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Stocks Slide as Texas Rolls Back Reopening

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Stocks tumbled Friday, with losses accelerating after Texas said it would reinstate some measures aimed at curbing the coronavirus outbreak there, a move that added to investors’ concerns that a recent surge in Covid-19 cases would put a halt to the economic recovery.

The S&P 500 was down more than 2 percent, a loss that erased any remaining gains the index had for the month of June.

Though stocks started the day only slightly lower, the selling quickly picked up pace after the governor of Texas ordered all bars to close on Friday, a day after he paused the state’s reopening amid surging cases there.

Shortly after Texas’s announcement, Florida’s governor also ordered bars in that state to stop serving food and alcohol for on-site consumption.

“The Texas response to close bars and restaurants is a the real driver of lower markets today, as it portends to a possible second shutdown across the country if we see Covid spikes,” said Doug Rivelli, president of institutional brokerage firm Abel Noser in New York. “And a second shutdown would be devastating to the overall economy.”

Shares of big banks led the declines, dropping after the Federal Reserve said it would put a temporary cap on their dividend payments to preserve cash during the pandemic. Goldman Sachs fell more than 8 percent. JPMorgan Chase and Bank of America were about 6 percent lower.

The decision to limit payouts is an admission by the Fed that large financial institutions, while far better off than they were in the financial crisis, remain vulnerable to an economic downturn unlike any other in modern history, The New York Times’s Jeanna Smialek reported. With virus cases across the United States still surging and business activity subdued, it remains unclear when and how robustly the economy will recover.

Shares of Facebook and Twitter also fell sharply after Unilever, one of the biggest advertisers in the world, said on Friday that it would stop running ads on Facebook, Instagram or Twitter in the United States for at least the rest of the year, citing a “polarized election period.” Both companies were down about 7 percent.

Markets have seesawed all week as new data made clear that the United States is far from bringing its coronavirus outbreak under control. At the same time, mass infections breaking out in a number of European and Asian countries underscored the fact that the disease will be a fact of life until vaccines become widely available.

Still, investors have also seen signs of recovery in economic data. Consumer spending data released on Friday by the Commerce Department showed a sharp increase of 8.2 percent in May, as businesses started to reopen.

Several analysts also pointed out that recent weakness in the stock market could be related to the approach of the end of the second quarter on Tuesday.

Institutional investors — such as pension funds — typically rebalance their portfolios at quarter end, resulting in sales of assets that have outperformed.

Stocks are up roughly 17 percent in the second quarter, trouncing the roughly 2 percent gains for the broadest measure of the bond market.

“Money managers will look to take profits and lock in gains ahead of quarter end,” Steven Ricchiuto, U.S. chief economist, Mizuho Americas, wrote in a note to clients on Friday. “Doing so before the weekend allows them to better enjoy the more seasonal weather rather than worry about the markets.”

When the coronavirus prompted states to order residents to stay at home in March, unemployment surged around the country as huge parts of the economy slowed or stopped. Soon after, there were calls for philanthropists, charitably inclined people and even occasional donors to accelerate any giving they were planning to do.

They stepped up, it turns out, giving more and giving faster then they typically do.

According a report released on Friday from Fidelity Charitable, which has become the largest grant maker in the country by managing thousands of individual donor-advised funds, those donors have given $3.4 billion nationwide since the start of the year, up at least 28 percent from a year earlier.

“Despite the economic environment, all the uncertainty at a personal level, people looked outside of themselves and gave to charity,” said Pamela Norley president of Fidelity Charitable.

Debra Mailman, who has spent the two years since she retired as an executive at Microsoft volunteering in disaster zones, initially slowed her giving, shocked by the sudden drop in value in the investments in her donor-advised fund.

“At the beginning of the pandemic, I did the same thing everyone did: I looked at the stock market and said, ‘Oh, my God,’” she said. “Then I held my nose and said, ‘Forget that — the money isn’t mine anymore. It will do more work out there.’”

Consumer spending rose by a record 8.2 percent in May, the Commerce Department said Friday, as businesses began reopening and the economy slowly started to recover.

The increase followed record drops in spending in March and April at the start of the coronavirus pandemic, when businesses were shuttered and millions of Americans lost their jobs, sending the economy into a recession.

The report showed that the spending came despite personal income dropping 4.2 percent in May, the most since January 2013, after surging by a record 10.8 percent in April when the government handed out one-time $1,200 stimulus payments to millions of people and bolstered unemployment benefits.

Spending by consumers is closely watched because it accounts for more than two-thirds of economic activity in the United States. A surge of new infections, however, is causing some businesses to close once more, and could affect the recovery.

Economists cautioned against reading much into last month’s surge in consumer spending. They noted that the increase followed two record declines and that it still left spending 11 percent below its pace before the pandemic hit.

“Amid rapidly rising infections across many states, risks to the outlook are dangerously tilted to the downside,” Gregory Daco, chief U.S. economist at Oxford Economics, said in a research note.

The commerce report showed that among the categories for which consumers ramped up spending in May, the sharpest increase — a 29 percent jump — was for durable goods such as autos. Spending on a category called nondurable goods, which includes food and clothing, rose nearly 8 percent. And spending on services — everything from cellphone contracts to hospital visits — rose more than 5 percent.

Virgin Australia, which like other airlines has been struggling to stay afloat during the coronavirus pandemic, has been bought by Bain Capital, the Boston-based private equity firm. The decision was announced on Friday by Deloitte, the carrier’s administrator, after a rival bidder in the sale, Cyrus Capital Partners, withdrew its offer.

“We appreciate how difficult the current situation is for Virgin Australia staff,” Mike Murphy, the managing director for Bain Capital in Australia, said in a statement.

“Our investment and plan for the airline will support and celebrate Virgin Australia’s unique culture and protect as many jobs as possible,” he said. Financial terms were not disclosed.

Virgin Australia entered voluntary administration in April, with debt totaling 6.8 billion Australian dollars, or $4.7 billion, after the Australian government refused to bail the company out. The filing made the airline one of Australia’s biggest corporate casualties of the coronavirus and left its rival Qantas Airways with an effective monopoly over the Australian airline industry.

  • Updated June 24, 2020

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


Qantas has struggled as well, however. This week, it cut about 6,000 workers and grounded about 100 planes for up to a year. Local flights have slowly begun to resume, but international travel is likely to be off the table for most Australians until there is a vaccine, and a surge this week in coronavirus cases in the state of Victoria has again raised questions about even domestic travel.

Unilever, one of the biggest advertisers in the world, joined a growing boycott against Facebook, following other companies displeased with the social media giant’s hands-off attitude toward posts from President Trump amid widespread protests against racism and police brutality.

The consumer goods giant, which owns brands such as Dove and Lipton, said on Friday that it would stop running ads on Facebook, Instagram or Twitter in the United States for at least the rest of the year, citing a “polarized election period.”

“Continuing to advertise on these platforms at this time would not add value to people and society,” Unilever added in comments that were first reported by The Wall Street Journal.

“The complexities of the current cultural landscape have placed a renewed responsibility on brands to learn, respond and act to drive a trusted and safe digital ecosystem,” said Unilever, which plans to shift its spending to other platforms.

Ben & Jerry’s, an ice cream brand owned by Unilever, said earlier this week that it is participating in the advertising boycott. Other companies involved include Verizon, Patagonia and Eddie Bauer.

Marc Pritchard, the chief brand officer of Procter & Gamble, said in an online speech on Wednesday for the Cannes Lions festival that the company would not be “advertising on or near content that we determine is hateful, denigrating or discriminatory.” Ad agencies like IPG Mediabrands said they were working with companies that wanted to cut ties with Facebook.

One of the most important factors affecting your retirement security is how long you work.

Additional years make it easier to increase annual Social Security benefits through delayed filing. Working longer also can mean saving more, living off those savings for fewer years and getting more years of employer-subsidized health insurance.

Many older workers, generally those over 40, say they will need to work longer because of the economic crisis. Here are some of the key issues facing older workers navigating the last part of their careers in the pandemic.

In a typical recession, the unemployment rate for older workers remains below that of their younger counterparts, but that’s not the case this time. The pandemic already has fueled a surge in early retirements, according to a report published recently by three economists. They found that among people who had left the labor force through early April, 60 percent said they were retired, up from 53 percent in January, before the pandemic.

Guidance from the Centers for Disease Control and Prevention states that adults over 65 are at higher risk of severe illness from the coronavirus than others. Most at-risk workers can’t afford to stay away from work for long periods. An analysis by the Kaiser Family Foundation shows that the average earnings of workers 65 and older in 2018 was $49,100.

The recession itself is likely the biggest obstacle to returning to work. The best odds for older workers to land or retain a job are typically found when the economy is strong, noted Peter Cappelli, a professor of management at the Wharton School at the University of Pennsylvania. Some experts worry about an increase in pandemic-related workplace age discrimination.

The motion-sensing lights sense nothing. The swivel chairs do not swivel. Only one sign of life remains in the abandoned corporate floor plan: potted plants.

Intended as a note of vibrancy amid bland surroundings, workplace greenery now seems an eerie symbol of the suddenness with which workers abandoned their routines.

Yet the cactuses and philodendrons we left behind have not been forgotten. During the pandemic, some have had their own essential workers keeping them alive. So-called interior horticulturalists water — and occasionally pet — the plants every few weeks, tending to a patch of the American economy.

“Most people just call me the plant guy when I walk in,” said Mac Rogers, an interior horticulturalist with Cityscapes, which designs and maintains interior landscapes.

“It’s kind of eerie going into spaces when there’s nobody around,” he said. “Now, there’s a lot less air movement. People have turned heat down. Plants are dormant and growing slower.”

  • Walt Disney Studios pushed back the theatrical release of its live-action remake of “Mulan,” leaving July without any big-budget movie releases and delaying a hoped-for recovery at cinemas. “Mulan” will now arrive in theaters on Aug. 21 instead of July 24.

  • Microsoft said Friday that it would permanently close its retail store locations, after having shuttered them since March because of the coronavirus outbreak. The company did not directly tie the closures to the outbreak, saying only that “our product portfolio has evolved to largely digital offerings.” The company will take a $450 million charge related to the closing. According to its website, Microsoft has 83 stores worldwide, including 72 stores in the United States, where it showcases its laptops and other hardware.

Reporting was contributed by Brooks Barnes, Paul Sullivan, Matt Phillips, Tiffany Hsu, Mark Miller, Alex Traub, Livia Albeck-Ripka, Mohammed Hadi, The Associated Press, Clifford Krauss, Katie Robertson, Carlos Tejada and Niraj Chokshi.

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