Financial stocks are the biggest weight on market, with JPMorgan Chase down 2.1% and Wells Fargo down 3.4%. Banks have been some of the hardest-hit stocks this year on worries that all the job losses caused by the recession will saddle them with mountains of bad loans. Energy stocks are also down after oil prices gave up some of their gains from earlier in the week. Tech stocks are rising.
ADP: More than 20 million jobs vanished in April
NEW YORK (AP) — A private survey finds that U.S. businesses cut an unprecedented 20.2 million jobs in April as the coronavirus outbreak shut down offices, factories, schools, construction sites and stores.
Payroll company ADP says the leisure and hospitality sector shed 8.6 million workers last month. Trade, transportation and utilities let 3.4 million people go. Construction firms cut nearly 2.5 million jobs, while manufacturers let go of roughly 1.7 million employees.
Wednesday’s report comes two days ahead of the official monthly figures from the U.S. Labor Department.
VIRUS OUTBREAK-SMALL BUSINESS JOB LOSSES
Small businesses slash more than 11 million jobs in April
NEW YORK (AP) — The nation’s small businesses slashed more than 11 million jobs in April as they were forced to close or suffered steep revenue losses amid the coronavirus outbreak.
The tally from ADP counts jobs lost at the payroll provider’s business customers with under 500 workers. The smallest companies, those with fewer than 20 workers, cut nearly 3.4 million jobs and those with 20 to 49 employees cut 2.6 million.
The Labor Department has reported that more than 30 million people have sought unemployment benefits since the virus hit.
EU forecasts ‘recession of historic proportions’ this year
BRUSSELS (AP) — The European Union is predicting “a recession of historic proportions this year” due to the impact of the coronavirus. In its first official forecast of the damage the disease has inflicted on its economy, the EU predicted a the 27-nation bloc will see its economy contract by 7.5% this year, before growing by about 6% in 2021. The forecast says the group of 19 nations using the euro as their currency will see a record decline of 7.75% this year, and grow by 6.25% in 2021.
More than 1.1 million people have contracted the virus across Europe and over 137,000 have died.
With factories dark, GM profit slumps 88%; 2Q likely worse
DETROIT (AP) — General Motors’ first-quarter net income fell 88%, but it still managed to make $247 million despite the arrival of the global coronavirus pandemic.
U.S. automakers suspended production in much of the world in late March. For GM, that clipped revenue for the quarter by 6%, to $32.7 billion, but that’s not as bad as industry analysts had been expecting.
The company essentially has been without revenue since early March, meaning that the second quarter almost certainly will be worse. However, GM plans to reopen most of its U.S. and Canadian factories starting May 18, and Chief Financial Officer Dhivya Suryadevara said there are signs that demand for cars and trucks exists despite the pandemic.
The automaker has suspended its full-year financial guidance, and Suryadevara conceded the second quarter will be tough.
Rush to fill medicine cabinets ahead of outbreak fuels CVS
UNDATED (AP) — A rush to fill medicine cabinets and pantries ahead of the rapidly spreading COVID-19 pandemic helped fuel a surging first-quarter profit for CVS Health. The outbreak also lifted the company’s insurance business because patients used the health care system less. Overall, CVS Health’s net income jumped 41% in the quarter to about $2 billion. But company leaders warned on Wednesday that the pandemic’s impact on their business will be complex as the year evolves. CVS Health operates one of the nation’s largest drugstore chains. It also sells insurance and runs a large pharmacy benefit management business.
NEW YORK TIMES
NYT says it can ‘ride out’ virus as subscriber numbers boom
NEW YORK (AP) — The New York Times Co. added new digital subscribers at a record rate as the coronavirus spread in the first quarter, helping offset shrinking ad revenues.
The newspaper publisher said it was “well positioned to ride out this storm and thrive in a post-pandemic world” because of its shift to relying more on subscriptions from readers than on advertising. While the Times and a few other national publishers like the Wall Street Journal have successfully built up digital subscription models, local news publishers are largely struggling to do so. Many news organizations are cutting pay, jobs or even shutting down as advertising craters.
Uber to lay off 3,700 workers and CEO to waive salary
NEW YORK (AP) — Uber says it will lay off 3,700 full-time workers and its CEO will forgo pay as the ride-sharing company struggles with the coronavirus. The San Francisco company says the reduction in customer support and recruiting workers will cost it about $20 million in severance and other termination benefits. Uber Technologies Inc. has already imposed a hiring freeze and has offered up to 14 days of financial assistance to drivers and delivery workers who were diagnosed with COVID-19 or placed in quarantine.
The company, which is scheduled to report quarterly financial results after the bell Thursday, said it is evaluating other cost cuts.