Friday, June 19, 2020
A Strong Week. U.S. stock indexes on Friday gave up strong early gains to close mostly lower on the session, after the World Health Organization signaled that the coronavirus pandemic remains a deadly threat, and Apple said it will reclose nearly a dozen stores due to rising case counts. But major indexes logged solid weekly gains. The Dow Jones Industrial Average finished 207 points, or 0.8%, lower Friday at 25,871, the S&P 500 index closed 0.6% lower at 3098, while the Nasdaq Composite Index finished virtually unchanged at 9946. For the week, the Dow booked a 1% gain, the S&P 500 returned 1.9% and the Nasdaq notched a 3.7% advance. Friday marked quadruple witching, which occurs on the third Friday of the month in March, June, September, and December and can cause higher volumes and volatility as single-stock options, single-stock futures, and stock-index options and stock-futures all expire. In corporate news, Shares of Norwegian Cruise Line Holdings, Carnival, and Royal Caribbean Cruises tumbled after the Cruise Lines International Association announced a voluntary suspension of operations from U.S. ports until Sept. 15 due to the Covid-19 outbreak. The current no-sail order had been set to expire on July 24.
Apple Is Shutting Stores in 4 States as Infections Rise
Apple said Friday it was temporarily shutting 11 stores in four U.S. states due to concern about rising infections from Covid-19.
In a statement to Barron’s, Apple said that it was closing locations in Florida, North and South Carolina, and Arizona, beginning Saturday. The company will close two stores in Florida and North Carolina, one store in South Carolina, and six stores in Arizona.
AMC Theatres Reverses Face Mask Policy After Outcry
AMC Theatres, the biggest cinema chain in the U.S., said Friday it will require all guests to wear face masks when it reopens its cinemas across the U.S. on July 15. The Leawood, Kansas-based company said it made the decision after listening to its customers and to scientific advisors, who recommend face masks to stop the spread of the coronavirus illness Covid-19.
The announcement comes after AMC CEO Adam Aron told Variety on Thursday that the company would not force customers to wear face masks, as he did not want his company to be drawn into “a political controversy.”
Jobless Claims Tick Lower
The pace of layoffs continues to moderate as businesses across the country reopen, though the still-high number of Americans filing for unemployment benefits shows how long of a road the labor market has to recovery.
In the latest week, 1.51 million people filed jobless claims on a seasonally adjusted basis, the Labor Department said Thursday, down from a revised 1.57 million a week earlier but higher than the 1.2 million economists polled by FactSet anticipated. Those continuing to claim unemployment insurance slipped to 20.54 million from 20.61 million, also higher than the 19.85 million economists predicted.
Fed Chief Touts Early Signs of Recovery, but Warns of Significant Uncertainty
Despite recent signs of improvement and massive stimulus efforts, the U.S. economy faces long-term damage from the coronavirus pandemic, Federal Reserve Chairman Jerome Powell said at the start of his two-day semiannual testimony before Congress.
In his comments delivered Tuesday to the Senate Banking Committee, Powell warned that significant uncertainty remains about the timing and strength of the U.S. economic recovery as current levels of output and employment remain far below their prepandemic levels. Much of that uncertainty, he said, stems from the path of the disease and the effects of measures to contain it.
Target Is Raising Wages. Here’s What It Means for Other Retailers.
Target announced that it’s raising wages for its workers. Its peers will likely have to follow suit, argues Credit Suisse.
On Wednesday, Target said that it would permanently boost its starting wage for U.S. workers to $15, while also giving one-time bonuses to some hourly workers for their efforts during the pandemic. This will coincide with other benefits, including free virtual doctor visits and extended paid leave for employees.
Justice Department Proposes Limiting Internet Companies’ Protections
The Justice Department proposed a rollback of legal protections that online platforms have enjoyed for more than two decades, in an effort to make tech companies more responsible in how they police their content.
The department’s changes, unveiled Wednesday, are designed to spur online platforms to be more aggressive in addressing illicit and harmful conduct on their sites, and to be fairer and more consistent in their decisions to take down content they find objectionable, a Trump administration official said.
U.S. Brands Aunt Jemima and Uncle Ben’s to Change Amid Protests
Amid nationwide protests against racism, major U.S. food companies on Wednesday said they would change the Aunt Jemima and Uncle Ben’s brands, both of which feature African American mascots.
PepsiCo said it would end entirely the Aunt Jemima line of pancake syrup and batter adorned with the face of a black woman, while Mars plans to “evolve” the Uncle Ben’s brand of rice dishes that uses a black man as its logo.
Retail Sales Had Their Biggest Jump Ever. What That Says About the Recovery.
Americans ramped up spending on retail items in May after months of store closures, one of the best signs yet that the economic recovery is under way.
Total retail sales jumped 17.7% last month from April, when sales dropped 14.7% from March, the Commerce Department said Tuesday. The result—the highest reading ever—was much better than expected. Economists polled by FactSet predicted an increase of 8.1%. Excluding more volatile items such as autos, building materials and gasoline, sales rose 11% in May, compared with a 12.4% decline in April and above the 5.5% consensus estimate.
PG&E to Exit Bankruptcy After Wildfires, Still Saddled With Debt
A federal judge gave PG&E Corp. a green light to exit bankruptcy, but the California utility is leaving chapter 11 more leveraged than ever after settling billions of dollars in liability claims from wildfires sparked by its equipment.
At a hearing Tuesday in the U.S. Bankruptcy Court in San Francisco, Judge Dennis Montali said he intends to approve PG&E’s $59 billion reorganization plan, which involves issuing huge amounts of new debt and equity to help pay for fire-related claims totaling $25.5 billion.
Apple Faces Two EU Antitrust Probes. One Was Sparked by a Spotify Complaint.
The European Union has opened two antitrust probes into Apple over its Apple Pay payment system and App Store rules.
The European Commission’s investigation into Apple’s app store comes in response to complaints made by music streaming service Spotify and an e-book/audiobook distributor, it said on Tuesday. The regulator said it would investigate whether the mandatory use of Apple’s in-app purchase systems and restrictions on developers informing iPhone and iPad users of cheaper alternatives violate EU competition rules.
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