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Starbucks Is Closing Cafes and Stocks Sink: Live Business Updates Starbucks Is Closing Cafes: Live Business Updates
(32 minutes later)
Wall Street had its worst week since 2008 as the threat of a severe recession appeared ever more likely in the face of the spreading coronavirus.
The Dow Jones industrial average fell more than 4.5 percent on Friday, ending below where it stood on the day before President Trump was inaugurated, erasing the so-called Trump bump that the president has trumpeted throughout his presidency as evidence of his success. The S&P 500 is not far from that mark as well.
Stocks have collapsed more than 30 percent in a month, wiping out trillions in value and ending an 11-year long bull market. For both the S&P 500 and the Dow, the drop this week was the worst since the financial crisis more than a decade ago.
Policymakers are working feverishly to offset the economic impact from the virus pandemic, but their promises have so far failed to fully soothe investors. The persistent volley of bad news continued this week as the number of confirmed coronavirus infections in the United States climbed. California has imposed a “shelter in place” restriction on the state, New York’s governor told residents to stay indoors and ordered nonessential businesses to keep workers home, and a wave of jobless claims is only just beginning to swell.
Congress is preparing a $1 trillion stimulus package to help workers and prop up the economy, and central bankers in the United States and Europe have used their financial firepower to bolster the markets.
On Friday, traders clearly focused on the negative. The S&P 500 fell about 4 percent, after rising earlier in the day, as the mood grew increasingly dour.
It was another sharp turn in a market that has come to be characterized by dizzying changes in direction over the past month as investors have grappled with the barrage of developments. On Friday, the United States said it would shut down its borders with Mexico and Canada, both of which are critical trading partners.
Analysts at the hedge fund Bridgewater on Thursday estimated that corporate revenue in the United States — among public and private companies — could fall by $4 trillion. “That is a very dangerous decline, and, if not mitigated, it will lead to a long-lasting ripple,” they wrote on Bridgewater’s website.
On Friday, United Airlines warned that it would have to lay off workers or lower wages if it did not get government assistance by the end of the month.
Oil prices, which have cratered along with expectations for economic growth this year, fell 10 percent on Friday, dragging shares of energy companies lower.
Starbucks informed staff that it would close its cafes in the United States in response to the coronavirus crisis, though it will remain open for delivery and drive-through customers, the company said in an emailed statement on Friday.Starbucks informed staff that it would close its cafes in the United States in response to the coronavirus crisis, though it will remain open for delivery and drive-through customers, the company said in an emailed statement on Friday.
Some cafes close to hospitals or health care centers will remain open, according to the statement, as part of the company’s “efforts to serve first responders and health care workers.” And Starbucks will continue to pay all employees for the next 30 days, whether they come to work or stay at home.Some cafes close to hospitals or health care centers will remain open, according to the statement, as part of the company’s “efforts to serve first responders and health care workers.” And Starbucks will continue to pay all employees for the next 30 days, whether they come to work or stay at home.
The move is the latest in a series of escalating steps that Starbucks has taken in response to the coronavirus crisis. The coffee chain had already eliminated seating at all its company-owned stores in the country and closed some stores in “high-social gathering locations,” like malls and college campuses.The move is the latest in a series of escalating steps that Starbucks has taken in response to the coronavirus crisis. The coffee chain had already eliminated seating at all its company-owned stores in the country and closed some stores in “high-social gathering locations,” like malls and college campuses.
Starbucks had come under pressure from customers and employees to shutter the stores as the pandemic intensified. On Monday, McDonald’s joined other fast-food companies and closed its restaurants except for delivery and drive-through.Starbucks had come under pressure from customers and employees to shutter the stores as the pandemic intensified. On Monday, McDonald’s joined other fast-food companies and closed its restaurants except for delivery and drive-through.
Starbucks has been through this before in one of its most important markets — China. As the virus sickened tens of thousands of people in China earlier this year, the company closed more than 2,000 stores. As of last week, 90 percent of those stores had reopened.Starbucks has been through this before in one of its most important markets — China. As the virus sickened tens of thousands of people in China earlier this year, the company closed more than 2,000 stores. As of last week, 90 percent of those stores had reopened.
Also on Friday, Starbucks announced it would close all its stores in Britain.Also on Friday, Starbucks announced it would close all its stores in Britain.
Hedge fund managers have mostly managed to stem their losses from the market sell-off. Now they’re trying to figure out how to make money again.Hedge fund managers have mostly managed to stem their losses from the market sell-off. Now they’re trying to figure out how to make money again.
Some hedge funds are looking to invest in beaten-down companies poised for a rebound. King Street Capital Management, a $20 billion firm, told investors in a note reviewed by The New York Times that it had begun looking to invest in “high quality companies that have seen their bonds or loans caught up in the sell-off.”Some hedge funds are looking to invest in beaten-down companies poised for a rebound. King Street Capital Management, a $20 billion firm, told investors in a note reviewed by The New York Times that it had begun looking to invest in “high quality companies that have seen their bonds or loans caught up in the sell-off.”
The hedge fund billionaire Kenneth C. Griffin is starting up a new fund at Citadel to take advantage of the volatility and price discrepancies caused by the selling pressure in the bond market.The hedge fund billionaire Kenneth C. Griffin is starting up a new fund at Citadel to take advantage of the volatility and price discrepancies caused by the selling pressure in the bond market.
But with the usual relationships between stocks, bonds and other securities breaking down, there are few safe bets. Already there have been winners and losers.But with the usual relationships between stocks, bonds and other securities breaking down, there are few safe bets. Already there have been winners and losers.
The hedge fund manager Boaz Weinstein said in a note to investors in his $2.7 billion firm, Saba Capital Management, that he had positioned his portfolios to profit from bets on defaults and bankruptcy filings by companies with lots of high-yield, or junk, bonds. According to the note, which was reviewed by The Times, his main fund was up 33 percent this month.The hedge fund manager Boaz Weinstein said in a note to investors in his $2.7 billion firm, Saba Capital Management, that he had positioned his portfolios to profit from bets on defaults and bankruptcy filings by companies with lots of high-yield, or junk, bonds. According to the note, which was reviewed by The Times, his main fund was up 33 percent this month.
One of the hardest hit is Bridgewater Associates, the $160 billion colossus led by Ray Dalio, which manages money for dozens of pensions and sovereign wealth funds. The firm’s eight main portfolios reported losses for the year ranging from 9 percent to 21 percent.One of the hardest hit is Bridgewater Associates, the $160 billion colossus led by Ray Dalio, which manages money for dozens of pensions and sovereign wealth funds. The firm’s eight main portfolios reported losses for the year ranging from 9 percent to 21 percent.
President Trump has told reporters that Micky Arison, a former business associate and the chairman of Carnival Corporation, had offered to make the cruise operator’s ships available as floating hospitals during the coronavirus pandemic. They could be used for patients battling illnesses unrelated to the coronavirus, to relieve strain on the health care system.President Trump has told reporters that Micky Arison, a former business associate and the chairman of Carnival Corporation, had offered to make the cruise operator’s ships available as floating hospitals during the coronavirus pandemic. They could be used for patients battling illnesses unrelated to the coronavirus, to relieve strain on the health care system.
The idea, which the White House declined to explain, was the latest in a string of seeming improvisations by Mr. Trump as he has come under pressure from states facing the prospect of swarms of new patients.The idea, which the White House declined to explain, was the latest in a string of seeming improvisations by Mr. Trump as he has come under pressure from states facing the prospect of swarms of new patients.
A spokesman for Carnival said the company would only charge for “essential costs” like food and drink, but that a city or hospital would have to cover costs to transform ships, if needed. And an abrupt transfer of hospital patients would likely mean that outside medical staff would need to contribute to the efforts.A spokesman for Carnival said the company would only charge for “essential costs” like food and drink, but that a city or hospital would have to cover costs to transform ships, if needed. And an abrupt transfer of hospital patients would likely mean that outside medical staff would need to contribute to the efforts.
For health emergencies, cruise ships are a “worst case scenario,” said Tara C. Smith, a professor of epidemiology at Kent State University who has written about the health challenges of cruise travel.For health emergencies, cruise ships are a “worst case scenario,” said Tara C. Smith, a professor of epidemiology at Kent State University who has written about the health challenges of cruise travel.
The potential public-private partnership with Carnival has also prompted concerns about how Mr. Trump might be leveraging past business relationships in a public health crisis.The potential public-private partnership with Carnival has also prompted concerns about how Mr. Trump might be leveraging past business relationships in a public health crisis.
The orders by Gov. Gavin Newsom of California and Gov. Andrew M. Cuomo of New York that residents stay in their houses as much as possible effectively puts 60 million people on lockdown, raising profound implications for the American economy.The orders by Gov. Gavin Newsom of California and Gov. Andrew M. Cuomo of New York that residents stay in their houses as much as possible effectively puts 60 million people on lockdown, raising profound implications for the American economy.
California, with a population of 40 million, is a $3 trillion economy — the world’s fifth largest if it were a country. It is highly integrated with global commerce through its large export industries, its huge farming sector and its role as a hub of international trade. Most U.S. imports from China move through the state’s ports and airports before heading to inland warehouses and then being shipped by trucks and trains to supply auto dealers, factory floors and retailers across the United States.California, with a population of 40 million, is a $3 trillion economy — the world’s fifth largest if it were a country. It is highly integrated with global commerce through its large export industries, its huge farming sector and its role as a hub of international trade. Most U.S. imports from China move through the state’s ports and airports before heading to inland warehouses and then being shipped by trucks and trains to supply auto dealers, factory floors and retailers across the United States.
New York, which has about 20 million residents, is the nation’s third-largest state economy, after California and Texas. New York City’s economy is dominated by finance, media and professional services like law and accounting, work that may be able to be done remotely in some form. But more than 300,000 New York City residents — and more than 600,000 statewide — work in bars and restaurants, and hundreds of thousands more work in hotels, retail stores and entertainment venues.New York, which has about 20 million residents, is the nation’s third-largest state economy, after California and Texas. New York City’s economy is dominated by finance, media and professional services like law and accounting, work that may be able to be done remotely in some form. But more than 300,000 New York City residents — and more than 600,000 statewide — work in bars and restaurants, and hundreds of thousands more work in hotels, retail stores and entertainment venues.
New York is also a major hub of international tourism, virtually all of which will come to a halt. The Port of New York and New Jersey is the nation’s second largest by tonnage, after the California ports of Los Angeles and Long Beach. The state is no longer known for its factories, but upstate New York still has a substantial manufacturing sector.New York is also a major hub of international tourism, virtually all of which will come to a halt. The Port of New York and New Jersey is the nation’s second largest by tonnage, after the California ports of Los Angeles and Long Beach. The state is no longer known for its factories, but upstate New York still has a substantial manufacturing sector.
They are a new class of emergency medical workers: the more than two million Americans reporting to work each day to sell food and other household staples amid the coronavirus pandemic.They are a new class of emergency medical workers: the more than two million Americans reporting to work each day to sell food and other household staples amid the coronavirus pandemic.
As shoppers swarm stores, snapping up everything from milk to toilet paper, cashiers are there to ring them up. Stockroom employees replenish shelves as soon as shipments arrive. Their presence is a source of calm, signifying that, even as demand has surged, supply chains remain intact and the essentials that people need remain available.As shoppers swarm stores, snapping up everything from milk to toilet paper, cashiers are there to ring them up. Stockroom employees replenish shelves as soon as shipments arrive. Their presence is a source of calm, signifying that, even as demand has surged, supply chains remain intact and the essentials that people need remain available.
But these same employees are growing tired and, because they constantly interact with customers, fearful of getting sick themselves.But these same employees are growing tired and, because they constantly interact with customers, fearful of getting sick themselves.
Amy Askelson, a grocery worker in Kalamazoo, Mich., said she uses hand sanitizer after each interaction with a customer. But Ms. Askelson, 36, still feels vulnerable. She has multiple sclerosis, meaning her immune system is impaired. And she worries about passing the virus to her 72-year-old mother, who has been helping take care of her children.Amy Askelson, a grocery worker in Kalamazoo, Mich., said she uses hand sanitizer after each interaction with a customer. But Ms. Askelson, 36, still feels vulnerable. She has multiple sclerosis, meaning her immune system is impaired. And she worries about passing the virus to her 72-year-old mother, who has been helping take care of her children.
“I’m going to work every day with the general public and coming over to look at my kids, and I know I’m giving her those germs,” she said. “We’re supposed to be standing six feet away, but I work in the self-checkout where you have to be right next to the customer.”“I’m going to work every day with the general public and coming over to look at my kids, and I know I’m giving her those germs,” she said. “We’re supposed to be standing six feet away, but I work in the self-checkout where you have to be right next to the customer.”
Boeing, whose stock has been battered in the last week, announced on Friday a series of steps to conserve cash as it works to shore up its finances: Dave Calhoun, the chief executive, and Larry Kellner, the chairman, will give up all pay through 2020, and the company will stop paying dividends to shareholders.
The top two executives at United Airlines asked employees in a letter on Friday to contact members of Congress and urge them to bail out the aviation industry, noting that deep cuts would have to be made if government assistance does not materialize by month’s end. Delta disclosed that the company expected second-quarter revenue to fall 80 percent compared with the same period last year.The top two executives at United Airlines asked employees in a letter on Friday to contact members of Congress and urge them to bail out the aviation industry, noting that deep cuts would have to be made if government assistance does not materialize by month’s end. Delta disclosed that the company expected second-quarter revenue to fall 80 percent compared with the same period last year.
WhatsApp, the global messaging service owned by Facebook, said on Friday it had partnered with the World Health Organization to distribute verified information about COVID-19. Users sign up for the program through a link on the W.H.O. website, and a chatbot then doles out up-to-date information about death statistics, the latest news and articles, and how to protect oneself from contracting the virus.WhatsApp, the global messaging service owned by Facebook, said on Friday it had partnered with the World Health Organization to distribute verified information about COVID-19. Users sign up for the program through a link on the W.H.O. website, and a chatbot then doles out up-to-date information about death statistics, the latest news and articles, and how to protect oneself from contracting the virus.
Bank employees are considered essential workers under the federal government’s emergency declaration, which means banks can require workers to keep coming into work.Bank employees are considered essential workers under the federal government’s emergency declaration, which means banks can require workers to keep coming into work.
Reporting and research were contributed by Matthew Goldstein, Kate Kelly, Alexandra Stevenson, Ben Dooley, Jason Karaian, Adam Satariano, Amie Tsang, Jeanna Smialek, Matina Stevis-Gridneff, Conor Dougherty, Emily Flitter, C.J. Hughes, Ben Casselman, Niraj Chokshi, Michael de la Merced, Mike Isaac, Daniel Victor and Kevin Granville.Reporting and research were contributed by Matthew Goldstein, Kate Kelly, Alexandra Stevenson, Ben Dooley, Jason Karaian, Adam Satariano, Amie Tsang, Jeanna Smialek, Matina Stevis-Gridneff, Conor Dougherty, Emily Flitter, C.J. Hughes, Ben Casselman, Niraj Chokshi, Michael de la Merced, Mike Isaac, Daniel Victor and Kevin Granville.