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Stocks Waver as China Tension Rises: Live Updates Stocks Waver as China Tension Rises: Live Updates
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Hertz, the car rental giant, could seek bankruptcy court protection if it fails to strike a deal with its creditors on Friday.Hertz, the car rental giant, could seek bankruptcy court protection if it fails to strike a deal with its creditors on Friday.
The company, which has seen sales collapse in recent weeks as people stay home, missed about $400 million in lease payments on its fleet late last month. It was able to persuade lenders to give it until the end of Friday to come up with a payment plan that they could accept.The company, which has seen sales collapse in recent weeks as people stay home, missed about $400 million in lease payments on its fleet late last month. It was able to persuade lenders to give it until the end of Friday to come up with a payment plan that they could accept.
Hertz had amassed $17 billion in debt, but it started the year off on solid ground: Revenue was up 6 percent in January and February. But the pandemic dealt what it has described as “a rapid, sudden and dramatic” blow. Rentals dried up in March and then a sharp drop in used-car prices dealt the company another jolt, decreasing the value of its fleet.Hertz had amassed $17 billion in debt, but it started the year off on solid ground: Revenue was up 6 percent in January and February. But the pandemic dealt what it has described as “a rapid, sudden and dramatic” blow. Rentals dried up in March and then a sharp drop in used-car prices dealt the company another jolt, decreasing the value of its fleet.
Its competitors were better positioned. Avis Budget Group, which has taken on less debt, said last month that it had access to enough cash to survive the year. Avis, which also raised approximately $500 million in a bond sale this month, acted more quickly to cut costs in response to the pandemic, analysts said. Enterprise, a private company, is more diversified and not nearly as reliant on airports as Avis or Hertz.Its competitors were better positioned. Avis Budget Group, which has taken on less debt, said last month that it had access to enough cash to survive the year. Avis, which also raised approximately $500 million in a bond sale this month, acted more quickly to cut costs in response to the pandemic, analysts said. Enterprise, a private company, is more diversified and not nearly as reliant on airports as Avis or Hertz.
Chinese officials declined to set an economic growth target for this year and outlined plans to ramp up government spending, as they continue to look for ways to recover from the economic toll of the coronavirus.Chinese officials declined to set an economic growth target for this year and outlined plans to ramp up government spending, as they continue to look for ways to recover from the economic toll of the coronavirus.
In his annual report to Chinese lawmakers on Friday, Premier Li Keqiang said that the country’s leaders had declined to set a target for the first time in years “because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.”In his annual report to Chinese lawmakers on Friday, Premier Li Keqiang said that the country’s leaders had declined to set a target for the first time in years “because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.”
China’s economy shrank in the first three months of the year compared with a year earlier, the first decline in the modern era, after efforts to fight the outbreak froze vast parts of its industrial machine.China’s economy shrank in the first three months of the year compared with a year earlier, the first decline in the modern era, after efforts to fight the outbreak froze vast parts of its industrial machine.
China’s growth target represents a gauge of how the country’s leaders see the economy faring, and its official figures — which most economists consider to be too smooth and steady to be precisely accurate — generally meet or exceed the goal. Last year, it set a target of 6 percent to 6.5 percent.China’s growth target represents a gauge of how the country’s leaders see the economy faring, and its official figures — which most economists consider to be too smooth and steady to be precisely accurate — generally meet or exceed the goal. Last year, it set a target of 6 percent to 6.5 percent.
Mr. Li’s report said China would ramp up government spending by $140 billion to stir growth, plus issue a similar amount on bonds for coronavirus recovery efforts. While significant, the spending represents about 2 percent of China’s annual economic output, a smaller proportion compared with what other countries have done. The country’s leaders are leery of putting in place the kind of debt-fueled stimulus programs that helped the Chinese economy rebound quickly from the global financial crisis a decade ago but burdened it with debt.Mr. Li’s report said China would ramp up government spending by $140 billion to stir growth, plus issue a similar amount on bonds for coronavirus recovery efforts. While significant, the spending represents about 2 percent of China’s annual economic output, a smaller proportion compared with what other countries have done. The country’s leaders are leery of putting in place the kind of debt-fueled stimulus programs that helped the Chinese economy rebound quickly from the global financial crisis a decade ago but burdened it with debt.
For millions of college students, internships can be a steppingstone to full-time work, a vital source of income and even a graduation requirement.
But like so much else, summer internships have been upended by the pandemic, with a wide range of major companies, including tech firms like Yelp and entertainment behemoths like the Walt Disney Company, canceling programs and rescinding offers.
Students who had locked down internships as early as September are now jobless. Others who had hoped to experience an office setting for the first time are instead looking for work at fast-food restaurants. Many low-income undergraduates, already saddled with student loans, are concerned that a jobless summer could put them at a disadvantage in future application cycles, making it harder to find full-time work after graduation.
“I feel like I had such a strong plan,” said Lydia Burns, whose internship at a nonprofit organization in Washington was canceled. “I knew what I was going to do — I had been working for it all of college. Now I don’t know what I’m going to do.”
Some companies are continuing to pay interns to work from home, sending corporate laptops in the mail and holding get-to-know-you sessions over Zoom. But students fear that remote internships will not afford the networking opportunities that can make spending a summer in an office so valuable, especially for interns who have few professional contacts.
The coronavirus pandemic has played havoc with energy markets. Last month, the price of benchmark American crude oil fell below zero as the economy shut down and demand plunged.The coronavirus pandemic has played havoc with energy markets. Last month, the price of benchmark American crude oil fell below zero as the economy shut down and demand plunged.
And now a British utility this weekend will actually pay some of its residential consumers to use electricity — to plug in the appliances, and run them full blast.And now a British utility this weekend will actually pay some of its residential consumers to use electricity — to plug in the appliances, and run them full blast.
So-called negative electricity prices usually show up in wholesale power markets, when a big electricity user like a factory or a water treatment plant is paid to consume more power. Having too much power on the line could lead to damaged equipment or even blackouts.So-called negative electricity prices usually show up in wholesale power markets, when a big electricity user like a factory or a water treatment plant is paid to consume more power. Having too much power on the line could lead to damaged equipment or even blackouts.
Negative prices were once relatively rare, but during the pandemic have suddenly become almost routine in Britain, Germany and other European countries.Negative prices were once relatively rare, but during the pandemic have suddenly become almost routine in Britain, Germany and other European countries.
In Britain, the price of power plunged into negative territory 66 times in April, more than twice as often as in any previous month in the last decade, according to Iain Chappell, senior lecturer in sustainable energy at Imperial College in London. The reason for these dips is similar to what caused the price of oil to plunge: oversupply meeting a collapse in demand.In Britain, the price of power plunged into negative territory 66 times in April, more than twice as often as in any previous month in the last decade, according to Iain Chappell, senior lecturer in sustainable energy at Imperial College in London. The reason for these dips is similar to what caused the price of oil to plunge: oversupply meeting a collapse in demand.
Amazon remains by far the country’s biggest online retailer. But the coronavirus put the tech giant on its heels, struggling to keep up with a surge in demand while keeping its warehouses safe. As it stumbled, some of its top rivals pounced, grabbing more online shoppers.Amazon remains by far the country’s biggest online retailer. But the coronavirus put the tech giant on its heels, struggling to keep up with a surge in demand while keeping its warehouses safe. As it stumbled, some of its top rivals pounced, grabbing more online shoppers.
But Amazon has been making changes to get customers back. The company is shipping many more items in a day or two and is again running promotions. It has also removed limits on the types of products allowed in its warehouses, meaning that more products can arrive on doorsteps quickly.But Amazon has been making changes to get customers back. The company is shipping many more items in a day or two and is again running promotions. It has also removed limits on the types of products allowed in its warehouses, meaning that more products can arrive on doorsteps quickly.
The changes position Amazon to recapture its customers who had fled elsewhere when the outbreak took hold. And the moves signal that Amazon’s leaders feel confident that the business, and in particular its shipping network, is no longer in crisis mode in response to the pandemic.The changes position Amazon to recapture its customers who had fled elsewhere when the outbreak took hold. And the moves signal that Amazon’s leaders feel confident that the business, and in particular its shipping network, is no longer in crisis mode in response to the pandemic.
“They eliminated their own competitive advantage they had built over 20 years,” said John Ghiorso, who runs Orca Pacific, an agency that helps brands run their Amazon business. “Now they are getting it back pretty quickly.”“They eliminated their own competitive advantage they had built over 20 years,” said John Ghiorso, who runs Orca Pacific, an agency that helps brands run their Amazon business. “Now they are getting it back pretty quickly.”
The coronavirus outbreak caused China’s economy to shrink for the first time in decades in the first three months of this year. Its impact on the fortunes of the country’s biggest online shopping company was far less dramatic.The coronavirus outbreak caused China’s economy to shrink for the first time in decades in the first three months of this year. Its impact on the fortunes of the country’s biggest online shopping company was far less dramatic.
The Alibaba Group generated $16 billion in sales in the first quarter, up 22 percent from a year earlier, the company said on Friday. That was a slower pace of growth than the e-commerce giant typically reports, but it was better than Wall Street had feared a few months ago, when the company warned that sales in certain areas, such as its retail business in China, might shrink. (In fact, revenue in that segment was up 21 percent).The Alibaba Group generated $16 billion in sales in the first quarter, up 22 percent from a year earlier, the company said on Friday. That was a slower pace of growth than the e-commerce giant typically reports, but it was better than Wall Street had feared a few months ago, when the company warned that sales in certain areas, such as its retail business in China, might shrink. (In fact, revenue in that segment was up 21 percent).
On a Friday conference call with analysts, Alibaba executives attributed the better-than-expected results to the Chinese government’s “effective” handling of the outbreak, which allowed the country to start reopening for business in late February and early March.On a Friday conference call with analysts, Alibaba executives attributed the better-than-expected results to the Chinese government’s “effective” handling of the outbreak, which allowed the country to start reopening for business in late February and early March.
During the nationwide lockdown, sales of groceries were particularly strong, the company said. On the other hand, with people working from home and wearing face masks, sales of clothes and makeup were not as good.During the nationwide lockdown, sales of groceries were particularly strong, the company said. On the other hand, with people working from home and wearing face masks, sales of clothes and makeup were not as good.
Alibaba’s profit for the quarter was down by 88 percent from a year before, which the company attributed to losses on its investments in publicly traded stocks.Alibaba’s profit for the quarter was down by 88 percent from a year before, which the company attributed to losses on its investments in publicly traded stocks.
The pandemic is producing enormous losses for business insurers worldwide: “It will be $100 billion or greater,” said Evan Greenberg, the chief executive of the insurer Chubb.The pandemic is producing enormous losses for business insurers worldwide: “It will be $100 billion or greater,” said Evan Greenberg, the chief executive of the insurer Chubb.
Speaking to editors and reporters from The New York Times on Thursday, Mr. Greenberg said that the pandemic had turned businesses upside down, but it did not mean every business with a policy had a valid claim.Speaking to editors and reporters from The New York Times on Thursday, Mr. Greenberg said that the pandemic had turned businesses upside down, but it did not mean every business with a policy had a valid claim.
Far from it. Business interruption insurance “is an outgrowth of a traditional fire insurance policy,” he said. Policyholders have to show that they “have direct physical damage,” and shelter-in-place orders by mayors or governors do not qualify. (Some trial lawyers and lawmakers don’t see it that way.)Far from it. Business interruption insurance “is an outgrowth of a traditional fire insurance policy,” he said. Policyholders have to show that they “have direct physical damage,” and shelter-in-place orders by mayors or governors do not qualify. (Some trial lawyers and lawmakers don’t see it that way.)
Mr. Greenberg said he sympathized with struggling business owners, but the general exclusion of pandemic losses from business insurance coverage is no accident. “If you had insurance to cover the pandemic, you’d be underwriting the whole U.S. economy,” he said. “It’s impossible. With a finite balance sheet, you’d be taking on an infinite risk.”Mr. Greenberg said he sympathized with struggling business owners, but the general exclusion of pandemic losses from business insurance coverage is no accident. “If you had insurance to cover the pandemic, you’d be underwriting the whole U.S. economy,” he said. “It’s impossible. With a finite balance sheet, you’d be taking on an infinite risk.”
Chubb is, however, paying some business interruption claims related to the pandemic, “and we’ll be paying many more over the next weeks and months,” he said. The payouts would be “quite visible” in the company’s next quarterly results.Chubb is, however, paying some business interruption claims related to the pandemic, “and we’ll be paying many more over the next weeks and months,” he said. The payouts would be “quite visible” in the company’s next quarterly results.
It was an uneasy day for global stock markets, as China’s pledges to combat the damage of the coronavirus fell short of those by other countries, and Beijing’s efforts to tighten its grip in Hong Kong worried investors.It was an uneasy day for global stock markets, as China’s pledges to combat the damage of the coronavirus fell short of those by other countries, and Beijing’s efforts to tighten its grip in Hong Kong worried investors.
At the annual National People’s Congress, China’s leaders unveiled a plan to spend another $140 billion to combat the pandemic’s economic effects, an amount smaller than what other countries have earmarked to fight the outbreak-related global economic crisis.At the annual National People’s Congress, China’s leaders unveiled a plan to spend another $140 billion to combat the pandemic’s economic effects, an amount smaller than what other countries have earmarked to fight the outbreak-related global economic crisis.
China’s plan to place Hong Kong firmly under Beijing’s control and crack down on new antigovernment protests set off a sharp decline in the city’s stock market — which fell more than 5 percent.China’s plan to place Hong Kong firmly under Beijing’s control and crack down on new antigovernment protests set off a sharp decline in the city’s stock market — which fell more than 5 percent.
The move could further increase tensions between the United States and China, coming as President Trump and Republican lawmakers seek to focus blame for the coronavirus outbreak on China’s leadership as part of their re-election strategy. On Thursday, when China’s plans for Hong Kong were announced, a number of U.S. senators proposed sanctions on Chinese officials.After recovering from an early drop, the S&P 500 was slightly higher by the end of the day.The move could further increase tensions between the United States and China, coming as President Trump and Republican lawmakers seek to focus blame for the coronavirus outbreak on China’s leadership as part of their re-election strategy. On Thursday, when China’s plans for Hong Kong were announced, a number of U.S. senators proposed sanctions on Chinese officials.After recovering from an early drop, the S&P 500 was slightly higher by the end of the day.
Other markets also leveled off. West Texas intermediate crude, for example, was down just 2 percent after earlier having fallen as much as 6 percent. The drop in oil futures came after they rose a total of 26 percent over six straight days.Other markets also leveled off. West Texas intermediate crude, for example, was down just 2 percent after earlier having fallen as much as 6 percent. The drop in oil futures came after they rose a total of 26 percent over six straight days.
It’s been a turbulent week for markets, with shares alternating between gains and losses as investors assessed new economic developments and the prospect of businesses reopening.It’s been a turbulent week for markets, with shares alternating between gains and losses as investors assessed new economic developments and the prospect of businesses reopening.
Thanks mostly to a big rally on Monday, the S&P 500 ended the week with a gain of more than 3 percent.Thanks mostly to a big rally on Monday, the S&P 500 ended the week with a gain of more than 3 percent.
Logistics — the science of making Thing A and delivering it to Point B — had become a national art form, the corporate answer to jazz, stand-up comedy and end-zone dances. The United States was like an operating system that upgraded itself so regularly that its design and endless enhancements were taken for granted.Logistics — the science of making Thing A and delivering it to Point B — had become a national art form, the corporate answer to jazz, stand-up comedy and end-zone dances. The United States was like an operating system that upgraded itself so regularly that its design and endless enhancements were taken for granted.
Now, the heart of the great American logistics machine is beating slowly and erratically, and in some places it has gone into full-on cardiac arrest, writes David Segal.Now, the heart of the great American logistics machine is beating slowly and erratically, and in some places it has gone into full-on cardiac arrest, writes David Segal.
Rationing meat. Scrambling for masks. Running low on crucial drugs. The early shortages for the pandemic — swabs, toilet paper, ventilators — were a foreshadowing, not an aberration. We still don’t have enough good tests. Our national pantry, long bursting, lacks essentials. Come to think of it, it’s also missing some nonessentials. Just try to buy a bicycle.Rationing meat. Scrambling for masks. Running low on crucial drugs. The early shortages for the pandemic — swabs, toilet paper, ventilators — were a foreshadowing, not an aberration. We still don’t have enough good tests. Our national pantry, long bursting, lacks essentials. Come to think of it, it’s also missing some nonessentials. Just try to buy a bicycle.
The country is flunking a curriculum that it basically wrote. Which is baffling. American supremacy in logistics has been a calling card for decades, even among people unfamiliar with the L-word.The country is flunking a curriculum that it basically wrote. Which is baffling. American supremacy in logistics has been a calling card for decades, even among people unfamiliar with the L-word.
Facebook will allow many of its employees to work from home permanently, Mark Zuckerberg, Facebook’s chief executive, announced during a staff meeting that was live-streamed on his Facebook page.
The social media giant sent its employees home in March as the coronavirus began to spread in the United States. Mr. Zuckerberg said that the temporary changes caused by the virus spurred the company to re-evaluate its requirement that employees work in a shared office. Within a decade, he said, as many as half of the company’s more than 45,000 employees would work from home.
Facebook will begin by allowing new hires who are senior engineers to work remotely, and then allow current employees to apply for permission to work from home if they have positive performance reviews.
Mr. Zuckerberg’s announcement followed similar decisions at Twitter and the payments company Square, both led by Jack Dorsey. Mr. Dorsey said last week that employees at his companies would be allowed to work from home indefinitely. At Google, employees have been told they can work from home through the end of the year.
Retailers were among the first to feel the financial pain of the pandemic. During a special call for DealBook readers, Sapna Maheshwari, who covers the retail industry for The New York Times, said that stores were planning to reopen by the end of July and hoping that the trickle of revenue would keep them afloat until the holiday season.Retailers were among the first to feel the financial pain of the pandemic. During a special call for DealBook readers, Sapna Maheshwari, who covers the retail industry for The New York Times, said that stores were planning to reopen by the end of July and hoping that the trickle of revenue would keep them afloat until the holiday season.
Many, however, are closing some stores permanently, like J.C. Penney, which recently filed for bankruptcy. For malls, the loss of anchor brands could set off cotenancy clauses, giving the other stores leverage to demand rent reductions, which feeds a downward financial spiral.Many, however, are closing some stores permanently, like J.C. Penney, which recently filed for bankruptcy. For malls, the loss of anchor brands could set off cotenancy clauses, giving the other stores leverage to demand rent reductions, which feeds a downward financial spiral.
And what to do with all those empty department stores? For big-box buildings that will not reopen, property owners need to be imaginative. “In the past, there have been experiential companies that make kids’ game centers in them, but that’s probably not the best idea right now in a social-distancing world,” Ms. Maheshwari said. “Maybe they become distribution centers, or in some cases we’ve even seen them become housing.”And what to do with all those empty department stores? For big-box buildings that will not reopen, property owners need to be imaginative. “In the past, there have been experiential companies that make kids’ game centers in them, but that’s probably not the best idea right now in a social-distancing world,” Ms. Maheshwari said. “Maybe they become distribution centers, or in some cases we’ve even seen them become housing.”
General Motors said on Friday that it was delaying plans to add second shifts next week at three pickup truck plants — in Flint, Mich., Ft. Wayne, Ind., and Silao, Mexico — because production in Mexico was resuming at a slower pace than in the United States. The company restarted its U.S. plants on Monday, and is still planning to add a second shift at a sport-utility vehicle plant near Lansing, Mich. next week as scheduled. It restarted engine and transmission plants in Mexico on Thursday evening, and vehicle assembly plants in Mexico on Friday.General Motors said on Friday that it was delaying plans to add second shifts next week at three pickup truck plants — in Flint, Mich., Ft. Wayne, Ind., and Silao, Mexico — because production in Mexico was resuming at a slower pace than in the United States. The company restarted its U.S. plants on Monday, and is still planning to add a second shift at a sport-utility vehicle plant near Lansing, Mich. next week as scheduled. It restarted engine and transmission plants in Mexico on Thursday evening, and vehicle assembly plants in Mexico on Friday.
Lululemon, the athleisure company known for its $100 yoga pants, said that it expected to have 70 percent of its stores reopened in coming weeks with new safeguards in place. It plans to add cashless payments “where permissible” and ask staff to “state a daily health declaration before every shift.” The company, which had 491 stores worldwide as of Feb. 2, said that it has reopened 150 locations and is set to reopen 200 more during the next two weeks. The company declined to share details what constituted the health declaration or about specific openings in the United States. Reporting was contributed by David Yaffe-Bellany, Stanley Kramer, Neal E. Boudette, Karen Weise, Niraj Chokshi, Raymond Zhong, David Segal, Mary Williams Walsh, Paul Mozur, Jason Karaian, Mohammed Hadi, Kate Conger, Sapna Maheshwari, Carlos Tejada, Daniel Victor and Kevin Granville.
Reporting was contributed by Neal E. Boudette, Karen Weise, Niraj Chokshi, Raymond Zhong, David Segal, Mary Williams Walsh, Paul Mozur, Jason Karaian, Mohammed Hadi, Kate Conger, Sapna Maheshwari, Carlos Tejada, Daniel Victor and Kevin Granville.