Asian markets tumble on more negative outbreak news.
Asian markets fell on Thursday amid more signs that the global recovery from the coronavirus will be slow and painful.
South Korean stocks led the moderate drop, echoing an even more downbeat Wednesday on Wall Street. Futures markets were predicting Wall Street would open flat or mildly positive.
Markets reacted in part to a combative-sounding tweet from President Trump mentioning the temporary truce that Washington and Beijing struck in January to halt their nearly two-year trade war. They were also responding to comments from Jerome H. Powell, the Federal Reserve chairman, who said the economic hit could be substantial if American policymakers don’t do enough to support the economy.
But the market drops in Asia weren’t as severe as the 1.8 percent fall in the S&P 500 on Wednesday, and other signs pointed to indecision. Prices for U.S. Treasury bonds, which tend to rise when investors are skittish, were mixed. Oil prices were slightly higher on futures markets.
In Japan, the Nikkei 225 index was 0.6 percent lower at midday. Hong Kong’s Hang Seng index was down 0.9 percent. Mainland China’s Shanghai Composite index was down 0.5 percent. South Korea’s Kospi was down 1.1 percent.
U.S. job losses keep mounting, and many of the unemployed can’t get benefits.
The Labor Department is expected to say Thursday that 2.5 million people filed new unemployment claims last week, according to a consensus of Wall Street analysts. Although the weekly tally of new claims has been declining since late March, the latest count is likely to push the eight-week total above 35 million.
Roughly one in four people who had jobs in February were unemployed by the end of April, the economists Alexander Bick of Arizona State University and Adam Blandin of Virginia Commonwealth University said in a report released Tuesday.
State unemployment insurance and emergency federal relief were supposed to tide households over during the shutdown. But several states have a backlog of claims, and applicants continue to complain of being unable to reach overloaded state agencies.
More than half of those applying for unemployment benefits in recent weeks have been unsuccessful, according to a poll for The New York Times in early May by the online research firm SurveyMonkey.
And 13 states have yet to fully put in place the Pandemic Unemployment Assistance program that Congress passed in March to help freelancers, self-employed individuals and other workers not normally eligible for state jobless benefits.
In states where workers have been able to apply for pandemic assistance, many got caught in what Roberta Reardon, the New York State labor commissioner, called a “federal glue trap” — an initially cumbersome application process. To New Yorkers still waiting, Ms. Reardon said, “I promise we will get you and make you whole.”
The Federal Reserve chair, Jerome H. Powell, delivered a stark warning on Wednesday that the United States was experiencing a blow that could permanently damage the economy if Congress and the White House did not provide sufficient financial support to prevent a wave of bankruptcies and prolonged joblessness.
In Washington, discussions of additional rescue measures have run aground, with Democrats proposing sweeping new programs and Republicans voicing concerns over the swelling federal budget deficit, which is projected to hit $3.7 trillion this year.
President Trump and his economic advisers have pressed the pause button on negotiations for additional spending, waiting to see how much the economy rebounds as states begin lifting restrictions on business activity.
“Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” Mr. Powell said at a Peterson Institute for International Economics event.
The comments, which were the latest, and perhaps most influential, negative note investors have heard this week, triggered a nearly 2 percent drop in the S&P 500 on Wednesday. On Tuesday, the nation’s top infectious disease expert, Dr. Anthony S. Fauci, warned that a too-rapid reopening of large parts of the American economy could risk a difficult-to-control resurgence of Covid-19.
The market had been steadily climbing since late March, when the Federal Reserve signaled that it was ready to purchase unlimited bonds to stabilize key financial markets and President Trump signed a $2 trillion economic rescue package.
That rally, however, may have taken some of the pressure off lawmakers.
“There is an inverse correlation between stock prices and the desire from Congress to provide additional stimulus,” said William Delwiche, an investment strategist at Baird, a financial firm based in Milwaukee.
Uber raised $900 million in a debt sale to help fund potential acquisitions, the ride-hailing company said Wednesday.
Uber is in talks to acquire Grubhub, the food-delivery service, although the deal has not yet been finalized and could still fall apart. If it goes through, it would create one giant player in food delivery as more people turn toward those services in the coronavirus pandemic.
Uber’s debt sale puts it alongside Disney, ViacomCBS and Live Nation, which have all raised cash to ride out financial uncertainty caused by the pandemic. Uber said it would put the proceeds toward “working capital and other general corporate purposes, which may include potential acquisitions and strategic transactions.”
Companies like Uber are trying to limit damage to their business from the coronavirus — Uber’s main ride-hailing business has cratered as people have stopped traveling — and double down on services that are growing. The food delivery business has also been highly competitive, with rivals regularly undercutting one another on delivery prices, so a deal that would unite two of the players could help reduce those pressures.
J.C. Penney, the department-store chain that was founded in 1902, might file for bankruptcy as soon as Friday after skipping two interest payments on its debt in the past month, according to two people familiar with the matter.
The company is in talks to secure about $450 million in debtor-in-possession financing, which would allow it to keep operating the business, according to the people, who spoke on condition of anonymity because discussions were confidential. The company declined to comment.
The people said that the filing date could change, and that the amount of financing was still being negotiated. It would follow last week’s bankruptcy filing from the Neiman Marcus Group, as department stores struggle to navigate their businesses through the coronavirus pandemic.
J. Crew also filed for bankruptcy last week. A filing from J.C. Penney, however, would be the biggest bankruptcy yet during the pandemic, based on its number of locations and workers. The retailer, which is based in Plano, Texas, has 846 stores in the United States and Puerto Rico and 90,000 employees.
J.C. Penney skipped a $12 million interest payment due last month, saying at the time that it was a “strategic decision” in order to take advantage of a 30-day grace period before it was considered in default. The deadline for that would be Friday. The chain also skipped a $17 million interest payment due on May 7, with a grace period of five business days. The deadline to make that payment also appears to be Friday.
Reporting was contributed by Carlos Tejada, Jeanna Smialek, Jim Tankersely, Matt Phillips, Sapna Maheshwari and Michael J. de la Merced.