Wall Street climbs with retailers in focus.
Stocks rose on Wednesday, rebounding from a late drop the day before, as investors were cheered by some strong results from retailers.
Markets have whipsawed this week, with stocks rallying Monday and then falling on Tuesday, as investors assessed a drugmaker’s claim of progress on a coronavirus vaccine. The drugmaker, Moderna, said that a very small early-stage trial of the vaccine had shown potential. But reporting that questioned the specificity of that claim a day later knocked markets back.
And Treasury Secretary Steven Mnuchin and Federal Reserve chair Jerome H. Powell on Tuesday offered a grim assessment of the economic challenges ahead, even as businesses reopen and government’s lift stay at home restrictions. But both pledged to support the economy in the months ahead.
On Wednesday, positive sales results in the retail industry lifted U.S. stocks. Lowe’s, the home supplies chain, jumped in early trading after reporting an 11.2 percent increase in comparable store sales in the first three months of the year. Target reported that digital sales in the first quarter had surged by 141 percent.
The S&P 500 jumped nearly 2 percent, and stocks in Europe were slightly higher.
Oil prices continued their recent rally, with the U.S. crude benchmark climbing above $33 a barrel. A number of energy stocks also rallied.
Cleaning with clouds of disinfectant. Keeping middle seats empty. Boarding back to front. For weeks, airlines have announced measure after measure aimed at putting travelers at ease. Now United Airlines hopes to lure customers back by partnering with two trusted brands: Clorox and the Cleveland Clinic.
On Wednesday, the airline said it was collaborating with both companies on a new initiative, United CleanPlus, that would help shape efforts to reduce points of contact and promote social distancing for travelers.
“Safety has always been our top priority, and right now in the midst of an unprecedented crisis, it’s our singular customer focus,” Scott Kirby, United’s chief executive, said in a recorded message to customers.
Clorox will consult with the airline on its disinfection practices and provide amenities to travelers at some locations. Experts from the Cleveland Clinic will offer advice on every part of the flying experience, keeping the airline up-to-date on the latest practices and technologies and helping to hold its policies to high standards.
Shares in the biopharma firm Moderna have been rising on hopes for its coronavirus vaccine candidate. The stock really took off on Monday when it released promising early findings from a trial on humans. Then came the reality check.
Moderna’s claims that the vaccine generated an immune response in eight volunteers didn’t come with data, the health news publication Stat pointed out. It also noted that the National Institute for Allergy and Infectious Diseases, which partnered with the company on the trial, hadn’t said anything about it. Moderna, which has a pipeline of vaccines in trials but no products on the market, has received roughly half a billion dollars from the agency headed by Dr. Anthony Fauci.
After Monday’s 20 percent jump in its share price, Moderna announced plans to raise up to $1.3 billion by selling new shares. But after the Stat report was published yesterday, the company’s stock was down 10 percent at Tuesday’s close, and has continued to fall in after-hours trading. Still, Moderna is up about 250 percent this year, valuing the company at about $27 billion.
If any place was prepared for quarantine, it was Milton Keynes. Two years before the pandemic, a start-up called Starship Technologies deployed a fleet of rolling delivery robots in the small city about 50 miles northwest of London.
The squat six-wheeled robots shuttled groceries and dinner orders to homes and offices. As the coronavirus spread, Starship shifted the fleet even further into grocery deliveries. Locals like Emma Maslin could buy from the corner store with no human contact.
“There’s no social interaction with a robot,” Ms. Maslin said.
The sudden usefulness of the robots to people staying in their homes is a tantalizing hint of what the machines could one day accomplish — at least under ideal conditions. Milton Keynes, with a population of 270,000 and a vast network of bicycle paths, is perfectly suited to rolling robots. Demand has been so high in recent weeks, some residents have spent days trying to schedule a delivery.
Rolls-Royce, the maker of jet engines, said on Wednesday that it would cut nearly 20 percent of its work force to deal with collapsing demand because of the coronavirus pandemic.
Rolls-Royce, one of Britain’s most important manufacturers, suggested that most of the job losses would come from its civil aerospace business, which produces engines for aircraft makers like Airbus and Boeing as well as airlines. The cuts — at least 9,000 jobs from a global work force of 52,000 — would come as part of a “detailed review” of its facilities, the company said.
At present the bulk of the world’s commercial airliners are grounded, and aircraft sales have slowed sharply and are not expected to fully recover for “several years,” according to the company. Rolls-Royce is losing revenue both from reduced engine sales and from lost sales of parts used to maintain its engines.
“We must respond to market conditions for the medium term until the world of aviation is flying again at scale,” Warren East, the company’s chief executive, said in a statement.
The carmaker Rolls-Royce is a separate company, owned by BMW.
Is a pandemic the right time to start a business? It just might be.
In March, as small businesses across the country were shutting down amid the spreading coronavirus pandemic, Shanel Fields was about to open one up.
For Ms. Fields, the timing couldn’t have been better. Her company, MD Ally, allows 911 dispatchers and other responders to route nonemergency calls and patients to virtual doctors, to help local governments improve their emergency response systems.
She’s not alone: New businesses are forming despite the pandemic, though at a significantly slower rate than before.
There have been more than 500,000 applications for an employer identification number since mid-March, according to the Census Bureau, although that is down nearly 20 percent from a year ago. Between mid-March and mid-April, the Small Business Administration issued nearly 300 start-up loans worth about $153 million, a 36 percent drop from year earlier. Stripe, the credit card processing firm, said it had handled more than $1 billion in sales for businesses that started on the platform during that time.
Past downturns produced some high-profile American companies: Airbnb, Disney, General Motors, Hewlett-Packard, Microsoft, Slack, Uber and Venmo, to name a few.
“Downturns or challenging times are seen as good times to start a business for two reasons,” said Rashmi Menon, entrepreneur in residence at the University of Michigan’s Zell Lurie Institute for Entrepreneurial Studies.
The U.S. economy faces irreparable damage from the fallout of the coronavirus pandemic, the nation’s top economic policymakers warned lawmakers on Tuesday, as the Congress and the White House grapple with how to restart business activity and how much additional government support is needed.
In a joint appearance before lawmakers, Treasury Secretary Steven Mnuchin and the Federal Reserve chair, Jerome H. Powell, offered a stark assessment of the fragile state of the economy, warning of more severe job losses in the coming months. But they offered contrasting views of how best to buttress the economy, with Mr. Powell suggesting that more fiscal support to states and businesses might be needed to avoid permanent economic damage and Mr. Mnuchin suggesting that, without an expeditious reopening, the economy might never fully recover.
“There is the risk of permanent damage” if states delay reopening, Mr. Mnuchin told members of the Senate Banking Committee.
The hearing, which was held by video conference, came at a pivotal moment, as Congress and the White House are beginning to debate the outlines of a second major economic relief bill and potentially inject trillions of additional taxpayer dollars into the economy.
Mr. Mnuchin’s comments reflect the change in tone among administration officials, who have begun trying to shift the economic discussion away from more financial support to allowing states to reopen. In his opening remarks, Mr. Mnuchin said “it is so important to begin bringing people back to work in a safe way.”
Mr. Powell sounded a more cautious tone, explaining that a full recovery will not come until the health crisis is resolved.
“The No. 1 thing, of course, is people believing that it’s safe to go back to work, and that’s about having a sensible, thoughtful reopening of the economy, something that we all want — and something that we’re in the early stages of now,” Mr. Powell said. “It will be a combination of getting the virus under control, development of therapeutics, development of a vaccine.”
More highlights from Tuesday’s hearing:
Mr. Powell suggested that the central bank might expand its program to buy municipal debt and agreed that state and local governments could slow the economic recovery if they laid off workers amid budget crunches.
Mr. Mnuchin warned that the economy may never fully recover if states extend their shutdowns for months — citing a risk of “permanent damage” — comments that reflect a change in focus by the Trump administration, which has tried to shift the economic discussion away from more financial support to allowing states to reopen.
Lawmakers grilled Mr. Mnuchin and Mr. Powell over whether their efforts to shore up the economy were doing enough to help workers and smaller companies, and warned that they should not help large corporations alone. Lawmakers repeatedly urged the pair to get the midsize business “Main Street” lending program up quickly.
Mr. Powell warned that the economy could face long-term damage if the policy response was not forceful enough, and reiterated that the economy might need more help to make it through the coronavirus period without lasting scars.
Mr. Mnuchin, who previously said he expected that the Treasury would return all $454 billion from Congress, changed that benchmark on Tuesday, saying the “base case” now is that the government will lose money. “Our intention is that we expect to take some losses on these facilities,” he said.
Pandemic lockdowns have halted a booming film industry in the Hudson Valley.
The Hudson Valley in upstate New York has for two decades beckoned filmmakers looking for bucolic settings. They used old towns, abandoned warehouses, office parks and rustic locales to produce some 500 movies, and in the process pump more than $250 million into the local economy.
This year, film production in the area was on the rise, and additional studio space was planned. But since the pandemic lockdown, work has ground to a halt.
“Things aren’t as they were, and they may never again be the same,” said Laurent Rejto, founder and director of the Hudson Valley Film Commission, a nonprofit organization based in the town of Woodstock that helps producers find locations, housing and crews.
Mary Stuart Masterson, the actress and founder of Upriver Studios, hoped to turn 104,000 square feet of a light-industrial complex in Saugerties, N.Y., into a state-of-the art film studio. But with the coronavirus pandemic, the rented space remains as it was, with the building conversion delayed and productions indefinitely paused.
“The timing is, who knows?” said Ms. Masterson, who remains optimistic that “there is a tomorrow.”
Catch up: Here’s what else is happening.
Urban Outfitters, which also owns Anthropologie and Free People, reported a 32 percent drop in net sales to $588 million in the first quarter and a net loss of $138 million, a decline that comes as apparel retailers continue to struggle with temporary store closures brought on by the pandemic. The retailer, which is known for its attractive and often large stores, said on an earnings call that it was negotiating with landlords on lease terms and cost reductions. It added that it was not willing to work with those who think “it’s 1995 and they can command any rent they wish.”
Reporting was contributed by Niraj Chokshi, Stanley Reed, Carlos Tejada, Cade Metz, Erin Griffith, Jason Karaian, Amy Haimerl, Eugene L. Meyer, Mohammed Hadi, Jeanna Smialek and Sapna Maheshwari.