Stock Markets Edge Higher: Live Business Updates

Wall Street enters the second half of 2020 on uncertain footing.

Stocks inched higher on Wednesday as investors started a new quarter on a cautious note, balancing tentative signs of economic resilience and a steady climb in coronavirus cases in the United States.

The S&P 500 rose slightly, while European markets were modestly lower, following a mixed day in Asia.

Markets on Tuesday completed a topsy-turvy first half of 2020. Over the course of six months, stocks on Wall Street experienced their biggest quarter-to-quarter swing in more than 80 years, propelled by the global pandemic and economic shutdowns, followed by extra big helpings of fiscal stimulus by central banks.

In the three months that just ended, the S&P 500 rose 20 percent, the best calendar quarter for the broad market index since 1998.

There’s so much uncertainty about the coronavirus crisis that roughly 40 percent of the S&P 500, about 200 companies, have withdrawn their customary forecasts about how their businesses will perform in the months ahead, according to data from S&P Capital IQ.

The companies’ silence has unnerved analysts, who have already axed their expectations for profit growth substantially. They’re now expecting that second-quarter profits will fall more than 40 percent, according to numbers compiled by the data provider FactSet.

That’s an ugly forecast, but investors face a crucial question: Is it ugly enough?

“The numbers are sort of all over the place,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said of analysts’ predictions. — Matt Phillips

Still, some of United’s plans appear to be at odds with the approach government officials are taking. For example, United said it would add flights in August to Brussels, Frankfurt, London, Munich, Paris and Zurich. Yet, the European Union this week said it would bar travelers from the United States, along with a number of other countries that have not brought the pandemic under control, when it allows international air travel to resume on Wednesday.

All told, United’s August schedule represents about 48 percent of the domestic flight schedule the airline operated during the same month last year and 25 percent of last year’s international flights. The company’s July schedule was just 30 percent of last year’s domestic schedule and 16 percent of the international schedule. — Niraj Chokshi

U.S. Senate votes to extend program to help small businesses.

Germany’s federal employment office reported Wednesday that an additional 40,000 workers lost their jobs in May from the month before, for an overall unemployment rate of 6.2 percent.

The relatively low figure — the U.S. unemployment rate is 13.3 percent — despite the economic lockdown to curb the pandemic reflects the widely-used program of “Kurzarbeit,” a federal scheme that temporarily helps pay workers’ wages to prevent layoffs or reduced hours. Since the shutdown in March, more than 12 million German workers have received wages through the program.

In response to the pandemic, Chancellor Angela Merkel’s government has spent more than 130 billion euros in stimulus money. One effort starts Wednesday: a reduction on a value-added sales tax of up to 3 percent, designed to bolster consumer spending.

By law, VAT must be added by merchants and service providers in the advertised price, meaning that the new VAT rules have lowered sticker prices on everything from food to new cars. When she announced the program last month, Ms. Merkel insisted that the program would not be extended past six months. — Christopher F. Schuetze

Airbus will cut 10 percent of its work force, the largest downsizing in its history.

The coronavirus pandemic continued to wreak havoc on global aviation as the aerospace giant Airbus announced Tuesday it would cut 15,000 jobs across its global work force, the largest downsizing in the history of the company.

Citing a 40 percent slump in commercial aircraft business activity and an “unprecedented crisis” facing the airline industry, the company said it would slash around 10 percent of its 135,000 employees worldwide, with layoffs hitting plants in Britain, France, Germany and Spain.

Airbus’s chief executive, Guillaume Faury, had been preparing employees for hard times in a series of recent memos warning it would be necessary to adapt to a “lasting decline” in the demand for airliners. The company said it doesn’t expect air travel to return to pre-pandemic levels before 2023 at the earliest and potentially not until 2025. — Liz Alderman

Catch up: Here’s what else is happening.

  • The Mexican airline Group Aeromexico, which has been hurt by a sharp drop in travel during the coronavirus pandemic, filed for bankruptcy protection on Wednesday in New York. Delta Air Lines owns about 51 percent of Aeromexico’s outstanding shares, according to the company’s bankruptcy filing. Aeromexico reported a loss of 2.5 billion pesos ($110 million) in the first quarter and its liabilities totaled $5.1 billion at the end of March, up from $4.2 billion at the end of December.

  • FedEx on Tuesday reported a loss of $334 million in its fourth quarter, compared with a loss of $1.97 billion in the same period a year ago, as a surge in deliveries during the pandemic and lower fuel costs helped offset increased costs. The results were better than expected, and the delivery company’s shares climbed 9 percent in after-hours trading. The company did not provide guidance for its 2021 fiscal year, but “FedEx is well positioned to support and benefit from the reopening of the global economy,” said Frederick W. Smith, the company’s chairman and chief executive.

Reporting was contributed by Niraj Chokshi, Vikas Bajaj, Matt Phillips, Liz Alderman, Christopher F. Schuetze, Emily Cochrane, Michael J. de la Merced and Gregory Schmidt.

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