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/2020/06/29/business/stock-market-today-coronavirus.html

The article has changed 13 times. There is an RSS feed of changes available.

Version 3 Version 4
Stock Markets Whipsaw as Investors Watch Outbreaks: Live Updates Powell to Warn Lawmakers of ‘Extraordinarily Uncertain’ Outlook: Live Updates
(about 10 hours later)
Major European stock markets fluctuated on Monday amid worries about the persistence of the coronavirus pandemic, paving the way for a turbulent day on Wall Street. Jerome H. Powell, the Federal Reserve chair, will tell lawmakers on Tuesday that the U.S. economy is bouncing back, but the path ahead remains dependent on the virus and the action of policymakers.
Markets in Europe were modestly higher in late-morning trading, rebounding from a jagged decline earlier in the day. “We have entered an important new phase and have done so sooner than expected,” Mr. Powell said in remarks prepared for delivery to the House Financial Services Committee. He will note that consumer spending rebounded “strongly,” but will warn that the outlook is “extraordinarily uncertain” and hinges on whether efforts to contain the coronavirus pandemic succeed.
Asian markets fell heavily, following a sharp drop on Friday in Wall Street. Japanese stocks led the decline, losing more than 2 percent. “The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed,” Mr. Powell will say.
Futures markets indicated that Wall Street would open modestly higher. Prices for U.S. Treasury bonds, a traditional investment haven, fell in overnight trading. The Fed has worked to shore up markets and the economy as the pandemic tossed millions out of work and starved businesses of revenue, including by cutting interest rates to near-zero, buying huge quantities of government-backed debt and rolling out a series of emergency lending programs.
Investors have been watching nervously as coronavirus cases rise in the United States and in places where the disease had seemed to be initially under control, like Europe. The global death total reached 500,000 on Sunday, according to a New York Times database. The number of confirmed cases passed the 10 million level. Mr. Powell’s testimony on Tuesday is meant to focus on those emergency efforts, which are backed by funding Congress earmarked as part of its coronavirus economic response package. Mr. Powell will describe the programs, most of which have seen fairly limited uptake as financial conditions have calmed, and as the private market or other government programs have met credit demand.
Gunmen tried to storm Pakistan’s stock exchange in the city of Karachi on Monday, killing at least three security officers, the police said. One notable exception is the Fed’s Paycheck Protection Program loan facility, which takes the government’s small-business loans off bank balance sheets to give the institutions room to continue lending. That program holds about $65 billion in outstanding loans, he will say, a sign that banks and other lenders have made use of the facility. — Jeanna Smialek
Officials reported that four gunmen drove up to the gate in front of the exchange and that two managed to enter the parking area before all four were killed in a nearly hourlong firefight with security forces. Officials and traders were reported to have taken shelter inside the exchange during the shooting, officials said. The coronavirus pandemic has created so much extra work for banks that they are at risk of falling down on basic requirements such as reporting customer activity to credit bureaus and rooting out fraud, a federal regulator warned in a report on Monday.
The Baluchistan Liberation Army, a separatist group, claimed responsibility for the attack in social media posts identified as belonging to the group. The Office of the Comptroller of the Currency, which oversees the largest banks in the United States, released the report as part of its routine assessments of the industry. In it, the regulator said programs created by Congress to try to prop up the economy, including a $650 billion aid package for small businesses that was structured as a series of forgivable loans, put special stresses on banks just as they were grappling with volatile financial market conditions and widespread lockdowns that forced many of their employees to work from home.
The B.L.A. is an ethnic Baluch insurgent movement in Baluchistan Province, a resource-rich region of Pakistan that has long been racked by violence. In recent years, the group has targeted Chinese interests in the region, which is a center for huge development projects that are part of China’s Belt and Road Initiative. “This could cause breakdowns in controls related to account management, servicing management, flood insurance coverage, credit bureau reporting, and complying with applicable laws and regulations,” the report said.
Three months after the coronavirus pandemic shut down offices, corporate America has concluded that working from home is working out. Many employees will be tethered to Zoom and Slack for the rest of their careers, their commute accomplished in seconds. The regulator also warned banks to keep a close eye on loans to homes and businesses that could be in jeopardy because of the economic shutdown caused by the pandemic, and to keep an eye out for fraudsters looking to take advantage of the sudden shift to work-from-home to find weaknesses in banks’ security systems. — Emily Flitter
Richard Laermer has some advice for companies rushing pell-mell into this remote future: Don’t be an idiot. Bimal Patel, a senior Treasury official and close aide to Treasury Secretary Steven Mnuchin, is leaving the department this week, the latest departure of a top member of President Trump’s economic team.
A few years ago, Mr. Laermer let the employees of RLM Public Relations work from home on Fridays. This small step toward telecommuting proved a disaster, he said. He often could not find people when he needed them. Projects languished. The exodus comes at a pivotal moment as the Trump administration and lawmakers in Congress have been debating the framework for another economic stimulus package while cases of the coronavirus are surging around the country and the economy is struggling to shake off a recession.
IBM came to a similar decision. In 2009, 40 percent of its 386,000 employees in 173 countries worked remotely. But in 2017, with revenue tumbling, management called tens of thousands back to the office. Mr. Patel, the assistant secretary for financial institutions, was one of the architects of the $660 billion small-business lending initiative known as the Paycheck Protection Program. He also worked closely with the Federal Reserve on its Treasury-financed programs.
Even as Facebook, Shopify, Zillow, Twitter and many other companies are developing plans to let employees work remotely forever, the experiences of Mr. Laermer and IBM are a reminder that the history of telecommuting has been strewn with failure. The companies are barreling forward but run the risk of the same fate. Several of Mr. Trump’s economic advisers announced plans to leave recently, including Kevin Hassett, his former head of the Council of Economic Advisers; Tomas Philipson, the acting C.E.A. chairman; and Andrew Olmem, the deputy director of the National Economic Council.
“Working from home is a strategic move, not just a tactical one that saves money,” said Kate Lister, president of Global Workplace Analytics. “A lot of it comes down to trust. Do you trust your people?” — David Streitfeld Mr. Patel was sworn in at the Treasury in June 2019. He previously was deputy assistant secretary for the Financial Stability Oversight Council.
Few areas of the country rely on tourism more than Central Florida, which is home to Disney World, SeaWorld, Universal, Gatorland, Legoland and a plethora of smaller attractions. An estimated 250,000 people work in the leisure and hospitality industries, accounting for 25 percent of jobs in the area, according to the trade organization Visit Orlando. The Treasury confirmed Mr. Patel’s planned departure, which was reported earlier by The Washington Post. — Alan Rappeport
Most workers whose livelihood depends on Orlando’s ability to attract tourists in large numbers have managed to get by as the amusement economy shut down around them — though for some it has been a struggle. Reprising a sales strategy some automakers used during the last recession, Ford Motor said on Monday it would let new car buyers return their vehicles if they lost their jobs.
Many Americans have received one-time stimulus payments from the federal government, but Unite Here, a union representing 30,000 hospitality workers in the Orlando area, recently said that at least 1,500 members had yet to receive any unemployment payments from the state. Ford said it would allow customers who buy new cars or trucks before Sept. 30 to return those vehicles within a year. The vehicles must be leased or financed through Ford’s credit arm. For a buyer seeking to return cars, Ford said it would subtract the trade-in value of returned cars against what the buyer still owed and waive up to $15,000 of what was still due.
Florida has been one of the slowest states to process jobless claims, in part because its system was designed to be arduous. “We feel like right now, the economy is at the stage of recovery where people want things back to normal, they want to buy, but they’re still a little nervous about what the future holds,” Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, said in a statement.
“We were both calling about a hundred times a day for weeks trying to get through to somebody, anybody,” said Paul Cox, a lighting, video and audio technician at the Walt Disney World Resort. His wife, Julia Cox, who has a similar professional specialty elsewhere in the Disney complex, added that “calling that number became my full-time job.” The policy, which the company calls Ford Promise, is the latest effort by automakers to entice people to buy new cars during the coronavirus pandemic. Ford, General Motors and other companies previously offered no-interest loans for 84 months and other incentives.
Mr. Cox said the couple made a color-coded spreadsheet to keep track of the calls — more than 4,000 of them. — Eve Edelheit and Brooks Barnes Ford’s car-return program is not the first such effort. In March and April, Hyundai and Kia put out a similar offer. Such programs date back to the recession in 2009 when auto sales plunged and banks all but stopped providing car loans. At the time, Hyundai was among the first automakers to gain attention for giving customers a means of returning cars. — Neal E. Boudette
When the coronavirus prompted states to order residents to stay at home in March, unemployment surged around the country as huge parts of the economy slowed or stopped. Soon after, there were calls for philanthropists, charitably inclined people and even occasional donors to accelerate any giving they were planning to do. The Federal Reserve’s primary market corporate credit program is up and running, the central bank said on Monday, giving relatively healthy companies a last-ditch option to sell bonds straight to the central bank if they are struggling to raise funding.
They stepped up, it turns out, giving more and giving faster then they typically do. The Fed’s announcement, which also set out pricing terms for the program, called it a “funding backstop” that will support market liquidity and “the availability of credit for large employers.”
According a report released on Friday from Fidelity Charitable, which has become the largest grant maker in the country by managing thousands of individual donor-advised funds, those donors have given $3.4 billion nationwide since the start of the year, up at least 28 percent from a year earlier. The Fed’s decision to buy corporate debt has already calmed markets, and analysts do not expect heavy use of the program unless market conditions take a turn for the worse.
“Despite the economic environment, all the uncertainty at a personal level, people looked outside of themselves and gave to charity,” said Pamela Norley, president of Fidelity Charitable. The Fed announced on March 23 that it would buy new bonds on the primary market and corporate bonds on the secondary market — the one for already-issued debt. On April 9, it said the two programs would be supported by $75 billion given to the Treasury Department as part of Congress’s coronavirus economic response package. The money was meant to support up $250 billion in secondary market purchases and $500 billion in primary market buying.
Debra Mailman, who has spent the two years since she retired as an executive at Microsoft volunteering in disaster zones, initially slowed her giving, shocked by the sudden drop in value in the investments in her donor-advised fund. The Fed’s primary bond-buying program was initially expected to be the larger effort, but that now seems unlikely, because the primary market program is intended to be a backstop. To use it, a company must check several boxes: It must be unable to get “adequate credit” from banks and markets. It must be investment grade — meaning it is seen as a safe bet — or have been downgraded to junk-bond status only after March 22. Even “fallen angels” cannot use the program if they are now insolvent.
“At the beginning of the pandemic, I did the same thing everyone did: I looked at the stock market and said, ‘Oh, my God,’” she said. “Then I held my nose and said, ‘Forget that — the money isn’t mine anymore. It will do more work out there.’” — Paul Sullivan The program could help out if markets gum up again, as they did in March. Its sister program, the one that buys already-issued securities, has been active since mid-May and had made $8.7 billion worth of exchange-traded fund and bond purchases through June 24, based on the latest data.
Walt Disney Studios pushed back the theatrical release of its live-action remake of “Mulan,” leaving July without any big-budget movie releases and delaying a hoped-for recovery at cinemas. “Mulan” is set to arrive in theaters on Aug. 21 instead of July 24. On Sunday, the Fed detailed the corporate bonds it will buy in that secondary market program. A total of 12 sectors are represented in the index. The most heavily represented companies listed in the index include automotive and technology companies: Toyota Motor Credit Corporation, Volkswagen Group America, Daimler Finance, AT&T, Apple, Verizon Communications and General Electric round out the top issuers. — Jeanna Smialek
Reporting was contributed by Carlos Tejada, Salman Masood, Eve Edelheit, Paul Sullivan, David Streitfeld and Brooks Barnes. Every January for 36 years, the Sundance Film Festival has been staged in Park City, Utah, an affluent ski town tucked 7,000 feet up in the Wasatch Range. Attendees fill theaters to capacity, huddle together in crowded wait-list tents, ride on jam-packed shuttle buses and hot-tub hop with boozy abandon — at the height of flu season.
But the coronavirus pandemic is forcing organizers to rethink Sundance. On Monday, Tabitha Jackson, the festival’s director, unveiled her preliminary plans for the 2021 edition, a gathering expected to take place under social distancing restrictions and with a Covid-19 vaccine still unavailable. It will simultaneously be held in Park City and at least 20 other locales: Exploratory talks are underway with independent cinemas in California, Colorado, Georgia, Kentucky, New York, Michigan, Minnesota, Tennessee and Texas. Mexico City is also on the list.
Participating theaters will choose a “bespoke” selection of Sundance 2021 offerings that make sense for their community, Ms. Jackson said, augmenting those choices with complimentary programming of their own.
She said that Sundance’s “full curated program” would also be made available online.
“It will be the nucleus of the festival,” she said of an online platform that Sundance is developing, “a one-stop point of access, designed to create a participatory experience which brings all the elements and locations of the festival together.” — Brooks Barnes
Stocks rallied Monday, rebounding from a week of losses, even as a resurgence in coronavirus cases that had alarmed Wall Street last week continued.
The S&P 500 rose more than 1 percent, after having fallen nearly 3 percent last week. A jump in shares of Boeing helped lead the Dow Jones industrial average to a gain of about 2 percent. Shares in Europe had also ended higher, after rebounding from a decline earlier in the day.
Companies that have come to reflect investor sentiment toward the return of normal spending by American consumers — retailers and airlines — were among the best performing stocks in the S&P 500. Southwest Airlines rose about 9 percent, and Simon Property Group, which operates shopping malls, jumped 10 percent.
Oil prices also rose, with West Texas intermediate futures approaching $40 a barrel.
Boeing surged more than 14 percent after the Federal Aviation Administration cleared the company to begin test flights of its beleaguered 737 Max jet, a critical step that could mean the aircraft is back in service by the end of the year.
Investors have been watching nervously as coronavirus cases rise in the United States and in places where the pandemic had seemed to be under control, like Europe. Florida, Nevada and South Carolina broke daily records for new cases over the weekend. The global death total reached 500,000 on Sunday, according to a New York Times database. The number of confirmed cases passed 10 million.
But there was also more good news on the economic recovery on Monday. The National Association of Realtors said contracts to buy previously owned homes rebounded by the most on record in May.
AMC Theaters, the largest cinema operator in North America, said it would push back its planned reopening by two weeks. AMC now plans to reopen most of its locations on July 30, with another 150 coming online the following week “barring further complications from the coronavirus outbreak.”
Cirque du Soleil announced that it had filed for bankruptcy protection in Canada and would seek to do the same in the United States. With productions shuttered, the famed circus said that it had lost its entire revenue stream. The company, which earlier this year temporarily laid off 5,000 employees, nearly 95 percent of its work force, said that it had entered into a “stalking horse” purchase agreement for existing shareholders to restart the business.
Broadway will remain dark for at least the rest of this year, and many shows are signaling that they do not expect a return to the stage until late winter or early spring. The Broadway League said Monday that theater owners and producers were ready to refund or exchange tickets previously purchased for shows through Jan. 3. But the league said it was not yet ready to specify a date when shows would reopen.
The first in a series of crucial test flights of Boeing’s 737 Max jet took off from a Seattle-area airport just before 10 a.m. on Monday. The flights, which are expected to take about three days, represent a significant milestone in returning the plane to service after it was grounded last year following two fatal crashes.
Reporting was contributed by Emily Flitter, Jeanna Smialek, Niraj Chokshi, Neal E. Boudette, Carlos Tejada, Clifford Krauss, Salman Masood, Jason Karaian, Eve Edelheit, Paul Sullivan, David Streitfeld, Andrew Ross Sorkin, Mohammed Hadi, Katie Robertson and Brooks Barnes.