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Stocks Inch Higher as Wall Street’s Turmoil Continues: Live Updates Stocks Inch Higher as Wall Street’s Turmoil Continues: Live Updates
(32 minutes later)
Stocks ended slightly higher on Thursday, after a volatile session, as investors weighed fresh evidence of a sharp economic decline against efforts in the United States and Europe to offset the damage.Stocks ended slightly higher on Thursday, after a volatile session, as investors weighed fresh evidence of a sharp economic decline against efforts in the United States and Europe to offset the damage.
By the end of the day, which had started with a sharp drop on Wall Street, the S&P 500 rose by less than 1 percent, and shares in Europe also scratched out small gains. Oil prices, which had collapsed by more than 20 percent on Wednesday, sharply rebounded.By the end of the day, which had started with a sharp drop on Wall Street, the S&P 500 rose by less than 1 percent, and shares in Europe also scratched out small gains. Oil prices, which had collapsed by more than 20 percent on Wednesday, sharply rebounded.
The uneven trading came as the steady drumbeat of bad news about the spread of the coronavirus, and its impact on the economy, continued.The uneven trading came as the steady drumbeat of bad news about the spread of the coronavirus, and its impact on the economy, continued.
In the United States, the number of workers filing first-time claims for unemployment insurance surged, government data released on Thursday showed. Those figures do not reflect the sharp cuts made in the past few days as companies quickly scale down operations. And a survey of manufacturers by the Federal Reserve Bank of Philadelphia showed a sudden drop off in activity.In the United States, the number of workers filing first-time claims for unemployment insurance surged, government data released on Thursday showed. Those figures do not reflect the sharp cuts made in the past few days as companies quickly scale down operations. And a survey of manufacturers by the Federal Reserve Bank of Philadelphia showed a sudden drop off in activity.
Economists in recent days have made increasingly dire predictions about the likely damage to the job market, with many predicting that the unemployment rate would quickly surpass the 10 percent level it hit in the worst of the last recession.Economists in recent days have made increasingly dire predictions about the likely damage to the job market, with many predicting that the unemployment rate would quickly surpass the 10 percent level it hit in the worst of the last recession.
“This is a body blow to the economy unlike anything we’ve experienced in recent memory,” said Patrick Anderson, an economist in East Lansing, Mich. “Even the Great Recession did not include shuttering of businesses by government order at the same time that people were being told to say home and distance themselves.”“This is a body blow to the economy unlike anything we’ve experienced in recent memory,” said Patrick Anderson, an economist in East Lansing, Mich. “Even the Great Recession did not include shuttering of businesses by government order at the same time that people were being told to say home and distance themselves.”
Overnight, the European Central Bank unveiled a huge bond-buying program aimed at preventing economic calamity, and the Fed presented a plan to support money market funds, which are threatened when there is a rush for cash. U.S. officials made progress on passage of stimulus efforts to keep the American economy running. The Bank of England on Thursday announced that it would reduce its benchmark interest rate to 0.1 percent and increase its buying of British government bonds and corporate bonds.Overnight, the European Central Bank unveiled a huge bond-buying program aimed at preventing economic calamity, and the Fed presented a plan to support money market funds, which are threatened when there is a rush for cash. U.S. officials made progress on passage of stimulus efforts to keep the American economy running. The Bank of England on Thursday announced that it would reduce its benchmark interest rate to 0.1 percent and increase its buying of British government bonds and corporate bonds.
On Thursday, Treasury Secretary Steven Mnuchin said that the White House’s economic relief plan included sending checks of $1,000 for every American adult and $500 per child within three weeks. If the crisis continues, the plan would be to send checks of the same amounts again in May.On Thursday, Treasury Secretary Steven Mnuchin said that the White House’s economic relief plan included sending checks of $1,000 for every American adult and $500 per child within three weeks. If the crisis continues, the plan would be to send checks of the same amounts again in May.
But news of efforts to bolster the economy has been matched by a sharp escalation in the number of coronavirus cases in Europe and the United States, and fresh evidence of the impact on businesses. On Thursday, Ford Motor said that it would suspend its dividend payment and draw down about $15 billion from two lines of credit to help offset the impact of coronavirus-related production shutdowns, becoming the latest company to take such measures to cushion itself.But news of efforts to bolster the economy has been matched by a sharp escalation in the number of coronavirus cases in Europe and the United States, and fresh evidence of the impact on businesses. On Thursday, Ford Motor said that it would suspend its dividend payment and draw down about $15 billion from two lines of credit to help offset the impact of coronavirus-related production shutdowns, becoming the latest company to take such measures to cushion itself.
Tesla, the luxury electric carmaker, said on Thursday that it would temporarily shut down production at its factory in the San Francisco Bay Area starting Monday.Tesla, the luxury electric carmaker, said on Thursday that it would temporarily shut down production at its factory in the San Francisco Bay Area starting Monday.
The company was under increasing pressure from local government officials and workers in recent days to stop making cars. Much of the Bay Area, including Tesla’s factory in Fremont, are under orders to shelter in place.The company was under increasing pressure from local government officials and workers in recent days to stop making cars. Much of the Bay Area, including Tesla’s factory in Fremont, are under orders to shelter in place.
Earlier on Thursday, Kimberly Petersen, the chief of the Fremont Police Department, and other city officials had planned to meet with Tesla management to discuss compliance with an order by Alameda County limiting the operations of nonessential businesses, the department said on Twitter.Earlier on Thursday, Kimberly Petersen, the chief of the Fremont Police Department, and other city officials had planned to meet with Tesla management to discuss compliance with an order by Alameda County limiting the operations of nonessential businesses, the department said on Twitter.
President Trump said on Thursday that he would support placing restrictions on companies that receive government help to deal with the economic ramifications of the coronavirus, including limiting their ability to buy back their own shares.President Trump said on Thursday that he would support placing restrictions on companies that receive government help to deal with the economic ramifications of the coronavirus, including limiting their ability to buy back their own shares.
“As far as I’m concerned, conditions like that would be OK,” Mr. Trump said at a news conference.“As far as I’m concerned, conditions like that would be OK,” Mr. Trump said at a news conference.
As Washington considers extending vast amounts of financial support to industries affected by the virus, many lawmakers have expressed concern that any bailouts come with significant strings attached, including limits on stock buybacks and executive compensation.As Washington considers extending vast amounts of financial support to industries affected by the virus, many lawmakers have expressed concern that any bailouts come with significant strings attached, including limits on stock buybacks and executive compensation.
Those buybacks are good for shareholders, including senior executives, who tend to be big owners of their companies’ stock. A company purchasing its own shares helps bolster its stock price, and American businesses have spent about $1.4 trillion on buybacks over the past three years.Those buybacks are good for shareholders, including senior executives, who tend to be big owners of their companies’ stock. A company purchasing its own shares helps bolster its stock price, and American businesses have spent about $1.4 trillion on buybacks over the past three years.
The Trump administration has in the past praised the surge in buybacks, including in the 2019 Economic Report of the President.The Trump administration has in the past praised the surge in buybacks, including in the 2019 Economic Report of the President.
Mr. Trump also suggested that he would be open to taking equity stakes in corporations that require bailouts, a move that would give the federal government more oversight over the business and allow them to potentially recoup their investment.Mr. Trump also suggested that he would be open to taking equity stakes in corporations that require bailouts, a move that would give the federal government more oversight over the business and allow them to potentially recoup their investment.
Larry Kudlow, the director of the National Economic Council, said earlier this week that the idea was under consideration, noting that taking such a stake in General Motors during the 2008 financial crisis worked out well for the government. Asked about the idea on Thursday, Treasury Secretary Steven Mnuchin was noncommittal.Larry Kudlow, the director of the National Economic Council, said earlier this week that the idea was under consideration, noting that taking such a stake in General Motors during the 2008 financial crisis worked out well for the government. Asked about the idea on Thursday, Treasury Secretary Steven Mnuchin was noncommittal.
“We’re looking at making secured loans on market terms,” Mr. Mnuchin said, referring to industries such as airlines. “We’ll see whether that includes equity or doesn’t include equity.”“We’re looking at making secured loans on market terms,” Mr. Mnuchin said, referring to industries such as airlines. “We’ll see whether that includes equity or doesn’t include equity.”
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Many of the companies in line for potential bailouts have been enthusiastic repurchases of their own shares in recent years. The four biggest U.S. airlines — American, Delta, Southwest and United — collectively bought back $39 billion in stock from 2015 to 2019.Many of the companies in line for potential bailouts have been enthusiastic repurchases of their own shares in recent years. The four biggest U.S. airlines — American, Delta, Southwest and United — collectively bought back $39 billion in stock from 2015 to 2019.
Over the same period, three large cruise lines — Carnival, Norwegian and Royal Caribbean — spent just over $8 billion on their own shares. Boeing alone spent $35 billion on stock buybacks over the past five years, halting the purchases in the middle of last year, after its 737 MAX planes were grounded worldwide.Over the same period, three large cruise lines — Carnival, Norwegian and Royal Caribbean — spent just over $8 billion on their own shares. Boeing alone spent $35 billion on stock buybacks over the past five years, halting the purchases in the middle of last year, after its 737 MAX planes were grounded worldwide.
Layoffs rose sharply last week as the effects of the coronavirus pandemic began to ripple through the economy. Some 281,000 Americans filed first-time claims for unemployment insurance, up by 33 percent from 211,000 the week before, the Labor Department said Thursday. On a percentage basis, the increase was among the largest one-week surges on record.Layoffs rose sharply last week as the effects of the coronavirus pandemic began to ripple through the economy. Some 281,000 Americans filed first-time claims for unemployment insurance, up by 33 percent from 211,000 the week before, the Labor Department said Thursday. On a percentage basis, the increase was among the largest one-week surges on record.
The Labor Department said the increase was “clearly attributable to impacts from the Covid-19 virus” and noted that many states reported a rise in jobless claims from workers in food services, accommodation and travel.The Labor Department said the increase was “clearly attributable to impacts from the Covid-19 virus” and noted that many states reported a rise in jobless claims from workers in food services, accommodation and travel.
Still, the data released Thursday was for claims filed from March 8-14, before the outbreak began to shut down restaurants, bars and retail stores in much of the country. The next report, which will reflect the first wave of closings, will almost certainly be much worse.Still, the data released Thursday was for claims filed from March 8-14, before the outbreak began to shut down restaurants, bars and retail stores in much of the country. The next report, which will reflect the first wave of closings, will almost certainly be much worse.
The Federal Reserve said Thursday it would extend currency swap lines to nine additional countries, an attempt to keep dollars flowing to banks around the world as the coronavirus disrupts every aspect of business, creating a cash crunch in many nations. On Thursday, Kohl’s and TJX, the owner of T.J. Maxx, Marshalls and Home Goods, decided to follow many major retail chains in temporarily closing stores after initially resisting the move. Kohl’s said it would close its stores nationwide on Thursday at 7 p.m. “through at least April 1.” TJX said on its website that it would close its stores globally, along with its online businesses, for two weeks.
The Fed has a history of creating swap lines to help foreign central banks deliver U.S. dollar funding to financial institutions in their regions amid market stress. Such agreements were used extensively during the 2008 financial crisis. Indeed, the new arrangements are with the same countries the Fed struck such agreements with during that crisis: Singapore, South Korea, Brazil, Sweden, Australia, New Zealand, Mexico, Norway and Denmark. Simon Property Group, America’s biggest mall operator, and Taubman Centers, which oversees malls including the Mall at Short Hills in New Jersey, announced temporary closures on Wednesday and Thursday as well.
It’s the latest in a series of steps by the central bank to keep the financial system functioning. Late Wednesday night, the Fed said that it would offer emergency loans to money market mutual funds. Employees for retail chains that sell nonessential goods have been expressing fear about their commutes and working in stores while the coronavirus spreads. Some chains like GameStop and Starbucks remained open as of Thursday afternoon.
General Motors and Ford Motor told the White House that they would be willing to produce ventilators if the administration was interested in mobilizing private businesses to manufacture equipment needed to respond to the coronavirus.
Neither company has detailed plans to produce the devices and said the discussions were preliminary. In a statement, G.M. said the topic came up on Wednesday when the company’s chief executive, Mary T. Barra, called to inform the White House that G.M. had decided to temporarily shut down plants to prevent the spread of the disease among workers.
Separately, Elon Musk, the chief executive of Tesla, said on Twitter that his electric car company would also produce ventilators “if there is a shortage.” Mayor Bill de Blasio of New York responded soon after, saying that the city was interested in buying ventilators and “could use your help.”
With its largest division (theme parks and consumer products) essentially closed, its movie and television studios idled and its ESPN operation with no live sports to broadcast, the Walt Disney Company’s market capitalization has fallen by about $57 billion over the last month.With its largest division (theme parks and consumer products) essentially closed, its movie and television studios idled and its ESPN operation with no live sports to broadcast, the Walt Disney Company’s market capitalization has fallen by about $57 billion over the last month.
Disney, which has a new chief executive, said in a regulatory filing on Thursday that it had become “challenging” to estimate future performance for various divisions.Disney, which has a new chief executive, said in a regulatory filing on Thursday that it had become “challenging” to estimate future performance for various divisions.
Disney’s primary competitors have also been in free fall. But those giants have more diversified holdings. Comcast, with its internet and cable hookup unit offsetting its NBCUniversal movie and theme park division, has shed about $30 billion in value over the last month. AT&T, which owns WarnerMedia, home to HBO, TNT, TBS, CNN and Warner Bros., is down by about $41 billion.Disney’s primary competitors have also been in free fall. But those giants have more diversified holdings. Comcast, with its internet and cable hookup unit offsetting its NBCUniversal movie and theme park division, has shed about $30 billion in value over the last month. AT&T, which owns WarnerMedia, home to HBO, TNT, TBS, CNN and Warner Bros., is down by about $41 billion.
Nikki Haley, the former U.N. ambassador, resigned from the board of Boeing, the company said in a regulatory filing on Thursday. “I cannot support a move to lean on the federal government for a stimulus or bailout,” Ms. Haley said in a letter to the board.Nikki Haley, the former U.N. ambassador, resigned from the board of Boeing, the company said in a regulatory filing on Thursday. “I cannot support a move to lean on the federal government for a stimulus or bailout,” Ms. Haley said in a letter to the board.
Fifty-nine percent of Americans said last week that they were somewhat or very worried that they or a family member would be exposed to the virus, according to a poll conducted for The New York Times by the online research firm SurveyMonkey. That’s up from 49 percent a week earlier. Eighty-four percent said they were worried about the outbreak’s effect on the economy, up from 73 percent in the first week of March.Fifty-nine percent of Americans said last week that they were somewhat or very worried that they or a family member would be exposed to the virus, according to a poll conducted for The New York Times by the online research firm SurveyMonkey. That’s up from 49 percent a week earlier. Eighty-four percent said they were worried about the outbreak’s effect on the economy, up from 73 percent in the first week of March.
Domino’s Pizza announced on Monday that it would hire 1,000 workers in the greater Chicago area — delivery drivers, customer service representatives and managers — to meet an increased demand for deliveries.Domino’s Pizza announced on Monday that it would hire 1,000 workers in the greater Chicago area — delivery drivers, customer service representatives and managers — to meet an increased demand for deliveries.
Uber rides fell by 45 percent from the previous year in Hong Kong at the height of the outbreak there, while in Seattle rides were down by 60 to 70 percent, the company said.Uber rides fell by 45 percent from the previous year in Hong Kong at the height of the outbreak there, while in Seattle rides were down by 60 to 70 percent, the company said.
Reporting and research were contributed by Sapna Maheshwari, Ben Casselman, Conor Dougherty, Emily Flitter, Isabella Kwai, Jack Ewing, Brooks Barnes, Niraj Chokshi, Neal E. Boudette, Carlos Tejada, Kate Conger, Jason Karaian, Amie Tsang, Heather Murphy, Matt Phillips, Jeanna Smialek, Jim Tankersley, Mohammed Hadi and Katie Robertson.
Reporting and research were contributed by Ben Casselman, Conor Dougherty, Emily Flitter, Isabella Kwai, Jack Ewing, Brooks Barnes, Niraj Chokshi, Neal E. Boudette, Carlos Tejada, Kate Conger, Jason Karaian, Amie Tsang, Heather Murphy, Matt Phillips, Jeanna Smialek, Jim Tankersley, Mohammed Hadi and Katie Robertson.