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Stocks Fall as Investor Fears Return: Live Updates Stocks Fall as Investors Look to Washington for Help: Live Updates
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Stocks on Wall Street tumbled on Wednesday, as volatile trading throughout global markets signaled continued investor concern about how governments would deal with the coronavirus fallout.Stocks on Wall Street tumbled on Wednesday, as volatile trading throughout global markets signaled continued investor concern about how governments would deal with the coronavirus fallout.
The S&P 500 fell as much as 4 percent in early trading Wednesday, undoing most of the previous day’s surge. On Tuesday, the benchmark index posted its best single-day performance in over a year, rising almost 5 percent.The S&P 500 fell as much as 4 percent in early trading Wednesday, undoing most of the previous day’s surge. On Tuesday, the benchmark index posted its best single-day performance in over a year, rising almost 5 percent.
Energy stocks drove the S&P 500 lower, taking a cue from another slump in oil prices. Benchmark American crude dropped 2 percent, to less than $34 a barrel, after the Saudi Arabian state oil company said for the second time this week that it would expand production capacity. The announcement signaled no relief in Saudi Arabia’s clash with Russia over oil supplies, which sent crude prices crashing earlier this week.Energy stocks drove the S&P 500 lower, taking a cue from another slump in oil prices. Benchmark American crude dropped 2 percent, to less than $34 a barrel, after the Saudi Arabian state oil company said for the second time this week that it would expand production capacity. The announcement signaled no relief in Saudi Arabia’s clash with Russia over oil supplies, which sent crude prices crashing earlier this week.
Yields on Treasury bonds fell again, with those on the 10-year note nosing below 0.7 percent in early trading. The decline reflects a combination of dour expectations for global economic growth, as well as high levels of nervousness from investors, who have bought U.S. government bonds as a haven during the market tumult in March. When bond prices rise, yields fall.Yields on Treasury bonds fell again, with those on the 10-year note nosing below 0.7 percent in early trading. The decline reflects a combination of dour expectations for global economic growth, as well as high levels of nervousness from investors, who have bought U.S. government bonds as a haven during the market tumult in March. When bond prices rise, yields fall.
Investors are vacillating between the threat that the coronavirus poses to the global economy and the hopes that governments will unveil a series of measures to help businesses. Investors are vacillating between the threat that the coronavirus poses to the global economy and the hopes that governments will unveil a series of measures to help businesses. On Wednesday, World Health Organization officials officially designated the spread of the coronavirus as a global pandemic.
President Trump has signaled he would consider ways to stimulate the economy. Options include cutting payroll taxes and extending the American tax filing deadline past April 15. But so far, the White House has not announced any specific measures, and most experts say a payroll tax cut is not an effective way to combat the problems facing the economy.President Trump has signaled he would consider ways to stimulate the economy. Options include cutting payroll taxes and extending the American tax filing deadline past April 15. But so far, the White House has not announced any specific measures, and most experts say a payroll tax cut is not an effective way to combat the problems facing the economy.
In Europe, major indexes fell, giving up early gains that had come after the Bank of England said it would cut interest rates to help British businesses. Shares in Asia also fell.In Europe, major indexes fell, giving up early gains that had come after the Bank of England said it would cut interest rates to help British businesses. Shares in Asia also fell.
Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that he would be recommending to the president that the Internal Revenue Service allow a delay of tax payments without penalty or interest that would apply to “virtually all Americans other than the superrich.”Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that he would be recommending to the president that the Internal Revenue Service allow a delay of tax payments without penalty or interest that would apply to “virtually all Americans other than the superrich.”
The Treasury secretary noted that all individuals are allowed to request tax payment extensions online but that this would be a special provision meant to help small and medium sized businesses and “hardworking individuals.”The Treasury secretary noted that all individuals are allowed to request tax payment extensions online but that this would be a special provision meant to help small and medium sized businesses and “hardworking individuals.”
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Mr. Mnuchin, who is testifying before House lawmakers said that this will not apply to large corporations or the wealthiest Americans, but did not elaborate on what the threshold will be. “That will have the impact of putting over $200 billion back into the economy and that will create a very big stimulus,” Mr. Mnuchin said, adding that Treasury is already working on funding the initiative.Mr. Mnuchin, who is testifying before House lawmakers said that this will not apply to large corporations or the wealthiest Americans, but did not elaborate on what the threshold will be. “That will have the impact of putting over $200 billion back into the economy and that will create a very big stimulus,” Mr. Mnuchin said, adding that Treasury is already working on funding the initiative.
He said the White House is particularly concerned about how the virus is affecting the cruise ship, airline and hotel industries and that the administration is considering providing loan guarantees, like those that were offered after the attacks of September 11, 2001, to keep those industries afloat.He said the White House is particularly concerned about how the virus is affecting the cruise ship, airline and hotel industries and that the administration is considering providing loan guarantees, like those that were offered after the attacks of September 11, 2001, to keep those industries afloat.
“Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk,” he said.“Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk,” he said.
Treasury and White House officials have been discussing the idea of extending the April 15 tax deadline over the past week as the administration considers measures to relieve financial pressure on individuals and businesses struggling with fallout from a virus that has closed schools, kept workers at home and disrupted supply chains.Treasury and White House officials have been discussing the idea of extending the April 15 tax deadline over the past week as the administration considers measures to relieve financial pressure on individuals and businesses struggling with fallout from a virus that has closed schools, kept workers at home and disrupted supply chains.
The I.R.S. could extend the tax payment deadline or waive penalties and interest for late payments.The I.R.S. could extend the tax payment deadline or waive penalties and interest for late payments.
Senate Democrats prepared to release a new fiscal response plan to the coronavirus, featuring paid sick leave for affected workers as well as breaks on federal student loans and mortgages, block grants to help communities, and assistance to help public transit systems stay in operation.Senate Democrats prepared to release a new fiscal response plan to the coronavirus, featuring paid sick leave for affected workers as well as breaks on federal student loans and mortgages, block grants to help communities, and assistance to help public transit systems stay in operation.
House Democrats were preparing to release a wide-ranging plan of their own on Wednesday, including proposals for government paid sick leave and increased safety-net spending on programs like food stamps and unemployment insurance. House Speaker Nancy Pelosi was aiming for a possible House vote on Thursday before lawmakers are scheduled to leave Washington for a weeklong recess.House Democrats were preparing to release a wide-ranging plan of their own on Wednesday, including proposals for government paid sick leave and increased safety-net spending on programs like food stamps and unemployment insurance. House Speaker Nancy Pelosi was aiming for a possible House vote on Thursday before lawmakers are scheduled to leave Washington for a weeklong recess.
Ms. Pelosi began talks on Tuesday with Mr. Mnuchin with the goal of reaching swift agreement, but the White House and congressional Democrats are divided about what the package should look like.Ms. Pelosi began talks on Tuesday with Mr. Mnuchin with the goal of reaching swift agreement, but the White House and congressional Democrats are divided about what the package should look like.
Notably absent from either the Senate or House proposals is a payroll tax cut, which President Trump has pushed for despite opposition from within the Republican Party. Democrats called that idea a non-starter.Notably absent from either the Senate or House proposals is a payroll tax cut, which President Trump has pushed for despite opposition from within the Republican Party. Democrats called that idea a non-starter.
“We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, Senator Chuck Schumer, the New York Democrat, said.“We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, Senator Chuck Schumer, the New York Democrat, said.
The Federal Reserve’s surprise rate cut last week didn’t reassure financial markets. Nor, it appears, did the Bank of England’s similar move this morning. So what could policymakers do to prevent a recession?The Federal Reserve’s surprise rate cut last week didn’t reassure financial markets. Nor, it appears, did the Bank of England’s similar move this morning. So what could policymakers do to prevent a recession?
If the financial crisis is any guide, the answer is to act aggressively, and to act now.If the financial crisis is any guide, the answer is to act aggressively, and to act now.
So far, at least, the Trump administration doesn’t seem to be heeding that advice. Mr. Trump is weighing a temporary elimination of the payroll tax, a measure that would have a big dollar figure (it could cost nearly $700 billion) but would provide only a trickle of extra cash into workers’ bank accounts. For people who lose their jobs as a result of the outbreak, a payroll tax cut wouldn’t help at all.So far, at least, the Trump administration doesn’t seem to be heeding that advice. Mr. Trump is weighing a temporary elimination of the payroll tax, a measure that would have a big dollar figure (it could cost nearly $700 billion) but would provide only a trickle of extra cash into workers’ bank accounts. For people who lose their jobs as a result of the outbreak, a payroll tax cut wouldn’t help at all.
A more effective move, according to many economists, would be to provide lump-sum payments to every American. That would help people directly affected by the outbreak by giving them cash to pay rent or buy food.A more effective move, according to many economists, would be to provide lump-sum payments to every American. That would help people directly affected by the outbreak by giving them cash to pay rent or buy food.
President Trump plans to meet with top officials from the nation’s banks at the White House Wednesday afternoon to discuss the coronavirus outbreak that has roiled markets and threatened economic growth.President Trump plans to meet with top officials from the nation’s banks at the White House Wednesday afternoon to discuss the coronavirus outbreak that has roiled markets and threatened economic growth.
Top executives from Goldman Sachs, Bank of America, Wells Fargo, JPMorgan Chase and Citigroup, as well as the leaders of some of their smaller counterparts, will attend, according to bank officials briefed on the plans.Top executives from Goldman Sachs, Bank of America, Wells Fargo, JPMorgan Chase and Citigroup, as well as the leaders of some of their smaller counterparts, will attend, according to bank officials briefed on the plans.
The full agenda is not clear, but the bank executives are preparing to address questions on their views of the recent market volatility, the funding of small businesses and their own economic outlooks, according to the officials.The full agenda is not clear, but the bank executives are preparing to address questions on their views of the recent market volatility, the funding of small businesses and their own economic outlooks, according to the officials.
The Bank of England made an emergency cut to its key borrowing rate on Wednesday by half a percentage point before the opening of stock trading in London.The Bank of England made an emergency cut to its key borrowing rate on Wednesday by half a percentage point before the opening of stock trading in London.
The move, which brings the rate down to one-quarter of a percent, was approved unanimously in an emergency meeting of the central bank’s policymaking board, the Bank of England said.The move, which brings the rate down to one-quarter of a percent, was approved unanimously in an emergency meeting of the central bank’s policymaking board, the Bank of England said.
It is intended “to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance,” the bank said.It is intended “to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance,” the bank said.
Christine Lagarde, the European Central Bank’s new president, is under intense pressure to take action as the virus outbreak threatens the Continent’s economy.Christine Lagarde, the European Central Bank’s new president, is under intense pressure to take action as the virus outbreak threatens the Continent’s economy.
But there’s one big problem. The E.C.B. has been in nearly nonstop crisis mode since 2008, and it has few cards left to play. The bank’s main interest rate, the one it charges commercial banks for short-term loans, is already zero. It can only tinker with a secondary rate that is already negative.But there’s one big problem. The E.C.B. has been in nearly nonstop crisis mode since 2008, and it has few cards left to play. The bank’s main interest rate, the one it charges commercial banks for short-term loans, is already zero. It can only tinker with a secondary rate that is already negative.
Ms. Lagarde has signaled that she understands the urgency of the situation. She told European Union leaders on a conference call late Tuesday that the situation could become as bad as 2008 if governments do not act decisively enough, according to a person familiar with her remarks. The call was first reported by Bloomberg News. Ms. Lagarde has signaled that she understands the urgency of the situation. She told European Union leaders on a conference call late Tuesday that the situation could become as bad as 2008 if governments do not act decisively enough, according to a person familiar with her remarks.
In what appears to be more jousting with Russia, Saudi Aramco, the national oil company of Saudi Arabia, said Wednesday that it had been directed by the country’s ministry of energy to increase its oil output capacity to 13 million barrels a day from the current 12 million barrels a day.
After Saudi Arabia and Russia failed to agree on new production cuts at a meeting in Vienna on Friday, the Saudis have been making highly visible preparations for a price war with Russia and other producers.
Over the weekend, Aramco offered its customers deep discounts on crude, and on Tuesday the company said that it would sell 12.3 million barrels a day in April, well over the 9.7 million barrels a day it has been producing.
The Federal Aviation Administration said on Wednesday that it would allow airlines to run fewer flights without running the risk of losing their coveted slots at some busy airports. Airlines had asked for the change so they could temporarily pare their schedules in response to the coronavirus outbreak.The Federal Aviation Administration said on Wednesday that it would allow airlines to run fewer flights without running the risk of losing their coveted slots at some busy airports. Airlines had asked for the change so they could temporarily pare their schedules in response to the coronavirus outbreak.
In what appears to be more jousting with Russia, Saudi Aramco, the national oil company of Saudi Arabia, said Wednesday that it had been directed by the country’s ministry of energy to increase its oil output capacity to 13 million barrels a day from the current 12 million barrels a day.
The coronavirus stands to wipe out more than $820 billion in spending on global business travel, about half of it concentrated in China, according to the Global Business Travel Association.The coronavirus stands to wipe out more than $820 billion in spending on global business travel, about half of it concentrated in China, according to the Global Business Travel Association.
Fiat Chrysler warned Wednesday that it might have to close some of its factories in Italy because of the coronavirus epidemic, which has hit the country especially hard. Any closures would be for health reasons, not because of problems getting parts or raw materials needed to keep assembly lines running, a Fiat spokesman said.Fiat Chrysler warned Wednesday that it might have to close some of its factories in Italy because of the coronavirus epidemic, which has hit the country especially hard. Any closures would be for health reasons, not because of problems getting parts or raw materials needed to keep assembly lines running, a Fiat spokesman said.
ABC’s “Live With Kelly and Ryan” was the latest talk show to temporarily ban its studio audience. “It feels like we’re auditioning,” said the co-host Ryan Seacrest on Wednesday morning to a mostly empty studio, which is in Manhattan.ABC’s “Live With Kelly and Ryan” was the latest talk show to temporarily ban its studio audience. “It feels like we’re auditioning,” said the co-host Ryan Seacrest on Wednesday morning to a mostly empty studio, which is in Manhattan.
Reporting was contributed by Alan Rappeport, Ben Casselman, Alexandra Stevenson, Ben Dooley, Niraj Chokshi, Kevin Granville, Carlos Tejada, Matthew Goldstein, Jack Ewing and John Koblin. An employee at Condé Nast tested positive for coronavirus, resulting in all employees at the company’s 1 World Trade Center headquarters being advised to work from home if possible through the end of the month, according to an email from chief executive Roger Lynch viewed by The New York Times. The floor on which the person worked has been closed, the email said.
Reporting was contributed by Alan Rappeport, Ben Casselman, Alexandra Stevenson, Ben Dooley, Niraj Chokshi, Kevin Granville, Carlos Tejada, Jim Tankersley, Matthew Goldstein, Jack Ewing, John Koblin and Marc Tracy.