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U.S. Stocks Climb Amid Virus Concerns: Live Updates

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U.S. Stocks Climb Amid Virus Concerns: Live Updates 2

Credit…Mike Blake/Reuters

Websites publishing coronavirus-related misinformation are being supported financially by tapping into internet advertising networks owned by Google and Amazon, according to a new Oxford University study.

Google and Amazon operate two of the world’s largest internet advertising networks and serve as central repositories for millions of ads that are distributed to websites around the world. But because the systems are largely automated, they are vulnerable to abuse, said Philip Howard, director of the Oxford Internet Institute, who co-wrote the study.

Social media platforms like Facebook, Twitter and YouTube have been widely criticized as being the primary tool for sharing coronavirus-related misinformation. But the researchers said the advertising networks provide the financial oxygen to websites that are publishing much of the dubious and misleading information about the pandemic.

Mr. Howard, who previously assisted the Senate investigation into Russian disinformation efforts, said Google and Amazon should consider developing a blacklist that blocks website with a history of sharing false and misleading information about the pandemic from being able to use their advertising networks.

He said the pandemic had spawned a niche world of websites that “preys on people’s insecurities.” Many of the sites sell products promising to cure or prevent the disease. Even though the sites have a relatively low audience, they muddy the information ecosystem and undermine the broader public health response.

“They are hucksters, fraudsters, peddling misinformation,” he said. “It would be a public service to take them down.”

Amazon and Google did not respond to requests for comment.

Credit…Ruth Fremson/The New York Times

More than 100 current and former chief executives called for more aid to small businesses in the United States in a letter sent to Treasury Secretary Steven Mnuchin on Monday.

The letter was organized by the former Starbucks chief Howard Schultz with the support of Senators Michael Bennet and Todd Young, a Democrat and a Republican, respectively. It is signed by the likes of Walmart’s Doug McMillon, Alphabet’s Sundar Pichai and Disney’s Bob Chapek.

The letter states:

“We cannot stress enough the urgent need to act. Every day that passes without a comprehensive recovery program makes recovery more difficult. By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon. Tens of millions of Americans have already lost their jobs in this pandemic. Allowing small businesses to fail will turn temporary job losses into permanent ones. By year end, the domino effect of lost jobs — as well as the lost services and lost products that small businesses provide — could be catastrophic.”

The chief executives call for “federally guaranteed loans, at favorable terms, that will enable small businesses to transform and sustain themselves through 2020 and well into 2021.”

U.S. stocks followed European markets higher on Monday, as investors weighed a mixed bag of business news against continuing concerns about the spread of the coronavirus.

The S&P 500 was up nearly 1 percent in early trading. The DAX in Germany, which gained more than 2 percent, led European indexes. Asian stocks ended the day mostly higher.

In other markets, the price of the U.S. 10-year Treasury note fell. Oil futures fell on the first day of trading since an agreement by major oil producers to restrict production, a result of plummeting prices for crude in April, had expired. Brent crude was down about 0.8 percent to $43 a barrel, and West Texas Intermediate was about 1.1 percent lower at $39.80 a barrel.

U.S. stocks rallied on Friday and the S&P 500 ended July with a gain of more than 5 percent. The index has climbed for four consecutive months — rising more than 26 percent since the end of February. It is now about 3 percent below its record high, which it reached in late February before the rapid spread of the coronavirus and concern about the economic damage it would cause sent markets into a tailspin.

A big factor behind the recovery has been the success of big technology companies. Technology stocks again led the gains on Monday, with the Nasdaq composite rising by more than 1 percent.

Microsoft was trading higher after a weekend of back-and-forth headlines about its potential takeover of TikTok in the United States. The tech giant said Sunday evening that, after consulting with President Trump, whose administration believes the Chinese-owned app is a national security threat, it would continue to pursue a deal for TikTok.

Concerns about the spread of the virus continued through the weekend, with tightening restrictions in Manila and Melbourne, Australia. In the United States, Dr. Deborah L. Birx, the Trump administration’s coronavirus coordinator, said that the country was in a “new phase” of the pandemic, and that it was much more extensive than the spring outbreaks in major cities like New York and Seattle.

HSBC, the London-based bank with roots in Asia, reported a huge drop in profit as it set aside billions for delinquent loans; its shares fell more than 5 percent. On a positive note, the IHT Purchasing Managers’ Index for manufacturing in the euro area reflected the first expansion in activity since early 2019.

The coronavirus has made it more difficult for entrepreneurs to raise money. But for many companies — from established businesses to smaller start-ups — the pandemic hasn’t prevented them from finding investors willing to open their wallets.

TransferWise recently raised $319 million in a secondary deal, in which existing shareholders will sell some of their holdings in the European fintech company. The transaction values TransferWise at about $5 billion, a nearly 43 percent bump from last year. Kristo Kaarmann, the company’s chief executive, said that TransferWise, which was founded in 2011, didn’t need to raise money, since it has been profitable for three years now. But it saw an opportunity for older investors and long-tenured employees to sell some of their stakes.

Smaller companies aren’t afraid to embark on fund-raising either, even if the pandemic has changed the way they court potential investors. Ro, a telehealth start-up, said last week that it had raised $200 million in new funding. Gro Intelligence, which uses artificial intelligence to gather agricultural data, is in the process of raising an “opportunistic” Series B round with a target of $50 million, its founder and chief executive, Sara Menker, said.

It has taken time for investors to get comfortable, well, investing. Venture deals in the second quarter in the United States, Europe and Asia were all down from the same time last year, but up from the previous quarter, according to PWC and CB Insights. “There’s obviously a lot more gun-shyness,” Ms. Menker of Gro Intelligence said, with many venture capitalists initially focused on protecting existing portfolio companies rather than striking new deals.

Credit…Bruce Bennett/Getty Images

Lord & Taylor and the company behind Men’s Wearhouse and Jos. A. Bank filed for bankruptcy protection on Sunday, the latest American retailers to fall victim to the coronavirus outbreak.

The department store chain Lord & Taylor traces its roots to 1826, and had been floundering for years. Tailored Brands, which once dominated the market for men’s suits through Men’s Wearhouse and Jos. A. Bank, saw demand plummet for its corporate clothing with the pandemic keeping America’s office workers at home.

They join a roster of bankruptcy filings since the beginning of May that includes Neiman Marcus, J. Crew, J.C. Penney, Brooks Brothers and the owner of Ann Taylor and Loft.

Tailored Brands had approximately 1,400 stores and 18,000 employees. It had already announced plans in July to eliminate 20 percent of its corporate jobs and close up to 500 stores, and on Sunday, the company said that it planned to use the restructuring process to cut its debt by at least $630 million.

Lord & Taylor was acquired last year by the clothing rental start-up Le Tote in an unusual $100 million deal. Now Le Tote and Lord & Taylor are both seeking Chapter 11 protection from their creditors. The companies said in a filing on Sunday that they operated 38 locations, which had been temporarily closed since March.

Credit…Chris Mcgrath/Getty Images

Like Hong Kong, HSBC has long sat at the crossroads between East and West, a big global bank based in Britain that has reveled in and profited from its deep relationship with China. And like Hong Kong, it is now caught in a new era of confrontation between Beijing and major Western governments.

In China, HSBC has been accused of “setting traps” to ensnare the Chinese tech giant, Huawei. In Britain, it has been admonished for seeming to back Huawei’s ambitions in the country.

Straddling neutral ground is no longer an option. HSBC got called out in China for not publicly backing the new national security law in Hong Kong. When the bank eventually expressed support on its Chinese social media account, members of the British Parliament demanded an explanation and urged HSBC to rescind the statement.

Global businesses are increasingly under pressure to pick sides as the United States and its allies target the political and economic agenda of China.

“There are multiple tailwinds pushing the global business world toward this highly geopolitically sensitive environment where the landscape has shifted fundamentally and you can no longer be agnostic,” said Jude Blanchette, a China scholar at the Center for Strategic and International Studies in Washington. “It is the logical extension of this new paradigm where economic security is now considered national security.”

Credit…Michael Blackshire for The New York Times

Homeownership is a crucial part of a family’s ability to build wealth: A home is the largest asset for most American families, and the value it can gain over decades can be tapped during retirement or left to the next generation.

But the share of Black households that own homes has only inched upward over the past 50 years, and the continuing homeownership gap is one of the main reasons the net worth of white households far exceeds that of Black families. One reason for the gap: the dearth of mortgages in communities where home prices are so low that most banks and lenders will not bother writing mortgages for them.

Now a new program in Louisville, Ky., called the MicroMortgage Marketplace project, which officially started two weeks ago, hopes to demonstrate how to increase the availability of small-dollar mortgages. Coordinated by the Urban Institute, a Washington think tank, the program hopes to become a demonstration project that can be replicated in other cities where modest homes are plentiful but the mortgages to buy them are in short supply.

🤝 American lawmakers are haggling over a new stimulus bill, with the shape of supplemental jobless benefits — which expired last week — the biggest sticking point. Democrats are pushing for a $3 trillion package that extends many of the previous measures, while Republicans have aimed for a narrower bill worth around $1 trillion.

🗣 It’s another busy week for earnings, with more than 100 S&P 500 companies reporting their latest quarterly results. The highlights include BP, Diageo, Disney and KKR on Tuesday; CVS and Moderna on Wednesday; Uber on Thursday; and Berkshire Hathaway on Saturday.

📱 Google is expected to unveil its latest Pixel smartphone on Monday. On Wednesday, Samsung announces its latest line of phones, tablets and watches. Most of these gadgets will be able to connect to 5G networks, if only more of those were available.

📈 A crucial U.S. jobs report on Friday will reveal whether improvements in hiring in May and June continued in July. Weekly data on unemployment claims haven’t been encouraging, but economists still predict that the economy added around 1.6 million jobs last month (on average, with huge variations in forecasts).

The president of the Federal Reserve Bank of Minneapolis suggested that it would be better for the economy if authorities across the United States reinstated lockdowns to bring the spread of the coronavirus under control.

“We’re going to have flare-ups, lockdowns, and a very halting recovery with many more job losses and many more bankruptcies,” Neel Kashkari said, speaking on CBS’ Face the Nation on Sunday.

“If we were to lock down hard for a month or six weeks, we could get the case count down, so that our testing and our contact tracing was actually enough to control it,” Mr Kashkari said. “If we don’t do that, and we have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we’re going to see many, many more business bankruptcies.”

“That’s going to be a much slower recovery for all of us,” he said.

He also said that given the low cost the United States government is paying to issue debt, the government has room to spend to support the economy.

“Congress should use this opportunity to support the American people, and the American economy,” he said. “If we get the economy growing, we will be able to pay off the debt.”

Credit…Brian L. Frank for The New York Times

Overcrowding, not density, has defined many coronavirus hot spots. Service workers’ quarters skirting Silicon Valley are no exception. The Times’s Conor Dougherty reports:

It was not surprising when three-quarters of the house tested positive. There were 12 people in three bedrooms, with a bathroom whose door frequently required a knock and a kitchen where dinnertime shifts extended from 5 p.m. well into the evening.

Karla Lorenzo, a Guatemalan immigrant who cleaned houses in San Francisco and Silicon Valley, lived in the big room along the driveway. Big is a relative term when a room has five people in it. She and her partner, Abel, slept in a queen-size bed along the wall. There was a crib for the baby at the foot, with the older children’s bunk bed next to that. The other housemates had similar layouts.

Living among many people, as Ms. Lorenzo put it in Spanish, you cannot really avoid your housemates. The sounds, the smells, the moods — everyone is pressed against all of it, and they understood that if one of them got the coronavirus, the rest probably would.

That happened in April, and now the house is returning to health. Abel, referred to by his first name because his immigration status is uncertain, is home after three weeks in the hospital, where Ms. Lorenzo feared he would die alone gasping for air. And she is no longer squirreled in the closet where she spent days to avoid giving the virus to the children.

Now comes a second struggle: figuring out how to pay rent.

  • HSBC, Europe’s largest bank, reported a 96 percent drop in profit in the second quarter to $192 million, as the bank increased provisions for bad loans by $3.8 billion. The bank, which does almost half of its business in Asia, also confirmed plans to speed up a restructuring plan that would cut 35,000 jobs.

  • Marathon Petroleum, the largest U.S. independent refiner, announced Sunday that it had sold its Speedway gas station chain to the Japanese retail group that owns 7-Eleven for $21 billion in cash. The sale of Speedway, one of the country’s largest convenience store chains with nearly 4,000 outlets, is the biggest corporate deal in the oil sector since the coronavirus slashed demand for fuel early this year.

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