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FINANCIAL MARKETS
Stocks give up gains after New York tightens virus clampdown
NEW YORK (AP) — Stocks gave up an early rally and turned slightly lower Friday after New York became the latest major state to mandate nearly all workers stay home to limit the spread of the coronavirus.
The action taken by New York Gov. Andrew Cuomo, coming just a day after California announced similar measures, is another sign that large swaths of the U.S. economy are coming to a standstill as restaurants, retailers and other businesses dependent on consumer traffic are forced to close doors and furlough or lay off workers.
The Dow Jones Industrial Average erased an early gain of 444 points and was down 180 points, or 0.9%, in afternoon trading. The slide wiped out the index's gains from a day earlier and deepened the market's losses in what's been another brutal week on Wall Street. The Dow is down 14% for the week.
The S&P 500, the benchmark for many index funds held in retirement accounts and the measure preferred by professional investors, was down 1.1% after being up 1.8% earlier. The index is down 29.6% since reaching a record high a month ago and is on track for its biggest weekly loss since October 2008 during the global financial crisis.
Investors continued to seek safety in U.S. government bonds, driving their yields broadly lower. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, slid to 0.92% from 1.12% late Thursday.
The price of U.S. crude slid 6.1% to $23.67 per barrel.
HOME SALES
US home sales jumped to 13-year high before viral outbreak
WASHINGTON (AP) — U.S. home sales jumped in February to their highest level in 13 years, a trend that will almost certainly be reversed as the viral outbreak keeps more people at home. The National Association of Realtors says home sales jumped 6.5% in February from the previous month, to a seasonally adjusted annual pace of 5.77 million. Those figures reflect contracts that were signed in December and January, with closings in February.
INCOME TAX-FILING DEADLINE
Income tax filing deadline moved to July 15 from April 15
WASHINGTON (AP) — The income tax filing date has been pushed back from April 15 to July 15.,
Treasury Secretary Steven Mnuchin (mih-NOO'-shin) announced the decision in a tweet Friday, saying that at President Donald Trump’s direction “we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
At a White House briefing, Trump said the delay on filing and paying taxes until July 15 was done to give taxpayers more time and “hopefully by that time, people will be getting back to their lives.” Trump said that if people are expecting refunds, they should go ahead and file now so that they can get their refunds from the IRS more quickly.
VIRUS-OUTBREAK-WASHINGTON
Trump moves on invoking powers to spur virus supplies
WASHINGTON (AP) — President Donald Trump is tapping stepped-up powers to marshal the private sector in the coronavirus pandemic. Earlier this week he said he'd invoke the rarely used Defense Production Act as needed to get needed medical supplies on the front lines of the outbreak. Now he says he's put that “in gear.”
Trump also announced an effective closure of the U.S. border with Mexico, prohibiting most travel except for trade. That brings it in line with the restriction on the Canadian border earlier this week. The government is suspending interest on federally owned student loans as well.
VIRUS OUTBREAK-CONGRESS
High-stakes negotiations begin on $1T economic rescue
WASHINGTON (AP) — Treasury Secretary Steven Mnuchin and Trump administration officials have launched high-stakes negotiations with Senate Republicans and Democrats. They're racing to draft a $1 trillion-plus economic rescue package amid the coronavirus outbreak. It's the biggest effort yet to shore up households and the economy as the pandemic and its nationwide shutdown hurtles the country toward a likely recession. Senate Majority Leader Mitch McConnell has unveiled a sweeping economic rescue plan but Democrats say it doesn't go far enough. In a phone call Friday, Democratic Leader Chuck Schumer implored the president to invoke the Defense Production Act to needed rush medical supplies to frontline healthcare workers.
VIRUS-OUTBREAK-NEW-YORK
Cuomo bans gatherings, nonessential workers to stay home
ALBANY, N.Y. (AP) — New York Gov. Andrew Cuomo is ordering all workers in nonessential businesses to stay home and banning gatherings statewide. Cuomo says he'll sign an executive order Friday. He also says nonessential gatherings of individuals of any size or for any reason are canceled or postponed. The Democratic governor took the dramatic actions as confirmed cases in New York climbed to more than 7,000. Cuomo reported that the state's number of fatalities had increased to 35. Johns Hopkins University, which has been tallying deaths globally, put the state's fatality count at 38. The rules will take effect Sunday evening. Cuomo says people can still go out for solitary exercise to protect their physical and mental health.
VIRUS OUTBREAK-CRUISE SHIP
Quarantined cruise passengers arrive from France in Atlanta
ATLANTA (AP) — A jet carrying 359 people including hundreds of American and Canadian cruise ship passengers from France has landed at Atlanta's airport and they're being screened for COVID-19, federal officials said. Three of the people on board have tested positive, but have no symptoms, the U.S. Department of Health and Human Services said Friday. Thirteen others are sick but have not been tested, authorities said. The passengers from the cruise ship Costa Luminosa were being taken a hangar for screening. State officials said they're encouraging federal officials to bring two commercial buses to the airport, and the Georgia State Patrol is prepared to escort the buses.
VIRUS OUTBREAK-BUSINESS FALLOUT
Business Fallout: Companies hoard cash, Walmart hiring 150K
UNDATED (AP) — Less than three months ago came the first reports of cases of pneumonia related to a virus first detected in Wuhan, China. The outbreak of the virus that causes COVID-19 has caused unprecedented disruptions that have brought an unparalleled shock to the global economy.
Here are some of the business developments related to the outbreak:
— The smallest number of passengers ever recorded at U.S. airports is being reported by the Transportation Security Administration. Nearly 624,000 people passed through its outbound checkpoints on Thursday, the TSA said. That compares with 2.4 million on the same day a year earlier. It’s the lowest number of outbound passengers ever recorded by an agency created in November 2001 in the wake of the Sept. 11 terrorist attacks. The CEO and labor leaders at American Airlines wrote to Treasury Secretary Steve Mnuchin and congressional leaders Friday imploring them to quickly approve aid for airlines or else workers will lose their jobs. The company says it will accept "appropriate conditions" on government aid.
— With outbreak-related layoffs expected to surge, at least two major retailers are hiring in a big way. Walmart, the nation's largest retailer, said late Thursday that it plans to hire 150,000 U.S. hourly workers for its stores and distribution centers through the end of May as online orders surge with households stocking up. The jobs are temporary, but many are expected to become permanent. Spokesman Dan Bartlett said the company is reaching out to industry groups in the restaurant and hospitality industry, both of which are getting slammed by lockdowns and travel bans. Amazon this week said it would hire 100,000 people across the U.S. to keep up with a crush of orders hires. Target Corp. said Friday it will give a $2 an hour wage increase to its 300,000-plus workers who have been scrambling to help customers. The pay bump will be effective at least through May 2. It's also begun offering workers who are pregnant, 65 years old or older, or who have underlying health risks, access to paid leave for up to 30 days.
— The chairman and CEO of Marlboro-maker Altria Group has contracted COVID-19. The company said in a regulatory filing that Howard Willard is on medical leave. Chief Financial Officer William Gifford, Jr. will lead the company in Willard's absence. The company is also suspending operations at its plant in Richmond, Virginia, for two weeks after two employees contracted the COVID-19 virus. Some domestic operations at its John Middleton Co. subsidiary will also be suspended due to supply chain issues. The tobacco giant said employees will continue to receive regular pay during the two-week shutdown.
— NBC News reported Friday that an employee who worked at the company’s 30 Rockefeller Plaza headquarters in New York has died from COVID-19. According to his wife, Larry Edgeworth had other health issues before contracting the coronavirus. Edgeworth died Thursday.
— Companies across almost every sector are raising cash to ride out the outbreak. Kohl's has fully drawn its $1 billion unsecured credit facility. The department store chain is slashing inventory and expenses. Kohl's Corp. has closed its 1,100 stores for at least the rest of the month. It and many other major chains are temporarily closing stores to curb the spread of the coronavirus. AT&T cancelled a $4 billion accelerated stock buyback program scheduled for the second quarter. The company said in a regulatory filing that it’s also canceling any other stock repurchases so it can have financial flexibility and continue to invest in its business.
— Kohl's withdrew its full-year and first-quarter forecasts. Several other chains like Nordstrom and Abercrombie & Fitch have also withdrawn their guidance given so much uncertainty.
— Coca-Cola Co. no longer expects to reach previously set financial goals for the year. Coke said in a regulatory filing that restaurant closures, suspended NHL, NBA and MLB seasons, reduced travel, social distancing, and more people working from home is straining operations. The Atlanta company said that it cannot reasonably estimate the negative impact the virus will have.
— Thousands of businesses have ordered employees to work remotely. But that’s not an option for a number of sectors and the impact on heavy industry has been immense. All major U.S. automakers, including Tesla, have shut down their factories.
— YouTube is reducing its streaming quality in Europe as more users self-isolate at home. The company, owned by Google, said Friday it would “temporarily default all traffic in the U.K. and the EU to Standard Definition,” instead of high definition. The measure will be in place for 30 days and users will still be able to manually adjust their video quality. YouTube follows Netflix, which said Thursday that it expects the video bit rate reduction to cut its European traffic by a quarter.
— Apple is allowing people to buy only two iPhones online. It appears to be attempting to prevent the large purchase and resale of its technology at higher prices. Apple is facing a potential demand decline and supply chain issues due to the virus pandemic spreading across the globe. It closed all retail stores outside of China to help fight the spread. Apple did not return a request for comment Friday. Apple announced a new iPad Pro and MacBook Air on Wednesday. It made no mention of new iPhones during the announcement.
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