Stocks Gain After E.U. Leaders Approve Stimulus Pact: Live Business Updates

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Stocks gained ground on Tuesday, buoyed by an agreement by European Union leaders to support the bloc’s countries with 750 billion euros ($857 billion) in grants and loans.

The S&P 500 climbed about half a percent, adding to gains on Monday that had lifted the index back into positive territory for the year. The index is now within 4 percent of its high, reached in late February before measures to contain the spreading coronavirus set off the sharpest economic decline in decades.

In Europe, shares were more than 1 percent higher. Economic optimism was also evident in other markets, with oil prices climbing about 3 percent.

The European Union’s stimulus package announced early Tuesday was notable because, for the first time, countries will raise large sums by selling bonds collectively, rather than individually. Spearheaded by Chancellor Angela Merkel of Germany and President Emmanuel Macron of France, the agreement sends a signal of European solidarity, while also exposing fault lines.

Economists predict a recession in Europe far worse than anything since World War II, with France, Italy and Spain expected to suffer the most, clocking in contractions of around 10 percent this year.

The deal in Europe comes as lawmakers in Washington are also trying to reach an agreement on another economic aid package, as millions of Americans are about to see their expanded unemployment insurance benefits expire. That new spending plan is still some way off with Democrats and Republicans still disagreeing about the size and scope of the spending.

On Tuesday, shares on Wall Street were also lifted by a round of better than expected earnings results. International Business Machines jumped after it said it has strong demand for its cloud computing business.

Coca-Cola rose as the company reported a 28 percent drop in sales but said that the past quarter was likely to be the most challenging of the year.

Credit…Phelan M. Ebenhack/Associated Press

The beverage giant Coca-Cola reported a big drop in revenue and profit in the second quarter as many consumers remained at home during the coronavirus pandemic.

Revenue fell 28 percent in the quarter to $7.2 billion, while net income dropped 33 percent to $1.759 billion, the company said in an earnings report. Executives said, however, that they believed the second quarter was likely to be the most challenging of the year.

Coca-Cola attributed much of the declines in the quarter to continued weakness in its away-from-home channels, such as restaurants and theaters, which either remained largely closed or had limited capacity in the quarter globally. That segment of the market makes up about half of Coca-Cola’s total revenue.

But executives said they started to see improvements in the away-from-home segments as lockdowns around the world began to ease.

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Tapestry, the owner of Coach and Kate Spade, said on Tuesday that its chief executive, Jide Zeitlin, had resigned for “personal reasons.” The abrupt exit came after Tapestry said in March that Mr. Zeitlin would remain at the helm for at least three more years.

The company said that Joanne Crevoiserat, its chief financial officer, was appointed interim chief executive of Tapestry and that it had started a search for a permanent replacement.

The unexpected departure comes as the retail industry grapples with the fallout from the coronavirus pandemic. Tapestry, like other retailers, has been forced to close stores and adjust operations in China and in the United States as the virus continues to spread.

The company, which also owns Stuart Weitzman, is a giant with about $6 billion in annual sales, but has seen its shares drop by roughly 50 percent this year. It next reports earnings on Aug. 13.

Mr. Zeitlin, who was one of only four Black chief executives among Fortune 500 companies, became the Tapestry chief in September 2019, and had been the company’s chairman since 2014. As part of his exit, he also resigned from the board. Mr. Zeitlin had previously been a private investor overseeing the Keffi Group, an investment office, and had spent two decades at Goldman Sachs. Mr. Zeitlin, who was born in Nigeria and adopted by an American family as a child, attracted praise and attention last month for a staff letter later published on LinkedIn about civil rights and the Black Lives Matter movement.

Tapestry did not immediately respond to a request seeking comment.

Mr. Zeitlin said in the statement on Tuesday that it had been “a privilege to lead Tapestry with its powerful brands and outstanding people.”

Credit…Fabrizio Bensch/Reuters

EBay said on Tuesday that it planned to sell its classified advertising division for about $9.2 billion in cash and stock, the latest effort by the company to refocus on its mainstay online sales business.

In agreeing to sell the unit to Adevinta, a Norwegian ad company, eBay agreed to demands from activist investors, including Elliott Management, who urged it to slim down its operations. The classified ads business is largely international, with footholds in Europe, Africa and other regions, and reported $1.1 billion in sales last year.

Under the terms of the transaction, eBay will receive $2.5 billion in cash and about 540 million shares in Adevinta. That will give eBay a roughly 44 percent stake in Adevinta and a 33 percent voting stake, letting it keep some exposure to what will become the world’s biggest online classifieds company.

“This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the classifieds business,” Jamie Iannone, eBay’s chief executive, said in a statement.

Late last year, eBay shed another unit, the ticket reseller StubHub, to a smaller rival, Viagogo of Switzerland, for $4.05 billion.

Shares in Adevinta, which beat out a number of rivals for the eBay business, were up 33 percent in trading on Tuesday.

The transaction is expected to close early next year, but must still be approved by regulators and shareholders in Adevinta.

  • Southeastern Grocers, the owner of the Winn Dixie chain of supermarkets, joined the growing list of retailers that are now going to require customers to wear masks, as did Publix. In a statement on Monday, Southeastern said it would require the masks starting on July 27, while Publix will require masks starting Tuesday.

  • LinkedIn is planning to cut about 960 jobs globally, 6 percent of its work force, as the pandemic has severely reduced demand for its key service: helping companies with hiring. The professional social network said it also planned to work with small businesses online rather than through a field sales team, meaning this team was no longer needed.

  • The cost of the British government’s economic response to the pandemic is becoming clear. Between April and June, the Treasury borrowed about 128 billion pounds ($162 billion), more than double the amount borrowed in the whole of the previous fiscal year, which ended in March, the government reported Tuesday. Last month alone, the government needed £47 billion in cash more than it took in tax receipts. The net cash requirement was nearly £34 billion more than the same month a year ago. The nation’s debt pile is just under £2 trillion, about the same size as the British economy.

  • Warner Bros. announced on Monday that it was abandoning its Aug. 12 release date for Christopher Nolan’s film “Tenet.” That date had been the one-time marker for when Hollywood hoped moviegoing would return in earnest. Warner Bros. did not offer concrete details for the release of “Tenet,” but it is likely that the studio will open the movie in the locations around the world where it is safe to do so before unveiling it in the United States.

  • United Airlines said on Monday said that it would leave its high-efficiency particulate air, or HEPA, filtration systems running as passengers get on and off most planes. The move, which it will put into place next week, is intended to maximize air flow. And Delta Air Lines said it would require passengers unable to wear face masks because of health conditions to undergo a private medical consultation by phone before boarding. Passengers who falsify health claims could be barred from future flights.

  • Chevron, the American oil giant, said on Monday that it had agreed to acquire Noble Energy, a Houston-based oil and gas explorer with an international dimension, for $5 billion. Noble would bring Chevron properties in shale drilling regions in the United States.

Credit…Erin Schaff/The New York Times

Judy Shelton, an unorthodox economist who was an adviser to President Trump’s 2016 campaign, could move one step closer to a seat on the Federal Reserve’s Board of Governors this week.

The Senate Banking Committee is expected to approve Ms. Shelton’s nomination on Tuesday, putting her one simple-majority vote in the full Senate away from confirmation at a moment when the central bank is employing vast powers that she has a track record of questioning.

Opponents of Ms. Shelton’s nomination say confirming her would place the Fed at risk of politicization while it tries to rescue the pandemic-hit economy. Democrats on the committee have called for a second confirmation hearing in light of the crisis so that they can get her views on the current response.

Her nomination seemed shaky in the wake of her mid-February Banking Committee hearing, but Republican opposition has slowly crumbled.

Ms. Shelton’s bid can advance to the full Senate without any support from the 12 Democrats on the committee as long as all 13 Republicans back her. Her nomination will come to a vote alongside Christopher Waller’s. Mr. Waller, the research director at the Federal Reserve Bank of St. Louis, was also nominated by Mr. Trump to the seven-seat Fed board. Mr. Waller, a more traditional nominee, is expected to clear the committee easily.

Credit…Aly Song/Reuters

There may be a pandemic and a recession. But in the past day, there has also been plenty of action among deal makers, as reported in the DealBook newsletter.

  • EBay announced on Tuesday that it would sell its classified-ads business for $9.2 billion in cash and stock to Adevinta of Norway. It is one of the biggest tech deals of the year, and will create the world’s largest online classifieds company.

  • Ant Group, the financial arm of China’s Alibaba, said Monday that it planned to go public this year in Hong Kong and Shanghai, in what could be one of the biggest initial public offerings on record.

  • Chevron struck a $5 billion deal to buy Noble Energy on Monday, in what may be the first of a wave of oil giants buying smaller, weaker rivals.

  • Walmart has restarted talks about selling most of Asda, its British grocery division. Competition regulators blocked a merger of Asda and J Sainsbury last year; Walmart restarted discussions in February, then suspended them during the crisis.

This suggests corporate boardrooms still have confidence in deal-making, perhaps more than could be expected during a pandemic.

Some 22,600 takeovers had been announced so far this year, according to Refinitiv, down 18 percent from the same time last year. But the total dollar value of deals was down even more, 38 percent, implying some caution. And then there are the buyers who have gotten cold feet, as when Sycamore Partners successfully got out of an agreement to buy control of Victoria’s Secret.

Buoyant equity markets have also coaxed companies to resume planning for stock listings. The I.P.O. hopefuls include Airbnb and Palantir, the data-mining consultancy.

Credit…Andrew Testa for The New York Times

Nearly 900,000 public workers in Britain, including teachers, doctors and security forces, will receive raises in recognition of the “vital contribution” they have made during the coronavirus pandemic, Britain’s finance ministry announced Tuesday.

Salaries for teachers in England will increase 3.1 percent, and dentists across Britain will get raises of 2.8 percent. The salaries of police and military forces, along with members of the judiciary and other civil servants, will also increase from 2 to 2.5 percent. But nurses and other National Health Service staff will not be included in the deal because they negotiated a three-year pay increase in 2018.

“These past months have underlined what we always knew — that our public sector workers make a vital contribution to our country and that we can rely on them when we need them,” Rishi Sunak, chancellor of the Exchequer, said in a statement.

The announcement was welcomed as deserved news for thousands of workers who have battled the pandemic, including many in the revered National Health Service, but opposition politicians said the raises would not make up for a decade of austerity during which a Conservative government froze salaries or granted small increases.

“Many other public sector workers — including those working on the front line in social care — won’t get a pay rise out of this,” said Anneliese Dodds, the Labour Party’s economic minister, because they are paid by local governments that have not seen their budgets increase.

At least 300 health workers and caretakers for adults had died of the coronavirus as of late May, according to numbers provided by Prime Minister Boris Johnson. Britain has been one of the worst-hit countries in the world, with more than 45,300 confirmed deaths and 295,000 cases.

Credit…The Ad Council

A new public service announcement debuting on Tuesday seeks to raise awareness of the surge of harassment faced by Asian-Americans.

The somber ad includes testimonials describing being told to “go back to China” or having people spit in their direction.

Anxiety about the coronavirus, which originated in Wuhan, China, has fueled xenophobia and bigotry toward people of Asian descent. A list of recent cases compiled by the Anti-Defamation League chronicles “surging reports of xenophobic and racist incidents,” including Asian-owned stores defaced with racist graffiti, video chats disrupted by anti-Asian comments and people being beaten or denied entry to businesses.

But the issue has been largely ignored by federal leaders — President Trump has repeatedly described the coronavirus as the “Chinese virus” — and the fight against pandemic-related harassment of Asian-Americans has largely fallen to civil rights groups, marketing agencies, social media accounts and nonprofit organizations, which have promoted hashtags like #IAmNotCovid19, #RacismIsAVirus, #HealthNotHate and #MakeNoiseToday.

The nonprofit Advertising Council, which also introduced a face mask initiative with Gov. Andrew M. Cuomo of New York this month, will roll out the new anti-harassment campaign online and on television.

The issue of racism toward Asians hit “very close to home,” said the Emmy-winning writer Alan Yang, who is known for popular shows like “Parks and Recreation” and “Master of None.”

“This wasn’t an abstract idea to me, something theoretical,” Mr. Yang said. “I knew people this was happening to.”

Even as the Covid-19 death toll rises in the nation’s most dense urban cores, economists still mostly expect cities to bounce back, once there is a vaccine, a treatment or a successful strategy to contain the virus’s spread.

And yet, this pandemic threatens the assets that make the country’s most successful cities so dynamic — not only their bars, museums and theaters, but also their dense networks of innovative businesses and highly skilled workers, jumping among employers, bumping into one another, sharing ideas, powering innovation and lifting productivity.

Covid-19 is not the deadliest disease to have ravaged cities through the ages. But it is showing us that they might not be as essential as they once were. “Cities are more in danger than in the 19th century even though this plague is less severe,” said the Harvard economist Edward Glaeser, “because we are rich enough to imagine a deurbanized world.”

Paradoxically, America’s big cities are becoming more valuable, churning out an increasing share of the nation’s economic output.

They have benefited from the rise of economic complexity and the explosive growth of technologies that reward the most highly educated workers. Complex industries like information technology, biotechnology and finance concentrate in large cities where they can find the most skilled employees.

These cutting-edge businesses don’t mind paying top dollar for the talent, not least because — research has found — highly skilled workers tend to be more productive and innovative when they are surrounded by others like them.

But if big-city businesses find that work from home doesn’t hit their productivity too hard, they might reassess the need to pay top dollar to keep employees in, say, Seattle or the Bay Area. A survey by the market research firm Reach Advisors found that companies facing high real estate and labor costs were the most interested in pursuing remote work into the future.

Credit…Hiroko Masuike/The New York Times

Since the 2008 global financial crisis, American corporations have taken advantage of historically low interest rates to gorge themselves on debt. Then came the pandemic and the sharpest economic downturn in history, which resulted in an odd solution for the companies that did all that borrowing: more debt.

Through late June, giant U.S. companies had borrowed roughly $850 billion in the bond markets this year, double the pace from last year. Analysts at JPMorgan Chase anticipate that investment-grade companies will borrow roughly $1.6 trillion from investors by the time 2020 is over.

It has turned conventional wisdom on its head.

The increased borrowing can be traced, in part, to the actions of the Federal Reserve. The central bank slashed interest rates back to rock-bottom levels, making it attractive for businesses to refinance and borrow more to build a cushion of cash. But an even bigger factor was the Fed’s announcement — in the heat of March’s market upheaval — that it would buy corporate bonds.

Investors have been so emboldened by the Fed’s actions that even companies viewed as especially risky are having no problem borrowing heavily despite a deeply uncertain economic recovery weighed down by surging infections and rolled-back reopening plans.

Credit…Fabrice Coffrini/Agence France-Presse — Getty Images

When Google and Apple announced plans in April for free software to help alert people of their possible exposure to the coronavirus, the companies promoted it as “privacy preserving” and said it would not track users’ locations. Encouraged by those guarantees, Germany, Switzerland and other countries used the code to develop national virus alert apps that have been downloaded more than 20 million times.

But for the apps to work on smartphones with Google’s Android operating system — the most popular in the world — users must first turn on the device location setting, which enables GPS and may allow Google to determine their locations.

Some government officials seemed surprised that the company could detect Android users’ locations. After learning about it, Cecilie Lumbye Thorup, a spokeswoman for Denmark’s Health Ministry, said her agency intended to “start a dialogue with Google about how they in general use location data.”

Switzerland said it had pushed Google for weeks to alter the location setting requirement.

Google’s location requirement adds to the slew of privacy and security concerns with virus-tracing apps, many of which were developed by governments before the new Apple-Google software became available. Government officials and epidemiologists say the apps can be a helpful complement to public health efforts to stem the pandemic. But human rights groups and technologists have warned that aggressive data collection and security flaws in many apps put hundreds of millions of people at risk for stalking, scams, identity theft or oppressive government tracking.

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