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Stock Markets Are Rebounding After Monday’s Rout: Live Updates Stock Markets Are Rebounding After Monday’s Rout: Live Updates
(32 minutes later)
Buyers moved back into the markets on Tuesday, a day after the coronavirus and a battle among the world’s biggest oil producers shook the global financial scene.Buyers moved back into the markets on Tuesday, a day after the coronavirus and a battle among the world’s biggest oil producers shook the global financial scene.
On Wall Street, the S&P 500 rose more than 2 percent, rebounding from its steepest decline in more than a decade. European stocks also climbed, with many indexes more than 2 percent higher and Asian markets rose as well. On Wall Street, the S&P 500 rose more than 3 percent, rebounding from its steepest decline in more than a decade. European stocks also climbed, with many indexes more than 2 percent higher. Asian markets rose as well.
Stocks were somewhat buoyed after President Trump on Monday night said he would work with Congress on measures to help the economy amid signs of a worsening outbreak in the United States, including a potential payroll tax cut. Stocks were somewhat buoyed after President Trump said on Monday night he would work with Congress on measures to help the economy amid signs of a worsening outbreak in the United States. Speaking with reporters, he said he would meet on Tuesday with Republican leaders to discuss a “very substantial” payroll tax cut and legislation to protect hourly wage earners who miss work because of the virus.
“Markets are always enamored with tax cuts, or even the hope thereof. Yesterday’s sell-off was so extreme that it’s not at all surprising to see a bounce,” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn., in an email.“Markets are always enamored with tax cuts, or even the hope thereof. Yesterday’s sell-off was so extreme that it’s not at all surprising to see a bounce,” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn., in an email.
But the gains didn’t come close to making up for the global plunge on Monday.But the gains didn’t come close to making up for the global plunge on Monday.
The S&P 500 fell nearly 8 percent on Monday, its sharpest daily decline since December 2008. In Asia and Europe on Monday, some of the biggest financial exchanges flirted with, or crossed into, bear market territory. The S&P 500 fell nearly 8 percent on Monday, its sharpest daily decline since December 2008 and a fall so swift that trading in the United States had to be halted for 15 minutes early in the day. In Asia and Europe, some of the biggest financial exchanges flirted with, or crossed into, bear market territory — a decline of more than 20 percent from their highs. Through Monday, the S&P 500 was down about 19 percent.
Investors still showed plenty of signs of nervousness on Tuesday. Yields on U.S. government debt rose slightly but remained close to record lows. Investors still showed plenty of signs of nervousness on Tuesday, and traders and analysts say markets remain fragile. Increased testing for the coronavirus is expected to generate rising numbers of new infections in the coming weeks, which could be a new challenge for the nerve of investors.
The price of oil, which had slumped by a quarter on Monday, rose more than 7 percent on Tuesday, with futures tracking the price of Brent crude trading at about $36.85 a barrel. One indicator of this in recent weeks: Yields on U.S. government debt rose slightly but remained close to record lows.
Several U.S. airlines on Tuesday said they were further slashing service and costs — including a cut to at least one chief executive’s salary — in response to the dramatic decline in bookings caused by fear over the coronavirus. The price of oil, which had slumped by a quarter on Monday, rose more than 7 percent on Tuesday, with futures tracking the price of Brent crude trading at about $36.85 a barrel. But oil prices remain down more than 45 percent this year.
Speaking at an investor conference hosted by JPMorgan on Tuesday, Ed Bastian, chief executive of Delta Air Lines, announced that the airline would cut domestic service by about 15 percent. President Trump’s top economic advisers are heading to Capitol Hill on Tuesday to brief lawmakers on the White House’s fiscal stimulus proposals, setting up tense negotiations with Congress about the response to the coronavirus.
Larry Kudlow, the director of the National Economic Council, and Treasury Secretary Steven Mnuchin will brief Senate Republicans at their weekly lunch. Among the items to be discussed: a payroll tax cut, financial help for workers who don’t get paid sick leave, and targeted relief for industries battered by the virus, including cruise lines, airlines and hotels.
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The idea of a payroll tax cut has divided Mr. Trump’s advisers, with Mr. Mnuchin and Mr. Kudlow skeptical of the idea. But Peter Navarro, Mr. Trump’s trade adviser, has been a proponent and Mr. Trump has been pushing for it to be included in a package of options.
The White House is also considering plans that would not require Congressional action, such as allowing tax payments to be deferred and using Federal Emergency Management Agency disaster declarations as a means to unlock stimulus money.
Mr. Trump said on Monday that the White House would hold another news conference at some point on Tuesday laying out stimulus measures in more detail.
The root of Monday’s financial market meltdown was the start of an oil-price war between Saudi Arabia and Russia over the weekend, when the Saudis slashed their prices after Russia refused to join OPEC in production cuts.
On Tuesday, Saudi Aramco, the national oil company, said that it would provide its customers with 12.3 million barrels a day in crude oil in April, a significant jump from its average of 9.7 million barrels a day.
Although it is not clear how much of this oil would come from storage, the company will likely sharply increase production.
Saudi officials have said that they need to sell more oil to compensate for lower prices, and Aramco is offering deep discounts on its oil to win over buyers.
The sudden upheaval in the oil markets may take months to assess, but the impact on the American economy is bound to be considerable, especially in Texas and other states where oil drives much of the job market.
Even if Russia and Saudi Arabia resolve their differences a global oil glut could keep prices low for years.
Many smaller American oil companies could face bankruptcy if the price pressure goes on for more than a few weeks, while larger ones will be challenged to protect their dividend payments. Thousands of oil workers are about to receive pink slips.
Shares of those oil companies rebounded on Tuesday, but many of them — including Apache Corp., Diamondback Energy and Marathon Oil — are still down about 50 percent this week as investors worry about their future with oil prices where they are now.
Several U.S. airlines on Tuesday said they were further slashing service and costs — including a cut to at least one chief executive’s salary — in response to the dramatic decline in bookings caused by fear over the coronavirus.
Speaking at an investor conference hosted by JPMorgan on Tuesday, Ed Bastian, chief executive of Delta Air Lines, announced that the airline would cut domestic service by about 15 percent.
“Two weeks ago our revenue trajectory changed dramatically as the virus spread meaningfully outside of Asia,” Mr. Bastian said. “Since then, we have seen a 25 to 30 percent decline in net bookings and are prepared for it to get worse.”“Two weeks ago our revenue trajectory changed dramatically as the virus spread meaningfully outside of Asia,” Mr. Bastian said. “Since then, we have seen a 25 to 30 percent decline in net bookings and are prepared for it to get worse.”
The cuts include a 20 to 25 percent decline in international service. The airline also plans to freeze hiring, offer voluntary leave and defer some spending, all in an effort to build up its cash cushion.The cuts include a 20 to 25 percent decline in international service. The airline also plans to freeze hiring, offer voluntary leave and defer some spending, all in an effort to build up its cash cushion.
American Airlines said in a statement that it was slashing trans-Pacific flights by more than half, including suspending service to mainland China until October. It will also reduce domestic flights in April by 7.5 percent.American Airlines said in a statement that it was slashing trans-Pacific flights by more than half, including suspending service to mainland China until October. It will also reduce domestic flights in April by 7.5 percent.
United Airlines and JetBlue announced similar capacity cuts last week, but Southwest Airlines said it was managing costs in a different way: by cutting the salary of its chief executive, Gary C. Kelly. In an update to employees on Monday, Mr. Kelly said that he was reducing his pay by 10 percent.United Airlines and JetBlue announced similar capacity cuts last week, but Southwest Airlines said it was managing costs in a different way: by cutting the salary of its chief executive, Gary C. Kelly. In an update to employees on Monday, Mr. Kelly said that he was reducing his pay by 10 percent.
South Korean officials on Tuesday moved to protect domestic companies one day after a brutal sell-off.
The government said it would tighten a rule banning the short sale of stocks that meet certain daily trading criteria over the next three months.
Short sellers borrow the stock of a company to sell in the hopes that they can buy it back at a lower price and pocket the difference. Free market proponents argue that it is a crucial part of a healthy market. But the act is often blamed for making a market downturn worse.
Other countries have taken similar measures after dramatic moves in the market. Chinese regulators took action during a stock market rout in 2015, while European policymakers put limits on several markets to stem losses from a downward spiral in 2011. Most famously, the United States banned the short selling of financial stocks at the height of the 2008 financial crisis, when some of the country’s biggest financial institutions began to fail.
With hundreds of millions of people in China cooped up at home for nearly two months now, demand for small appliances has surged as a new class of involuntary shut-ins channel their boredom into cooking and cleaning.With hundreds of millions of people in China cooped up at home for nearly two months now, demand for small appliances has surged as a new class of involuntary shut-ins channel their boredom into cooking and cleaning.
Sales of air fryers soared more than seven times year-on-year, according to data in February from Suning, a major retailer in China. Sales of self-heating lunchboxes surged as well.Sales of air fryers soared more than seven times year-on-year, according to data in February from Suning, a major retailer in China. Sales of self-heating lunchboxes surged as well.
Households have also gone on cleaning sprees. Home sterilizing equipment surged, of course, but so did sales of vacuum cleaners, according to Suning.Households have also gone on cleaning sprees. Home sterilizing equipment surged, of course, but so did sales of vacuum cleaners, according to Suning.
In China, the trend is called the “lazy economy,” referring to devices and products bought by urbanites who want to save time and energy on household chores. But laziness most likely has little to do with it now, as Chinese people learn new ways to cook and take care of their homes. Travel restrictions and virtual quarantines give them little else to do.In China, the trend is called the “lazy economy,” referring to devices and products bought by urbanites who want to save time and energy on household chores. But laziness most likely has little to do with it now, as Chinese people learn new ways to cook and take care of their homes. Travel restrictions and virtual quarantines give them little else to do.
Markets in the United States plummeted on Monday as a panic that began in the oil market set off a chain reaction that rumbled across the world, adding to concerns about the global economy.
It was Wall Street’s worst day in more than a decade. The S&P 500, already down 12 percent from its late February high, fell more than 7 percent on Monday. The sudden drop tripped automatic “circuit breakers,” halting trading for 15 minutes — a rare occurrence meant to prevent stocks from crashing.
The plunge was the biggest in the United States since December 2008, when investors were still reeling from the collapse of Lehman Brothers and the housing crisis that dragged the economy into a recession. It put the index close to 20 percent below its record high, a drop that would have ended the bull market for stocks that began exactly 11 years ago.
With the State Department advising against traveling on cruise ships because of the coronavirus and an increasing number of conventions and festivals canceled, Disney’s theme parks in Florida and California on Monday started their high-volume spring-break season as usual: gridlocked.
But the coronavirus continued to cause major problems for Disney overseas. The company’s Asian theme park operation — four parks in China and Japan that together attract 51.2 million visitors annually — has been closed, and Disney expects its China parks to remain shuttered until the end of March.
The Shanghai property began a “phased reopening” on Monday by allowing guests to enter a shopping and dining area outside the park gates. Tokyo Disneyland and Tokyo Disney Sea are scheduled to reopen next Monday.
Disney Cruise Line, which operates four ships that can carry 13,400 people at any given time, remains open.
A Disney spokeswoman declined to comment on Monday.
Since Feb. 4, Disney’s stock price has declined 27 percent, to about $106. The S&P 500 has fallen about 10 percent over that period.
The Securities and Exchange Commission, in response to a potential coronavirus case, on Monday required a part of its staff to stay away from the agency’s Washington headquarters and advised all other employees there to work from home as well, a person briefed on the matter said.The Securities and Exchange Commission, in response to a potential coronavirus case, on Monday required a part of its staff to stay away from the agency’s Washington headquarters and advised all other employees there to work from home as well, a person briefed on the matter said.
An employee at Point72, the hedge fund run by Steven A. Cohen, has tested positive for the novel coronavirus. Other workers based on the same floor of Point72’s Hudson Yards location on Manhattan’s west side have been asked to work at home for the next two weeks.An employee at Point72, the hedge fund run by Steven A. Cohen, has tested positive for the novel coronavirus. Other workers based on the same floor of Point72’s Hudson Yards location on Manhattan’s west side have been asked to work at home for the next two weeks.
An employee of the European Central Bank in Frankfurt has tested positive for the virus, the bank said late Monday. The employee, who was not identified, is receiving medical care and about 100 co-workers have been asked to work from home as a precaution, the bank said.An employee of the European Central Bank in Frankfurt has tested positive for the virus, the bank said late Monday. The employee, who was not identified, is receiving medical care and about 100 co-workers have been asked to work from home as a precaution, the bank said.
South Korean officials on Tuesday moved to protect shares of domestic companies by saying it would tighten a rule banning the short sale of stocks that meet certain daily trading criteria over the next three months. Short sellers borrow the stock of a company to sell in the hopes that they can buy it back at a lower price and pocket the difference.
Reporting and research were contributed by Alexandra Stevenson, Jack Ewing, Kevin Granville, Kate Kelly, Matthew Goldstein, Brooks Barnes and Niraj Chokshi.Reporting and research were contributed by Alexandra Stevenson, Jack Ewing, Kevin Granville, Kate Kelly, Matthew Goldstein, Brooks Barnes and Niraj Chokshi.