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Wall Street Climbs After Monday’s Slump: Live Updates Wall Street Climbs After Monday’s Slump: Live Updates
(about 1 hour later)
Stocks rose on Tuesday, lifted by the latest emergency measure from the Federal Reserve to keep money flowing through the economy and rebounding from Wall Street’s sharpest drop since the outbreak of the coronavirus.Stocks rose on Tuesday, lifted by the latest emergency measure from the Federal Reserve to keep money flowing through the economy and rebounding from Wall Street’s sharpest drop since the outbreak of the coronavirus.
Early trading was unsteady, with the S&P 500 rising and then falling. But after the Fed said it would use its emergency lending powers to try to keep credit flowing to households and businesses in the United States by buying up commercial paper, the gains picked up.Early trading was unsteady, with the S&P 500 rising and then falling. But after the Fed said it would use its emergency lending powers to try to keep credit flowing to households and businesses in the United States by buying up commercial paper, the gains picked up.
The S&P 500 was about 5 percent higher by midday. Stock benchmarks in Europe, which had been lower for most of the day, also recovered. Tuesday’s gain followed a 12 percent drop for the S&P 500, in what was also its biggest decline since the stock market crash of 1987. The S&P 500 was about 4 percent higher by midday. Stock benchmarks in Europe, which had been lower for most of the day, also recovered. Tuesday’s gain followed a 12 percent drop for the S&P 500, in what was also its biggest decline since the stock market crash of 1987.
Signs of a small recovery were evident in other markets too. The yield on the 10-year U.S. Treasury bond rose, and energy prices, which slid sharply on Monday, staged a very modest comeback. West Texas Intermediate, the American benchmark, was up 1.9 percent, to about $29.25 a barrel. Signs of a small recovery were evident in other markets, too. The yield on the 10-year U.S. Treasury bond rose, and energy prices, which slid sharply on Monday, staged a modest comeback. West Texas Intermediate, the American benchmark, was up 1.9 percent, to about $29.25 a barrel.
Financial markets have been reeling as investors sharply ratchet down their expectations for the economy and look to the White House and Congress to help businesses and workers threatened by efforts to contain the pandemic.There are few historical parallels for the shock waves created by the outbreak. From still-closed factories in China, to Western nations where millions of people are living in a state of semi-house arrest, most of the engines that keep the global economy aloft have simultaneously sputtered to a halt.Financial markets have been reeling as investors sharply ratchet down their expectations for the economy and look to the White House and Congress to help businesses and workers threatened by efforts to contain the pandemic.There are few historical parallels for the shock waves created by the outbreak. From still-closed factories in China, to Western nations where millions of people are living in a state of semi-house arrest, most of the engines that keep the global economy aloft have simultaneously sputtered to a halt.
So far, the biggest measures have come from the Federal Reserve, which has slashed interest rates to near zero and announced other emergency measures to ensure the financial system keeps functioning.So far, the biggest measures have come from the Federal Reserve, which has slashed interest rates to near zero and announced other emergency measures to ensure the financial system keeps functioning.
But Washington has yet to authorize a large-scale plan to help and investors could stay uneasy as the outbreak continues to grow.But Washington has yet to authorize a large-scale plan to help and investors could stay uneasy as the outbreak continues to grow.
“The Fed has a lot of tools in its tool kit. A vaccine isn’t one of them,” said Rick Rieder, chief investment officer of global fixed income at BlackRock. “And I think the markets are realizing that it’s going to be uncertain for a period of time.”“The Fed has a lot of tools in its tool kit. A vaccine isn’t one of them,” said Rick Rieder, chief investment officer of global fixed income at BlackRock. “And I think the markets are realizing that it’s going to be uncertain for a period of time.”
Treasury Secretary Steven Mnuchin is expected to make a pitch to Republican senators for additional fiscal firepower on Tuesday, with the Trump administration preparing to ask for about $850 billion in additional stimulus to support the economy.Treasury Secretary Steven Mnuchin is expected to make a pitch to Republican senators for additional fiscal firepower on Tuesday, with the Trump administration preparing to ask for about $850 billion in additional stimulus to support the economy.
Estimates of vast U.S. job losses inflicted by the coronavirus outbreak are emerging, even as actual layoffs are only just starting.
Major retailers like Apple, Abercrombie & Fitch, and Nordstrom, as well as upstarts like Glossier and Warby Parker, are shutting their stores. Airlines are canceling flights and grounding planes. Yet so far, relatively few companies, especially outside of the hospitality industry, have announced significant job cuts.
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Mr. Mnuchin said Tuesday that President Trump instructed him to allow for the deferment of tax payments, interest free and penalty free for 90 days. People can defer up to a $1 million and corporations can defer up to $10 million in payments.
The Treasury secretary said that this would inject $300 billion into the economy. He said that people who can file their taxes now should do so, because many will get refunds.
He added that financial markets would remain open, but the hours may be shortened.“We absolutely believe in keeping the markets open,” Mr. Mnuchin said. “Americans need to know they have access to their money.”
Marriott International, one of the largest hotel chains in the world, said it is starting to furlough what it expected will be tens of thousands of employees as it closes various hotel properties around the world, a spokesman for the hotel chain confirmed Tuesday.
Marriott, which operates a variety of hotels under well-known brands including Sheraton, Ritz-Carlton, St. Regis and Westin, said that it had started to shut down some of its properties last week and that employees would not be paid while furloughed, but would continue to receive health care benefits and would be eligible for company-paid free short-term disability pay should they get sick, a spokesman said.
Staff at properties that continued to operate would be trimmed by furloughs as well, said The Wall Street Journal, which first reported the furloughs.
Estimates of vast U.S. job losses inflicted by the coronavirus outbreak have started to emerge.
Economists in recent days have made increasingly dire forecasts of the wave of layoffs to come. IHS Markit, an economic forecasting firm, said Monday that it expected the unemployment rate to rise to 6 percent by mid-2021, up from 3.5 percent in February. The Economic Policy Institute, a progressive think tank, estimated on Tuesday that the outbreak could eliminate three million jobs by June.Economists in recent days have made increasingly dire forecasts of the wave of layoffs to come. IHS Markit, an economic forecasting firm, said Monday that it expected the unemployment rate to rise to 6 percent by mid-2021, up from 3.5 percent in February. The Economic Policy Institute, a progressive think tank, estimated on Tuesday that the outbreak could eliminate three million jobs by June.
The situation could be especially bad if layoffs hit the retail industry, the country’s biggest private-sector employer, as mall chains and department stores brace themselves for fewer visitors and a broader downturn. The Federal Reserve announced Tuesday that it would try to keep credit flowing to households and businesses by buying up commercial paper, short-term promissory notes companies use to fund themselves.
The Federal Reserve announced Tuesday that it will try to keep credit flowing to households and businesses by buying up commercial paper, short term promissory notes companies use to fund themselves. The program, enacted using the Fed’s emergency lending powers, pulls a page from the central bank’s financial crisis playbook. Putting it into action required the signoff of Treasury Secretary Steven Mnuchin, and the Treasury Department will provide $10 billion of credit protection to the Fed using its Exchange Stabilization Fund.
The program, enacted using the Fed’s emergency lending powers, pulls a page from the central bank’s financial crisis playbook. Putting it into action required the signoff of Treasury Secretary Steven Mnuchin and Treasury will provide $10 billion of credit protection to the Fed, using Treasury’s Exchange Stabilization Fund.
“Commercial paper markets directly finance a wide range of economic activity,” the Fed said in a statement, noting that it supplies “credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies.”“Commercial paper markets directly finance a wide range of economic activity,” the Fed said in a statement, noting that it supplies “credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies.”
The program will use a special vehicle to buy unsecured and asset-backed commercial paper from eligible companies, according to the release.The program will use a special vehicle to buy unsecured and asset-backed commercial paper from eligible companies, according to the release.
A group of Senate Democrats, led by Michael Bennet of Colorado, Cory Booker of New Jersey and Sherrod Brown of Ohio, is proposing legislation to send as much as $4,500 to nearly every adult and child in the United States this year, as part of a sustained government income-support program to counter the economic slowdown from coronavirus. Amazon told sellers and vendors for its website on Tuesday that it was halting some shipments of nonessential items into its warehouses for three weeks as it tries to meet demand for household staples and medical supplies.
The plan would start with a $2,000 payment to individuals that would be made as quickly as possible, phasing down for only the highest-income taxpayers. Each individual would receive another payment of $1,500 in July and further payments in October if the virus was continuing to hurt the economy, as measured by the unemployment rate or by declarations from the Treasury and Health and Human Services Departments. That includes halting purchase orders from brands that sell directly to the company and stopping shipments from the third-party sellers that offer goods on its marketplace.
Senators in both parties have rapidly coalesced in recent days around the idea of direct cash assistance to help Americans weather the shutdowns spurred by the spread of the virus. On Monday, Senator Mitt Romney, Republican of Utah, proposed an immediate $1,000 payment to individuals. “We are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers,” emails from Amazon said. The emails were earlier reported by Business Insider.
Airlines around the world are facing an unprecedented cash crunch and are in desperate need of government aid, the International Air Transport Association said Tuesday. Companies that work with brands report that Amazon is still allowing baby products, pet suppliers and other categories it deems essential into its warehouses.
On Monday, Amazon announced in a news release that it would hire 100,000 new workers and raise pay by $2 an hour for many employees in response to a surge in delivery orders from people staying at home to combat the spread of the coronavirus.
Airlines around the world are facing an unprecedented cash crunch and were in desperate need of government aid, the International Air Transport Association said Tuesday.
“We are in a very, very tough liquidity crisis, so we ask the governments to act urgently,” Alexandre de Juniac, the chief executive of the group, said.“We are in a very, very tough liquidity crisis, so we ask the governments to act urgently,” Alexandre de Juniac, the chief executive of the group, said.
While a few large carriers stand out, the typical airline started the year with about two months of cash on hand and many could face near-term bankruptcies, the group warned. To save the industry, governments may need to spend between $150 billion and $200 billion on airline bailouts, Mr. de Juniac estimated. A few large carriers stand out, but the typical airline started the year with about two months of cash on hand and many could face near-term bankruptcies, the group warned. To save the industry, governments may need to spend $150 billion to $200 billion on airline bailouts, Mr. de Juniac said.
In the United States, all four major airlines have taken out sizable loans in recent weeks, with Southwest Airlines announcing a $1 billion loan on Monday. A domestic industry group, Airlines for America, has called for more than $50 billion in grants, loans and tax relief, for U.S. carriers, a request for which the Trump administration has expressed support. In the United States, all four major airlines have taken out sizable loans in recent weeks, with Southwest Airlines announcing a $1 billion loan on Monday. A domestic industry group, Airlines for America, has called for more than $50 billion in grants, loans and tax relief for U.S. carriers, a request for which the Trump administration has expressed support.
The speed and severity of the economic downturn means other industries are likely to follow in asking for bailouts, argues today’s DealBook newsletter. The speed and severity of the economic downturn means other industries are likely to follow in asking for bailouts, according to the DealBook newsletter.
Amazon said it would hire 100,000 new workers and raise pay by $2 an hour for many employees in response to a surge in delivery orders from people staying at home to combat the spread of the coronavirus. Facebook announced a $100 million grant program for small businesses around the world that are affected by the coronavirus outbreak. The company said in a blog post that it would begin accepting applications in the coming weeks.
Amazon said the new jobs would include both full and part-time positions across the United States to staff its warehouses and make deliveries. The company encouraged people who lost work as a result of coronavirus-related shutdowns and cancellations to apply. Nordstrom said on Monday evening that it planned to temporarily close its stores — including Nordstrom Rack and Trunk Club — for two weeks starting on Tuesday. It will provide pay and benefits for store employees during that time. Sephora also said that it would close its retail stores in the United States and Canada through April 3, and pay employees for their scheduled shifts.
“We also know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis,” the company said in a news release. “We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back.” Volkswagen said Tuesday it would close most of its European factories because of the coronavirus. The aircraft manufacturer Airbus also said Tuesday it would suspend manufacturing in France and Spain for the next four days while it took measures to prevent the spread of the virus.
Amazon said it would also spend $350 million to raise pay by $2 or more an hour for workers staffing its enormous logistics operation in the United States, Britain and parts of Europe. The raises would last at least through April. In the United States, such workers start at $15 an hour.
Facebook announced a $100 million grant program for small businesses around the world that are impacted by the coronavirus outbreak. The company said in a blog post that it would begin accepting applications in the coming weeks.
Nordstrom said on Monday evening that it planned to temporarily close its stores — including Nordstrom Rack and Trunk Club — for two weeks starting on Tuesday. It will provide pay and benefits for store employees during that time. Sephora also said that it would close its retail stores in the U.S. and Canada through April 3, and pay employees for their scheduled shifts.
Volkswagen said Tuesday it would close most of its European factories because of the coronavirus. The aircraft manufacturer Airbus also said Tuesday it would suspend manufacturing in France and Spain for the next four days while it takes measures to prevent the spread of the virus.
The Philippine Stock Exchange on Tuesday became the first market to close over the coronavirus. In a memorandum on its website, it said trading would stop until further notice.
Laura Ashley, the British brand known for feminine prints and home furnishings inspired by the English countryside, has filed for administration, a form of bankruptcy protection. The company blamed the coronavirus pandemic.
Alexandra Stevenson, Jack Ewing, Jeanna Smialek, Ben Casselman, Jim Tankersley, Niraj Chokshi, Sapna Maheshwari, Liz Alderman, Michael Corkery, Jack Nicas, Daniel Victor, Kevin Granville and Carlos Tejada contributed reporting.Alexandra Stevenson, Jack Ewing, Jeanna Smialek, Ben Casselman, Jim Tankersley, Niraj Chokshi, Sapna Maheshwari, Liz Alderman, Michael Corkery, Jack Nicas, Daniel Victor, Kevin Granville and Carlos Tejada contributed reporting.