This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.nytimes.com/2020/06/25/business/stock-market-today-coronavirus.html
The article has changed 24 times. There is an RSS feed of changes available.
| Version 13 | Version 14 |
|---|---|
| Federal Reserve Clamps Down on Bank Payouts: Live Updates | |
| (about 1 hour later) | |
| The Federal Reserve on Thursday temporarily restricted shareholder payouts by the nation’s biggest banks, barring them from buying back their own shares or increasing dividend payments in the third quarter as regulators try to ensure banks remain strong enough to keep lending through the pandemic-induced downturn. | |
| The decision to limit payouts is an admission by the Fed that large financial institutions remain vulnerable to an economic downturn unlike any other in modern history. With virus cases across the United States still surging and business activity subdued, it remains unclear when and how robustly the economy will recover. | |
| Some of the Fed’s loss projections for banks suggest that the eventual hit to loans in a bad scenario could be far worse than in the aftermath of 2008. That outcome helped drive the new restrictions. | |
| Still, the Fed stopped short of barring banks from paying dividends, as some lawmakers and former regulators have urged — a decision that drew public criticism from one of the Fed’s governors, who said not taking stronger measures could “impair the recovery.” | |
| The Fed, which devised its primary stress test scenarios before the virus tore through the economy, will require the 34 banks subjected to the test to resubmit and update their capital plans later this year. Those plans detail how the banks intend to proceed with share buybacks and dividend increases in light of the pandemic, and the Fed said that resubmitting them “will help firms reassess their capital needs.” | |
| European Union countries are considering barring Americans as the union reopens its borders next week, a move that could deal a blow to airlines hoping to revive their business when travel typically peaks across the Atlantic Ocean. | European Union countries are considering barring Americans as the union reopens its borders next week, a move that could deal a blow to airlines hoping to revive their business when travel typically peaks across the Atlantic Ocean. |
| International flights make up a minority of flights for U.S. airlines but are typically much more profitable than domestic ones. And flights to and from Europe are generally the most important. U.S. and European airlines had reduced the number of available seats on flights connecting the two markets by about 75 percent next month compared with last July, according to the aviation data provider OAG. And a travel ban could lead to even deeper cuts. | International flights make up a minority of flights for U.S. airlines but are typically much more profitable than domestic ones. And flights to and from Europe are generally the most important. U.S. and European airlines had reduced the number of available seats on flights connecting the two markets by about 75 percent next month compared with last July, according to the aviation data provider OAG. And a travel ban could lead to even deeper cuts. |
| “It’s a huge deal,” said John Grant, a senior analyst at OAG. “It is by far the jewel in the crown for many major airline networks, in terms of both revenue and profitability.” | “It’s a huge deal,” said John Grant, a senior analyst at OAG. “It is by far the jewel in the crown for many major airline networks, in terms of both revenue and profitability.” |
| Last year, flights across the Atlantic, to Europe and other destinations, accounted for about 17 percent of passenger revenue for United Airlines, or about $7.4 billion, and 15 percent of all passenger revenue for Delta Air Lines. Such flights generated a quarter of passenger profits at those two airlines last year, according to the Transportation Department. | Last year, flights across the Atlantic, to Europe and other destinations, accounted for about 17 percent of passenger revenue for United Airlines, or about $7.4 billion, and 15 percent of all passenger revenue for Delta Air Lines. Such flights generated a quarter of passenger profits at those two airlines last year, according to the Transportation Department. |
| Travel between the United States and the European Union has been restricted since March, when governments on both sides of the Atlantic barred most visitors to prevent the spread of the coronavirus, with exceptions for repatriations and “essential” travel by medical professionals. At the time, the United States had just over 1,100 coronavirus cases as the virus spread extensively in Italy and Spain. Today, the United States leads the world with about 2.4 million cases, and infections are surging in Arizona, California, Florida, Texas and other states. | Travel between the United States and the European Union has been restricted since March, when governments on both sides of the Atlantic barred most visitors to prevent the spread of the coronavirus, with exceptions for repatriations and “essential” travel by medical professionals. At the time, the United States had just over 1,100 coronavirus cases as the virus spread extensively in Italy and Spain. Today, the United States leads the world with about 2.4 million cases, and infections are surging in Arizona, California, Florida, Texas and other states. |
| The Trump administration delivered more than a million stimulus payments worth about $1.4 billion to dead people in a rush to pump money into the economy this year, the Government Accountability Office said on Thursday. | The Trump administration delivered more than a million stimulus payments worth about $1.4 billion to dead people in a rush to pump money into the economy this year, the Government Accountability Office said on Thursday. |
| The improper payments represent some of the wasteful government spending that occurred in the wake of the rapid economic stabilization effort that was undertaken after Congress passed a $2.6 trillion bailout package in March, as the Treasury Department, working with the Internal Revenue Service, raced to deliver nearly $270 billion in payments to Americans. | The improper payments represent some of the wasteful government spending that occurred in the wake of the rapid economic stabilization effort that was undertaken after Congress passed a $2.6 trillion bailout package in March, as the Treasury Department, working with the Internal Revenue Service, raced to deliver nearly $270 billion in payments to Americans. |
| “The agencies faced difficulties delivering payments to some individuals, and faced additional risks related to making improper payments to ineligible individuals, such as decedents, and fraud,” the report said. | “The agencies faced difficulties delivering payments to some individuals, and faced additional risks related to making improper payments to ineligible individuals, such as decedents, and fraud,” the report said. |
| The report noted that while the I.R.S. typically uses death records maintained by the Social Security Administration to prevent improper payments, that did not happen with the first three batches of stimulus payments because of a legal interpretation of the legislation authorizing the payments. | The report noted that while the I.R.S. typically uses death records maintained by the Social Security Administration to prevent improper payments, that did not happen with the first three batches of stimulus payments because of a legal interpretation of the legislation authorizing the payments. |
| I.R.S. lawyers “determined that I.R.S. did not have the legal authority to deny payments to those who filed a return for 2019, even if they were deceased at the time of payment,” the report found. That decision, the G.A.O. said, went against the agency’s own internal controls that had been in place for seven years and “substantially increased the risk of potentially making improper payments to decedents.” | I.R.S. lawyers “determined that I.R.S. did not have the legal authority to deny payments to those who filed a return for 2019, even if they were deceased at the time of payment,” the report found. That decision, the G.A.O. said, went against the agency’s own internal controls that had been in place for seven years and “substantially increased the risk of potentially making improper payments to decedents.” |
| The G.A.O. recommended that the I.R.S. find ways to notify ineligible recipients of the payments how to return them, though it did not explain how that would work with regard to those who are deceased. It also suggested that Congress ensure that the Treasury and its Bureau of the Fiscal Service, which distributed the payments, gain full access to the Social Security Administration’s complete set of death records to help prevent money from being paid to the deceased. | The G.A.O. recommended that the I.R.S. find ways to notify ineligible recipients of the payments how to return them, though it did not explain how that would work with regard to those who are deceased. It also suggested that Congress ensure that the Treasury and its Bureau of the Fiscal Service, which distributed the payments, gain full access to the Social Security Administration’s complete set of death records to help prevent money from being paid to the deceased. |
| In its report, the G.A.O. also warned that the $660 billion Paycheck Protection Program was vulnerable to fraud because the Small Business Administration is relying on borrower certifications to determine if the loans are needed and how they are being used. | In its report, the G.A.O. also warned that the $660 billion Paycheck Protection Program was vulnerable to fraud because the Small Business Administration is relying on borrower certifications to determine if the loans are needed and how they are being used. |
| Nearly 1.5 million workers filed new claims for state unemployment insurance last week, the Labor Department reported Thursday, the 14th week in a row that the figure has topped one million. | Nearly 1.5 million workers filed new claims for state unemployment insurance last week, the Labor Department reported Thursday, the 14th week in a row that the figure has topped one million. |
| An additional 728,000 workers filed for benefits from Pandemic Unemployment Assistance, a federally funded emergency program aimed at covering the self-employed, independent contractors and other workers who don’t qualify for traditional unemployment insurance. | An additional 728,000 workers filed for benefits from Pandemic Unemployment Assistance, a federally funded emergency program aimed at covering the self-employed, independent contractors and other workers who don’t qualify for traditional unemployment insurance. |
| The total number of people collecting state unemployment insurance is 19.5 million, down from nearly 25 million in early May. | The total number of people collecting state unemployment insurance is 19.5 million, down from nearly 25 million in early May. |
| The latest data comes amid conflicting signals for the economy. On the one hand, New York and some other places that were hard hit are starting to get back to business. | The latest data comes amid conflicting signals for the economy. On the one hand, New York and some other places that were hard hit are starting to get back to business. |
| But a surge in cases in states that reopened earlier has raised fears of new setbacks. On Tuesday, Gov. Greg Abbott of Texas urged residents to stay home and warned that the state might have to impose new restrictions if the virus could not be contained. And California and Florida have each posted record numbers of new cases in recent days. | But a surge in cases in states that reopened earlier has raised fears of new setbacks. On Tuesday, Gov. Greg Abbott of Texas urged residents to stay home and warned that the state might have to impose new restrictions if the virus could not be contained. And California and Florida have each posted record numbers of new cases in recent days. |
| “The renewed outbreak will hinder the recovery,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago. “I can’t help but think that the willingness of consumers to be in crowded places has diminished. It’s going to be a long haul to get back to where we were before the pandemic.” | “The renewed outbreak will hinder the recovery,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago. “I can’t help but think that the willingness of consumers to be in crowded places has diminished. It’s going to be a long haul to get back to where we were before the pandemic.” |
| Macy’s said on Thursday that it would cut about 3,900 corporate and management jobs, or 25 percent of that staff, as the struggling department store chain fights the effects of the coronavirus pandemic on its business. The company also said that it had reduced staffing in stores, its supply chain and customer support network “which it will adjust as sales recover,” without providing the number of employees affected. | Macy’s said on Thursday that it would cut about 3,900 corporate and management jobs, or 25 percent of that staff, as the struggling department store chain fights the effects of the coronavirus pandemic on its business. The company also said that it had reduced staffing in stores, its supply chain and customer support network “which it will adjust as sales recover,” without providing the number of employees affected. |
| Macy’s, which also owns Bloomingdale’s and Bluemercury, has been rushing to reopen stores and put into place a range of cost-cutting measures after its sales nose-dived. The company said that the new job cuts would save $365 million this year and about $630 million per year on an annualized basis in the future. | Macy’s, which also owns Bloomingdale’s and Bluemercury, has been rushing to reopen stores and put into place a range of cost-cutting measures after its sales nose-dived. The company said that the new job cuts would save $365 million this year and about $630 million per year on an annualized basis in the future. |
| The pandemic dealt a severe blow to a company that was already making job cuts and closing stores before the global crisis. Macy’s said in February that it was eliminating about 2,000 corporate and support function positions, and that it would close about 125 of its least productive stores in the next three years. | The pandemic dealt a severe blow to a company that was already making job cuts and closing stores before the global crisis. Macy’s said in February that it was eliminating about 2,000 corporate and support function positions, and that it would close about 125 of its least productive stores in the next three years. |
| “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward,” Jeff Gennette, chief executive of Macy’s, said in a statement on Thursday. | “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward,” Jeff Gennette, chief executive of Macy’s, said in a statement on Thursday. |
| The company pushed its formal first-quarter earnings report to July 1 because of the pandemic, but it has announced preliminary first-quarter net sales of roughly $3 billion, a 45 percent drop from last year, and an operating loss of as much as $1.1 billion. | The company pushed its formal first-quarter earnings report to July 1 because of the pandemic, but it has announced preliminary first-quarter net sales of roughly $3 billion, a 45 percent drop from last year, and an operating loss of as much as $1.1 billion. |
| Stocks on Wall Street rose on Thursday, rebounding from a sharp decline the day before that had been set off by concerns a surge in coronavirus cases around the United States. | Stocks on Wall Street rose on Thursday, rebounding from a sharp decline the day before that had been set off by concerns a surge in coronavirus cases around the United States. |
| After a day of unsteady trading, the S&P 500 ended about 1 percent higher by Thursday afternoon. The index had tumbled 2.6 percent on Wednesday. | After a day of unsteady trading, the S&P 500 ended about 1 percent higher by Thursday afternoon. The index had tumbled 2.6 percent on Wednesday. |
| Investors have worried for days about a rising number of new infections in the United States, a surge that raises questions about how quickly the world’s largest economy can get back up to speed. India and Brazil have also reported higher infection rates, days after China and South Korea also disclosed outbreaks. | Investors have worried for days about a rising number of new infections in the United States, a surge that raises questions about how quickly the world’s largest economy can get back up to speed. India and Brazil have also reported higher infection rates, days after China and South Korea also disclosed outbreaks. |
| The reopening of many businesses is not going as smoothly as financial markets had once anticipated, and unemployment claims data released Thursday show that layoffs continue at a substantial pace. Nearly 1.5 million workers filed for unemployment benefits last week, a larger number than economists had forecast. | The reopening of many businesses is not going as smoothly as financial markets had once anticipated, and unemployment claims data released Thursday show that layoffs continue at a substantial pace. Nearly 1.5 million workers filed for unemployment benefits last week, a larger number than economists had forecast. |
| It helped that data on manufactured goods rebounded. The Commerce Department said orders for manufactured goods meant to last at least three years rose 15.8 percent in May after plunging 18.1 percent in April. Economists had expected a rebound, but the May increase was stronger than anticipated. | It helped that data on manufactured goods rebounded. The Commerce Department said orders for manufactured goods meant to last at least three years rose 15.8 percent in May after plunging 18.1 percent in April. Economists had expected a rebound, but the May increase was stronger than anticipated. |
| The Walt Disney Company said on Thursday that it would remake one of its most popular theme park rides, Splash Mountain, which depicts characters and songs from “Song of the South,” the racist 1946 musical in which a former slave, Uncle Remus, recounts African folk tales. The 31-year-old flume ride will be rethemed around “The Princess and the Frog,” Disney’s 2009 musical that introduced the company’s first black princess, Tiana. | The Walt Disney Company said on Thursday that it would remake one of its most popular theme park rides, Splash Mountain, which depicts characters and songs from “Song of the South,” the racist 1946 musical in which a former slave, Uncle Remus, recounts African folk tales. The 31-year-old flume ride will be rethemed around “The Princess and the Frog,” Disney’s 2009 musical that introduced the company’s first black princess, Tiana. |
| The name Splash Mountain will also be retired. New Adventures With Princess Tiana is the working title of the remade attraction, which will be set in the Louisiana bayou. | The name Splash Mountain will also be retired. New Adventures With Princess Tiana is the working title of the remade attraction, which will be set in the Louisiana bayou. |
| “It is important that our guests be able to see themselves in the experiences we create,” Carmen Smith, vice president of creative development and inclusion strategies at Walt Disney Imagineering, said in a blog post. Imagineering is the entertainment conglomerate’s research and design division. | “It is important that our guests be able to see themselves in the experiences we create,” Carmen Smith, vice president of creative development and inclusion strategies at Walt Disney Imagineering, said in a blog post. Imagineering is the entertainment conglomerate’s research and design division. |
| Disney’s decision to expunge “Song of the South” from its domestic theme parks — Splash Mountain is at both Disney World in Florida and Disneyland in California — comes amid a deep reckoning on racial justice in the United States. Protests against police brutality and racism, sparked by the killing of George Floyd, a black man, in Minneapolis by a white police officer, have prompted a wide spectrum of companies to make long-overdue changes. | Disney’s decision to expunge “Song of the South” from its domestic theme parks — Splash Mountain is at both Disney World in Florida and Disneyland in California — comes amid a deep reckoning on racial justice in the United States. Protests against police brutality and racism, sparked by the killing of George Floyd, a black man, in Minneapolis by a white police officer, have prompted a wide spectrum of companies to make long-overdue changes. |
| In the case of Splash Mountain, Disney executives have privately discussed abandoning the “Song of the South” theming for at least five years. Last summer, Disney said, a plan was put into motion to give the ride a “Princess and the Frog” story line. Concept art was commissioned. Disney said it sped up the public unveiling of the project because of the cultural reckoning. | In the case of Splash Mountain, Disney executives have privately discussed abandoning the “Song of the South” theming for at least five years. Last summer, Disney said, a plan was put into motion to give the ride a “Princess and the Frog” story line. Concept art was commissioned. Disney said it sped up the public unveiling of the project because of the cultural reckoning. |
| CEC Entertainment, the parent company of Chuck E. Cheese and Peter Piper Pizza, filed for bankruptcy protection on Thursday, citing financial damage from the prolonged closings of its entertainment centers because of the coronavirus pandemic. | CEC Entertainment, the parent company of Chuck E. Cheese and Peter Piper Pizza, filed for bankruptcy protection on Thursday, citing financial damage from the prolonged closings of its entertainment centers because of the coronavirus pandemic. |
| The company said that it expected to keep stores open during the Chapter 11 process, and to continue reopening more locations every week. It has so far reopened 266 Chuck E. Cheese and Peter Piper Pizza venues. | The company said that it expected to keep stores open during the Chapter 11 process, and to continue reopening more locations every week. It has so far reopened 266 Chuck E. Cheese and Peter Piper Pizza venues. |
| The pandemic has had a particularly devastating impact on the entertainment and hospitality industries. But Chuck E. Cheese’s problems preceded the crisis, dating back to when CEC was acquired by the private equity firm Apollo Global Management in 2014. The company has lost money in four out of the past five years since the acquisition. In 2019, the company lost $28.9 million, 41 percent more than it had in 2018. | The pandemic has had a particularly devastating impact on the entertainment and hospitality industries. But Chuck E. Cheese’s problems preceded the crisis, dating back to when CEC was acquired by the private equity firm Apollo Global Management in 2014. The company has lost money in four out of the past five years since the acquisition. In 2019, the company lost $28.9 million, 41 percent more than it had in 2018. |
| “The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history and get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond,” said David McKillips, chief executive of CEC Entertainment, in a statement. | “The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history and get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond,” said David McKillips, chief executive of CEC Entertainment, in a statement. |
| The company said its 16,400 employees would continue to be paid during the bankruptcy process. | The company said its 16,400 employees would continue to be paid during the bankruptcy process. |
| Masayoshi Son, the founder of SoftBank, the Japanese conglomerate and investment company, said on Thursday that he would resign from the board of Alibaba, the Chinese e-commerce company, in which he was an early and wildly successful investor. The move comes after Jack Ma, Alibaba’s co-founder, said last month that he would quit SoftBank’s board, without giving an explanation. | |
| Apple said it planned to closed 11 stores in Florida because of rising coronavirus cases in the state, adding to the 18 other stores it had closed in the past week amid a resurgence of the virus across part of the country. Apple has now closed stores in Arizona, Florida, North Carolina, South Carolina and Texas since it reopened its stores in the United States weeks ago. | Apple said it planned to closed 11 stores in Florida because of rising coronavirus cases in the state, adding to the 18 other stores it had closed in the past week amid a resurgence of the virus across part of the country. Apple has now closed stores in Arizona, Florida, North Carolina, South Carolina and Texas since it reopened its stores in the United States weeks ago. |
| Qantas, the Australian airline, will cut roughly one-fifth of its work force as it joins other airlines grappling with the near-halt in global travel. In addition to the reductions of at least 6,000 jobs, it would also keep an additional 15,000 workers on furlough until flying resumes. It will also retire its six Boeing 747 jumbo jets six months ahead of schedule. | Qantas, the Australian airline, will cut roughly one-fifth of its work force as it joins other airlines grappling with the near-halt in global travel. In addition to the reductions of at least 6,000 jobs, it would also keep an additional 15,000 workers on furlough until flying resumes. It will also retire its six Boeing 747 jumbo jets six months ahead of schedule. |
| Reporting was contributed by Jeanna Smialek, Peter Eavis, Kate Kelly, Jack Nicas, Nelson D. Schwartz, Niraj Chokshi, Alan Rappeport, Gillian Friedman, Sapna Maheshwari, Ben Dooley, Mohammed Hadi, Matt Phillips, Carlos Tejada, Brooks Barnes and Alan Rappeport. |