Tech Stocks Lead Wall Street Higher: Live Business Briefing
Stocks on Wall Street rose on Friday, shaking off an unsteady start, as a rally in technology stocks lifted the broader market.
The S&P 500 was more than half a percent higher, after an earlier drop. The technology heavy Nasdaq composite rose more than 1 percent. Amazon, Microsoft and Apple were all higher.
Companies that have been hard hit by the coronavirus pandemic’s impact on travel and tourism led the gains on Friday. Norwegian Cruise Line rose more than 9 percent, and Carnival Corporation, MGM Resorts and Boeing were all sharply higher.
The broad market is still on track for its fourth consecutive weekly decline, and is down roughly 9 percent from its Sept. 2 record. A drop of 10 percent from that high would put the index into what is known as a correction on Wall Street — a label used to acknowledge that a long-term decline is underway.
European stocks have also mostly tumbled this week after a surge in coronavirus cases has led several European governments to mandate tighter restrictions, further clouding the timeline for a recovery. The benchmark Stoxx Europe 600 fell more than 5 percent this week.
Investors are watching developments in Washington closely. On Thursday, Treasury Secretary Steven Mnuchin said that he and Speaker Nancy Pelosi had agreed to resume talks on another economic relief package. The remarks moved markets higher.
But at the same congressional hearing, the Federal Reserve chair, Jerome H. Powell, underscored the need for fiscal support. Without more help, “we’ll see sooner or later, probably sooner, that the economy has a hard time sustaining the growth that we’ve seen — that’s the risk,” Mr. Powell said.
Impresa Aerospace, a parts supplier to Boeing, filed for bankruptcy on Thursday, citing a “perfect storm” created by the global grounding of the 737 Max and the pandemic’s effect on commercial aviation.
In its filing, Impresa, which has nearly 150 employees, said that Boeing was the company’s largest customer and that the Max program “is (or was)” Impresa’s largest source of revenue. Most of the company’s growth from 2016 to 2019 was fueled by preparation for production of the Max, which Boeing had projected would reach 57 planes per month this year.
Instead, after two fatal crashes, the Max was grounded worldwide in March 2019 and will likely remain so until at least this winter. The pandemic’s toll on air travel has led airlines to retrench, dealing another blow to Boeing, which has lost more than 900 net orders for planes this year and has a backlog of just over 4,000. Boeing suspended 737 production in January and said in July that it expected to reach a rate of 31 per month by 2022.
“The effects of the 737 Max grounding and the Covid-19 pandemic have been particularly acute because of the nature of the commercial aerospace supply chain,” Impresa said in the filing.
Impresa has long-term agreements with Boeing and others, but orders are not guaranteed. As a result, the company is on the hook for $10 million of materials that it no longer needs and that it doesn’t expect to be able to pay. Twin Haven Capital Partners, a private equity firm that is the majority owner of Impresa, offered to buy the company out of bankruptcy for $10 million, according to the filing.
The German airline Lufthansa has more than 1,000 more pilots than it needs and is talking to their union about job reductions, the airline said Friday. A spokesman for Lufthansa, which has about 5,000 pilots, said that some of the cuts could probably be achieved by early retirements or reduced flying hours, but that forced layoffs might be necessary.
The European Commission said on Friday that it would appeal a July court ruling that struck down an order forcing Apple to pay more than 13 billion euros in back taxes to Ireland, home to the company’s European headquarters. The court defeat was a setback for European regulators who have acted aggressively against Silicon Valley companies. Led by Margrethe Vestager, the top antitrust official in the European Union, the commission has accused Apple of receiving unfair tax treatment in Ireland in violation of European Union laws. Apple and Ireland have said the arrangement was within the law.
Costco reported a 14.1 percent increase in comparable sales for the quarter that ended on Aug. 30, excluding gas and currency effects. The company’s sales jump is nearly twice as high as the spring quarter, when Costco struggled to keep items in stock after the virus struck and Americans rushed to buy groceries, toilet paper, and cleaning supplies. The company reported profit of about $1.4 billion, compared with roughly $1.1 billion during the same period last year.
As workers return to offices in greater numbers, managers face this inevitable situation: An employee tests positive for Covid-19, possibly exposing others at the workplace. Who should be told about it?
Traders at JPMorgan Chase in Manhattan recently complained when they found out about a coronavirus case in their building via news reports. The bank only informs people on the same floor, or who have otherwise had potential contact with the infected person. That’s one way to do it, and there are others. The DealBook newsletter asked experts to debate the pros and cons of four major approaches.
“As an employer, I owe a duty of care to all my employees. They have a right to know,” said Anthony Gentile, a partner at the law firm Godosky & Gentile. This isn’t a hypothetical question for the litigator. When employees at the 20-person New York firm tested positive early in the pandemic, everyone was alerted and the office was closed.
“Do not tell nobody!” the Cornell employment law professor Stewart Schwab warned, gasping at the notion.
Tell only those in possible contact
This is the JPMorgan approach, shared by many other companies. The risk of telling a narrower group of people, lawyers warn, is that it may reveal, explicitly or otherwise, who tested positive — and it’s important to protect an employee’s confidentiality. More-limited disclosures may also rankle employees who work in the general vicinity but not directly with the infected person.
Tell everyone in the building
Technically, the workplace is a manager’s “zone of duty,” Mr. Gentile said. That could mean notifying anybody who could have shared air or space with the infected person, but he suggested circumspection with clients.
Tell everyone in the company
Strictly speaking, if there’s no possible contact — in a lobby, elevator or elsewhere — it’s probably not necessary for everyone to know. But wide disclosure can cultivate a culture of transparency and openness, Mr. Schwab said. (It can also become overwhelming at a big company where a lot of cases may be inevitable.) He isn’t totally sold on this approach, but isn’t opposed either.
— Ephrat Livni
The editors and reporters for the DealBook newsletter listen to many corporate conference calls, sift through a lot of company reports and otherwise digest all of the most important business news. These are some of the quotes that caught our attention this week:
? “It’s not like Tesla’s profitability is crazy high. Our average profitability for the last four quarters is like maybe 1 percent. So just to be clear, it’s not like we’re minting money. Our valuation makes it seem like we are, but we’re not.” — Elon Musk, Tesla‘s chief executive, setting the record straight
? “People had to make sure they had a room before they actually showed up. That’s much less the case now.” — Leeny Oberg, Marriott‘s chief financial officer, on the way hotels work now
? “You wake up every day and you’re $300,000 short just in that one restaurant. That’s our best restaurant in the Olive Garden system. We do over $15 million there, and now we’re doing $2,500 a day.” — Gene Lee, the chief executive of Darden Restaurants, on the urgency of reopening the Olive Garden in Times Square
? “The whole thing is a crock.” — Barry Diller, the chairman of Expedia and IAC, on TikTok‘s complex takeover saga
? “The red berry shape reflects our heritage and the values the company was built on. The green shape is our innovative mind-set and ability to pivot to any challenge. The darker green represents our growth, teal is our people and culture, and purple represents the creativity that we hope will propel the company forward.” — Kara Buckler, the director of creative services at J.M. Smucker, on the company’s new logo
College experts say that it will be important to apply early for financial aid this year, because many families have suffered economically during the coronavirus pandemic and may have to take extra steps to qualify for maximum help.
Families should complete the Free Application for Federal Student Aid — the form known as FAFSA — as soon as they can:
The form is a major gateway for financial help from the federal government, as well as from many states and colleges.
The FAFSA for the 2021-22 academic year is available starting Thursday.
An analysis by NerdWallet found that $2.6 billion in federal need-based Pell grants went unclaimed in 2018 because eligible students failed to file the form.
The upcoming FAFSA will use financial information from the 2019 tax year to determine a family’s expected out-of-pocket payment for college.
But many students and families have been affected by the health crisis this year, suffering job losses, catastrophic medical bills and even deaths, said Kim Cook, executive director of the National College Attainment Network, a nonprofit advocacy group. Tax returns filed this year won’t accurately reflect students’ current financial picture, diminishing their eligibility for need-based grants and scholarships.
“Families may have had significant change in circumstances,” Ms. Cook said. “It means many students have had a loss of income.”
If that’s the case, students must still use the required, older tax information to complete the FAFSA, but they also should immediately contact college financial aid offices to alert them to their situation and request a review known as professional judgment. With that review, financial aid administrators have discretion to make adjustments to the FAFSA so that students can qualify for more aid.
The coronavirus pandemic forced China to bring industrial activity to a halt earlier this year, but the country is revving its engines again — and global prices of metals are reflecting that renewed appetite for growth.
China consumes roughly half of the world’s industrial metals, according to analysts. As the country emerged from the worst of the pandemic in March, the Chinese government unleashed a program of enormous fiscal stimulus aimed at building bridges, roads, utilities, broadband and railroads across the country.
As a result, the prices of metals used to build infrastructure have surged in recent months:
Since late March, prices of iron ore — the key ingredient in steel — have risen more than 40 percent.
Nickel, needed for stainless steel, and zinc, used to galvanize metal, are up more than 25 percent.
Copper, which is used in wiring for power transmission, construction and car manufacturing, and has long been seen as a barometer for the world’s industrial economy, is also up around 35 percent.
“China, as usual, went the investment route and is massively investing in metals-intensive infrastructure,” said Caroline Bain, a commodities market analyst with Capital Economics in London. “So there’s been a very strong pick up in China’s demand for metals.”
That’s good news not only for metals markets, but could also herald better times for the global economy. Analysts have studied the prices of some metals as a leading indicator of global economic growth.
“People’s perception of the economy is how weakened it is, yet all the industrial metals are telling you a very different story,” said Chris Verrone, an analyst and partner at Strategas Research in New York. “We think copper is the market trying to tell us that the economy is stronger than we expect.”
Thursday, Sept. 24
Mnuchin and Pelosi inch toward resuming stimulus talks as economy continues to struggle.
Top Democrats on Thursday were crafting a $2.4 trillion package — about $1 trillion less than the measure the House approved in May — that could either serve as a new basis for the Democratic position in negotiations or be voted on as a stand-alone package in the coming days, according to a senior Democratic aide.
A rise in new claims for state jobless benefits signals continuing layoffs.
About 825,000 Americans filed for state unemployment benefits last week. That is up from 796,000 a week earlier, though it is far below the more than six million people a week who were filing for benefits during the peak period of layoffs in the spring. By any measure, however, hundreds of thousands of Americans are losing their jobs each week, and millions more laid off earlier in the crisis are still relying on unemployed benefits to meet their basic expenses. Applications for benefits remain higher than at the peak of many past recessions, and after falling quickly in the spring, the number has declined only slowly in recent weeks.
Wednesday, Sept. 23
Tech stocks dragged stocks to their fifth decline in the last six sessions.
Stocks have been retreating since that Sept. 2 peak, as investors rotated out of the high-flying tech shares and concerns grew about the state of the economy. A key worry has been Washington’s inability to reach a deal on a new economic aid package, and the gridlock between Democrats and Republicans has only worsened since the death of Justice Ruth Bader Ginsburg last week.
Disney delays the release of ‘Black Widow,’ ‘West Side Story’ and other films.
Movie theaters, already starved for new Hollywood films to show, were handed new setbacks on Wednesday: Walt Disney Studios said it would hold off releasing several major films, including “Black Widow,” a Marvel superhero spectacle, and Steven Spielberg’s “West Side Story.”
Tuesday, Sept. 22
Britain issues a U-turn for office workers, urging them to stay home.
Companies that had been under pressure from British government ministers to get employees back to the office were scrambling to change their guidance for staff. Some had organized rotation systems to alternate different teams in the office to ensure social distancing. Others supplied personal protective equipment, created one-way systems to move around offices and reconfigured desk spaces. Both JPMorgan Chase and Goldman Sachs were at about 30 percent capacity in their London offices.
Wall Street climbs, snapping a losing streak as tech rallies
The S&P 500 rose more than 1 percent and the tech-heavy Nasdaq composite climbed nearly 2 percent. Amazon and Twitter gained more than 6 percent to become the best performing stock in the S&P 500.
Monday, Sept. 21
President Trump says China must cede control of TikTok or he ‘won’t make the deal.’
Asked about reports that TikTok’s Chinese owner, ByteDance, would still own 80 percent of the service after the deal, President Trump said that they would “have nothing to do with it, and if they do we just won’t make the deal.” He said Oracle and Walmart, which under the deal would take a 20 percent stake in the new company, TikTok Global, would control the service.
Wall Street continues slide as virus cases rise and Washington gridlock worsens.
Shares of companies that are sensitive to the pandemic and the return of restrictions on travel in particular fared poorly on Monday. Delta Air Lines fell more than 9 percent, for example. Sectors of the market relatively immune to the ups and downs of the business cycle, including some large-cap technology companies fared better. Apple and Netflix climbed more than 3 percent. Countries around the world are reporting significant increases in coronavirus cases, just as cooler weather comes to the northern hemisphere, drawing more people inside.
A top editor of The Miami Herald’s Spanish-language sister publication, El Nuevo Herald, has resigned and its publisher has been demoted after a racist and anti-Semitic column was published in a paid insert inside the newspaper this month.
Kristin Roberts, vice president of news at McClatchy, which publishes The Herald and El Nuevo Herald, announced the leadership shake-up on Thursday in an email to staff, which The New York Times obtained.
Ms. Roberts said Nancy San Martin, El Nuevo Herald’s managing editor, had resigned.
Aminda Marques Gonzalez, the executive editor and publisher of The Herald and El Nuevo Herald, will no longer be publisher, a job she had held since April 2019, but will remain executive editor.
The column was published on Sept. 11 in Libre, a Friday supplement in El Nuevo Herald. The author, Roberto Luque-Escalona, took aim at American Jews who support Black Lives Matter.
“What kind of people are these Jews?” Mr. Luque-Escalona wrote. “They are always talking about the Holocaust, but have they now forgotten Kristallnacht, when Nazi thugs razed Jewish businesses throughout Germany? The same is being done by B.L.M. and Antifa, only the Nazis did not rob; they only destroyed.”
Ms. San Martin and Ms. Marques apologized to readers several days after the column was published, saying: “The fact that no one in leadership, beginning with us, had previously read this advertising insert until this issue was surfaced by a reader is distressing.”
In a statement last week, McClatchy said an internal review had resulted in a termination of the company’s commercial relationship with Libre.
Fox News won a legal victory on Thursday after a federal judge dismissed a defamation suit brought against its host Tucker Carlson by a former Playboy model who said she had an affair with Donald J. Trump before he was president.
The suit, filed last year, stemmed from a 2018 episode of Mr. Carlson’s show in which he accused the model, Karen McDougal, of extorting Mr. Trump. She sold the rights to her story of an affair to The National Enquirer in 2016, which did not publish the story, a transaction that involved Mr. Trump’s former longtime lawyer, Michael D. Cohen.
Ms. McDougal said Mr. Carlson’s remarks harmed her reputation, but Judge Mary Kay Vyskocil, of United States District Court in Manhattan, said the host’s comments were protected by the First Amendment.
“The statements are rhetorical hyperbole and opinion commentary intended to frame a political debate, and, as such, are not actionable as defamation,” she wrote.
In reaching her decision, Judge Vyskocil relied in part on an argument made by Fox News lawyers: that the “general tenor” of Mr. Carlson’s program signals to viewers that the host is “engaging in ‘exaggeration’ and ‘nonliteral commentary.'” The judge added: “Given Mr. Carlson’s reputation, any reasonable viewer ‘arrive[s] with an appropriate amount of skepticism'” about the host’s on-air comments.
In other words, Mr. Carlson’s viewers may not necessarily believe everything they hear.
A lawyer for Ms. McDougal, Eric R. Bernstein, said in an email on Thursday that the decision was “unfortunate” and that he and Ms. McDougal were considering their options.
Fox News said in a statement: “Karen McDougal’s lawsuit attempted to silence spirited opinion commentary on matters of public concern. The court today held that the First Amendment plainly prohibits such efforts to stifle free speech.”
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