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Stocks Fall Amid Concerns Over Recovery: Live Updates Stocks Fall Amid Concerns Over Recovery: Live Updates
(about 1 hour later)
Stocks fell on Tuesday as reports from China, South Korea and the United States offered sobering reminders to investors of how long and difficult the coronavirus recovery is likely to be.Stocks fell on Tuesday as reports from China, South Korea and the United States offered sobering reminders to investors of how long and difficult the coronavirus recovery is likely to be.
The S&P 500 dropped about 2 percent, a decline that picked up steam as the day progressed.The S&P 500 dropped about 2 percent, a decline that picked up steam as the day progressed.
Investors had plenty of reasons for concern. Dr. Anthony S. Fauci, a central figure in the U.S. government’s coronavirus response, warned lawmakers on Tuesday that “needless suffering and death” would result if the country opened up too quickly. In China, the city of Wuhan, which seemed to have tamed its outbreak, has reported six new infections in recent days, while cases have also risen in the northern part of the country.Investors had plenty of reasons for concern. Dr. Anthony S. Fauci, a central figure in the U.S. government’s coronavirus response, warned lawmakers on Tuesday that “needless suffering and death” would result if the country opened up too quickly. In China, the city of Wuhan, which seemed to have tamed its outbreak, has reported six new infections in recent days, while cases have also risen in the northern part of the country.
But the S&P 500 made a sharp move lower in the final hour of trading after Senator Lindsey Graham, Republican of South Carolina, proposed legislation that would authorize sanctions on China unless it provided a full accounting of the events leading up to the outbreak of the coronavirus.But the S&P 500 made a sharp move lower in the final hour of trading after Senator Lindsey Graham, Republican of South Carolina, proposed legislation that would authorize sanctions on China unless it provided a full accounting of the events leading up to the outbreak of the coronavirus.
Though markets have been able to shrug off a number of risks to the economy lately, but investors, who are already worried about an economic conflict between the world’s two largest economies, have been spooked lately by rising tension between the United States and China over the coronavirus outbreak. Markets have been able to shrug off a number of risks to the economy lately, but investors, who are already worried about an economic conflict between the world’s two largest economies, have been spooked lately by rising tension between the United States and China over the coronavirus outbreak.
Yields on government bonds also fell on Tuesday, reflecting investors downgrading of expectations for the economy. But oil prices, another measure of expectations for global growth rose. Yields on government bonds also fell on Tuesday, reflecting a lowering of expectations for the economy by investors.
The United States recorded its largest monthly deficit in history in April as the government began funneling billions of dollars of stimulus funds to cushion the economy from the coronavirus pandemic.The United States recorded its largest monthly deficit in history in April as the government began funneling billions of dollars of stimulus funds to cushion the economy from the coronavirus pandemic.
The Treasury Department said on Tuesday that the budget deficit surged to $738 billion last month as the Trump administration deferred tax payments that normally come due in April to mid-July and sent millions of Americans economic relief payments. It was the largest shortfall of any month on record and the deficit for the fiscal year to date topped $1.4 trillion.The Treasury Department said on Tuesday that the budget deficit surged to $738 billion last month as the Trump administration deferred tax payments that normally come due in April to mid-July and sent millions of Americans economic relief payments. It was the largest shortfall of any month on record and the deficit for the fiscal year to date topped $1.4 trillion.
The figures show the breadth of the fiscal measures that the government has been taking to support a cratering economy and the deep debt burden that it will be facing as the economy recovers. A Treasury official outlining the release of the date called the numbers “striking.”The figures show the breadth of the fiscal measures that the government has been taking to support a cratering economy and the deep debt burden that it will be facing as the economy recovers. A Treasury official outlining the release of the date called the numbers “striking.”
The Congressional Budget Office projected last month that the federal budget deficit would hit $3.7 trillion for the 2020 fiscal year, which would be its largest size as a share of the economy since World War II.The Congressional Budget Office projected last month that the federal budget deficit would hit $3.7 trillion for the 2020 fiscal year, which would be its largest size as a share of the economy since World War II.
Much of the decline in government receipts last month was because of the three-month delay of Tax Day to July 15, while a large proportion of the increase in spending was reflected in the economic impact payments and in additional health care spending. April usually yields a surplus. The largest deficit for the month previously came in 2010.Much of the decline in government receipts last month was because of the three-month delay of Tax Day to July 15, while a large proportion of the increase in spending was reflected in the economic impact payments and in additional health care spending. April usually yields a surplus. The largest deficit for the month previously came in 2010.
Although Republicans have been increasingly expressing worry about the deficit, it is likely that more government spending is in store. And most economists argue that the massive spending is necessary to prevent the severe economic downturn from becoming even worse. House Democrats released on Tuesday released a proposal for another $3 trillion economic relief bill.Although Republicans have been increasingly expressing worry about the deficit, it is likely that more government spending is in store. And most economists argue that the massive spending is necessary to prevent the severe economic downturn from becoming even worse. House Democrats released on Tuesday released a proposal for another $3 trillion economic relief bill.
Early in the coronavirus pandemic, workers spoke up and staged protests to demand that employers provide protective equipment, limit customer traffic or even shut down in the interest of safety. As many companies return to business, workers are pursuing a new goal: that employers not prematurely roll back measures they put in place.Early in the coronavirus pandemic, workers spoke up and staged protests to demand that employers provide protective equipment, limit customer traffic or even shut down in the interest of safety. As many companies return to business, workers are pursuing a new goal: that employers not prematurely roll back measures they put in place.
The workers speaking out say they are pressing for many of the measures they have pushed for since the pandemic began: more generous and accessible sick leave policies, more protective equipment and better hazard pay.The workers speaking out say they are pressing for many of the measures they have pushed for since the pandemic began: more generous and accessible sick leave policies, more protective equipment and better hazard pay.
Employees of Target, some of whom walked off their jobs on May 1 over working conditions, have raised concerns about the company’s decision to resume accepting returns from customers, a service that had been suspended to reduce potential virus exposure.Employees of Target, some of whom walked off their jobs on May 1 over working conditions, have raised concerns about the company’s decision to resume accepting returns from customers, a service that had been suspended to reduce potential virus exposure.
Some workers at Amazon, who also joined the May Day protests, said they were upset over the end of the company’s policy of unlimited unpaid time off, which many had used to avoid exposure inside warehouses.Some workers at Amazon, who also joined the May Day protests, said they were upset over the end of the company’s policy of unlimited unpaid time off, which many had used to avoid exposure inside warehouses.
Riley Breakell, a Starbucks barista in Connecticut, was reassured in mid-March when the company sent a letter announcing expanded catastrophe pay for those absent because of the pandemic. She appreciated the company’s effort to do right by its employees. But the company has since said those provisions would cease for those “unwilling to work” as stores reopened last week.Riley Breakell, a Starbucks barista in Connecticut, was reassured in mid-March when the company sent a letter announcing expanded catastrophe pay for those absent because of the pandemic. She appreciated the company’s effort to do right by its employees. But the company has since said those provisions would cease for those “unwilling to work” as stores reopened last week.
A Starbucks spokeswoman said the company was taking several steps to ensure that only healthy employees went to work, such as fever checks and paid leave for those who may be ill.A Starbucks spokeswoman said the company was taking several steps to ensure that only healthy employees went to work, such as fever checks and paid leave for those who may be ill.
Uber is in talks to acquire Grubhub, said two people with knowledge of the discussions, aiming to create one giant player in food delivery as more people turn toward those services in the coronavirus pandemic.Uber is in talks to acquire Grubhub, said two people with knowledge of the discussions, aiming to create one giant player in food delivery as more people turn toward those services in the coronavirus pandemic.
It was unclear how advanced the discussions were and whether a deal would come together, said the people, who spoke on the condition of anonymity because the talks were confidential.It was unclear how advanced the discussions were and whether a deal would come together, said the people, who spoke on the condition of anonymity because the talks were confidential.
Representatives from Uber and Grubhub declined to comment. Bloomberg earlier reported the talks.Representatives from Uber and Grubhub declined to comment. Bloomberg earlier reported the talks.
The discussions are a sign of how the companies are working to capitalize on people’s shifting behavior. With consumers staying home and many restaurants across the country shut down, more people are turning to food deliveries for meals.The discussions are a sign of how the companies are working to capitalize on people’s shifting behavior. With consumers staying home and many restaurants across the country shut down, more people are turning to food deliveries for meals.
But the discussions are also an attempt by Uber to limit damage to its business and find a new path for growth.But the discussions are also an attempt by Uber to limit damage to its business and find a new path for growth.
President Trump said on Tuesday that California should allow Tesla to restart its electric car factory in the San Francisco Bay Area “NOW.” His remark came a day after the company’s chief executive, Elon Musk, said he was resuming production in violation of a local order prohibiting him from doing so. Tesla’s California car factory was shipping out new cars on Tuesday despite a county order prohibiting it from restarting production and even as local officials continued to try to negotiate with the company.
Mr. Trump’s comments are in keeping with his effort to push state and local officials to allow businesses to reopen despite the advice of public health officials, who have called for a more gradual reopening to prevent a surge in coronavirus cases and deaths. The company’s chief executive, Elon Musk, said on Monday that the factory would restart in violation of an order from Alameda County, and dared officials to arrest him. President Trump threw his weight behind the billionaire entrepreneur on Tuesday, saying California should allow Tesla to restart “NOW.”
But it is not clear what effect the president’s statement would have on California’s governor, Gavin Newsom, a Democrat, and county officials, most of whom are also Democrats. In addition, the Tesla factory in Fremont, Calif., already appears to be making cars and Mr. Musk has dared local officials to arrest him. It was not clear how many cars Tesla is making. But on Tuesday, trucks were leaving the factory, which is the Bay Area city of Fremont, with new sedans and sport-utility vehicles. New cars were also parked in rows outside the factory. The parking lot for employees was also filled.
“Tesla is restarting production today against Alameda County rules,” he announced on Twitter on Monday. “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.” Tesla’s head of human resources for North America, Valerie Workman, sent an email to employees on Monday saying that their furloughs had ended on Sunday. She told employees they would be contacted within 24 hours about when to return to work.
The county’s director for health care services, Colleen Chawla, sent a letter to Tesla on Monday saying that the company appeared to be violating its order. “We hope that Tesla — like other businesses who have been notified of noncompliance — comes into compliance with the order without the need for additional enforcement measures,” Ms. Chawla said. Tesla did not respond to a request for comment.
On Tuesday, the county said that it had received Tesla’s plan for reopening the plant and was reviewing it. The plant is Tesla’s main source of revenue and has been closed since early April. County officials have said they were working with Tesla on an agreement to reopen the plant on May 18, and Mr. Musk has threatened to sue the county. The county’s director for health care services, Colleen Chawla, sent a letter to Tesla late Monday saying that the company was violating its order. “We hope that Tesla — like other businesses who have been notified of noncompliance — comes into compliance with the order without the need for additional enforcement measures,” Ms. Chawla said.
In an email that was sent on Monday and was reviewed by The New York Times, the company’s head of human resources in North America, Valerie Workman, told employees they would be contacted within 24 hours about when to report for work. On Tuesday, the county said that it had received Tesla’s plan for reopening the plant and was reviewing it. The plant is Tesla’s main source of revenue and has been closed for more than a month. County officials have said they were working with Tesla on an agreement to reopen the plant on May 18. But Tesla sued the county on Saturday in United States District Court in San Francisco, arguing that the county’s order was unconstitutional and contradicted an order by Gov. Gavin Newsom that permits manufacturing statewide.
The state has authorized a resumption of manufacturing, Mr. Newsom said Monday, but that “we recognize localism” and “if a county doesn’t want to go as far,” local orders would prevail. The state has authorized a resumption of manufacturing, Mr. Newsom said Monday, but he added that “we recognize localism” and “if a county doesn’t want to go as far,” local orders would prevail.
In her email, Ms. Workman said employees who were uncomfortable returning to work could stay home on unpaid leave.In her email, Ms. Workman said employees who were uncomfortable returning to work could stay home on unpaid leave.
Britain will extend until October its program to ensure that private-sector workers keep getting paid if the pandemic prevents them from working, the government said on Tuesday in a clear indication that it expects it to take several months to fully reopen the economy.
As an incentive for employers to keep people on their payrolls, the government is subsidizing the pay of millions of workers who would otherwise be furloughed, along with self-employed people who cannot work. The program covers 80 percent of each person’s wages, up to 2,500 pounds a month — almost $3,100.
The program, begun in March, was originally put in place until June, and is costing billions of pounds per month. On Tuesday, the chancellor of the Exchequer, Rishi Sunak, announced that the government would keep paying 80 percent of wages through the end of July.
Business groups and labor unions largely welcomed the extension.
Mr. Sunak’s statement came a day after the government urged those who cannot work from home to go back to factories and other workplaces if they can. But some parts of the economy not expected to restart until mid-sumer or later.
Jack Dorsey, Twitter’s chief executive, told employees on Tuesday that they would not be expected to return to the company’s offices and could work from home forever if they wanted.Jack Dorsey, Twitter’s chief executive, told employees on Tuesday that they would not be expected to return to the company’s offices and could work from home forever if they wanted.
Twitter sent its employees home in early March to help stop the spread of the coronavirus, but Mr. Dorsey had previously said he wanted Twitter’s work force to be more diversified around the world and that he welcomed remote work.Twitter sent its employees home in early March to help stop the spread of the coronavirus, but Mr. Dorsey had previously said he wanted Twitter’s work force to be more diversified around the world and that he welcomed remote work.
Twitter will reopen its offices no sooner than September, said Jennifer Christie, a vice president of human resources at Twitter.Twitter will reopen its offices no sooner than September, said Jennifer Christie, a vice president of human resources at Twitter.
“If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return,” Ms. Christie wrote in a blog post.“If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return,” Ms. Christie wrote in a blog post.
The Federal Reserve on Tuesday began to buy corporate bond exchange-traded funds and announced additional details on another program, its latest efforts to keep credit flowing as coronavirus roils the economy and threatens markets.The Federal Reserve on Tuesday began to buy corporate bond exchange-traded funds and announced additional details on another program, its latest efforts to keep credit flowing as coronavirus roils the economy and threatens markets.
In March, the central bank said that it would set up two corporate bond programs and a new version of the Term Asset-Backed Securities Loan Facility, a 2008 lending effort that accepts bundles of debt backed by a variety of consumer and business loans.In March, the central bank said that it would set up two corporate bond programs and a new version of the Term Asset-Backed Securities Loan Facility, a 2008 lending effort that accepts bundles of debt backed by a variety of consumer and business loans.
The Fed opened the first of the corporate bond facilities Tuesday by purchasing E.T.F.’s, which trade like stocks but provide broad exposure to corporate debt. The Federal Reserve Bank of New York said in a release that it would begin to buy both newly issued and older corporate debt in the “near future.”The Fed opened the first of the corporate bond facilities Tuesday by purchasing E.T.F.’s, which trade like stocks but provide broad exposure to corporate debt. The Federal Reserve Bank of New York said in a release that it would begin to buy both newly issued and older corporate debt in the “near future.”
It also released a question-and-answer sheet on the TALF, detailing what the facility will look like, but without giving a start date. The program, which will accept asset-backed securities built on auto loans, student loans and leveraged loans as collateral, has relatively conservative terms and is clearly meant to be used as a backstop.It also released a question-and-answer sheet on the TALF, detailing what the facility will look like, but without giving a start date. The program, which will accept asset-backed securities built on auto loans, student loans and leveraged loans as collateral, has relatively conservative terms and is clearly meant to be used as a backstop.
The central bank said that it would disclose detailed information on recipients and usage each month for the TALF and its Paycheck Protection Program lending facility, which takes small-business loans off bank balance sheets.The central bank said that it would disclose detailed information on recipients and usage each month for the TALF and its Paycheck Protection Program lending facility, which takes small-business loans off bank balance sheets.
The Fed has announced nine emergency lending facilities since the coronavirus crisis began. Four are up and running, one of the corporate bond programs is now partially operational, and four are still being prepared.The Fed has announced nine emergency lending facilities since the coronavirus crisis began. Four are up and running, one of the corporate bond programs is now partially operational, and four are still being prepared.
Walmart said on Tuesday that it would give another round of bonuses to its workers in the United States: $300 for full-time workers and $150 for part-time and temporary workers, for a total of more than $390 million. The retailer said it had committed more than $935 million in bonuses for its workers so far this year.Walmart said on Tuesday that it would give another round of bonuses to its workers in the United States: $300 for full-time workers and $150 for part-time and temporary workers, for a total of more than $390 million. The retailer said it had committed more than $935 million in bonuses for its workers so far this year.
The theatrical distribution company Solstice Studios said Tuesday that it would release the thriller “Unhinged,” which stars Russell Crowe, in theaters nationwide on July 1. That’s two weeks before Warner Bros. release date for Christopher Nolan’s “Tenet” and three weeks before Disney’s planned release of “Mulan.”The theatrical distribution company Solstice Studios said Tuesday that it would release the thriller “Unhinged,” which stars Russell Crowe, in theaters nationwide on July 1. That’s two weeks before Warner Bros. release date for Christopher Nolan’s “Tenet” and three weeks before Disney’s planned release of “Mulan.”
The Transportation Department warned airlines for a second time on Tuesday that they must refund passengers for canceled tickets after receiving about 20,000 consumer complaints in April, up from the 1,500 it receives in a typical month.The Transportation Department warned airlines for a second time on Tuesday that they must refund passengers for canceled tickets after receiving about 20,000 consumer complaints in April, up from the 1,500 it receives in a typical month.
Saudi Aramco, the world’s largest oil company, reported Tuesday that its net income fell by 25 percent in the first quarter of 2020 compared with a year earlier. Still, Aramco said it earned $16.7 billion — an amount that may allow it to retain the title of world’s most profitable company. Amin H. Nasser, the company’s president and chief executive, said in a statement that the coronavirus pandemic “impacted” the results, which he called “exceptionally strong” given the situation.Saudi Aramco, the world’s largest oil company, reported Tuesday that its net income fell by 25 percent in the first quarter of 2020 compared with a year earlier. Still, Aramco said it earned $16.7 billion — an amount that may allow it to retain the title of world’s most profitable company. Amin H. Nasser, the company’s president and chief executive, said in a statement that the coronavirus pandemic “impacted” the results, which he called “exceptionally strong” given the situation.
Ryanair, Europe’s largest low-cost carrier, said it would resume 40 percent of its flight network beginning July 1, and institute safety measures like requiring passengers to wear face masks and to request access to the bathroom to prevent lines in the aisles.Ryanair, Europe’s largest low-cost carrier, said it would resume 40 percent of its flight network beginning July 1, and institute safety measures like requiring passengers to wear face masks and to request access to the bathroom to prevent lines in the aisles.
Reporting was contributed by Jeanna Smialek, Ben Dooley, Alan Rappeport, Kate Conger, Mike Isaac, Michael J. de la Merced, Noam Scheiber, Kai Schultz, Geneva Abdul, Stanley Reed, Niraj Chokshi, Alexandra Stevenson, Cao Li, Damien Cave, Matt Phillips, Gregory Schmidt, Carlos Tejada, Daniel Victor, Katie Robertson and Kevin Granville. Reporting was contributed by Stephen Castle, Jeanna Smialek, Ben Dooley, Alan Rappeport, Kate Conger, Mike Isaac, Michael J. de la Merced, Noam Scheiber, Kai Schultz, Geneva Abdul, Stanley Reed, Niraj Chokshi, Alexandra Stevenson, Cao Li, Damien Cave, Matt Phillips, Gregory Schmidt, Carlos Tejada, Daniel Victor, Katie Robertson and Kevin Granville.