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Wall Street Rallies as Investors Focus on the Recovery: Live Updates Wall Street Rallies as Investors Focus on the Recovery: Live Updates
(about 1 hour later)
Wall Street resumed its rally on Wednesday. With a more than 3 percent gain, the S&P 500 is now up about 23 percent from its March 23 low.Wall Street resumed its rally on Wednesday. With a more than 3 percent gain, the S&P 500 is now up about 23 percent from its March 23 low.
The market has been steadily climbing since it hit that bottom, a rebound that began after the Federal Reserve and lawmakers in Washington took steps to protect the U.S. economy from a collapse amid the coronavirus pandemic. Stocks are still down about 19 percent from their late February high.The market has been steadily climbing since it hit that bottom, a rebound that began after the Federal Reserve and lawmakers in Washington took steps to protect the U.S. economy from a collapse amid the coronavirus pandemic. Stocks are still down about 19 percent from their late February high.
More recently, the gains have reflected hope that the peak of the pandemic in many cities is near, or already past. The growth rate of hospitalizations in hot spots like New York is slowing; China has lifted its lockdown of Wuhan, the city where the virus emerged; and governments in parts of Europe are making plans to do the same.More recently, the gains have reflected hope that the peak of the pandemic in many cities is near, or already past. The growth rate of hospitalizations in hot spots like New York is slowing; China has lifted its lockdown of Wuhan, the city where the virus emerged; and governments in parts of Europe are making plans to do the same.
To some extent, the recent gains also reflect Wall Street’s fear of missing out on the rebound that many analysts predicted would eventually come.To some extent, the recent gains also reflect Wall Street’s fear of missing out on the rebound that many analysts predicted would eventually come.
“If you wait until the coast is clear, you will have missed a huge part of the gains,” said Matt Maley, chief market strategist at Miller Tabak a trading and asset management firm. “And professional investors can’t afford to do that.”“If you wait until the coast is clear, you will have missed a huge part of the gains,” said Matt Maley, chief market strategist at Miller Tabak a trading and asset management firm. “And professional investors can’t afford to do that.”
For now, though, it is big money managers — not mom-and-pop retail investors — who are in on the action. Hedge fund traders and mutual fund managers have swooped into the market, driving sharp gains for blue-chip shares that have been battered by the market selloff. For now, though, it is big money managers — not mom-and-pop retail investors — who are in on the action. Hedge fund traders and mutual fund managers have swooped into the market, driving sharp gains for blue-chip shares that have been battered by the market sell-off.
Still, the market’s recent optimism is set against a grim backdrop of economic and human catastrophe that continues to play out — and which threatens to undercut any rally at a moment’s notice.Still, the market’s recent optimism is set against a grim backdrop of economic and human catastrophe that continues to play out — and which threatens to undercut any rally at a moment’s notice.
In Europe, data released on Wednesday showed that Germany and France, the largest economies in the region, were heading toward their sharpest downturns since World War II.In Europe, data released on Wednesday showed that Germany and France, the largest economies in the region, were heading toward their sharpest downturns since World War II.
There’s more data to come. A new report on weekly jobless claims on Thursday is certain to show millions more Americans are out of work. The two prior reports recorded more than 10 million claims for unemployment in late March.There’s more data to come. A new report on weekly jobless claims on Thursday is certain to show millions more Americans are out of work. The two prior reports recorded more than 10 million claims for unemployment in late March.
The Federal Reserve said on Wednesday it had temporarily lifted a growth restriction it had imposed on Wells Fargo in the wake of the bank’s fake account scandal in another effort to expand small-business owners’ access to emergency loans. After a 3.4 percent rise on Wednesday, the S&P 500 has bounced 23 percent from its low in a disastrous March, despite a darkening outlook for economic growth and corporate profits.
The Fed said in an announcement that the move was a response to “extraordinary disruptions from the coronavirus,” which has cause a widespread economic shutdown and resulted in the loss of millions of jobs. The federal government is trying to keep small businesses afloat through the $349 billion Paycheck Protection Program, which provides forgivable loans they can use to pay their employees, rent and mortgages. The program has had a rocky start. One reason: It’s the time to buy for investors able to stomach the market’s swoons.
Wells Fargo, the country’s fourth-largest bank, said on Sunday its balance sheet had reached a $1.95 trillion limit that prevented it from making more loans. That limit was imposed two years ago and was meant to be in place until the banks leaders could demonstrate that it was being run in a way that no longer put its customers at risk. Cole Smead, a portfolio manager at the Smead Value Fund, has been snapping up bargains in beaten-up parts of the market, like oil and energy producers, homebuilders and shopping-mall companies, that are closely tied to short-term swings in the economy.
The bank has not yet made the necessary changes, according to regulators, but reaching the limit meant it could not participate fully in the program. “We will never get these prices again,” said Mr. Smead, whose fund has $1.3 billion in assets.
As economically damaging as the pandemic will no doubt be, Wall Street is starting to see a path forward that wasn’t clear a few weeks ago. Slowing infection rates, hefty government relief packages and the Federal Reserve’s efforts to calm the markets have helped eased investors’ minds.
Some of the buyers are opportunistic hedge fund traders and mutual fund managers, driving sharp gains for blue-chip shares that were battered by the market sell-off. Some are traders feeling pressure to get into a rising market. And some are short-sellers forced to buy to minimize their own losses.
But mom-and-pop investors have largely been sitting out — a sign that the rally doesn’t reflect widespread optimism.
In a sign of just how desperate hospitals and doctors are for cash during the coronavirus pandemic, insurance companies, notorious for slow-walking their payments to health care providers, are now speeding up how quickly they pay.In a sign of just how desperate hospitals and doctors are for cash during the coronavirus pandemic, insurance companies, notorious for slow-walking their payments to health care providers, are now speeding up how quickly they pay.
“There was a universal cry for cash,” said Paul Markovich, the chief executive of Blue Shield of California, which said it would advance up to $200 million in payments to hospitals and doctors.“There was a universal cry for cash,” said Paul Markovich, the chief executive of Blue Shield of California, which said it would advance up to $200 million in payments to hospitals and doctors.
With revenues down for surgeries and other care not viewed as essential, providers are scrambling for money to pay for protective equipment and other supplies. “The pressure on the entire health care ecosystem is something I’ve never seen before,’‘ said Mr. Markovich, who hopes to get out the first payments as soon as this week.With revenues down for surgeries and other care not viewed as essential, providers are scrambling for money to pay for protective equipment and other supplies. “The pressure on the entire health care ecosystem is something I’ve never seen before,’‘ said Mr. Markovich, who hopes to get out the first payments as soon as this week.
“We’re effectively advancing payment now and collecting later,” he said, even as it is also working with customers about letting them delay paying premiums.“We’re effectively advancing payment now and collecting later,” he said, even as it is also working with customers about letting them delay paying premiums.
UnitedHealth, which owns one of the nation’s largest insurance companies, said it would also take a series of steps, like waiving the need for pre-authorization when patients see a new doctor or go to a skilled nursing facility, that should result in nearly $2 billion in payments getting in the hands of providers more quickly. Providers could be paid in a matter of days rather than several weeks.UnitedHealth, which owns one of the nation’s largest insurance companies, said it would also take a series of steps, like waiving the need for pre-authorization when patients see a new doctor or go to a skilled nursing facility, that should result in nearly $2 billion in payments getting in the hands of providers more quickly. Providers could be paid in a matter of days rather than several weeks.
United also announced it would be making $125 million available in small-business loans to medical groups that work with its Optum unit, which provides consulting and other services.United also announced it would be making $125 million available in small-business loans to medical groups that work with its Optum unit, which provides consulting and other services.
Highmark, a Blue Cross plan in Pittsburgh, said it was advancing more than $30 million to primary care doctors, who have been particularly hard hit as many patients have decided to forgo face-to-face doctors’ visits.Highmark, a Blue Cross plan in Pittsburgh, said it was advancing more than $30 million to primary care doctors, who have been particularly hard hit as many patients have decided to forgo face-to-face doctors’ visits.
New data on electricity use suggest that U.S. economic activity probably declined more over the past three weeks than it did during the entire year and a half of the Great Recession. It may already be the deepest downturn since the Great Depression; it is certainly the fastest.New data on electricity use suggest that U.S. economic activity probably declined more over the past three weeks than it did during the entire year and a half of the Great Recession. It may already be the deepest downturn since the Great Depression; it is certainly the fastest.
These numbers are important because our official statistics cannot keep pace with the abrupt economic changes the coronavirus shutdown has caused. All those closed stores, silenced factories and darkened office buildings are yet to be counted in the government’s official economic numbers, which take months to collect, process and report.These numbers are important because our official statistics cannot keep pace with the abrupt economic changes the coronavirus shutdown has caused. All those closed stores, silenced factories and darkened office buildings are yet to be counted in the government’s official economic numbers, which take months to collect, process and report.
But evidence of the sharp economic shift shows up in a large and rapid decline in electricity usage over recent weeks.But evidence of the sharp economic shift shows up in a large and rapid decline in electricity usage over recent weeks.
Demand for food assistance in the United States is surging, as millions of Americans find themselves out of work and school closures mean that many families who counted on them for free or subsidized meals need to turn elsewhere.Demand for food assistance in the United States is surging, as millions of Americans find themselves out of work and school closures mean that many families who counted on them for free or subsidized meals need to turn elsewhere.
The rise in need is coming just as food banks face shortages of both donated food and volunteer workers.The rise in need is coming just as food banks face shortages of both donated food and volunteer workers.
It’s a nationwide phenomena:It’s a nationwide phenomena:
At Food Bank for the Heartland in Omaha, the amount of food donated for March dropped by nearly half. The food bank typically purchases $73,000 of food in a month this time of year but has spent $675,000 in the past four weeks.At Food Bank for the Heartland in Omaha, the amount of food donated for March dropped by nearly half. The food bank typically purchases $73,000 of food in a month this time of year but has spent $675,000 in the past four weeks.
In Jonesboro, Ark., after a powerful tornado struck, a food bank received less than half the donations it expected because nervous families held on to what they had.In Jonesboro, Ark., after a powerful tornado struck, a food bank received less than half the donations it expected because nervous families held on to what they had.
In Washington State and Louisiana, the National Guard has been called in to help pack food boxes and ensure that the distributions run smoothly.In Washington State and Louisiana, the National Guard has been called in to help pack food boxes and ensure that the distributions run smoothly.
Feeding America, the nation’s largest network of food banks, with more than 200 affiliates, has projected a $1.4 billion shortfall in the next six months alone.Feeding America, the nation’s largest network of food banks, with more than 200 affiliates, has projected a $1.4 billion shortfall in the next six months alone.
“I’ve never seen anything like it,” said Stacy Dean, vice president for food assistance policy at the Center on Budget and Policy Priorities, a left-leaning research organization in Washington. She has studied food security for more than a quarter century. “People love the phrase ‘the perfect storm,’” she added, “but nothing is built for this.”“I’ve never seen anything like it,” said Stacy Dean, vice president for food assistance policy at the Center on Budget and Policy Priorities, a left-leaning research organization in Washington. She has studied food security for more than a quarter century. “People love the phrase ‘the perfect storm,’” she added, “but nothing is built for this.”
Federal Reserve officials viewed the coronavirus as a risk that made the economic outlook “profoundly uncertain” when they chose to slash interest rates to near-zero in early March. The nation’s largest union representing grocery store and pharmacy workers asked the Centers for Disease Control and Prevention on Wednesday to issue “immediate and mandatory guidance” to protect the workers, and others at food processing and meatpacking facilities, from the coronavirus.
Minutes from the Fed’s March 15 meeting, released on Wednesday, offer a glimpse at the conversations behind the central bank’s early response to the economic effects of the virus. In a letter to Dr. Robert Redfield, the C.D.C. director, the international president of the United Food & Commercial Workers International Union asked that the agency require stores to, among other things, limit the number of consumers who enter at any given time, allow employees to wash their hands at least once every 30 minutes, and ensure that employees wear masks and gloves while on the job.
Officials had made their first emergency rate cut since 2008 just weeks earlier at an unscheduled meeting on March 3, then slashed borrowing costs to rock-bottom on a Sunday evening while rolling out a mammoth bond-purchasing program aimed at calming troubled markets. The union president, Anthony Perrone, also asked for the C.D.C.’s help improving safety conditions at food processing facilities — for example, by requiring them to provide protective gear to their workers.
“All participants viewed the near-term U.S. economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain,” according to the minutes. Officials also “noted that financial markets had exhibited extraordinary turbulence and stresses.” “Given the direct health threat faced by these food workers,” Mr. Perrone said in the letter, “we believe it is absolutely critical that the C.D.C. take action before this growing crisis threatens our nation’s food supply.”
Among the areas showing signs of severe strain were the markets for commercial paper, a kind of short-term debt companies use to finance their operations, as well as corporate bonds, according to the minutes. The union represents more than 900,000 members who work at grocery stores, pharmacies, food processing and meatpacking plants. Several big supermarket chains have reported deaths of employees from Covid-19, the disease caused by the coronavirus.
A “few” participants at the meeting would have preferred to cut interest rates less drastically than the full percentage point move the Fed made. They wanted to preserve room to lower rates later and worried that a big cut “ran the risk of sending an overly negative signal about the economic outlook,” according to the minutes. The C.D.C. did not immediately respond to a request for comment, and it was unclear whether the agency could require such actions. Its guidance is generally not mandatory.
Europe’s pandemic-induced lockdowns were widely expected to throw the continent into a deep recession. Germany and France, the largest economies, said on Wednesday that they were headed toward their sharpest downturns since World War II, a warning that showed just how bad it’s about to get.Europe’s pandemic-induced lockdowns were widely expected to throw the continent into a deep recession. Germany and France, the largest economies, said on Wednesday that they were headed toward their sharpest downturns since World War II, a warning that showed just how bad it’s about to get.
France officially slid into a recession after suffering one of the worst quarterly contractions in more than 50 years. Growth tumbled an estimated 6 percent from January to April, from the fourth quarter, the central bank said. For every two weeks the population remains under confinement, the economy shrinks by at least 1.5 percent, it added.France officially slid into a recession after suffering one of the worst quarterly contractions in more than 50 years. Growth tumbled an estimated 6 percent from January to April, from the fourth quarter, the central bank said. For every two weeks the population remains under confinement, the economy shrinks by at least 1.5 percent, it added.
And Germany is sliding toward its deepest recession on record, with growth expected to plunge almost 10 percent from April through June, five leading economic institutes said Tuesday.And Germany is sliding toward its deepest recession on record, with growth expected to plunge almost 10 percent from April through June, five leading economic institutes said Tuesday.
Tesla plans to cut salaries and furlough some employees starting on Monday, according to an internal memo viewed by The New York Times.
“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” Valerie Workman, Tesla’s head of human resources for North America, said in the memo. The electric carmaker expects to resume normal operations at its U.S. facilities on May 4, she said.
Salaries will be cut by up to 30 percent for vice presidents and more senior executives and by 20 percent for employees at the director level and above. Pay will be reduced by 10 percent for the rest of Tesla’s salaried work force. Tesla employees who cannot work from home and have not been reassigned to other on-site work would be furloughed, according to the memo.
The $2 trillion relief bill made contractors eligible for unemployment assistance during the coronavirus pandemic. But a variety of obstacles — including the difficulty of bringing state unemployment systems up to speed and strict eligibility guidelines from the Labor Department — have left most ride-share drivers and other gig workers unable to take advantage so far.
Few states appear ready to process applications from gig workers, and some are turning them away. Critics have also expressed concern that guidance from the Labor Department issued over the weekend may be excluding workers who should qualify.
The guidance appeared to leave out drivers who could theoretically choose to work on any given day but are not doing so because few passengers are requesting rides. It also appeared to exclude certain workers who choose not to work because they are at a high risk from the coronavirus.
A Labor Department representative said the situations laid out in the guidance “are not exhaustive, and we expect many ride-share workers to be eligible.” The two big ride-hailing companies, Uber and Lyft, also said they expected many drivers to qualify.
The federal stimulus bills enacted in March, including a $2 trillion economic relief plan, offer help for the millions of American small businesses affected by the coronavirus pandemic.The federal stimulus bills enacted in March, including a $2 trillion economic relief plan, offer help for the millions of American small businesses affected by the coronavirus pandemic.
Cash grants. Low-interest loans. Payments to offset some payroll costs for businesses that keep or rehire workers. There are also enhancements to unemployment insurance and paid leave.Cash grants. Low-interest loans. Payments to offset some payroll costs for businesses that keep or rehire workers. There are also enhancements to unemployment insurance and paid leave.
Here are the answers to common questions about these programs. If you have questions, or have applied for small business aid and can tell us how the process went, we’d love to hear from you.Here are the answers to common questions about these programs. If you have questions, or have applied for small business aid and can tell us how the process went, we’d love to hear from you.
More information on money help during this difficult period be found in our F.A.Q. for individuals and our Hub for Help.More information on money help during this difficult period be found in our F.A.Q. for individuals and our Hub for Help.
The Walt Disney Company has been badly battered by the pandemic, with its theme parks closed and movies postponed, but the company on Wednesday offered an upbeat update on its nascent streaming service: Disney Plus has passed 50 million paid subscribers worldwide in just five months of operation. Before its November introduction, analysts had predicted that Disney Plus would take a full year to sign up half that many subscribers. A hit series, “The Mandalorian,” has greatly increased demand. The pandemic has likely also helped, with parents looking for ways to entertain homebound children.
Nordstrom, one of the country’s best-performing department stores, said in a regulatory filing on Wednesday that it did not have a “firm date” on when its stores would reopen. Most of the company’s work force — about 69,000 people, according to a separate filing — has been furloughed “or assigned zero hours of work.” Nordstrom has also temporarily closed its headquarters in Seattle.Nordstrom, one of the country’s best-performing department stores, said in a regulatory filing on Wednesday that it did not have a “firm date” on when its stores would reopen. Most of the company’s work force — about 69,000 people, according to a separate filing — has been furloughed “or assigned zero hours of work.” Nordstrom has also temporarily closed its headquarters in Seattle.
Amazon said it planned to pause a pilot program that shipped products for sellers on its marketplace in a bid to ease the pressures on its logistics operations, which are stretched thin by the surge in online shopping. The program, called Amazon Shipping, picked up packages that were already packed and labeled from a seller’s warehouse and then delivered them using Amazon’s delivery network. It competed with U.P.S. and FedEx’s ground service.Amazon said it planned to pause a pilot program that shipped products for sellers on its marketplace in a bid to ease the pressures on its logistics operations, which are stretched thin by the surge in online shopping. The program, called Amazon Shipping, picked up packages that were already packed and labeled from a seller’s warehouse and then delivered them using Amazon’s delivery network. It competed with U.P.S. and FedEx’s ground service.
Airbus, the European aerospace giant, said it was cutting production by about a third in response to the reshaping of the aircraft market. “Our airline customers are heavily impacted by the COVID-19 crisis,” Guillaume Faury, Airbus’s chief executive, said in a statement. “We are actively adapting our production to their new situation.”Airbus, the European aerospace giant, said it was cutting production by about a third in response to the reshaping of the aircraft market. “Our airline customers are heavily impacted by the COVID-19 crisis,” Guillaume Faury, Airbus’s chief executive, said in a statement. “We are actively adapting our production to their new situation.”
The London-based Jewish Chronicle, one of the oldest Jewish newspapers in the world, said on Wednesday that it would cease publication after being crushed by the financial impact of the coronavirus pandemic. Founded in 1841, The Chronicle claims to be the oldest continuously published Jewish paper in the world.The London-based Jewish Chronicle, one of the oldest Jewish newspapers in the world, said on Wednesday that it would cease publication after being crushed by the financial impact of the coronavirus pandemic. Founded in 1841, The Chronicle claims to be the oldest continuously published Jewish paper in the world.
Reporting was contributed by Reed Abelson, Jeanna Smialek, Emily Flitter, Ana Swanson, Stacy Cowley, Karen Weise, Noam Scheiber, Liz Alderman, Jack Ewing, Sapna Maheshwari, Conor Dougherty, Niraj Chokshi, Adam Satariano, Choe Sang-Hun, Jack Nicas, Ceylan Yeginsu, Austin Ramzy, Mohammed Hadi, Matt Phillips, Katie Robertson, Carlos Tejada and Amie Tsang.Reporting was contributed by Reed Abelson, Jeanna Smialek, Emily Flitter, Ana Swanson, Stacy Cowley, Karen Weise, Noam Scheiber, Liz Alderman, Jack Ewing, Sapna Maheshwari, Conor Dougherty, Niraj Chokshi, Adam Satariano, Choe Sang-Hun, Jack Nicas, Ceylan Yeginsu, Austin Ramzy, Mohammed Hadi, Matt Phillips, Katie Robertson, Carlos Tejada and Amie Tsang.