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Wall Street Climbs After Monday’s Slump: Live Updates Wall Street Climbs After Monday’s Slump: Live Updates
(32 minutes 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 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.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 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.
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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.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.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.”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 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.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.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.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.
Europe’s auto industry was virtually at a standstill on Tuesday after Daimler, Ford Motor and Nissan joined Volkswagen and most other major carmakers in shutting down their manufacturing operations on the Continent. Pressure mounted for carmakers to do the same in the United States.
Ford said the suspension would take effect Thursday and last “for a number of weeks” depending on the spread of the pandemic, as well as disruptions to supply chains, government restrictions on travel, and declines in sales.
The United Automobile Workers union has called on the three Detroit carmakers to shut down manufacturing plants across the United States for two weeks to prevent the spread of the coronavirus, a request the companies have so far denied.
In an email sent to U.A.W. members on Tuesday, the union’s president, Rory Gamble, said he had requested the shutdown in a meeting on Sunday with the chief executives of General Motors, Ford Motor, and Fiat Chrysler, based on the guidelines from the Centers for Disease Control and Prevention and the World Health Organization.
“Your U.A.W. leadership feels very strongly, and argued very strongly, that this is the most responsible course of action,” Mr. Gamble said in the email.
The automakers have responded by taking actions to protect workers, such as extending down time between shifts to allow for sanitizing of equipment and common areas in the plants.
Jim Cain, a G.M. spokesman, said the company was trying to keep factory workers safe while being mindful of the potential economic impact of a broad shutdown and of the hardship employees could face if they were no longer earning paychecks.
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 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 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 the Treasury Department will provide $10 billion of credit protection to the Fed using its 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.
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.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.
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.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.
“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.“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.
Companies that work with brands report that Amazon is still allowing baby products, pet suppliers and other categories it deems essential into its warehouses.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.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.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.
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.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, according to the 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.
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.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.
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.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.
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.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.
Reporting was contributed by Alexandra Stevenson, Julie Creswell, Neal Boudette, 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.
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.