. In China, the Shanghai Composite Index rose 0.6 percent. Chip Rogers, the president of the American Hotel & Lodging Association, urged Americans to make “fact-based decisions” and not to put off their spring break travel plans out of fear. “There is no place in the United States right now that is not safe to travel,” he said.
Roger Dow, the president of the U.S. Travel Association, went so far as to say that the government should stimulate travel. “The smartest thing someone can do is book their travel now, because this thing isn’t going to last,” he said.
The U.S. Centers for Disease Control and Prevention now recommends that travelers avoid non-essential travel to China, Iran, South Korea and Italy, and that older adults or those with chronic medical conditions consider postponing travel to Japan. Elsewhere, it says that travelers should practice the usual precautions.
The head of the International Monetary Fund warned on Wednesday that the economic fallout of the coronavirus would be more “dire” than previously thought and said that uncertainty would remain until policymakers could more clearly assess the duration of the outbreak.The head of the International Monetary Fund warned on Wednesday that the economic fallout of the coronavirus would be more “dire” than previously thought and said that uncertainty would remain until policymakers could more clearly assess the duration of the outbreak.
The I.M.F. said in late February that it was reducing its 2020 global growth forecast by 0.1 percentage points to 3.2 percent, with a more dramatic slowdown in China weighing on the global economy.The I.M.F. said in late February that it was reducing its 2020 global growth forecast by 0.1 percentage points to 3.2 percent, with a more dramatic slowdown in China weighing on the global economy.
“We have unfortunately seen a shift towards a more adverse scenario for the global economy,” Kristalina Georgieva, the managing director of the I.M.F., said at a briefing on Wednesday.“We have unfortunately seen a shift towards a more adverse scenario for the global economy,” Kristalina Georgieva, the managing director of the I.M.F., said at a briefing on Wednesday.
Treasury Secretary Steven Mnuchin said at a congressional hearing on Wednesday that it was too early to predict the impact of the virus on the economy around the world or in the United States. He said he had not seen major disruptions to global supply chains but that he expected some industries, such as travel, to face headwinds.Treasury Secretary Steven Mnuchin said at a congressional hearing on Wednesday that it was too early to predict the impact of the virus on the economy around the world or in the United States. He said he had not seen major disruptions to global supply chains but that he expected some industries, such as travel, to face headwinds.
Mr. Mnuchin said that he believed it was safe for most Americans to travel.Mr. Mnuchin said that he believed it was safe for most Americans to travel.
“I’d be very comfortable getting on a commercial plane today if I were personally traveling,” he told reporters before the hearing.“I’d be very comfortable getting on a commercial plane today if I were personally traveling,” he told reporters before the hearing.
As conferences around the world are canceled over virus concerns, including annual developer summits hosted by Facebook and Google, the popular South by Southwest festival will continue as planned.As conferences around the world are canceled over virus concerns, including annual developer summits hosted by Facebook and Google, the popular South by Southwest festival will continue as planned.
Organizers of the conference, held in Austin, Tex., said their plans have not changed, even as companies like TikTok and Twitter pulled out of their scheduled appearances. By Wednesday, more than 42,000 people had signed a petition to call off the gathering, which is scheduled for March 13-22.Organizers of the conference, held in Austin, Tex., said their plans have not changed, even as companies like TikTok and Twitter pulled out of their scheduled appearances. By Wednesday, more than 42,000 people had signed a petition to call off the gathering, which is scheduled for March 13-22.
Health officials have said that at least one person in Travis County, where the city is located, is being tested for coronavirus. But Dr. Mark Escott, the interim health authority for Austin Public Health, said there was no evidence right now that closing the festival would make the community safer.Health officials have said that at least one person in Travis County, where the city is located, is being tested for coronavirus. But Dr. Mark Escott, the interim health authority for Austin Public Health, said there was no evidence right now that closing the festival would make the community safer.
He said government officials were concerned that “canceling large events that impact the economy, that may lead to job loss, has some downstream effects that may be hard to quantify.”
Conference organizers have promised to screen workers before the event and make more hand-washing and sanitizing stations available, Dr. Escott said. They have also discussed limiting the number of people allowed into venues, he added.Conference organizers have promised to screen workers before the event and make more hand-washing and sanitizing stations available, Dr. Escott said. They have also discussed limiting the number of people allowed into venues, he added.
Another tech conference planning to go ahead is introducing strict rules. SaaStr, a business software conference scheduled for next week in San Jose, Calif., said it will ban residents of the most affected countries — China, South Korea, Italy and Iran — as well as anyone who has visited those places in the past 60 days.Another tech conference planning to go ahead is introducing strict rules. SaaStr, a business software conference scheduled for next week in San Jose, Calif., said it will ban residents of the most affected countries — China, South Korea, Italy and Iran — as well as anyone who has visited those places in the past 60 days.
All attendees will need to show a U.S. driver’s license or a passport to enter. Citizens of China, South Korea, Italy and Iran will also be subject to additional screening, organizers said.All attendees will need to show a U.S. driver’s license or a passport to enter. Citizens of China, South Korea, Italy and Iran will also be subject to additional screening, organizers said.
Organizers plan to check all attendees’ temperatures via “passive scanning.” They also banned handshakes and mandated that attendees wash their hands before each session. “This may create some lines,” the organizers said. “Our apologies.”Organizers plan to check all attendees’ temperatures via “passive scanning.” They also banned handshakes and mandated that attendees wash their hands before each session. “This may create some lines,” the organizers said. “Our apologies.”
Larry Birnbaum, who owns the Lightbulb Store in Hackensack, N.J., which manufactures and distributes LED products, said 95 percent of his stock comes from China, and nothing has arrived in the last month. Many local restaurants, retailers and other small businesses operate so leanly that some owners fear the U.S. coronavirus outbreak may be catastrophic for them.
On average, Mr. Birnbaum said, he orders $100,000 in LED light bulbs from China every month, the equivalent of roughly 1,000 bulbs. When he paid the balance on his last order about a month ago, the factory called him and said the Chinese government said that it wouldn’t be able to ship the bulbs and that the soonest it could was maybe the end of April or beginning of May. Some members of Congress are considering policies to assist small businesses and their employees, including federal loans to cover outbreak-related losses and reimbursement for workers who need to take sick leave.
“Small businesses are on the front line of this crisis,” said Amanda Ballantyne, executive director of Main Street Alliance, a public policy group for small businesses.
Some places are already feeling the effects. Patrick Day, who runs two board game stores in King County, Wash., the site of the largest U.S. outbreak of the disease, said his business had very little slack to absorb staffing shortages or the reduced foot traffic he was beginning to see.
Other places are seeing the impact on their supply chains. Larry Birnbaum, who owns the Lightbulb Store in Hackensack, N.J., which manufactures and distributes LED products, said 95 percent of his stock comes from China, and nothing has arrived in the last month.
On average, Mr. Birnbaum said, he orders $100,000 in LED light bulbs from China every month. He was told by the factory that it wouldn’t be able to ship his latest order until “maybe” the end of April or beginning of May.
“Maybe is a scary word,” Mr. Birnbaum said. “I’ve been in the lighting business for 47 years. I’ve never seen anything like this.”“Maybe is a scary word,” Mr. Birnbaum said. “I’ve been in the lighting business for 47 years. I’ve never seen anything like this.”
Ford Motor Company told its employees on Tuesday to stop all domestic air travel in the United States, and to use videoconferences as much as possible for critical meetings. Rare exceptions will be made for travel that is critical to Ford operations, requires employees to be on site and does not put anyone at risk, the company said. Ford Motor Company told its employees on Tuesday to stop all domestic air travel in the United States, and to use videoconferences as much as possible for critical meetings..
The Bank of Canada cut rates on Wednesday by 50 basis points, to 1.25 percent, following the Fed’s move on Tuesday. So did Hong Kong’s monetary authority also cut rates on Wednesday and central banks in the United Arab Emirates, Qatar and Bahrain.The Bank of Canada cut rates on Wednesday by 50 basis points, to 1.25 percent, following the Fed’s move on Tuesday. So did Hong Kong’s monetary authority also cut rates on Wednesday and central banks in the United Arab Emirates, Qatar and Bahrain.
The London Book Fair, one of the publishing industry’s biggest international events of the year, was canceled on Wednesday because of concerns related to the coronavirus in Europe.The London Book Fair, one of the publishing industry’s biggest international events of the year, was canceled on Wednesday because of concerns related to the coronavirus in Europe.
General Electric said the coronavirus outbreak would probably cost it as much as $300 million in operating profit in the first quarter. It described the virus’s impact as an “evolving variable.”General Electric said the coronavirus outbreak would probably cost it as much as $300 million in operating profit in the first quarter. It described the virus’s impact as an “evolving variable.”
The Hannover Messe, a major industrial technology fair in Germany scheduled for April, was postponed because of coronavirus concerns; it will now take place in July. Google said on Tuesday that it was canceling its annual developers conference because of similar concerns. The Google I/O event was scheduled to take place May 12-14 in Mountain View, Calif. The Hannover Messe, a major industrial technology fair in Germany scheduled for April, was postponed because of coronavirus concerns; it will now take place in July.
Amazon learned that an employee in one of its office buildings in the South Lake Union neighborhood of Seattle had tested positive for the virus, the company said in an email to its staff late Tuesday.Amazon learned that an employee in one of its office buildings in the South Lake Union neighborhood of Seattle had tested positive for the virus, the company said in an email to its staff late Tuesday.
Reporting was contributed by Geneva Abdul, Neal E. Boudette, Julie Creswell, Tiffany Hsu, Sophia June, Jeanna Smialek, Alan Rappeport, Karen Weise and Daisuke Wakabayashi. Reporting was contributed by Geneva Abdul, Neal E. Boudette, Julie Creswell, Tiffany Hsu, Sophia June, Jeanna Smialek, Alan Rappeport, Ana Swanson, Karen Weise and Daisuke Wakabayashi.