Stocks Fall on Recovery Fears and China Tensions: Live Updates

Costco, the club retailer, has started to limit the amount of meat customers can buy at once.

The company, which attracts shoppers who want to buy in bulk, said in an update on its website on Monday that fresh beef, pork and poultry products would be “temporarily limited to 3 items” per member.

On Monday, Tyson Foods, one of the world’s largest pork, chicken and beef producers, said that it expected further “slowdowns and temporary idling” of meat processing plants because of the coronavirus pandemic.

Tyson did not quantify how much meat production had declined, but the union representing plant workers estimates that pork production has fallen by as much as 25 percent and beef was down 10 percent.

The cruise giant Carnival Corporation said on Monday that it planned to reopen cruising on eight of its ships before the end of the summer.

Carnival has canceled service on some of its cruise lines through September, but it said it would offer cruises from ports in Galveston, Tex.; Miami; and Port Canaveral, Fla., on Aug. 1.

Carnival, the world’s largest cruise line, has been at the center of the coronavirus pandemic since the beginning, widely blamed for a series of major outbreaks that spread the disease across the world. Last week, Congress began investigating the company’s handling of the virus, asking it to turn over internal communications related to the pandemic.

All of Carnival’s North American cruises set to depart between June 27 and July 31 would be canceled, the company said in its statement on Monday.

“We will use this additional time to continue to engage experts, government officials and stakeholders on additional protocols and procedures to protect the health and safety of our guests, crew and the communities we serve,” the company said.

The shares of the four biggest U.S. airlines — Delta Air Lines, United Airlines, American Airlines and Southwest Airlines — fell sharply on Monday after Warren Buffett said that he had dumped his stakes in the companies. By late morning, they were among the worst-performing shares on the S&P 500.

“We like those airlines, but the world has changed for the airlines,” Mr. Buffett said on Saturday during the annual shareholder meeting of his conglomerate, Berkshire Hathaway. “I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way.”

Mr. Buffett invested in those companies in 2016 after rejecting the industry for years. In an interview with CNBC at the time, he said that airlines had been “a disaster for capital,” but said that he believed that the industry had gotten “a bad first century” out of the way. Indeed, airlines had enjoyed a rare yearslong streak of profitability before the pandemic.

The existential crisis the industry now finds itself in has started to spread to their suppliers. On Monday, General Electric’s aviation unit, which makes engines and other aircraft components, said it is planning to cut up to 25 percent of its work force, a reduction of about 13,000 hourly and salaried employees. Last week, Boeing said it expected it would take years for passenger demand to recover and is planning to cut 16,000 jobs. Boeing shares were down about 3.5 percent on Monday and G.E. was down about 4.5 percent.

“We have not done anything, because we don’t see anything that attractive to do,” he said.

Stocks slip as Washington ratchets up tension with China.

Stocks on Wall Street slid on Monday, following a drop in Europe and Asia, as investors remained on edge about the severity of the economic downturn.

The S&P 500 fell about 1 percent at the start of trading, putting it on track for its third-straight decline, but pared the worst of those losses in part because of a rebound in shares of large technology companies. The Nasdaq composite rose slightly.

Markets have been pushed and pulled by two competing ideas lately. Encouraged by the progress made in combating the coronavirus pandemic and hopeful that economies will begin to reopen soon, investors bid stocks sharply higher in April. But that optimism has been undermined as evidence of the damage caused by the coronavirus pandemic to employment, corporate profits and the broader economy continues to roll in.

For the last few days, the focus has been on the risks. On Monday, sentiment was hurt by rising tensions between the United States and China.

The Trump administration, under pressure for its own bungles in dealing with the outbreak, has ramped up criticism of China’s response. President Trump said on Sunday that the Chinese government made a “horrible mistake” in its coronavirus response and then orchestrated a cover-up that allowed the pathogen to spread around the world. He has threatened new tariffs on Chinese products in response.

In some global markets, the drop was partly a catch-up to trading on Friday. Stocks in France and Germany, which had been closed Friday, fell more than 3 percent. But the FTSE 100 in Britain, which did trade on Friday, was only slightly lower.

Tim Bray, an engineer who had been a vice president of Amazon Web Services, wrote in a blog post that his last day at the company was Friday. He criticized a number of recent firings by Amazon, including that of an employee in a Staten Island warehouse, Christian Smalls, who had led a protest in March calling for the company to provide workers with more protections.

Mr. Bray, who had worked for the company for more than five years, called the fired workers whistle-blowers, and said that firing them was “evidence of a vein of toxicity running through the company culture.”

Amazon did not immediately respond to a request for comment.

The company, whose popularity was lifted more than a decade ago by one of its most prominent fans, Michelle Obama, had amassed enormous debt even before the outbreak. Since then, it has seen sales virtually wiped out at more than 170 J. Crew stores and a further 140 operated under the popular Madewell brand that it also owns.

The Federal Reserve’s two corporate bond-buying programs will be up and running soon, the central bank said on Monday, getting closer to kicking off a never-before-tried effort to ensure companies can raise cash amid the economic damage from the coronavirus crisis.

The Federal Reserve Bank of New York said that its program to buy already-issued corporate bonds will “in early May” start to buy eligible exchange traded funds, which hold bundles of company debt but trade like stocks. The Fed’s purchases of existing and newly issued debt are expected to start “soon thereafter.”

The central bank announced on March 23 that it would buy company debt, then said on April 9 that it would ramp up the size and scope of the program. It plans to buy up to $500 billion in bonds on the primary market and $250 billion on the secondary market, backed by $75 billion in Treasury Department funding to insure against potential credit losses.

The mere anticipation of the Fed programs has helped to unstick corporate credit, which had ground to a halt amid shutdowns and financial market tumult. Companies have been successfully issuing bonds in the weeks since the central bank’s announcements.

“Companies are out there financing, they’re out there raising liquidity,” Jerome H. Powell, the Fed chair, said at a news conference last week. “We have to follow through, though. And we will follow through to validate that announcement effect.”

🤝 U.S.-Britain trade talks begin tomorrow, with post-Brexit Britain eager to set a free-trade agreement with the world’s largest economy.

🚗 Carmakers have been hit hard by coronavirus shutdowns, so expect an accounting of the damage in financial reports from Fiat Chrysler Tuesday and General Motors on Wednesday.

🎮 Stay-at-home orders give people more time for video games, as reports from Activision Blizzard and Electronic Arts on Tuesday and Zynga on Wednesday are expected to show.

💰 KKR reports quarterly earnings on Wednesday, revealing how hard the private equity group’s investments have been hit, and whether the crisis presents opportunities for discounted deals.

🗣 Other noteworthy companies reporting earnings this week include AB InBev, Air France-KLM, Beyond Meat, Bristol-Myers Squibb, InterContinental Hotels, News Corp., Siemens, Total, Tyson Foods and Wendy’s. (As well as The New York Times Company.)

📉 Jobs numbers end the week on a grim note. Weekly data on unemployment claims on Thursday — improving, but still terrible — will be followed on Friday by monthly employment data. Analysts say the April numbers could show a decline of more than 20 million jobs and an unemployment rate around 16 percent.

After a decade of spectacular growth, Disney’s entertainment conglomerate has been devastated by the coronavirus pandemic.

“From great to good to bad to ugly,” Michael Nathanson, a media analyst, wrote in a recent report of Disney’s decline. “Recession will cause further pain.”

There are some bright spots in Disney’s vast portfolio of businesses: ABC, which is owned by Disney, has outperformed other networks, according to Nielsen data, and Disney’s streaming platform, Disney Plus, has gained 50 million subscribers.

The company is pressing ahead with plans to reopen some of the 312 Disney Store locations in China, Europe, Japan and the United States. And its big-budget production of “Mulan” has been scheduled for a July 24 release, which cinema chains hope will revive moviegoing.

Catch up: Here’s what else is happening.

  • Intel said it would pay $900 million to acquire Moovit, the maker of an app that provides directions based on real-time traffic data, a rare deal in the current environment. The acquisition will complement Intel Mobileye, the company’s growing autonomous driving unit, which produces hardware and software for driving-assistance features used in vehicles across the industry.

  • Taubman, the shopping mall owner, said that it would reopen three major shopping centers on May 6 as retailers aim to return to business: International Plaza in Tampa, Fla.; the Mall at University Town Center in Sarasota, Fla.; and City Creek Center in Salt Lake City, Utah. The company made its plans known after Simon Property Group, the biggest mall operator in the United States, said that it planned to reopen 49 malls this weekend across 10 states. Macy’s, which also owns Bloomingdale’s and Bluemercury, said on Thursday that it planned to open 68 stores on Monday.

  • Approximately 36,000 employees of news media companies have been affected by layoffs, pay cuts or furloughs since the coronavirus crisis began in earnest in the United States in March, according to New York Times estimates. This week Gannett, Lee Enterprises and The New York Times Company will release their quarterly earnings reports.

Reporting was contributed by Alexandra Stevenson, Kate Conger, Michael Corkery, David Yaffe-Bellany, Vanessa Friedman, Andrew Ross Sorkin, Mihir Zaveri, Jeanna Smialek, Niraj Chokshi, Brooks Barnes, Mohammed Hadi, Austin Ramzy, Michael J. de la Merced, Carlos Tejada, Noam Scheiber, David McCabe, Marc Tracy and Sapna Maheshwari.

Source Article