Stock Market: Live News During the Coronavirus Pandemic

Disney World will begin to reopen in July.

Walt Disney World in Florida, which draws 93 million people a year as one of the world’s largest tourist sites, will reopen to the public on a limited basis in mid-July.

Disney presented its reopening plan on Wednesday to the Orange County Recovery Task Force in Orlando. Two of Disney World’s four main theme parks, the Magic Kingdom and the Animal Kingdom, will reopen on July 11 with reduced capacity and numerous safety precautions, including mandatory face masks for all visitors and employees. Disney World’s remaining major parks, Epcot and Hollywood Studios, will reopen on July 15. The resort has been closed since March 15.

Disney said its “thoughtful, methodical and phased” approach to reopening would include increased use of plexiglass barriers and contactless payment systems. All visitors will need a reservation. Temperature checks will be conducted at entrances. Disney also said its parades, fireworks displays and character meet and greets would be suspended because of crowd control concerns.

Disney did not give reopening dates for its two water parks, Blizzard Beach and Typhoon Lagoon. Disney Springs, an adjacent 120-acre shopping mall, began to reopen on May 20.

Tourism is Orlando’s largest industry, supporting 41 percent of the city’s work force, according to the trade organization Visit Orlando. Disney World attracts the bulk of those visitors.

Boeing said Wednesday that it was taking a significant step toward its goal of slashing 10 percent of its global work force by laying off more than 6,700 employees in the United States, all of whom will be notified this week. Another 5,500 workers have been approved for voluntary buyouts and will leave within weeks.

Boeing’s commercial business, which was most exposed to the devastating decline in air travel, will suffer the deepest cuts, the company said. Its defense and space operations have been more insulated.

“The Covid-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices,” the chief executive, David L. Calhoun, said in a note to employees. “I wish there were some other way.”

A lot is riding on the launch. NASA thinks the future of space — at least for low Earth orbit, for now — is chartered flights on private spacecraft. If successful, the launch could open up a range of economic activity and experimentation, with commercial operators stepping in while governments step back.

SpaceX’s Crew Dragon is the cheapest human-carrying spacecraft yet made for NASA, by some distance. The agency’s contracts with private companies have fixed prices, an incentive to keep costs down. But Elon Musk, who runs SpaceX in addition to Tesla, will get some extra promotional value out of the launch: The astronauts, Douglas Hurley and Robert Behnken, will be ferried to the spacecraft in a NASA-branded Tesla Model X.

A potential stumbling block for it is the cost. Netflix’s no-frills plan costs $9 a month. Disney Plus charges $7 a month. But HBO Max is asking people to spend $15 a month, at a time when household budgets are constrained by the economic fallout from the coronavirus pandemic.

Wall Street’s turbulent stretch continued Wednesday, and an early rally faded, as shares of large technology stocks declined.

The S&P 500 was slightly lower, giving back some of its gains from the day before. A drop in large technology stocks like Amazon and Microsoft was particularly evident in the Nasdaq composite, which fell nearly 2 percent.

A retreat in oil prices also weighed on shares of energy producers. West Texas Intermediate, the U.S. benchmark, fell about 6 percent to just above $32 a barrel.

Even though stocks were lower, Wednesday’s trading reflected optimism about a return to normal as states lift stay-at-home restrictions. For example, Nordstrom and Gap were among the best performing shares in the S&P 500, and shares of airlines continued to climb.

It’s been an unsteady period for stocks, with the S&P 500 alternating between gains and losses, as expectations for an eventual recovery from the coronavirus pandemic have squared off against the reality that the damage is still severe and likely to continue for some time.

On Wednesday, investors were initially cheered by the news of fiscal stimulus proposals from the European Union and Japan. In Japan, the cabinet of Prime Minister Shinzo Abe approved more than a trillion dollars in stimulus money. In Brussels, the European Commission seemed on the verge of introducing expansive financial measures to support the bloc.

The eurozone economy is likely to shrink by as much as 12 percent this year, in line with the European Central Bank’s most pessimistic projections a month ago, the bank’s president said.

“The mild scenario is out of date,” Ms. Lagarde said.

But she answered “no” to a question about whether skyrocketing government debt will provoke a crisis like the one that nearly destroyed the eurozone earlier in the decade.

The pandemic emergency has obliged governments to acquire more debt to prop up their economies, Ms. Lagarde said.

“It was the right thing do,” she said. “In the face of the pandemic, fiscal measures had to be taken, come what may.”

Wall Street analysts have grown increasingly pessimistic in recent weeks about the outlook for corporate profits, even as investors have pushed markets steadily higher, breaking the link between analyst forecasts and the direction of stock prices.

Most companies in the S&P 500 stock index have reported their first-quarter earnings, and the impact of the coronavirus pandemic on profits is becoming clear, at least for January through March. On a per-share basis, profits of S&P 500 companies fell by 13 percent, making it the worst slump since 2009.

Analysts say they think that things will get worse before they get better. At the end of March, the consensus among analysts was that profits at companies that make up the index would sink a modest 1.8 percent in 2020. But after digesting the financial reports of companies from Agilent Technologies to Zions Bancorp, they now think 2020 profits will tumble more than 20 percent.

Any finance textbook’s section on equity prices holds that the direction of the stock market is determined, to a large extent, by the profits and dividends that shareholders expect companies to produce in the future. And academic research has repeatedly shown that when Wall Street analysts revise their forecasts for a company’s profits, it can move share prices.

Going by the conventional wisdom, the current collapse in profit expectations — and analysts’ woeful prognoses for future earnings — should be clobbering share prices. But investors don’t appear to be taking their cues from analysts. The S&P 500 has soared more than 30 percent over the last two months.

Nissan and Renault, the quarrelsome main partners in the world’s largest automaker alliance, announced a plan to try to reset their troubled relationship as they seek to survive the coronavirus’s devastating impact on the car industry.

The plan seeks to more clearly allocate responsibility for product development and regions. For example, Nissan will take the lead on development of autonomous driving technology and Renault will be in charge of electric vehicle bodies and chassis, the so-called platform.

Nissan will be the dominant partner in Japan, China and the United States, while Renault will take the lead in Europe, Russia, Africa and Latin America. Mitsubishi, the smallest of the three companies in the alliance, will be in charge of the rest of Asia.

The pandemic has made it even more essential for the companies to cooperate despite a history of severe tension. Renault’s auto sales fell by almost 26 percent in the first three months of 2020, and Nissan, which reports its annual results on Thursday, has seen a steady drop in sales and profits over the last year.

“There is absolutely no doubt about how it will work in the future,” Jean-Dominique Senard, the chairman of the Renault-Nissan-Mitsubishi Alliance, said during an online news conference. “If there had been some few doubts in the markets these days, well, this is over today.”

The European Union’s executive arm laid out on Wednesday the details of a recovery package worth 750 billion euros, or about $826 billion, for its 27 member economies, especially those hit hardest by the coronavirus pandemic and lockdowns put in place to stop its spread.

Europe’s recovery effort will be difficult and expensive, as some of its economies are set to shrink as much as 10 percent this year. Germany and other wealthy countries have their own funds available to spend immediately to prop up their economies, but poorer European Union members need help.

The program, which was presented by the European Commission president, Ursula von der Leyen, in an address to the European Parliament on Wednesday, hinges on using its own budget to issue bonds in international capital markets, and then distributing the proceeds according to members’ needs. It is seen as a breakthrough for the bloc’s integration, even if it is a one-off.

The fund will distribute €500 billion worth of grants — free money that will not be piled on to national debt — to all 27 member states, with Italy getting the largest slice, followed by Spain.

As with most things in the bloc’s administrative capital, Brussels, the plan is the product of compromise between conflicting visions of what the European Union can do to help its members in times of crisis. It requires unanimous support by all nations, as well as the European Parliament’s blessing, and so a long road of negotiations lies ahead before it is finalized.

Japan made similar moves on Wednesday as its cabinet approved more than a trillion dollars in stimulus funds, including a combination of subsidies to companies and people. The Parliament is expected to approve the measure next month.

Japan’s proposal follows a raft of measures that the country passed in April. Taken together, the two packages would be equivalent to 40 percent of Japan’s economic output, Prime Minister Shinzo Abe told reporters on Wednesday.

The nation’s biggest nursing home operator, Genesis HealthCare, reported a profit in the first quarter of the year and said it also received money from the federal government while trying to contain the spread of coronavirus within half of its 361 facilities.

Genesis reported Wednesday that it had received $180 million under the federal CARES Act and other federal and state programs as part of the nation’s response to the pandemic. The company, based in Pennsylvania, disclosed the federal grant money as it announced first-quarter earnings of $33.5 million after reporting a loss in the same period a year earlier.

Genesis said that it took in $1.09 billion in revenue compared to $1.16 billion during the same quarter a year ago. The company’s earnings outlook brightened over the past year as it sold some of its facilities and reduced the number of nursing homes that it rented from corporate landlords.

The earnings report covered the quarter that ended in March, when the coronavirus crisis first hit hard in the United States. Genesis, which has 42,000 beds, said the first resident tested positive for coronavirus on March 16.

But the company’s outlook for the rest of year could be muddled as it disclosed that occupancy levels at its nursing homes have plunged in the second quarter. The company said that occupancy declined from 88 percent at the end of March to about 76 percent this month, which will mean fewer federal Medicaid and Medicare dollars.

Catch up: Here’s what else is happening.

  • New data released on Wednesday showed that the Chinese economy — or at least the part involving its vast industrial sector — continues to bounce back from the outbreak. Industrial sales in April rose 5.1 percent compared with a year earlier, statistics officials said.

Reporting was contributed by Brooks Barnes, Jason Karaian, Niraj Chokshi, Matthew Goldstein, Jack Ewing, Carlos Tejada, Matt Phillips, Ben Dooley, Makiko Inoue, Matina Stevis-Gridneff, Mohammed Hadi, Joe Gose, Mary Williams Walsh, Katie Robertson and Kevin Granville.

Source Article