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| Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies | Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies |
| (1 day later) | |
| The coronavirus outbreak ended one of the longest winning streaks in market history on Wednesday as the Dow Jones industrial average plunged and global policymakers grappled with the growing economic crisis. | The coronavirus outbreak ended one of the longest winning streaks in market history on Wednesday as the Dow Jones industrial average plunged and global policymakers grappled with the growing economic crisis. |
| The Dow closed with a loss of nearly 6 percent. That brought the decline from its most recent peak to more than 20 percent, the threshold that defines a bear market, after the Dow’s 11-year run in bull-market territory. | The Dow closed with a loss of nearly 6 percent. That brought the decline from its most recent peak to more than 20 percent, the threshold that defines a bear market, after the Dow’s 11-year run in bull-market territory. |
| The broader S&P 500 was off nearly 5 percent for the day, though down less than 20 percent from its peak less than a month ago. On Thursday, stocks in the Asia-Pacific region again fell broadly, with shares in Japan down more than 5 percent at midday. Futures markets signaled grim news for Wall Street. | The broader S&P 500 was off nearly 5 percent for the day, though down less than 20 percent from its peak less than a month ago. On Thursday, stocks in the Asia-Pacific region again fell broadly, with shares in Japan down more than 5 percent at midday. Futures markets signaled grim news for Wall Street. |
| The full economic toll of the outbreak will not be clear for months. But there is mounting evidence that it will be severe. | The full economic toll of the outbreak will not be clear for months. But there is mounting evidence that it will be severe. |
| Airlines are warning of empty planes and huge financial losses. A sharp drop in oil prices is threatening to put energy companies out of business and thousands of American drillers out of work. Supply-chain bottlenecks are forcing factories around the world to cut output, even as a slump in consumer confidence is raising doubts that there will be demand for their goods once production resumes. | Airlines are warning of empty planes and huge financial losses. A sharp drop in oil prices is threatening to put energy companies out of business and thousands of American drillers out of work. Supply-chain bottlenecks are forcing factories around the world to cut output, even as a slump in consumer confidence is raising doubts that there will be demand for their goods once production resumes. |
| Policymakers on both sides of the Atlantic appeared unwilling or unable to mount an aggressive response to the crisis. A rate cut by the Federal Reserve last week failed to calm financial markets. A similar move by the Bank of England on Wednesday was equally ineffectual. | Policymakers on both sides of the Atlantic appeared unwilling or unable to mount an aggressive response to the crisis. A rate cut by the Federal Reserve last week failed to calm financial markets. A similar move by the Bank of England on Wednesday was equally ineffectual. |
| Governments in Europe were struggling to manage their budgets even before the virus struck, limiting their ability to spend heavily to keep their economies afloat. And in the United States, which faces no such constraints, President Trump has resisted aggressive stimulus measures that many economists say are necessary to contain the damage. | Governments in Europe were struggling to manage their budgets even before the virus struck, limiting their ability to spend heavily to keep their economies afloat. And in the United States, which faces no such constraints, President Trump has resisted aggressive stimulus measures that many economists say are necessary to contain the damage. |
| “If the Trump administration and Congress can’t get it together quickly and put together a sizable and responsible package, then a recession seems like a real possibility here,” said Mark Zandi, chief economist for Moody’s Analytics. He said he saw a roughly 50 percent chance of a recession in the next year. | “If the Trump administration and Congress can’t get it together quickly and put together a sizable and responsible package, then a recession seems like a real possibility here,” said Mark Zandi, chief economist for Moody’s Analytics. He said he saw a roughly 50 percent chance of a recession in the next year. |
| As recently as a week ago, few economists thought a recession was likely. Most thought that any damage from the virus would be brief, and that the economy would experience a sharp, “V-shaped” recovery. Forecasts have become significantly gloomier, however, as the virus has spread in the United States and as the effects around the world have become more pronounced. | As recently as a week ago, few economists thought a recession was likely. Most thought that any damage from the virus would be brief, and that the economy would experience a sharp, “V-shaped” recovery. Forecasts have become significantly gloomier, however, as the virus has spread in the United States and as the effects around the world have become more pronounced. |
| Italy on Wednesday ordered almost all businesses nationwide to close after earlier travel restrictions failed to contain the virus. Chancellor Angela Merkel of Germany said that as much as 70 percent of her country’s population was likely to become infected. The World Health Organization declared the outbreak a pandemic, acknowledging its worldwide scope. | Italy on Wednesday ordered almost all businesses nationwide to close after earlier travel restrictions failed to contain the virus. Chancellor Angela Merkel of Germany said that as much as 70 percent of her country’s population was likely to become infected. The World Health Organization declared the outbreak a pandemic, acknowledging its worldwide scope. |
| The United States, unlike Europe, was on fairly firm economic footing before the virus hit. Unemployment was near a five-decade low, consumer spending and the housing market were strong, and overall growth was slowing but still solid. That should give the economy some cushion. | The United States, unlike Europe, was on fairly firm economic footing before the virus hit. Unemployment was near a five-decade low, consumer spending and the housing market were strong, and overall growth was slowing but still solid. That should give the economy some cushion. |
| But cracks were already showing. The trade war with China hurt manufacturers and farmers, leaving the economy even more dependent on consumer spending. The Federal Reserve last year cut interest rates three times to try to keep the expansion on track. | But cracks were already showing. The trade war with China hurt manufacturers and farmers, leaving the economy even more dependent on consumer spending. The Federal Reserve last year cut interest rates three times to try to keep the expansion on track. |
| “The economy was already on its back heels coming into this year,” Mr. Zandi said. “All it was going to take was a shove to put the economy on its back, and it just got a body blow.” | “The economy was already on its back heels coming into this year,” Mr. Zandi said. “All it was going to take was a shove to put the economy on its back, and it just got a body blow.” |
| Top Wall Street executives, summoned to a Wednesday meeting with Mr. Trump, said the banking system was strong enough to withstand the recent turmoil. | Top Wall Street executives, summoned to a Wednesday meeting with Mr. Trump, said the banking system was strong enough to withstand the recent turmoil. |
| “This is not a financial crisis,” Citigroup’s chief executive, Michael Corbat, told the president. “The banks and financial system are in sound shape, and the banks are here to help.” | “This is not a financial crisis,” Citigroup’s chief executive, Michael Corbat, told the president. “The banks and financial system are in sound shape, and the banks are here to help.” |
| Mr. Trump, often with his arms crossed, appeared to lament the end of the bull market. He cited the strength of the February jobs report and said additional data suggested that the economy was still running smoothly. | Mr. Trump, often with his arms crossed, appeared to lament the end of the bull market. He cited the strength of the February jobs report and said additional data suggested that the economy was still running smoothly. |
| “Now we’re hitting a patch,” he said. “And we’re going to have to do something with response to this virus.” | “Now we’re hitting a patch,” he said. “And we’re going to have to do something with response to this virus.” |
| Investors were not convinced. Hopes for a stimulus package, which helped drive stocks sharply higher on Tuesday, faded Wednesday, and so did the rally: Oil prices tumbled again, pulling down energy stocks. Consumer discretionary stocks — a sector that includes both cruise lines and restaurants — also dived, as investors appeared to price in a downturn in spending among Americans. Analysts at Goldman Sachs said Wednesday that they expected the S&P 500 to fall another 11 percent by midyear. | Investors were not convinced. Hopes for a stimulus package, which helped drive stocks sharply higher on Tuesday, faded Wednesday, and so did the rally: Oil prices tumbled again, pulling down energy stocks. Consumer discretionary stocks — a sector that includes both cruise lines and restaurants — also dived, as investors appeared to price in a downturn in spending among Americans. Analysts at Goldman Sachs said Wednesday that they expected the S&P 500 to fall another 11 percent by midyear. |
| “Even if the virus situation improves, we’re looking at people just being very cautious about going back,” said Nariman Behravesh, chief economist for IHS Markit. “It’s going to take a while for people to feel comfortable to go back into large crowds, to get back on an airplane.” | “Even if the virus situation improves, we’re looking at people just being very cautious about going back,” said Nariman Behravesh, chief economist for IHS Markit. “It’s going to take a while for people to feel comfortable to go back into large crowds, to get back on an airplane.” |
| Indeed, no amount of fiscal stimulus or interest-rate cuts will restore canceled flights or postponed events — nor, at a time when health officials are recommending “social distancing,” would policymakers want to. The only thing that could truly prevent economic damage or settle financial markets lies beyond the power of economic policymakers: getting the virus itself in check. | Indeed, no amount of fiscal stimulus or interest-rate cuts will restore canceled flights or postponed events — nor, at a time when health officials are recommending “social distancing,” would policymakers want to. The only thing that could truly prevent economic damage or settle financial markets lies beyond the power of economic policymakers: getting the virus itself in check. |
| “I don’t think it’s something that conventional fiscal and monetary policy can solve,” said Lewis Alexander, chief U.S. economist at Nomura Securities in New York. “It’s not like if you just write a big enough check everything will be fine.” | “I don’t think it’s something that conventional fiscal and monetary policy can solve,” said Lewis Alexander, chief U.S. economist at Nomura Securities in New York. “It’s not like if you just write a big enough check everything will be fine.” |
| But economists said there was still a window of opportunity to limit the damage and avoid the cascading ripple effects that could cause a recession. Targeted aid for affected industries could help prevent layoffs. Cash payments could allow people to keep spending even if their hours are cut or they miss work because of a quarantine. | But economists said there was still a window of opportunity to limit the damage and avoid the cascading ripple effects that could cause a recession. Targeted aid for affected industries could help prevent layoffs. Cash payments could allow people to keep spending even if their hours are cut or they miss work because of a quarantine. |
| That window could be closing. The employment site ZipRecruiter said Wednesday that it had seen a sharp decline in postings for jobs in hotels, restaurants and other affected industries, one of the first wobbles in the labor market. | That window could be closing. The employment site ZipRecruiter said Wednesday that it had seen a sharp decline in postings for jobs in hotels, restaurants and other affected industries, one of the first wobbles in the labor market. |
| Updated June 16, 2020 | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Consumer confidence in March suffered its largest single-month drop of Mr. Trump’s tenure in office, according to a nationwide poll conducted for The New York Times by the online research firm SurveyMonkey. The decline was some of the first evidence that the outbreak — and the financial market turmoil it has caused — is threatening consumer spending, the linchpin of the decade-long economic expansion. | Consumer confidence in March suffered its largest single-month drop of Mr. Trump’s tenure in office, according to a nationwide poll conducted for The New York Times by the online research firm SurveyMonkey. The decline was some of the first evidence that the outbreak — and the financial market turmoil it has caused — is threatening consumer spending, the linchpin of the decade-long economic expansion. |
| The drop in confidence is not yet dire: More people (39 percent) expected very good or somewhat good business conditions in the coming year than those who expected very bad or somewhat bad conditions (22 percent). But sentiment could be shaken further by the continuing financial turmoil. The poll was conducted last week and completed on Sunday, before stock markets dropped 8 percent on Monday in a single day of virus-driven losses. | The drop in confidence is not yet dire: More people (39 percent) expected very good or somewhat good business conditions in the coming year than those who expected very bad or somewhat bad conditions (22 percent). But sentiment could be shaken further by the continuing financial turmoil. The poll was conducted last week and completed on Sunday, before stock markets dropped 8 percent on Monday in a single day of virus-driven losses. |
| Adding to the challenge, the people most at risk of losing their jobs or hours are mostly service workers: hotel housekeepers, airport vendors, waiters and waitresses. Those workers are less likely than white-collar workers to have paid sick leave, and they are less likely to have the financial resources to weather a period of reduced income. That could worsen the impact on consumer spending, said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch. | Adding to the challenge, the people most at risk of losing their jobs or hours are mostly service workers: hotel housekeepers, airport vendors, waiters and waitresses. Those workers are less likely than white-collar workers to have paid sick leave, and they are less likely to have the financial resources to weather a period of reduced income. That could worsen the impact on consumer spending, said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch. |
| “That’s the part of the economy that is presumably most budget constrained, so they don’t necessarily have savings to draw down or lines of credit they can use,” she said. “An income shock in that population becomes a consumption shock more quickly and potentially more deeply.” | “That’s the part of the economy that is presumably most budget constrained, so they don’t necessarily have savings to draw down or lines of credit they can use,” she said. “An income shock in that population becomes a consumption shock more quickly and potentially more deeply.” |
| Efforts to fight the outbreak are likely to make the economic situation worse, at least in the short run. | Efforts to fight the outbreak are likely to make the economic situation worse, at least in the short run. |
| The experience in other countries offers lessons for the United States. China appears to have been able to get its outbreak under control, but only through shutting down vast regions of the country. South Korea has won plaudits for its decisive response, but that, too, required huge disruptions to daily life and commerce. | The experience in other countries offers lessons for the United States. China appears to have been able to get its outbreak under control, but only through shutting down vast regions of the country. South Korea has won plaudits for its decisive response, but that, too, required huge disruptions to daily life and commerce. |
| “The virus is beatable, but the measures that are required to beat it are economy killers,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics, a research firm. | “The virus is beatable, but the measures that are required to beat it are economy killers,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics, a research firm. |
| The only way to kick-start the economy after such a vast disruption, Mr. Shepherdson said, is through a “blockbuster fiscal response.” | The only way to kick-start the economy after such a vast disruption, Mr. Shepherdson said, is through a “blockbuster fiscal response.” |
| There is little evidence so far that such a response is coming. Mr. Trump is proposing a temporary elimination of the payroll tax, a measure with a big dollar figure — it could cost nearly $1 trillion — that would put 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. | There is little evidence so far that such a response is coming. Mr. Trump is proposing a temporary elimination of the payroll tax, a measure with a big dollar figure — it could cost nearly $1 trillion — that would put 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. |
| Democrats are preparing their own plan, 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. Negotiations between the parties have hardly begun. | Democrats are preparing their own plan, 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. Negotiations between the parties have hardly begun. |
| Reporting was contributed by Niraj Chokshi, Matt Phillips, Deborah Solomon and Jim Tankersley. | Reporting was contributed by Niraj Chokshi, Matt Phillips, Deborah Solomon and Jim Tankersley. |