Stocks Rise While Oil Prices Continue Their Decline: Live Updates

Global stocks are showing some confidence.

Stock markets were gaining strength on Tuesday as more governments made plans to gradually reopen their economies and investors prepared to scrutinize corporate earning announcements.

In the oil markets, Monday’s steep slide in the price of U.S. crude appeared to reverse itself before the losses continued. West Texas Intermediate was down more than 11 percent to less than $12 a barrel.

U.S. stock futures predicted a positive opening on Wall Street, one day after the S&P 500 rose nearly 1.5 percent. European markets were 1 to 2 percent higher, following mixed trading in Asia.

In the United States, at least a dozen states are moving to ease restrictions, and several European countries have loosened rules. Later on Tuesday, French officials are expected to announce how they will lift the country’s lockdown.

Companies like Ford, Merck and Starbucks are scheduled to report financial results for the first quarter of the year on Tuesday. While the earnings reports may further cloud the hopes for a healthy global recovery, they may also give companies a chance to outline the steps they are taking to reopen.

Underscoring the uncertainty, prices for U.S. Treasury bonds, often seen as a safe place to put money in times of trouble, were mixed outside U.S. trading hours.

U.S. oil prices gyrated on Tuesday, one day after a global glut drove the price of a barrel of crude down 24 percent.

The price of a barrel of West Texas Intermediate, the type of oil used to determine industry prices in the United States, fell as much as 16 percent more in morning trading on Tuesday, but then pared some of those losses. The price is now under $12 a barrel, a level virtually unheard-of before the double whammy of the coronavirus outbreak and a price war between Saudi Arabia and Russia.

Quirks in how oil is traded are also driving the swings. As a financial instrument, oil is typically traded on futures markets. The most active futures are typically the ones that expire the month after the current one. Anybody holding the contract when it expires has to take delivery of actual barrels of crude oil, an unappealing choice for the investors, hedge funds and others who simply want to bet on oil prices, not open a refinery.

Oil prices plunged last week when financial investors rushed to sell their futures before they expired and found few buyers. A similar dynamic is working against oil prices currently as major investors shift away from the near-month contract and diversify with those that expire in other months. On Monday, one of the biggest oil investment vehicles, an exchange-traded fund called United States Oil Fund, detailed plans in a financial filing to spread its exposure across contracts that expire as late as September.

Southwest Airlines lost $94 million in the first quarter of the year, a relatively light blow in an industry ravaged by the coronavirus pandemic. Last week, Delta Air Lines reported a loss of more than $600 million, while United Airlines said it lost more than $2 billion.

Southwest’s results reflected its relatively strong financial position, having ended 2019 with less debt and a stronger balance sheet than its peers. Still, the company ended the quarter with $4.2 billion in revenue, nearly 18 percent less than the same period last year.

“The U.S. economy has been at a standstill, and the current outlook for second quarter 2020 indicates no material improvement in air travel trends,” said Gary C. Kelly, the chief executive, in a statement.

Southwest has more than $9 billion in cash and short-term investments, slightly more than Delta and well above the approximately $6 billion that United has in reserve.

Still, Southwest is not immune to the industry’s broader problems. The airline was one of the largest operators of Boeing’s 737 MAX jet, which was grounded last year after two fatal crashes. On Tuesday, Mr. Kelly said that Southwest was negotiating its current order for more of the jets. The airline doesn’t expect to fly the Max before November, well beyond the expected summer return Boeing had previously announced.

BP said Tuesday that profits for the first quarter fell by two-thirds compared with a year earlier as the impact of the coronavirus pandemic began to hit the performance of big oil companies.

The London-based oil giant said that what it calls underlying replacement cost profit, the metric most closely followed by analysts, was $791 million for the quarter, down from $2.36 billion a year earlier.

“Our industry has been hit by supply and demand shocks on a scale never seen before,” said Bernard Looney, who became the company’s chief executive in February, in a statement.

BP said it was responding by cutting capital spending by about one quarter, to $12 billion for the year, while also beefing up its balance sheet with $17 billion in a new credit facility and bonds.

The company also reported a $4.4 billion loss for the period, mostly because of a $3.7 billion inventory loss on holdings of oil.

Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients.

Some irritated bankers vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.”

Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go.

But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers.

When the University of California, San Francisco, was running perilously low on personal protective equipment, the university’s chancellor called Marc Benioff, the hyperconnected billionaire who is a founder and the chief executive of Salesforce.

The phone call set off a frenzied effort by Mr. Benioff and his team that drew in major companies like FedEx, Walmart, Uber and Alibaba. In a matter of weeks, Mr. Benioff’s team spent more than $25 million to procure more than 50 million pieces of protective equipment. Fifteen million units have already been delivered to hospitals, medical facilities and states, and more are on the way.

The relative ease with which Salesforce acquired so much protective gear stands in sharp contrast to the often chaotic government efforts to secure it. And while the national stockpile of supplies has been depleted, Mr. Benioff and his team simply called their business partners in China and started writing checks.

Once it was apparent that the Salesforce team could obtain and deliver supplies, they took steps to formalize their efforts and set a lofty target.

“We did the math when we started, and thought we were going to acquire a billion pieces of P.P.E.,” Mr. Benioff said.

By March 29, 10 days after the chancellor called Mr. Benioff, Salesforce had found more than 50 million pieces of protective equipment, with millions already delivered.

With galleries and museums shuttered across the world, Seoul is offering an early answer to what the post-coronavirus art world might look like as it tiptoes back to normalcy.

Galleries in Seoul, a dense metropolis with a population of nearly 10 million but only two coronavirus deaths to date and a daily infection rate that has dropped to the single digits, have begun reopening, but with extra precautions in place. At Lehmann Maupin, a gallery attendant dutifully took down the name, address and phone number of everyone who came through the front door — just in case someone at the opening later found out they had been exposed to the virus.

“Now is actually a good time to see if you can buy art, because collectors around the world having a hard time have put forward quite good art pieces into the market at cheap prices,” said one attendee, Passion Lim. He said he didn’t feel uncomfortable in the crowd of about 50 inside the gallery’s two-story, 3,200-square-foot space, as he trusted the government’s handling of the outbreak.

In New York City, Lehmann Maupin’s co-founder, Rachel Lehmann, said she was painfully aware of the market dynamic. The gallery’s Hong Kong branch had reopened, but its flagship Manhattan locations had been closed since March 13. With sales there reduced to a crawl, she said she had been forced to institute salary cuts and furloughs among its 36 staffers. Still, having worked as an art dealer for several decades and weathered a string of recessions, she took the long view: This, too, shall pass.

The deceptive power of simplicity.

Why did Zoom become a staple of our pandemic routines? How come Netflix is the king of home entertainment and Amazon rules shopping online?

There’s no magic formula for why some companies and products last and others fizzle, but one overlooked ingredient is simplicity. “It just works” are magic words.

Facebook, envious of Zoom’s success, is putting weight behind its own video-calling feature. It could catch on, given the billions of people already hanging out on Facebook. But vaults of money and a big audience aren’t everything. Remember … Skype?

Zoom took hold because it nails the basics. Audio quality on Zoom is crystal clear, it feels social and joining business meetings online has been a breeze. None of this is rocket science, but it’s deceptively difficult to make tasks look easy.

Many celebrations and milestones have been delayed, but grief is in abundance, and the greeting card aisle offers a snapshot of the virus’s wicked toll. Sympathy cards are nearly all sold out.

CVS, one of the nation’s largest sellers of greeting cards, said that it was seeing “higher demand for sympathy cards than most other types of greeting cards during the pandemic” and was experiencing shortages in certain stores. Shoppers across the country have posted on social media that their local Winn-Dixie or ShopRite was running out of cards.

Some of the shortages have been caused by distribution problems. Pharmacies and grocery chains, focused on keeping their shelves stocked with household staples, are not allowing card companies to come into the stores and restock regularly.

Barbara Macchiaroli’s longtime companion died of the virus the day after Easter in a nursing home. He was 90. They haven’t had a funeral, but the cards — 34 so far — have been arriving at her house every day. The senders have written memories about his beautiful singing voice, his devotion to the local Kiwanis Club and his love of Ford Model A’s.

“The cards have comforted me in a way I never expected they would,” she said. “I think it is because I can’t be with people right now.”

Catch up: Here’s what else is happening.

  • Harley-Davidson on Tuesday reported a steep drop in retail sales of motorcycles in the first three months of the year. In the United States, sales were up 6.6 percent until mid-March, and then ended the quarter 15.5 percent below the same period last year, the company said.

  • Amazon may have violated federal worker safety laws and New York State’s whistle-blower protections when it fired an employee from its Staten Island warehouse who protested the company’s response to the coronavirus outbreak, according to a letter the office of the New York attorney general, Letitia James, sent the company last week.

  • JetBlue announced on Monday that it would require all passengers to wear a face covering during travel starting May 4. The mask must cover the nose and mouth throughout the entire journey, from check-in to deplaning. JetBlue did not say whether it would provide masks to its passengers.

  • Boeing plans to resume operations in South Carolina next week, bringing several thousand employees back to work on the 787 Dreamliner about a month after sending them home. Those who can work remotely will continue to do so, and managers will tell the recalled workers when to return to Boeing’s complex in North Charleston, the company said.

Reporting was contributed by Karen Weise, David Gelles, Stanley Reed, Gregory Schmidt, Su-Hyun Lee, Brett Sokol, Michael Corkery, Sapna Maheshwari, Niraj Chokshi, Shira Ovide, Stacy Cowley, Carlos Tejada, Kevin Granville and Daniel Victor.




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