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The Federal Reserve will disclose the names of companies that benefit from its lending programs, it announced Thursday, a sign that the central bank is willing to provide the kind of transparency lawmakers have been urging.The Federal Reserve will disclose the names of companies that benefit from its lending programs, it announced Thursday, a sign that the central bank is willing to provide the kind of transparency lawmakers have been urging.
The central bank will release the names and details of participants in each of its programs, the amount borrowed and interest rate charged, and overall costs, revenues and fees, it said. The Fed will publish program reports on its website at least every 30 days.The central bank will release the names and details of participants in each of its programs, the amount borrowed and interest rate charged, and overall costs, revenues and fees, it said. The Fed will publish program reports on its website at least every 30 days.
Congress has handed the Treasury Department $454 billion to back up Fed lending facilities, which either make loans or buy bonds to keep credit flowing in key market segments. With that layer of taxpayer insurance, the Fed has announced programs that are meant to help mid-size businesses, state governments and large corporations. Congress has handed the Treasury Department $454 billion to back up Fed lending facilities, which either make loans or buy bonds to keep credit flowing in key market segments. With that layer of taxpayer insurance, the Fed has announced programs that are meant to help midsize businesses, state governments and large corporations.
But the backing came with some reporting requirements, as do the Fed’s emergency lending authorities in general: Jerome H. Powell, the Fed chair, and Treasury Secretary Steven Mnuchin must regularly report to Congress on the programs, for instance. It was unclear how detailed those explanations would be until Thursday’s release laid out the parameters.But the backing came with some reporting requirements, as do the Fed’s emergency lending authorities in general: Jerome H. Powell, the Fed chair, and Treasury Secretary Steven Mnuchin must regularly report to Congress on the programs, for instance. It was unclear how detailed those explanations would be until Thursday’s release laid out the parameters.
“The Federal Reserve is committed to transparency and accountability,” Mr. Powell said in the release.“The Federal Reserve is committed to transparency and accountability,” Mr. Powell said in the release.
About 27,000 Boeing employees are returning to work in Washington State this week, offering an early preview of what a resumption of economic activity looks like. One thing is already clear: It is not exactly a return to normal.About 27,000 Boeing employees are returning to work in Washington State this week, offering an early preview of what a resumption of economic activity looks like. One thing is already clear: It is not exactly a return to normal.
The Boeing employees, who make jets typically used by airlines and cargo companies, are returning in staggered shifts. Their workplaces will be newly outfitted with hand-washing stations, additional cleaning supplies and signs and floor markings reminding them to keep their distance. Employees will be provided with protective gear when necessary and, in some cases, asked to submit to voluntary temperature checks.The Boeing employees, who make jets typically used by airlines and cargo companies, are returning in staggered shifts. Their workplaces will be newly outfitted with hand-washing stations, additional cleaning supplies and signs and floor markings reminding them to keep their distance. Employees will be provided with protective gear when necessary and, in some cases, asked to submit to voluntary temperature checks.
It’s too soon to say whether the measures will be sufficient, said Connie Kelliher, a spokeswoman for the Machinists Union District Lodge 751, which represents Boeing workers. Union officials toured some of the facilities as workers started coming back on Monday and are encouraging members to take advantage of a clause in their contract that allows them to stop working if they sense an imminent danger.It’s too soon to say whether the measures will be sufficient, said Connie Kelliher, a spokeswoman for the Machinists Union District Lodge 751, which represents Boeing workers. Union officials toured some of the facilities as workers started coming back on Monday and are encouraging members to take advantage of a clause in their contract that allows them to stop working if they sense an imminent danger.
“It is important that every member ensure that all new safety requirements are being followed in their shop when they return to work,” the union said in a note to members on Monday.“It is important that every member ensure that all new safety requirements are being followed in their shop when they return to work,” the union said in a note to members on Monday.
The precautions may be necessary, but they are also likely to slow down the aerospace giant’s operations, which are known for efficiently churning out planes.The precautions may be necessary, but they are also likely to slow down the aerospace giant’s operations, which are known for efficiently churning out planes.
Stocks on Wall Street ended unchanged on Thursday as an early rally, fueled by a spike in oil prices, faded. Stocks on Wall Street ended virtually unchanged on Thursday as an early rally, fueled by a surge in oil prices, faded.
The S&P 500, which rose as much as 1.6 percent earlier in the day, was flat by the close of trading. The ups and downs came as investors absorbed more grim economic news: Millions more workers claimed unemployment benefits in the United States and data from Europe highlighted the heavy toll of shutdowns to prevent the spread of coronavirus.The S&P 500, which rose as much as 1.6 percent earlier in the day, was flat by the close of trading. The ups and downs came as investors absorbed more grim economic news: Millions more workers claimed unemployment benefits in the United States and data from Europe highlighted the heavy toll of shutdowns to prevent the spread of coronavirus.
Investors have been shrugging off such data in recent weeks, as the shock of the economic devastation caused by the coronavirus pandemic fades and they begin to expect an eventual recovery.Investors have been shrugging off such data in recent weeks, as the shock of the economic devastation caused by the coronavirus pandemic fades and they begin to expect an eventual recovery.
Governments have started to discuss measures to return to normal. Businesses in Europe and the United States have begun to detail their plans to reopen businesses. Major airlines have already aggressively advertised the precautions they are taking to lure back passengers, from fogging cabins with disinfectant to restricting food service to blocking out middle seats.Governments have started to discuss measures to return to normal. Businesses in Europe and the United States have begun to detail their plans to reopen businesses. Major airlines have already aggressively advertised the precautions they are taking to lure back passengers, from fogging cabins with disinfectant to restricting food service to blocking out middle seats.
Lawmakers in Washington continue to advance measures to support the economy. The House will vote on Thursday on a $484 billion coronavirus package that would revive a depleted loan program for distressed small businesses and provide funds for hospitals and testing.Lawmakers in Washington continue to advance measures to support the economy. The House will vote on Thursday on a $484 billion coronavirus package that would revive a depleted loan program for distressed small businesses and provide funds for hospitals and testing.
Thursday’s early gains were tempered somewhat in the afternoon after reports that a drug being tested as a possible Covid-19 treatment had fared poorly in a clinical trial conducted in China, although the company, Gilead, cautioned that data from the trial in question was incomplete because it had been halted early because of a lack of patients. Upbeat news about a different trial of the same drug, which is called remdesivir, had fueled gains in the market earlier this month. The early gains on Thursday were tempered somewhat in the afternoon after reports that a drug being tested as a possible Covid-19 treatment had fared poorly in a clinical trial conducted in China, although the company, Gilead, cautioned that data from the trial in question was incomplete because it had been halted early because of a lack of patients. Upbeat news about a different trial of the same drug, which is called remdesivir, had fueled gains in the market earlier this month.
Still, energy companies managed to hold onto their gains as crude oil continued its rebound from a staggering plunge earlier in the week. Futures for West Texas Intermediate crude, the American benchmark, which had fallen into negative territory earlier in the week, rose about 20 percent. Still, energy companies managed to hold on to their gains as crude oil continued its rebound from a staggering plunge earlier in the week. Futures for West Texas Intermediate crude, the American benchmark, which had fallen into negative territory earlier in the week, rose about 20 percent.
The price of oil has plunged, but the price of finding a place to put it has soared. And if you are in the business of providing a temporary home for the world’s glut of crude, you’ve hit the jackpot, writes Stanley Reed of The Times.The price of oil has plunged, but the price of finding a place to put it has soared. And if you are in the business of providing a temporary home for the world’s glut of crude, you’ve hit the jackpot, writes Stanley Reed of The Times.
More and more massive tankers at sea are being used simply to hold the oil — as much as 2 million barrels per vessel — until it is wanted. Other vessels are busy carrying it to buyers like China, which is taking advantage of prices not seen in two decades.More and more massive tankers at sea are being used simply to hold the oil — as much as 2 million barrels per vessel — until it is wanted. Other vessels are busy carrying it to buyers like China, which is taking advantage of prices not seen in two decades.
Tankers are in demand, and their rates, as low as $25,000 a day in February, have ballooned to nearly $200,000 a day, even hitting almost $300,000 at one point.Tankers are in demand, and their rates, as low as $25,000 a day in February, have ballooned to nearly $200,000 a day, even hitting almost $300,000 at one point.
“We are one of the few industries making money in this period,” said Hugo de Stoop, chief executive of Belgium-based Euronav, one of the world’s largest tanker companies. The current market for vessels, he added, “is totally and completely unusual.”“We are one of the few industries making money in this period,” said Hugo de Stoop, chief executive of Belgium-based Euronav, one of the world’s largest tanker companies. The current market for vessels, he added, “is totally and completely unusual.”
The grim economic toll from the coronavirus pandemic jumped on Thursday when the government reported another 4.4 million people filed new unemployment claims last week, bringing the five-week total to more than 26 million.The grim economic toll from the coronavirus pandemic jumped on Thursday when the government reported another 4.4 million people filed new unemployment claims last week, bringing the five-week total to more than 26 million.
The report is likely to intensify the debate over when to lift restrictions that have helped fight the virus’s spread but placed the economy in a stranglehold, reports Patricia Cohen of The Times.The report is likely to intensify the debate over when to lift restrictions that have helped fight the virus’s spread but placed the economy in a stranglehold, reports Patricia Cohen of The Times.
“At all levels, it’s eye-watering numbers,” said Torsten Slok, chief international economist at Deutsche Bank Securities. But as large as the figures have been, they do not capture the full extent of layoffs — or the cascade of economic troubles that they have set in motion.“At all levels, it’s eye-watering numbers,” said Torsten Slok, chief international economist at Deutsche Bank Securities. But as large as the figures have been, they do not capture the full extent of layoffs — or the cascade of economic troubles that they have set in motion.
Problems responding to the waves of jobless claims now will affect the shape of the recovery when the pandemic eases, Mr. Slok said. Laid-off workers need money quickly to pay for rent, groceries and credit card bills. If they cannot do so, he said, the hole that the larger economy has fallen into “gets deeper and deeper, and more difficult to crawl out of.”Problems responding to the waves of jobless claims now will affect the shape of the recovery when the pandemic eases, Mr. Slok said. Laid-off workers need money quickly to pay for rent, groceries and credit card bills. If they cannot do so, he said, the hole that the larger economy has fallen into “gets deeper and deeper, and more difficult to crawl out of.”
The Trump administration warned big companies on Thursday that they must prove they were in need of emergency small business loans to keep their operations running and had no other option to get financing or repay the funds.The Trump administration warned big companies on Thursday that they must prove they were in need of emergency small business loans to keep their operations running and had no other option to get financing or repay the funds.
The new guidance from the Treasury Department came amid an uproar over bigger companies taking loans through the Paycheck Protection Program while smaller businesses have been left out.The new guidance from the Treasury Department came amid an uproar over bigger companies taking loans through the Paycheck Protection Program while smaller businesses have been left out.
The Treasury Department updated its “Frequently Asked Questions” page about the P.P.P. to urge “large companies with adequate sources of liquidity” to think twice before applying for loans backed by the Small Business Administration.The Treasury Department updated its “Frequently Asked Questions” page about the P.P.P. to urge “large companies with adequate sources of liquidity” to think twice before applying for loans backed by the Small Business Administration.
The S.B.A.’s $349 billion fund to support these loans ran out last week and is expected to be replenished with another $310 billion this week. Backlash over the program has been escalating after some big restaurant chains, including Shake Shack, took out multiple $10 million loans for their subsidiaries.The S.B.A.’s $349 billion fund to support these loans ran out last week and is expected to be replenished with another $310 billion this week. Backlash over the program has been escalating after some big restaurant chains, including Shake Shack, took out multiple $10 million loans for their subsidiaries.
The Treasury notes that, by law, the small-business loans are intended to be taken in cases when the money is “necessary to support the ongoing operations.” It said that borrowers needed to certify this in “good faith” and to take into account their ability to get access to other sources of money.The Treasury notes that, by law, the small-business loans are intended to be taken in cases when the money is “necessary to support the ongoing operations.” It said that borrowers needed to certify this in “good faith” and to take into account their ability to get access to other sources of money.
Treasury Secretary Steven Mnuchin warned businesses that they would be investigated and could face penalties if they improperly accept small-business money. He has urged such businesses to return those funds. The guidance released on Thursday said borrowers that repaid loans in full by May 7, 2020, would be deemed by the S.B.A. to have made their certifications in good faith, leaving them in good standing with the government.Treasury Secretary Steven Mnuchin warned businesses that they would be investigated and could face penalties if they improperly accept small-business money. He has urged such businesses to return those funds. The guidance released on Thursday said borrowers that repaid loans in full by May 7, 2020, would be deemed by the S.B.A. to have made their certifications in good faith, leaving them in good standing with the government.
At least five companies have already given back the funds: Shake Shack, Sweetgreen, Kura Sushi USA, ItWorks! and the owner of Ruth’s Chris Steakhouse, have all disclosed that they have returned the P.P.P. loans.At least five companies have already given back the funds: Shake Shack, Sweetgreen, Kura Sushi USA, ItWorks! and the owner of Ruth’s Chris Steakhouse, have all disclosed that they have returned the P.P.P. loans.
Intel, one of the world’s largest computer chip makers, said Thursday that revenue climbed 23 percent to $19.8 billion during the quarter ending in March, an indication that parts of the computer industry are thriving amid the coronavirus pandemic. The company expects revenue to be $18.5 billion in the current quarter — up $2 billion from last year.Intel, one of the world’s largest computer chip makers, said Thursday that revenue climbed 23 percent to $19.8 billion during the quarter ending in March, an indication that parts of the computer industry are thriving amid the coronavirus pandemic. The company expects revenue to be $18.5 billion in the current quarter — up $2 billion from last year.
Sales of the Intel computer server chips that help drive internet services increased significantly during the quarter, as people across the globe spent more time on the internet during quarantine, straining the internet’s infrastructure. Intel’s data center revenue, which includes server chips, rose 43 percent compared with the same quarter last year. Sales of the chips that drive PCs and laptops climbed 14 percent.Sales of the Intel computer server chips that help drive internet services increased significantly during the quarter, as people across the globe spent more time on the internet during quarantine, straining the internet’s infrastructure. Intel’s data center revenue, which includes server chips, rose 43 percent compared with the same quarter last year. Sales of the chips that drive PCs and laptops climbed 14 percent.
Texas Instruments, another major chip maker, reported results on Thursday mirroring Intel’s.Texas Instruments, another major chip maker, reported results on Thursday mirroring Intel’s.
Senator Mitch McConnell, the majority leader, shot down the possibility of additional federal aid for state governments, suggesting that they should instead be allowed to declare bankruptcy. His comments could leave the Federal Reserve at the center of helping strapped state and local leaders. When Mayor Bill de Blasio of New York said on Wednesday that Macy’s and its chief executive, Jeff Gennette, were committed to holding its annual Fourth of July fireworks display, he called the gesture “generous” and “really patriotic.”
“This whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” Mr. McConnell, a Republican from Kentucky, said in an interview with a conservative radio host on Wednesday. “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.” But critics questioned the expense at a time when most of Macy’s 123,000 employees have been furloughed. The retailer, which also owns Bloomingdales and Bluemercury, is facing intense financial pressure with the temporary closure of its stores.
States cannot declare bankruptcy to restructure their debt, though local governments sometimes do. That means that when cash shortages crop up — like now, as coronavirus quarantines delay income tax filings and tank other sources of income, like casino revenue, just as costs skyrocket — they must tax more, slash spending or issue additional debt. “Macy’s should not be spending millions on fireworks displays while its own work force is out of work,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said in a statement on Thursday. The company should be spending the money on health care coverage for employees instead, he added.
If the federal government is not willing to come through with the cash that states need to cover expenses, they will probably turn to the third option, which is where the Fed will come in. The central bank announced this month that it would begin buying short-term debt from states and some large cities and counties. Macy’s does not disclose the cost of the show, though Mr. de Blasio suggested in a briefing on Thursday that this year’s display might be more modest. Macy’s said the display dates to 1976 and that this year’s show “will be a celebration of the strength and resilience of New York City and will honor frontline workers across America.”
States are already laying plans to tap the program, and lawmakers from both parties have called on the Fed to make it broader and more inclusive of smaller local governments, something officials have signaled that they are working to do. The Fed has yet to give a start date for the program. Mr. de Blasio defended the plans to proceed with the pyrotechnics show. “I don’t think it’s an either-or,” he said. “Macy’s put aside the resources to provide this celebration.” The cost of the show, he added, was “small compared to the needs of working people.”
The CARES Act did provide some funding to the state and local governments in the form of a $150 billion relief fund. That was insufficient to plug the hole coronavirus has shot through budgets, though, and governments could again be forced to lay off teachers and other public workers. A similar scenario played out in the wake of the 2008 financial crisis, hampering the economic recovery.
Buyers who agreed to acquisitions before the pandemic are getting bolder about pulling out of deals (or trying to, at least). The latest is the private equity group Sycamore Partners, which is asking a court in Delaware to terminate the purchase of a majority stake in Victoria’s Secret it agreed to in February.Buyers who agreed to acquisitions before the pandemic are getting bolder about pulling out of deals (or trying to, at least). The latest is the private equity group Sycamore Partners, which is asking a court in Delaware to terminate the purchase of a majority stake in Victoria’s Secret it agreed to in February.
As today’s DealBook newsletter explains, buyers can try to wriggle out of deals that have not yet closed by claiming their targets have failed to operate according to the “ordinary course” of business. Sycamore, for example, said that closing stores and laying off employees veered from the plan when the deal was signed. The auto parts maker BorgWarner is trying a similar argument to get out of its deal for Delphi. Success for either could embolden others to scrap deals agreed to before the pandemic.As today’s DealBook newsletter explains, buyers can try to wriggle out of deals that have not yet closed by claiming their targets have failed to operate according to the “ordinary course” of business. Sycamore, for example, said that closing stores and laying off employees veered from the plan when the deal was signed. The auto parts maker BorgWarner is trying a similar argument to get out of its deal for Delphi. Success for either could embolden others to scrap deals agreed to before the pandemic.
The courts in Delaware, where many American companies are incorporated, have not tried many cases using the “ordinary course” argument, so there is little precedent. And what is “ordinary” these days, anyway?The courts in Delaware, where many American companies are incorporated, have not tried many cases using the “ordinary course” argument, so there is little precedent. And what is “ordinary” these days, anyway?
Exxon Mobil said on Thursday it would produce medical-grade hand sanitizer in Louisiana. The company plans to initially make 160,000 gallons, enough for nearly five million bottles, which will be donated to health care providers in Louisiana, New Jersey, New Mexico, New York, Pennsylvania and Texas.Exxon Mobil said on Thursday it would produce medical-grade hand sanitizer in Louisiana. The company plans to initially make 160,000 gallons, enough for nearly five million bottles, which will be donated to health care providers in Louisiana, New Jersey, New Mexico, New York, Pennsylvania and Texas.
Toyota Motor said on Thursday that it would begin restarting its U.S. plants the week of May 4. The announcement comes a day after Volkswagen said it would bring workers back to its plant in Chattanooga, Tenn., on May 3.Toyota Motor said on Thursday that it would begin restarting its U.S. plants the week of May 4. The announcement comes a day after Volkswagen said it would bring workers back to its plant in Chattanooga, Tenn., on May 3.
The beef and pork subsidiary of Tyson Foods will halt production at its beef facility in Pasco, Wash., while local health officials test more than 1,400 workers there for the coronavirus. Workers will continue to be paid while the plant is closed. Tyson is working with health officials on a plan to resume production. Tyson also said it would close its meat plant in Shelbyville, Tenn., on Monday to do a deep cleaning.The beef and pork subsidiary of Tyson Foods will halt production at its beef facility in Pasco, Wash., while local health officials test more than 1,400 workers there for the coronavirus. Workers will continue to be paid while the plant is closed. Tyson is working with health officials on a plan to resume production. Tyson also said it would close its meat plant in Shelbyville, Tenn., on Monday to do a deep cleaning.
The German airline Lufthansa warned Thursday that it would require government bailouts after plummeting sales led to a loss of more than a billion euros in the first quarter. Passenger traffic has fallen to almost nothing and the second quarter will be even worse, Lufthansa said in a statement.The German airline Lufthansa warned Thursday that it would require government bailouts after plummeting sales led to a loss of more than a billion euros in the first quarter. Passenger traffic has fallen to almost nothing and the second quarter will be even worse, Lufthansa said in a statement.
Target reported Thursday that sales since February were up 7 percent, with in-store sales falling slightly and online purchases jumping 100 percent. The retailer also extended its $2 an hour emergency pay rate for workers through May 30.Target reported Thursday that sales since February were up 7 percent, with in-store sales falling slightly and online purchases jumping 100 percent. The retailer also extended its $2 an hour emergency pay rate for workers through May 30.
Reporting was contributed by Clifford Krauss, David Yaffe-Bellany, Jason Karaian, Cade Metz, Gregory Schmidt, Patricia Cohen, Ben Dooley, Jeanna Smialek, Conor Dougherty, John Eligon, Karen Weise, Su-Hyun Lee, Vindu Goel, Niraj Chokshi, Jack Ewing, Carlos Tejada, Neal E. Boudette, Stanley Reed, Daniel Victor and Kevin Granville.Reporting was contributed by Clifford Krauss, David Yaffe-Bellany, Jason Karaian, Cade Metz, Gregory Schmidt, Patricia Cohen, Ben Dooley, Jeanna Smialek, Conor Dougherty, John Eligon, Karen Weise, Su-Hyun Lee, Vindu Goel, Niraj Chokshi, Jack Ewing, Carlos Tejada, Neal E. Boudette, Stanley Reed, Daniel Victor and Kevin Granville.