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Wall Street Tumbles as Economic Projections Worsen: Live Updates America’s Air Travel Has Come to a Virtual Standstill: Live Updates
(about 1 hour later)
As the coronavirus pandemic spread around the world in February and March, demand for flights quickly started to collapse. World governments enacted travel bans, borders closed, and travelers opted to stay at home in efforts to contain the outbreak. Those efforts have almost entirely halted air travel in the United States.
The number of people screened by the federal government at airport checkpoints fell dramatically each day in March when compared to the same day of the week a year earlier, ending the month at just 7 percent of last year’s volume, according to Transportation Security Administration data.
On March 1, the agency screened about 99 percent of the 2.3 million passengers, airline crew members and airport workers who filtered past its checkpoints on the same day last year. But by Tuesday, the end of the month, only about 146,000 people streamed past the checkpoints, or about 7 percent of the 2 million people screened last year.
Stocks on Wall Street fell sharply on Wednesday, following a slump in global markets, as investors face new projections of the potential scale and economic ramifications of the coronavirus pandemic.
The S&P 500 fell about 3 percent in early trading, extending its losses from March, which was the worst month for stocks since 2008. Stocks fell more than 12 percent last month and are down more than 20 percent this year.
Though the panic-driven, stomach-churning market volatility of recent weeks had subsided in recent days, numerous signs point to dire prospects for the world economy as the pandemic continues its spread. President Trump said at a news conference on Tuesday that the United States would face a “very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 people in the country. And on Wednesday, the United Nations warned of “enhanced instability, enhanced unrest and enhanced conflict.”
And economic readings continue to worsen. On Wednesday, surveys of manufacturing and factory activity in the United States, Europe and Japan showed activity slowing to levels not seen in a decade or more. Investors will get more data on the job market in the United States later this week, with the government reporting weekly jobless claims on Thursday and the unemployment rate on Friday.
Analysts now expect average earnings for S&P 500 companies to fall by 10 percent this quarter, versus the same period last year. That would be the first double-digit percentage decline since 2009, according to FactSet.
The first quarter of this year saw the end of the record-breaking, 11-year bull market in U.S. stocks, a crash in oil prices and the seizing up of Wall Street’s more esoteric markets, among other twists and turns. An enormous fiscal and policy response at the end of March helped undo some of the worst damage. The S&P 500 recouped more than half its losses in the final week of the month after lawmakers passed a $2 trillion spending package, and the Federal Reserve said it would buy an unlimited amount of government-backed debt to keep markets functioning.
Calmer markets do not mean that the worst is over. As people stay home and factories shut down, millions of workers have lost their jobs. Economic data showing the scale of the damage has only just begun to roll in, and Wall Street analysts continue to downgrade expectations for the economy.
On Wednesday, stocks in London and Paris stocks were trading 2 to 4 percent lower, following similar drops in Asia.
Automakers are expected to report a plunge in new-vehicle sales in March as fear of the coronavirus and stay-at-home orders kept consumers from dealerships, adding to the troubles of the country’s largest manufacturing sector.Automakers are expected to report a plunge in new-vehicle sales in March as fear of the coronavirus and stay-at-home orders kept consumers from dealerships, adding to the troubles of the country’s largest manufacturing sector.
Fiat Chrysler said first-quarter sales fell 10 percent as a significant decline in March offset strong sales in January and February.Fiat Chrysler said first-quarter sales fell 10 percent as a significant decline in March offset strong sales in January and February.
Other automakers will report monthly and quarterly totals later on Wednesday.Other automakers will report monthly and quarterly totals later on Wednesday.
Many dealerships had hoped to continue selling cars at the beginning of March, but customer traffic quickly dwindled as it became clear that the virus was spreading rapidly. Many dealerships around the country remain open for repair and maintenance services, often with reduced hours.Many dealerships had hoped to continue selling cars at the beginning of March, but customer traffic quickly dwindled as it became clear that the virus was spreading rapidly. Many dealerships around the country remain open for repair and maintenance services, often with reduced hours.
“The market right now is really shellshocked,” said Brian Benstock, the general manager of Paragon Honda in Queens. He said his service department is “on limp mode” and his sales area is dark.“The market right now is really shellshocked,” said Brian Benstock, the general manager of Paragon Honda in Queens. He said his service department is “on limp mode” and his sales area is dark.
Tom Maletic, a retired pharmaceuticals salesman in Napoleon, Mich., was ready to turn in a 2011 Ford Focus in need of major repairs a week ago, but the virus forced him to put off a purchase. Instead he spent $1,500 on repairs to his Focus, which has 130,000 miles on the odometer.Tom Maletic, a retired pharmaceuticals salesman in Napoleon, Mich., was ready to turn in a 2011 Ford Focus in need of major repairs a week ago, but the virus forced him to put off a purchase. Instead he spent $1,500 on repairs to his Focus, which has 130,000 miles on the odometer.
“My wife said we could get a Mustang, but I wasn’t going to go out shopping for a car,” Mr. Maletic said.“My wife said we could get a Mustang, but I wasn’t going to go out shopping for a car,” Mr. Maletic said.
The sales drop comes as almost all automakers have shut down plants across North America to prevent the spread of the virus among workers.The sales drop comes as almost all automakers have shut down plants across North America to prevent the spread of the virus among workers.
Stocks on Wall Street fell sharply on Wednesday, following a slump in global markets, as investors face new projections of the potential scale and economic ramifications of the coronavirus pandemic.
The S&P 500 fell nearly 3 percent in early trading, extending its losses from March, which was the worst month for stocks since 2008. Stocks fell more than 12 percent last month and are down more than 20 percent this year.
Though the panic-driven, stomach-churning market volatility of recent weeks had subsided in recent days, numerous signs point to dire prospects for the world economy as the pandemic continues its spread. President Trump said at a news conference on Tuesday that the United States would face a “very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 people in the country. And on Wednesday, the United Nations warned of “enhanced instability, enhanced unrest and enhanced conflict.”
And economic readings continue to worsen. On Wednesday, surveys of manufacturing and factory activity in the United States, Europe and Japan showed activity slowing to levels not seen in a decade or more. Investors will get more data on the job market in the United States later this week, with the government reporting weekly jobless claims on Thursday and the unemployment rate on Friday.
The first quarter of this year saw the end of the record-breaking, 11-year bull market in U.S. stocks, a crash in oil prices and the seizing up of Wall Street’s more esoteric markets, among other twists and turns. An enormous fiscal and policy response at the end of March helped undo some of the worst damage. The S&P 500 recouped more than half its losses in the final week of the month after lawmakers passed a $2 trillion spending package, and the Federal Reserve said it would buy an unlimited amount of government-backed debt to keep markets functioning.
Calmer markets do not mean that the worst is over. As people stay home and factories shut down, millions of workers have lost their jobs. Economic data showing the scale of the damage has only just begun to roll in, and Wall Street analysts continue to downgrade expectations for the economy.
On Wednesday, stocks in London and Paris stocks were trading 2 to 4 percent lower, following similar drops in Asia.
Analysts now expect average earnings for S&P 500 companies to fall by 10 percent this quarter, versus the same period last year. That would be the first double-digit percentage decline since 2009, according to FactSet. At the start of the year, notes today’s DealBook newsletter, market watchers thought earnings would grow 6 percent this quarter.
Bear in mind, too, that analysts are a notoriously over-optimistic bunch. Forward-looking earnings estimates routinely drift lower as companies drop hints about trading conditions. The grim news from firms dealing with coronavirus shutdowns does not suggest that this pattern will be broken in the coming months.
Fears are growing that the downturn gripping the global economy could be far more punishing and long lasting than initially feared — potentially enduring into next year and even beyond.Fears are growing that the downturn gripping the global economy could be far more punishing and long lasting than initially feared — potentially enduring into next year and even beyond.
The pandemic is above all a public health emergency. So long as human interaction remains dangerous, business cannot responsibly return to normal. And what was normal before may not be anymore. People may be less inclined to jam into crowded restaurants and concert halls even after the virus is contained.The pandemic is above all a public health emergency. So long as human interaction remains dangerous, business cannot responsibly return to normal. And what was normal before may not be anymore. People may be less inclined to jam into crowded restaurants and concert halls even after the virus is contained.
The abrupt halt of commercial activity threatens to impose economic pain so profound and enduring in every region of the world at once that recovery could take years. The losses to companies, many already saturated with debt, risk setting off a financial crisis of cataclysmic proportions.The abrupt halt of commercial activity threatens to impose economic pain so profound and enduring in every region of the world at once that recovery could take years. The losses to companies, many already saturated with debt, risk setting off a financial crisis of cataclysmic proportions.
“I feel like the 2008 financial crisis was just a dry run for this,” said Kenneth S. Rogoff, a Harvard economist and co-author of a history of financial crises, “This Time Is Different: Eight Centuries of Financial Folly.”“I feel like the 2008 financial crisis was just a dry run for this,” said Kenneth S. Rogoff, a Harvard economist and co-author of a history of financial crises, “This Time Is Different: Eight Centuries of Financial Folly.”
“This is already shaping up as the deepest dive on record for the global economy for over 100 years,” he said. “Everything depends on how long it lasts, but if this goes on for a long time, it’s certainly going to be the mother of all financial crises.”“This is already shaping up as the deepest dive on record for the global economy for over 100 years,” he said. “Everything depends on how long it lasts, but if this goes on for a long time, it’s certainly going to be the mother of all financial crises.”
The Treasury Department and the Federal Reserve are racing to finalize the development of a Main Street lending program aimed at helping mid-market companies along with a new program to buttress states and municipalities suffering financially from the coronavirus pandemic.
Treasury Secretary Steven Mnuchin said on CNBC on Wednesday that the programs were part of the Trump administration’s ongoing efforts to stimulate an economy that is facing a deep recession. Mr. Mnuchin said he was also talking with members of Congress about legislation that would boost investment in the nation’s infrastructure and that he was prepared to ask for more money to support small business loans.
“Jay Powell and I are working around-the-clock at providing liquidity into the economy,” Mr. Mnuchin said.
Mr. Mnuchin would not reveal the timing of the new Fed programs, but said they would be coming shortly.
“We want to get up and running so that they’re available to American business and American workers quickly,” he said.
Mr. Mnuchin and Mr. Powell have emerged as the two most powerful players in the economic response to the coronavirus, turning what was a collegial friendship into a vital partnership.
Start-ups have always been risky, designed to grow fast or die, but the coronavirus pandemic is turbocharging Silicon Valley’s natural selection and causing a shake-up so sudden it has defied comparison.Start-ups have always been risky, designed to grow fast or die, but the coronavirus pandemic is turbocharging Silicon Valley’s natural selection and causing a shake-up so sudden it has defied comparison.
In just a few weeks, more than 50 start-ups have cut or furloughed roughly 6,000 employees, according to a tally by The New York Times. Plans for initial public offerings are delayed. And funding is drying up for many young tech companies.In just a few weeks, more than 50 start-ups have cut or furloughed roughly 6,000 employees, according to a tally by The New York Times. Plans for initial public offerings are delayed. And funding is drying up for many young tech companies.
Start-ups in some areas — telemedicine, food delivery, online learning, remote work, gaming — are thriving amid the quarantines.Start-ups in some areas — telemedicine, food delivery, online learning, remote work, gaming — are thriving amid the quarantines.
But at ClassPass, which offers a membership program for fitness classes, more than 95 percent of its revenue evaporated in just 10 days as studios and gyms around the world shut down.But at ClassPass, which offers a membership program for fitness classes, more than 95 percent of its revenue evaporated in just 10 days as studios and gyms around the world shut down.
The fallout is hitting prominent start-ups as well. Airbnb, the home rental start-up valued at $31 billion, has stopped hiring and has suspended $800 million of marketing. Bird, an electric scooter start-up, laid off 30 percent of its staff last week, while Everlane, an apparel company, cut or furloughed hundreds of workers.The fallout is hitting prominent start-ups as well. Airbnb, the home rental start-up valued at $31 billion, has stopped hiring and has suspended $800 million of marketing. Bird, an electric scooter start-up, laid off 30 percent of its staff last week, while Everlane, an apparel company, cut or furloughed hundreds of workers.
There were signs that the boom times were shaky even before the coronavirus brought wide swaths of the U.S. economy to a halt. But the pain is now deeper and most likely just beginning, especially as investors, already bruised by a string of disappointing initial public offerings last year, become even more cautious.There were signs that the boom times were shaky even before the coronavirus brought wide swaths of the U.S. economy to a halt. But the pain is now deeper and most likely just beginning, especially as investors, already bruised by a string of disappointing initial public offerings last year, become even more cautious.
As the coronavirus pandemic spread around the world in February and March, demand for flights quickly started to collapse. World governments enacted travel bans, borders closed, and travelers opted to stay at home in efforts to contain the outbreak. Those efforts have almost entirely halted air travel in the United States.
The number of people screened by the federal government at airport checkpoints fell dramatically each day in March when compared to the same day of the week a year earlier, ending the month at just 7 percent of last year’s volume, according to Transportation Security Administration data.
On March 1, the agency screened about 99 percent of the 2.3 million passengers, airline crew members and airport workers who filtered past its checkpoints on the same day last year. But by Tuesday, the end of the month, only about 146,000 people streamed past the checkpoints, or about 7 percent of the 2 million people screened last year.
The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.
Global desperation to protect front-line medical workers battling the coronavirus epidemic has spurred a global scramble for masks and other protective gear.Global desperation to protect front-line medical workers battling the coronavirus epidemic has spurred a global scramble for masks and other protective gear.
The White House said over the weekend that it had organized 22 flights to airlift personal protection equipment. The aim is to resupply hospitals that are within 72 hours of running out of protection equipment, said Gregory Forrester, the chief executive of National Voluntary Organizations Active in Disaster.The White House said over the weekend that it had organized 22 flights to airlift personal protection equipment. The aim is to resupply hospitals that are within 72 hours of running out of protection equipment, said Gregory Forrester, the chief executive of National Voluntary Organizations Active in Disaster.
“If any one of these planes don’t take off,” he said, “that’s going to be an issue.”“If any one of these planes don’t take off,” he said, “that’s going to be an issue.”
China has become a major part of the solution. Already a giant in mask manufacturing, it has ramped up production to nearly 12 times its earlier level. The huge mobilization effort has involved redesigning freight train routes and sending large numbers of workers across the country in sealed buses.China has become a major part of the solution. Already a giant in mask manufacturing, it has ramped up production to nearly 12 times its earlier level. The huge mobilization effort has involved redesigning freight train routes and sending large numbers of workers across the country in sealed buses.
The Chinese government has encouraged global deals, but buying and selling masks is no easy feat. Traders, some just weeks into their new but unstable careers, have to navigate confusion, fraud attempts, byzantine customs laws and other barriers.The Chinese government has encouraged global deals, but buying and selling masks is no easy feat. Traders, some just weeks into their new but unstable careers, have to navigate confusion, fraud attempts, byzantine customs laws and other barriers.
Whiting Petroleum, an oil company focused on shale projects in North Dakota and Colorado, said it was filing for Chapter 11 bankruptcy protection, citing “the severe downturn in oil and gas prices driven by uncertainty around the duration of the Saudi/Russia oil price war and the Covid-19 pandemic.” Whiting, which has roughly $1 billion of debt coming due over the next year, said it had reached an agreement in principle with some creditors on a comprehensive restructuring.Whiting Petroleum, an oil company focused on shale projects in North Dakota and Colorado, said it was filing for Chapter 11 bankruptcy protection, citing “the severe downturn in oil and gas prices driven by uncertainty around the duration of the Saudi/Russia oil price war and the Covid-19 pandemic.” Whiting, which has roughly $1 billion of debt coming due over the next year, said it had reached an agreement in principle with some creditors on a comprehensive restructuring.
BP, the London-based oil giant, said on Wednesday that it was cutting capital spending for 2020 to $12 billion, around 25 percent less than earlier guidance, in response to the fallout from the coronavirus pandemic. Among the trims are $1 billion from shale drilling and other “onshore” activity and another $1 billion from refining and marketing. Investors pulled more than $83 billion out of equity and debt investments in emerging markets, new data from the Institute of International Finance shows. “This record-breaking outflow episode is significantly larger than the one seen during the global financial crisis,” economists at IIF wrote in a note on Wednesday.
Japan’s factory activity in March slowed to its lowest rate in a decade and its manufacturers are increasingly pessimistic about the state of the country’s economy, data showed on Wednesday, in the latest indications of the pressure that the coronavirus is putting on Japanese businesses.
Banks in Britain, including Barclays, HSBC and RBS, said they would not pay dividends or carry out share buybacks this year. The supervisory arm of the Bank of England, which had requested the move, also encouraged the banks not to award cash bonuses to senior staff members this year. The European Central Bank has issued a similar request to eurozone banks.Banks in Britain, including Barclays, HSBC and RBS, said they would not pay dividends or carry out share buybacks this year. The supervisory arm of the Bank of England, which had requested the move, also encouraged the banks not to award cash bonuses to senior staff members this year. The European Central Bank has issued a similar request to eurozone banks.
Some workers at Whole Foods held a sickout on Tuesday seeking to pressure the company to provide paid leave for those who choose to quarantine and to double the pay of those who work during the pandemic. There appeared to be at least dozens who called in sick, based on conversations among organizers in a messaging app that they allowed journalists to join. The company said that it had raised pay $2 per hour through the end of April and was providing two weeks of paid sick leave for workers. Reporting was contributed by Erin Griffith, Alan Rappeport, Neal E. Boudette, Ben Dooley, Peter S. Goodman, Niraj Chokshi, Li Yuan, Keith Bradsher, Noam Scheiber, Amie Tsang, Jason Karaian, Carlos Tejada, Stanley Reed, Mohammed Hadi, Kevin Granville and Daniel Victor.
Reporting was contributed by Erin Griffith, Neal E. Boudette, Ben Dooley, Peter S. Goodman, Niraj Chokshi, Li Yuan, Keith Bradsher, Noam Scheiber, Amie Tsang, Jason Karaian, Carlos Tejada, Stanley Reed, Mohammed Hadi, Kevin Granville and Daniel Victor.