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Wall Street Gains as Washington’s Rescue Deal Inches Forward: Live Updates Wall Street Gains as Washington’s Rescue Deal Inches Forward: Live Updates
(32 minutes later)
Stocks on Wall Street rose on Wednesday as investors sized up a $2 trillion coronavirus rescue package intended to shore up the American economy, but the gains faded late in the day as debate over the bill continued without a vote in the Senate.Stocks on Wall Street rose on Wednesday as investors sized up a $2 trillion coronavirus rescue package intended to shore up the American economy, but the gains faded late in the day as debate over the bill continued without a vote in the Senate.
The legislation would be the biggest fiscal stimulus package in modern American history, and more than double the size of the roughly $800 billion stimulus package that Congress passed in 2009, during the last recession.The legislation would be the biggest fiscal stimulus package in modern American history, and more than double the size of the roughly $800 billion stimulus package that Congress passed in 2009, during the last recession.
The S&P 500 climbed more than 1 percent, adding to a 9.4 percent gain on Tuesday that had come as investors anticipated that Democrats and Republicans would reach a deal over the plans.The S&P 500 climbed more than 1 percent, adding to a 9.4 percent gain on Tuesday that had come as investors anticipated that Democrats and Republicans would reach a deal over the plans.
Some of the companies expected to benefit from government help led Wednesday’s gains. Boeing was up more than 20 percent, helping lift the Dow Jones industrial average. American Airlines and Carnival Corporation both jumped more than 10 percent.Some of the companies expected to benefit from government help led Wednesday’s gains. Boeing was up more than 20 percent, helping lift the Dow Jones industrial average. American Airlines and Carnival Corporation both jumped more than 10 percent.
Investors have welcomed the plans, but few are willing to conclusively say that the worst of the market sell-off is over.Investors have welcomed the plans, but few are willing to conclusively say that the worst of the market sell-off is over.
In the United States, widespread social distancing measures put in place to control the spread of the coronavirus have hammered consumer spending, the heart of the American economy.In the United States, widespread social distancing measures put in place to control the spread of the coronavirus have hammered consumer spending, the heart of the American economy.
Economists are expecting almost unthinkable declines in the gross domestic product in the second quarter. Analysts at Capital Economics said on Wednesday that they expected U.S. growth to fall 40 percent in the second quarter at an annualized pace, as the unemployment rate jumps to 12 percent, higher than its 10 percent peak in 2009.Economists are expecting almost unthinkable declines in the gross domestic product in the second quarter. Analysts at Capital Economics said on Wednesday that they expected U.S. growth to fall 40 percent in the second quarter at an annualized pace, as the unemployment rate jumps to 12 percent, higher than its 10 percent peak in 2009.
The Labor Department’s weekly estimate of new claims for unemployment insurance, which will be released at 8:30 a.m. Thursday, typically draws little attention. Not this week: The report will provide some of the first hard data on the scale of the economic damage caused by the pandemic.The Labor Department’s weekly estimate of new claims for unemployment insurance, which will be released at 8:30 a.m. Thursday, typically draws little attention. Not this week: The report will provide some of the first hard data on the scale of the economic damage caused by the pandemic.
Citigroup economists estimate that the report could show that four million people applied for benefits last week. Other forecasters put the number a bit lower. But there is wide agreement that the total will dwarf the previous record of 695,000 new claims, from October 1982.Citigroup economists estimate that the report could show that four million people applied for benefits last week. Other forecasters put the number a bit lower. But there is wide agreement that the total will dwarf the previous record of 695,000 new claims, from October 1982.
“In the whole history of initial claims, there’s never been anything remotely close to that,” said Ben Herzon, executive director of IHS Markit, a business data and analytics firm.“In the whole history of initial claims, there’s never been anything remotely close to that,” said Ben Herzon, executive director of IHS Markit, a business data and analytics firm.
THE RESCUE PLANTHE RESCUE PLAN
The airline industry is poised to receive an enormous bailout as part of the stimulus bill, a draft of which sets aside around $30 billion to pay employees of passenger and cargo employees. It also provides loans to passenger and cargo carriers in addition to some tax relief.The airline industry is poised to receive an enormous bailout as part of the stimulus bill, a draft of which sets aside around $30 billion to pay employees of passenger and cargo employees. It also provides loans to passenger and cargo carriers in addition to some tax relief.
In exchange for the aid, airlines are prohibited from stock buybacks and dividends until a year after the loan is repaid. They must also maintain current staffing levels through September.In exchange for the aid, airlines are prohibited from stock buybacks and dividends until a year after the loan is repaid. They must also maintain current staffing levels through September.
THE CONTEXT In recent weeks, the outlook for the global aviation business has soured significantly, with major carriers like American Airlines fighting for survival and United Airlines eliminating virtually all of its international flights for April. During that time, airline executives and industry groups had been lobbying the White House and members of Congress for aid.THE CONTEXT In recent weeks, the outlook for the global aviation business has soured significantly, with major carriers like American Airlines fighting for survival and United Airlines eliminating virtually all of its international flights for April. During that time, airline executives and industry groups had been lobbying the White House and members of Congress for aid.
The provisions almost exactly mirror what the industry lobbying group, Airlines for America, said would be necessary to stave off devastation of the industry.The provisions almost exactly mirror what the industry lobbying group, Airlines for America, said would be necessary to stave off devastation of the industry.
THE RESPONSE As executives and union officials pored over the details of the stimulus deal on Wednesday morning, Sara Nelson, the influential president of the Association of Flight Attendants union, claimed victory.THE RESPONSE As executives and union officials pored over the details of the stimulus deal on Wednesday morning, Sara Nelson, the influential president of the Association of Flight Attendants union, claimed victory.
The Rescue PLANThe Rescue PLAN
If you want to shut down an economy to fight a pandemic without driving millions of people and businesses into bankruptcy, you need the government to cut some checks. The coronavirus response deal that congressional leaders struck early Wednesday will get a lot of checks in the mail, but those checks will soothe financial pain for only a few months.If you want to shut down an economy to fight a pandemic without driving millions of people and businesses into bankruptcy, you need the government to cut some checks. The coronavirus response deal that congressional leaders struck early Wednesday will get a lot of checks in the mail, but those checks will soothe financial pain for only a few months.
Among the items in the bill are:Among the items in the bill are:
$350 billion in loans for small businesses to help bridge their expenses for up to 10 weeks. Firms would not need to repay up to eight weeks of the loans if they refrain from laying off employees, or move by June to rehire workers they have already laid off. $350 billion in loans for small businesses to help bridge their expenses for up to 10 weeks. Firms would not need to repay up to eight weeks of the loans if they refrain from laying off employees or if they move by June to rehire workers they have already laid off.
$500 billion in aid to airlines and other large corporations that have been hurt by the cratering of consumer demand. Much of the money would be used to backstop loans and other assistance that the Federal Reserve said it planned to extend to companies.$500 billion in aid to airlines and other large corporations that have been hurt by the cratering of consumer demand. Much of the money would be used to backstop loans and other assistance that the Federal Reserve said it planned to extend to companies.
A $1,200 payment for each adult, and $500 per child, in households that earn up to $75,000 per year for individuals or $150,000 for couples. The assistance phases out for people who earn more. Democratic aides in the Senate said on Wednesday that eligible Americans with direct-deposit bank account information on file with the Internal Revenue Service — about 70 million people — should see their payments arrive within a few weeks of the bill being signed into law. Those who did not have such information on file and would instead by mailed a check will need to wait up to four months to receive one, the aides said.A $1,200 payment for each adult, and $500 per child, in households that earn up to $75,000 per year for individuals or $150,000 for couples. The assistance phases out for people who earn more. Democratic aides in the Senate said on Wednesday that eligible Americans with direct-deposit bank account information on file with the Internal Revenue Service — about 70 million people — should see their payments arrive within a few weeks of the bill being signed into law. Those who did not have such information on file and would instead by mailed a check will need to wait up to four months to receive one, the aides said.
The hotel industry has taken a particularly damaging hit from the coronavirus pandemic devastating the American economy.The hotel industry has taken a particularly damaging hit from the coronavirus pandemic devastating the American economy.
As many as four million hotel employees — housekeepers, maintenance workers, desk clerks and others — have been laid off or will be let go in coming weeks, according to the American Hotel and Lodging Association. And the industry has asked for a $150 billion bailout.As many as four million hotel employees — housekeepers, maintenance workers, desk clerks and others — have been laid off or will be let go in coming weeks, according to the American Hotel and Lodging Association. And the industry has asked for a $150 billion bailout.
The industry is particularly concerned about the roughly $350 billion in mortgages, construction loans and commercial and industrial loans taken out on hotels and held by banks, insurance companies and investors. Much of that debt was borrowed by individual franchisees who have taken out mortgages on the hotels they own, rather than by major chains like Marriott International and Hilton Hotels & Resort.The industry is particularly concerned about the roughly $350 billion in mortgages, construction loans and commercial and industrial loans taken out on hotels and held by banks, insurance companies and investors. Much of that debt was borrowed by individual franchisees who have taken out mortgages on the hotels they own, rather than by major chains like Marriott International and Hilton Hotels & Resort.
Vinay Patel is one of those anxious borrowers. In recent days, the occupancy rates at the nine hotels he owns in the Northern Virginia area have plummeted from about 50 percent to only a handful of rooms each night.Vinay Patel is one of those anxious borrowers. In recent days, the occupancy rates at the nine hotels he owns in the Northern Virginia area have plummeted from about 50 percent to only a handful of rooms each night.
“It’s just gut-wrenching,” Mr. Patel said. “I’ve reached out to my lenders saying, ‘We have to work through this together.’”“It’s just gut-wrenching,” Mr. Patel said. “I’ve reached out to my lenders saying, ‘We have to work through this together.’”
President Trump is a ratings hit, and some journalists and public health experts say that could be a dangerous thing.President Trump is a ratings hit, and some journalists and public health experts say that could be a dangerous thing.
Since reviving the daily White House briefing — a practice abandoned last year by an administration that bristles at outside scrutiny — Mr. Trump and his coronavirus updates have attracted an average audience of 8.5 million on CNN, Fox News, and MSNBC, roughly the viewership of the season finale of “The Bachelor.” On Monday, nearly 12.2 million people watched Mr. Trump’s briefing on cable news, according to Nielsen — “Monday Night Football” numbers. Since reviving the daily White House briefing — a practice abandoned last year by an administration that bristles at outside scrutiny — Mr. Trump and his coronavirus updates have attracted an average audience of 8.5 million on CNN, Fox News and MSNBC, roughly the viewership of the season finale of “The Bachelor.” On Monday, nearly 12.2 million people watched Mr. Trump’s briefing on cable news, according to Nielsen — “Monday Night Football” numbers.
And the audience is expanding even as Mr. Trump has repeatedly delivered information that doctors and public health officials have called ill-informed, misleading or downright wrong.And the audience is expanding even as Mr. Trump has repeatedly delivered information that doctors and public health officials have called ill-informed, misleading or downright wrong.
The veteran anchor Ted Koppel said on Wednesday that television news executives had forgotten a crucial distinction of their profession. “Training a camera on a live event, and just letting it play out, is technology, not journalism; journalism requires editing and context,” he wrote in an email.The veteran anchor Ted Koppel said on Wednesday that television news executives had forgotten a crucial distinction of their profession. “Training a camera on a live event, and just letting it play out, is technology, not journalism; journalism requires editing and context,” he wrote in an email.
Questions from President Trump about the sustainability of shutting down normal life to safeguard health raise an issue that economists have long grappled with: How can a society assess the trade-off between economic well-being and saving lives?Questions from President Trump about the sustainability of shutting down normal life to safeguard health raise an issue that economists have long grappled with: How can a society assess the trade-off between economic well-being and saving lives?
Government agencies calculate these trade-offs regularly. The Environmental Protection Agency has established a cost of about $9.5 million per life saved as a benchmark for determining whether to clean up a toxic-waste site.Government agencies calculate these trade-offs regularly. The Environmental Protection Agency has established a cost of about $9.5 million per life saved as a benchmark for determining whether to clean up a toxic-waste site.
In a paper this week, three economists tried to calculate the optimal way to slow the spread of the coronavirus without economic costs that exceed the benefits.In a paper this week, three economists tried to calculate the optimal way to slow the spread of the coronavirus without economic costs that exceed the benefits.
In one set of assumptions — leaving it to individuals to decide whether to isolate themselves — the authors say that about 1.7 million people in the United States would die within a year and that consumer demand would decline by $800 billion in 2020, or about 5.5 percent.In one set of assumptions — leaving it to individuals to decide whether to isolate themselves — the authors say that about 1.7 million people in the United States would die within a year and that consumer demand would decline by $800 billion in 2020, or about 5.5 percent.
They say that under an alternative approach — involving tighter restrictions on movement and commerce — the decline in consumption in 2020 more than doubles, to $1.8 trillion, but deaths drop by half a million. The difference amounts to $2 million in lost economic activity per life saved.They say that under an alternative approach — involving tighter restrictions on movement and commerce — the decline in consumption in 2020 more than doubles, to $1.8 trillion, but deaths drop by half a million. The difference amounts to $2 million in lost economic activity per life saved.
They are scrounging for fabric, cutting it up, stitching it together. They are repurposing drapes, dresses, bra straps, shower curtains, even coffee filters. They are building supply chains, organizing workers, managing distribution networks.They are scrounging for fabric, cutting it up, stitching it together. They are repurposing drapes, dresses, bra straps, shower curtains, even coffee filters. They are building supply chains, organizing workers, managing distribution networks.
Most of all, they are sewing.Most of all, they are sewing.
All over the country, homebound Americans are crafting thousands upon thousands of face masks to help shield doctors, nurses and many others from the coronavirus.All over the country, homebound Americans are crafting thousands upon thousands of face masks to help shield doctors, nurses and many others from the coronavirus.
At the White House’s urging, manufacturing companies are beginning to ramp up their production of masks. But it could be weeks before the new supplies start rolling off the assembly lines.At the White House’s urging, manufacturing companies are beginning to ramp up their production of masks. But it could be weeks before the new supplies start rolling off the assembly lines.
In the meantime, some of the void is being filled by legions of sewers, called to duty in a matter of days via social media and word of mouth, their skills no longer taken for granted or dismissed as a mere hobby. They are making masks for America, much as a previous generation manufactured ammunition and tended “victory gardens” during World War II.In the meantime, some of the void is being filled by legions of sewers, called to duty in a matter of days via social media and word of mouth, their skills no longer taken for granted or dismissed as a mere hobby. They are making masks for America, much as a previous generation manufactured ammunition and tended “victory gardens” during World War II.
HUB FOR HELPHUB FOR HELP
Older Americans are at a high risk for serious illness from the coronavirus, and most who are over age 65 are covered by Medicare.Older Americans are at a high risk for serious illness from the coronavirus, and most who are over age 65 are covered by Medicare.
Medicare already covers its enrollees for much of what they might need if they contract the virus and become seriously ill — and it has expanded some services and loosened some rules in response to the crisis. Read more on how navigate Medicare right now.Medicare already covers its enrollees for much of what they might need if they contract the virus and become seriously ill — and it has expanded some services and loosened some rules in response to the crisis. Read more on how navigate Medicare right now.
Ask us your money questions at this difficult time. If you have questions or ideas, write to hubforhelp@nytimes.com and Ron Lieber, Tara Siegel Bernard and our personal finance team will read every message.Ask us your money questions at this difficult time. If you have questions or ideas, write to hubforhelp@nytimes.com and Ron Lieber, Tara Siegel Bernard and our personal finance team will read every message.
BuzzFeed chief executive Jonah Peretti told employees Wednesday that their salaries would be reduced by up to 13 percent (and up to 25 percent for executives) in April and May in order to avoid layoffs. BuzzFeed is the first major digital news outlet to institute cutbacks in response to the pandemic-induced economic headwinds that have already swept across other sectors of the news industry. Hollywood agencies are moving ahead with layoffs and announcing that senior executives — Ari Emanuel among them — will forgo salaries for the remainder of the year. On Wednesday, Endeavor, a media company that includes the William Morris and IMG agencies and is run by Mr. Emanuel, laid off about 250 of its 7,500 employees. United Talent Agency instituted a companywide salary cut on Monday, with pullbacks based on income. And Paradigm, an agency with a large roster of musicians, jettisoned more than 100 of its 700 employees on Friday.
BuzzFeed’s chief executive, Jonah Peretti, told employees Wednesday that their salaries would be reduced by up to 13 percent (and up to 25 percent for executives) in April and May in order to avoid layoffs. BuzzFeed is the first major digital news outlet to institute cutbacks in response to the pandemic-induced economic headwinds that have already swept across other sectors of the news industry.
Ford Motor said on Wednesday that it would keep its North American plants closed beyond March 30, the day it had previously hoped to restart production. BMW also said it would idle its factory in Spartanburg, S.C., on Sunday, five days sooner that is had previously planned, and keep it shut through at least April 12. And Volvo said it would close a plant in Ridgeville, S.C., from Thursday until at least April 14.Ford Motor said on Wednesday that it would keep its North American plants closed beyond March 30, the day it had previously hoped to restart production. BMW also said it would idle its factory in Spartanburg, S.C., on Sunday, five days sooner that is had previously planned, and keep it shut through at least April 12. And Volvo said it would close a plant in Ridgeville, S.C., from Thursday until at least April 14.
Gap said it would help source masks and protective gowns from its vendors for California hospitals. Canada Goose said it would reopen two manufacturing facilities to produce scrubs and patient gowns for health care workers and patients in Canada.Gap said it would help source masks and protective gowns from its vendors for California hospitals. Canada Goose said it would reopen two manufacturing facilities to produce scrubs and patient gowns for health care workers and patients in Canada.
Reporting was contributed by Ben Casselman, Patricia Cohen, Niraj Chokshi, Jim Tankersley, Alan Rappeport, Alexandra Stevenson, David Gelles, Julie Creswell, David Yaffe-Bellany, David Enrich, Rachel Abrams, Steven Kurutz, Eduardo Porter, Clifford Krauss, Michael M. Grynbaum, Edmund Lee, Sapna Maheshwari, Brian X. Chen, Neal E. Boudette, Elaine Yu, Daniel Victor, Jason Karaian, Kevin Granville and Carlos Tejada. Reporting was contributed by Brooks Barnes, Ben Casselman, Patricia Cohen, Niraj Chokshi, Jim Tankersley, Alan Rappeport, Alexandra Stevenson, David Gelles, Julie Creswell, David Yaffe-Bellany, David Enrich, Rachel Abrams, Steven Kurutz, Eduardo Porter, Clifford Krauss, Michael M. Grynbaum, Edmund Lee, Sapna Maheshwari, Brian X. Chen, Neal E. Boudette, Elaine Yu, Daniel Victor, Jason Karaian, Kevin Granville and Carlos Tejada.