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Stocks Rally as Oil Spikes on Hopes of Production Cuts: Live Updates Stocks Rally as Oil Soars on Hopes of Production Cuts: Live Updates
(32 minutes later)
Oil prices surged, setting off a rally in shares of energy companies, after President Trump said on Thursday that he expected that Saudi Arabia and Russia would substantially cut their oil production to halt the collapse of prices.Oil prices surged, setting off a rally in shares of energy companies, after President Trump said on Thursday that he expected that Saudi Arabia and Russia would substantially cut their oil production to halt the collapse of prices.
Mr. Trump said in a tweet that he spoke with Crown Prince Mohammed bin Salman, who had spoken with President Vladimir V. Putin. “I expect & hope that they will be cutting back approximately 10 million barrels,” he said. That figure represents about 10 percent of normal world consumption. The president later said the cut could be as much as 15 million barrels.Mr. Trump said in a tweet that he spoke with Crown Prince Mohammed bin Salman, who had spoken with President Vladimir V. Putin. “I expect & hope that they will be cutting back approximately 10 million barrels,” he said. That figure represents about 10 percent of normal world consumption. The president later said the cut could be as much as 15 million barrels.
Saudi Arabia called on Thursday for an urgent meeting of the Organization of the Petroleum Exporting Countries and other oil-producing countries with the “aim of reaching a fair agreement to restore” balance in the oil markets. The Saudis said in a statement that they were acting to support the global economy and in “appreciation” of Mr. Trump’s request.Saudi Arabia called on Thursday for an urgent meeting of the Organization of the Petroleum Exporting Countries and other oil-producing countries with the “aim of reaching a fair agreement to restore” balance in the oil markets. The Saudis said in a statement that they were acting to support the global economy and in “appreciation” of Mr. Trump’s request.
The Kremlin denied that Mr. Putin had spoken to the Saudi crown prince, as Mr. Trump had said in his Twitter message. “No, there was no conversation,” Dmitri S. Peskov, spokesman for Mr. Putin, told the Interfax news agency.The Kremlin denied that Mr. Putin had spoken to the Saudi crown prince, as Mr. Trump had said in his Twitter message. “No, there was no conversation,” Dmitri S. Peskov, spokesman for Mr. Putin, told the Interfax news agency.
Still, crude oil futures, which had already been climbing on Thursday, surged and shares of oil and gas companies rallied. West Texas Intermediate, the U.S. crude benchmark, rose about 25 percent, and Occidental Petroleum was the best performing stock in the S&P 500, with a gain of about 19 percent. Apache rose nearly 17 percent, and Halliburton gained more than 13 percent.Still, crude oil futures, which had already been climbing on Thursday, surged and shares of oil and gas companies rallied. West Texas Intermediate, the U.S. crude benchmark, rose about 25 percent, and Occidental Petroleum was the best performing stock in the S&P 500, with a gain of about 19 percent. Apache rose nearly 17 percent, and Halliburton gained more than 13 percent.
The rally bolstered the stock market, with the S&P 500 ending the day up more than 2 percent.The rally bolstered the stock market, with the S&P 500 ending the day up more than 2 percent.
Oil prices had been hammered as the coronavirus pandemic all but eliminated travel and damped demand for energy. A price war that broke out between Saudi Arabia and Russia last month intensified the decline. After the countries failed to reach a deal on production cuts, both instead increased output in an effort to gain market share.Oil prices had been hammered as the coronavirus pandemic all but eliminated travel and damped demand for energy. A price war that broke out between Saudi Arabia and Russia last month intensified the decline. After the countries failed to reach a deal on production cuts, both instead increased output in an effort to gain market share.
The combination of slumping demand and the contest between two of the world’s largest oil producers had pushed crude oil prices down by 55 percent in March alone, wreaking havoc on the energy industry, with oil companies slashing budgets, and refineries cutting production of gasoline, diesel and jet fuel.The combination of slumping demand and the contest between two of the world’s largest oil producers had pushed crude oil prices down by 55 percent in March alone, wreaking havoc on the energy industry, with oil companies slashing budgets, and refineries cutting production of gasoline, diesel and jet fuel.
The possibility of some relief to the industry was also welcomed by stock investors looking for some good news. Earlier on Thursday, a report on jobless claims showed that 6.6 million people filed for unemployment benefits last week in the latest sign of the economic damage wrought across the country by the coronavirus pandemic.The possibility of some relief to the industry was also welcomed by stock investors looking for some good news. Earlier on Thursday, a report on jobless claims showed that 6.6 million people filed for unemployment benefits last week in the latest sign of the economic damage wrought across the country by the coronavirus pandemic.
Businesses dependent on consumer spending were battered as a result. Retailers ranging from Gap to Walgreens Boots Alliance fell. Live Nation Entertainment, which produces concerts and sells tickets to events, was one of the worst-performing stocks in the S&P 500, after falling about 13 percent. Kohls fell about 10 percent.Businesses dependent on consumer spending were battered as a result. Retailers ranging from Gap to Walgreens Boots Alliance fell. Live Nation Entertainment, which produces concerts and sells tickets to events, was one of the worst-performing stocks in the S&P 500, after falling about 13 percent. Kohls fell about 10 percent.
More than 6.6 million people filed new claims for unemployment benefits last week, the Labor Department said Thursday, setting a grim record for the second straight week.More than 6.6 million people filed new claims for unemployment benefits last week, the Labor Department said Thursday, setting a grim record for the second straight week.
The latest claims brought the two-week total to nearly 10 million.The latest claims brought the two-week total to nearly 10 million.
The speed and scale of the job losses is without precedent. Until last month, the worst week for unemployment filings was 695,000 in 1982.The speed and scale of the job losses is without precedent. Until last month, the worst week for unemployment filings was 695,000 in 1982.
“What usually takes months or quarters to happen in a recession is happening in a matter of weeks,” said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.“What usually takes months or quarters to happen in a recession is happening in a matter of weeks,” said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.
A month ago, most forecasters still thought the United States could avoid a recession. Today, with the pandemic shuttering businesses and forcing vast layoffs, many economists are expecting a decline in gross domestic product that rivals the worst periods of the Great Depression.A month ago, most forecasters still thought the United States could avoid a recession. Today, with the pandemic shuttering businesses and forcing vast layoffs, many economists are expecting a decline in gross domestic product that rivals the worst periods of the Great Depression.
The Labor Department’s report on Thursday that 6.6 million Americans filed claims for unemployment benefits last week only increases the pressure on President Trump and members of Congress to ready another package to further aid workers and businesses through the coronavirus crisis.The Labor Department’s report on Thursday that 6.6 million Americans filed claims for unemployment benefits last week only increases the pressure on President Trump and members of Congress to ready another package to further aid workers and businesses through the coronavirus crisis.
The $2.2 trillion package that Mr. Trump signed into law last week includes enhanced benefits for unemployed workers for up to four months, along with aid for large and small businesses and direct payments to millions of individuals, as the country struggles through a shutdown of economic activity meant to slow the spread of the virus.The $2.2 trillion package that Mr. Trump signed into law last week includes enhanced benefits for unemployed workers for up to four months, along with aid for large and small businesses and direct payments to millions of individuals, as the country struggles through a shutdown of economic activity meant to slow the spread of the virus.
Many economists have warned that the $350 billion included in that most recent package for aid to small businesses will not prove sufficient to help all of the companies that might otherwise go under during the shutdowns.Many economists have warned that the $350 billion included in that most recent package for aid to small businesses will not prove sufficient to help all of the companies that might otherwise go under during the shutdowns.
R. Glenn Hubbard, a Columbia University economist and former adviser to President George W. Bush, said in an interview that the necessary assistance was likely to be “closer to $1 trillion,” which would require another $650 billion appropriation from Congress.R. Glenn Hubbard, a Columbia University economist and former adviser to President George W. Bush, said in an interview that the necessary assistance was likely to be “closer to $1 trillion,” which would require another $650 billion appropriation from Congress.
Democrats, including Speaker Nancy Pelosi of California, have pushed for additional payments to reach more Americans, to help people continue to pay their bills through the crisis. Senator Sherrod Brown of Ohio has called for federally funded “hazard pay” for doctors, nurses, grocery store clerks, postal carriers and other workers on the front lines of the virus.Democrats, including Speaker Nancy Pelosi of California, have pushed for additional payments to reach more Americans, to help people continue to pay their bills through the crisis. Senator Sherrod Brown of Ohio has called for federally funded “hazard pay” for doctors, nurses, grocery store clerks, postal carriers and other workers on the front lines of the virus.
Mr. Trump and Democratic leaders have also called for a sweeping investment in infrastructure, like broadband expansion and bridge repair, that could put millions of Americans to work once the crisis abates. Republican leaders in the House and Senate have shown less enthusiasm for many of those ideas.Mr. Trump and Democratic leaders have also called for a sweeping investment in infrastructure, like broadband expansion and bridge repair, that could put millions of Americans to work once the crisis abates. Republican leaders in the House and Senate have shown less enthusiasm for many of those ideas.
The arts-and-crafts chain Hobby Lobby was accused of defying stay-at-home orders in at least four states during the coronavirus outbreak, prompting officials to take action against the retailer.The arts-and-crafts chain Hobby Lobby was accused of defying stay-at-home orders in at least four states during the coronavirus outbreak, prompting officials to take action against the retailer.
The moves by state and local authorities in Colorado, Indiana, Ohio and Wisconsin to shut the stores down came as governors across much of the United States have signed stay-at-home orders and health authorities have urged Americans to practice social distancing. Still, some haven’t heeded the advice, from spring breakers to some megachurches. In Florida, a pastor was arrested after defying virus orders.The moves by state and local authorities in Colorado, Indiana, Ohio and Wisconsin to shut the stores down came as governors across much of the United States have signed stay-at-home orders and health authorities have urged Americans to practice social distancing. Still, some haven’t heeded the advice, from spring breakers to some megachurches. In Florida, a pastor was arrested after defying virus orders.
W. Eric Kuhn, the senior assistant state attorney general of Colorado, where there are 10 stores, sent a cease-and-desist letter to the company after it reopened its stores in the state this week, saying it had violated a March 25 executive order signed by Gov. Jared Polis requiring all businesses to close that were not designated as critical. The letter said that the company had until 5 p.m. on Thursday to comply with the closing order or the state would seek court relief, including a temporary restraining order.W. Eric Kuhn, the senior assistant state attorney general of Colorado, where there are 10 stores, sent a cease-and-desist letter to the company after it reopened its stores in the state this week, saying it had violated a March 25 executive order signed by Gov. Jared Polis requiring all businesses to close that were not designated as critical. The letter said that the company had until 5 p.m. on Thursday to comply with the closing order or the state would seek court relief, including a temporary restraining order.
Ohio’s attorney general, Dave Yost, wrote on Twitter on Wednesday that he had sent a similar cease-and-desist letter to Hobby Lobby and that the company had agreed to close stores in his state, where there are 10.Ohio’s attorney general, Dave Yost, wrote on Twitter on Wednesday that he had sent a similar cease-and-desist letter to Hobby Lobby and that the company had agreed to close stores in his state, where there are 10.
With a $350 billion emergency lending program for small businesses supposed to begin on Friday, bank lobbying groups have told the Treasury Department that the structure is unworkable and creates too much risk. The Congressional Budget Office said on Thursday that it expected unemployment to top 10 percent for the second quarter of 2020 and the economy to contract by 7 percent as the coronavirus takes a toll on economic activity in the United States.
The program, created as part of a $2 trillion spending plan passed by lawmakers last week, offers companies and nonprofit organizations with up to 500 workers a low-interest loan to cover up to two months of payroll and other expenses. Most — and in some cases, all — of the loan will be forgiven if the borrower retains workers and does not cut wages. In a blog post on Thursday, the director of the budget office, Phillip Swagel, wrote the decline “could be much larger” and that the virus had made any economic forecasts highly uncertain.
In letters and telephone calls, the groups have warned the Treasury Department that the program as written will not be workable, and that millions of businesses expecting funds to be approved and released in a matter of hours are likely going to be disappointed if the current government guidance is not updated. Mr. Swagel said the unemployment rate could have reached 12 percent if not for the expected effects of the $2.2 trillion economic rescue package that President Trump signed last week.
The top concern among banks is about their own liability as they try to rush money to borrowers while being required to verify their applications and keep tabs on potential fraud. Banks are concerned that they could be held liable for loans made to borrowers who provide inaccurate or fraudulent information. More ominously, the office does not expect a quick return to rapid economic growth later this year. Instead, Mr. Swagel wrote that its analysts “expected the effects of job losses and business closures to be felt for some time” with the unemployment rate remaining at 9 percent by the end of 2021.
Remuneration for taking on these risks is also a worry. The Independent Community Bankers of America sent a letter to Treasury Secretary Steven Mnuchin on Wednesday complaining that the existing guidelines that call for loans to be made with 0.5 percent interest rates means that banks will not be able to break even on those loans, creating “unacceptable losses” for lenders. The electric car company Tesla said on Thursday that its deliveries jumped 40 percent in the first quarter to 88,400 compared with the same period a year earlier, helped by a new plant in China and expansion into new markets. Deliveries were down 21 percent from the fourth quarter, which is typically the best three-month period for auto sales.
The company said production increased by about 33 percent to 102,672 cars, compared with a year earlier. The company exceeded analysts’ forecasts, and its stock jumped about 10 percent in extended trading, to about $508.
Tesla provided no information about what impact the coronavirus pandemic had on its operation in the first quarter. The company temporarily suspended production at its factory in Fremont, Calif., last month but has resumed making cars at a plant in Shanghai that opened late last year.
Amazon, which has come under fire from employees and politicians for not taking sufficient steps to protect workers on the job during the pandemic, said it would ramp up safety efforts.Amazon, which has come under fire from employees and politicians for not taking sufficient steps to protect workers on the job during the pandemic, said it would ramp up safety efforts.
The company said in a blog post on Thursday that temperature checks, which it began at certain facilities last Sunday, were likely to be put in place across all of its U.S. and European facilities and Whole Foods stores by early next week, and that it was already checking the temperatures of more than 100,000 workers each day. Anyone with a fever of more than 100.4 degrees is sent home and asked to stay home until they are free of fever for three days, the company said.The company said in a blog post on Thursday that temperature checks, which it began at certain facilities last Sunday, were likely to be put in place across all of its U.S. and European facilities and Whole Foods stores by early next week, and that it was already checking the temperatures of more than 100,000 workers each day. Anyone with a fever of more than 100.4 degrees is sent home and asked to stay home until they are free of fever for three days, the company said.
The company also said it was in the process of procuring more hand sanitizer and disinfectant wipes for workers, and that it was beginning to distribute millions of masks to workers.The company also said it was in the process of procuring more hand sanitizer and disinfectant wipes for workers, and that it was beginning to distribute millions of masks to workers.
Workers who learned they had contracted the coronavirus or presumed they had but were unable to get tested could receive extra paid time off, and any worker who had contact with a person with the illness would receive 14 days of paid leave, Amazon said.Workers who learned they had contracted the coronavirus or presumed they had but were unable to get tested could receive extra paid time off, and any worker who had contact with a person with the illness would receive 14 days of paid leave, Amazon said.
Amazon also said that it had already hired 80,000 of the 100,000 new workers it had pledged to hire in mid-March to keep up with recent demand.Amazon also said that it had already hired 80,000 of the 100,000 new workers it had pledged to hire in mid-March to keep up with recent demand.
Delta Air Lines told employees on Wednesday that it would allow flight attendants, baggage handlers, gate agents and other so-called front-line employees who were concerned about the coronavirus to stay home and still get paid. Also on Thursday, the grocery delivery service Instacart, which saw some workers strike over safety concerns earlier this week, announced that it would provide free health and safety kits to workers.
Any employee concerned for their safety would be allowed to take voluntary leave and continue to be paid “in some form,” according to an internal memo to managers that was viewed by The New York Times. Managers, who are referred to as “leaders” at Delta were also instructed not to question the employees about whether they were personally at higher risk and were told to share guidance from the Centers for Disease Control and Prevention on high-risk factors associated with the virus. The kits will include a washable cloth face mask, hand sanitizer and a thermometer, the company said. Workers known as full-service shoppers — who both fill customer orders and deliver them, and who are classified as independent contractors — will be able to order the kits beginning next week, the company said.
“This is the right thing to do for our people who may be part of a high-risk group based on the latest C.D.C. guidance,” the airline said in a statement to The Times. Delta Air Lines told employees that it would allow flight attendants, baggage handlers, gate agents and other so-called front-line employees who were concerned about the coronavirus to stay home and still get paid. Any employee concerned for their safety would be allowed to take voluntary leave and continue to be paid “in some form,” according to an internal memo to managers that was viewed by The New York Times.
Separately, International Airlines Group, which operates British Airways, Iberia and other airlines, said on Thursday it was slashing its schedule by 90 percent in April and May. And British Airways said it had reached an agreement in which each of its 4,000 pilots would take four weeks of unpaid leave over the next two months. Lululemon said on Thursday that its stores in North America and other countries would remain closed until it was safe to reopen and that it would keep employees on payroll through June 1, even if the stores remain shuttered. The company’s senior leaders will take a 20 percent salary cut for three months and its board will forgo a cash retainer, which will go toward a fund for Lululemon employees “facing Covid-19 related hardships.” The athleisure retailer, which recently hit $4 billion in annual sales, will continue to be available for online sales.
A partnership between Ben Silbermann, chief executive of technology company Pinterest, and research groups at institutions and universities including Stanford University and University of Pennsylvania, introduced a new app called How We Feel. The app allows people to report their symptoms to scientists, doctors and public health professionals to aid in research and tracking of the coronavirus.A partnership between Ben Silbermann, chief executive of technology company Pinterest, and research groups at institutions and universities including Stanford University and University of Pennsylvania, introduced a new app called How We Feel. The app allows people to report their symptoms to scientists, doctors and public health professionals to aid in research and tracking of the coronavirus.
Governors and mayors across the country are answering questions about the virus on Twitter, using the hashtags #AsktheGov and #AsktheMayor. Governors from Rhode Island, California, Washington, Illinois, and 10 other states took questions on Thursday, while mayors from at least nine cities said they would answer questions on Friday.Governors and mayors across the country are answering questions about the virus on Twitter, using the hashtags #AsktheGov and #AsktheMayor. Governors from Rhode Island, California, Washington, Illinois, and 10 other states took questions on Thursday, while mayors from at least nine cities said they would answer questions on Friday.
Amazon said on Thursday that it was restricting the sale of N95 masks and large bottles of hand sanitizer to hospitals and government agencies in an effort to ease the supply shortages of medical supplies from the coronavirus. It said small-volume bottles of hand sanitizer and disinfectant wipes for personal use would remain available on the site.Amazon said on Thursday that it was restricting the sale of N95 masks and large bottles of hand sanitizer to hospitals and government agencies in an effort to ease the supply shortages of medical supplies from the coronavirus. It said small-volume bottles of hand sanitizer and disinfectant wipes for personal use would remain available on the site.
Google said on Thursday that it was looking at relaxing some of its restrictions for ads related to the coronavirus to allow hospitals, medical providers, governments and nongovernmental organizations to place advertisements featuring information about the virus or next to virus-related searches. The company had been broadly blocking ads pertaining to the coronavirus since January under its “sensitive events” policy.Google said on Thursday that it was looking at relaxing some of its restrictions for ads related to the coronavirus to allow hospitals, medical providers, governments and nongovernmental organizations to place advertisements featuring information about the virus or next to virus-related searches. The company had been broadly blocking ads pertaining to the coronavirus since January under its “sensitive events” policy.
The aviation unit of General Electric said it would temporarily furlough about half of its staff involved in engine assembly and component manufacturing. The furlough will last four weeks and the thousands of affected employees will still receive health benefits and at least some pay.The aviation unit of General Electric said it would temporarily furlough about half of its staff involved in engine assembly and component manufacturing. The furlough will last four weeks and the thousands of affected employees will still receive health benefits and at least some pay.
Amazon announced that its Prime Video service had partnered with the SXSW Film Festival to offer consumers the chance to view some of the movies that were scheduled to screen during the March event in Austin, Tex. The 10-day virtual experience will be provided free to customers with an Amazon account. SXSW filmmakers have until April 7 to opt into the festival, which Amazon hopes to introduce by the end of the month.Amazon announced that its Prime Video service had partnered with the SXSW Film Festival to offer consumers the chance to view some of the movies that were scheduled to screen during the March event in Austin, Tex. The 10-day virtual experience will be provided free to customers with an Amazon account. SXSW filmmakers have until April 7 to opt into the festival, which Amazon hopes to introduce by the end of the month.
The chief executive of Boeing, Dave Calhoun, announced voluntary layoffs in a note to staff on Thursday, with details on eligibility and benefits to come in three to four weeks. “We’re in uncharted waters,” he said, adding that the layoffs would provide a bridge to recovery, provided “we’re not confronted with more unexpected challenges.” Reporting was contributed by Sapna Maheshwari, Nicole Sperling, Niraj Chokshi, Jim Tankersley, Peter Eavis, Stanley Reed, Ben Casselman, Patricia Cohen, Clifford Krauss, Andrew E. Kramer, Mary Williams Walsh, Keith Bradsher, Neal E. Boudette, Kate Conger, Daisuke Wakabayashi, Stefanos Chen, Keith Collins, David Yaffe-Bellany, Mohammed Hadi, Carlos Tejada and Daniel Victor.
Reporting was contributed by Nicole Sperling, Niraj Chokshi, Jim Tankersley, Peter Eavis, Stanley Reed, Ben Casselman, Patricia Cohen, Clifford Krauss, Andrew E. Kramer, Mary Williams Walsh, Keith Bradsher, Neal E. Boudette, Kate Conger, Daisuke Wakabayashi, Stefanos Chen, Keith Collins, David Yaffe-Bellany, Mohammed Hadi, Carlos Tejada and Daniel Victor.