Update on the latest business

FINANCIAL MARKETS

Stocks mixed at midday

NEW YORK (AP) — Stock indexes have turned mixed in early afternoon trading on Wall Street as investors weigh another batch of data showing how the business shutdowns are ravaging the economy.

The S&P 500 was flat after being down 1.3% in the early going. The Dow Jones Industrial Average was down slightly, while the Nasdaq composite edged higher.

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The government reported that retail sales sank a record 16% in April, the second steep decline in a row as store closures kept shoppers away. The Federal Reserve also reported that industrial production plunged a record 11.2% in April. Germany’s economy shrank in the first quarter, meaning that Europe’s largest economy is in a recession.

RETAIL SALES

US retail sales plunged a record 16% in April as virus hit

BALTIMORE (AP) — U.S. retail sales tumbled by a record 16.4% from March to April as business shutdowns caused by the coronavirus kept shoppers away, threatened stores across the country and weighed down a sinking economy. The Commerce Department’s report on retail purchases showed a sector that has collapsed so quickly that sales over the past 12 months are down a crippling 21.6%. The sharpest drops from March to April were at clothiers, electronics stores, furniture stores and restaurants. A long-standing migration of consumers toward online purchases is accelerating, with that segment posting an 8.4% monthly gain. Measured year over year, online sales surged 21.6%.

INDUSTRIAL PRODUCTION

Industrial production plunges unprecedented 11.2% in April

WASHINGTON (AP) — American industry suffered the most severe plunge on record last month with factories, mines and utilities battered by the coronavirus pandemic. The Federal Reserve said Friday that its industrial production index tumbled a record 11.2% in April. Manufacturing output also posted a record drop — 13.7% — as production of cars, trucks and auto parts plummeted more than 70%. Production of aerospace and other transportation products, metals and furniture fell around 20%. Output dropped 6.1% at mines and 0.9% at utilities. The implosion of the U.S. industrial sector was not unexpected, but the scale of the decline shocks the senses. Jennifer Lee, a senior economist at BMO Capital Markets, said “one can’t help but grimace.”

JOB OPENINGS

U.S. layoffs surged to record high of 11.4 million in March

WASHINGTON (AP) — The Labor Department says layoffs soared in March to a record high of 11.4 million after state and local governments closed restaurants, bars, movie theaters and other nonessential businesses as the viral outbreak intensified. Job openings and hiring both fell sharply, though those changes weren’t nearly as dramatic as layoffs, which rose more than six-fold. The number of available jobs fell nearly 12% to 6.2 million. The number of hires declined 13%, to 5.2 million.

VIRUS OUTBREAK-AUTO INDUSTRY-JOBS

Auto workers’ tenuous return a ray of hope in jobs crisis

DETROIT (AP) — The U.S. auto industry is defying a wave of layoffs that has sent the job market into its worst catastrophe ever. Automakers are restarting factories next week that were closed by the coronavirus and bringing back an estimated 133,000 workers. It’s not a full return to normal and it could be temporary if people don’t start buying vehicles again. But automakers say there’s enough pent-up demand, especially for pickup trucks, to get the factories humming again. Looming in the background is an economy decimated by the pandemic. Nearly 3 million laid-off workers applied for unemployment benefits last week, raising the total seeking aid to about 36 million.

VIRUS-OUTBREAK-TYSON FOODS

Tyson Foods closes 2 poultry plants for cleaning

UNDATED (AP) — Tyson Foods is temporarily closing two plants at a North Carolina complex for cleaning amid the COVID-19 outbreak.

Tyson Foods spokesman Derek Burleson says one of two fresh meat plants and a food-service plant at the Wilkesboro complex are closed from Thursday to Tuesday. A third Wilkesboro plant, which also processes fresh poultry, will continue limited operations.

The closures will allow “additional deep cleaning” due to sick workers and quarantine-related absences. The company says staff will have additional virus testing, protective gear, symptom screening and access to nurse practitioners. The complex employs approximately 3,000 people. Statewide, health officials reported more than 1,600 virus cases as of Thursday at meat-processing plants in 17 counties.

JC PENNEY

Penney forestalls bankruptcy filing

UNDATED (AP) — J.C. Penney forestalled a bankruptcy filing Friday after making a $17 million interest payment. The retailer had skipped an interest payment of $12 million in mid-April, kicking off a 30-day grace period. Another non-payment would have put Penney into default.

The payment comes as reports are swirling around an expected bankruptcy filing. Neil Saunders, managing director of GlobalData Retail, says Penney needed to show “good faith” if it wants cooperation of lenders as it goes into bankruptcy and seeks to raise money for the process.

J.Crew, Neiman Marcus and Stage Stores have already filed for Chapter 11 this month.

VIRUS OUTBREAK-CONGRESS

House to vote on more virus aid, despite GOP skeptics

WASHINGTON (AP) — Democrats are pushing Congress’ biggest coronavirus relief bill yet toward expected House passage. The measure is a $3 trillion behemoth that they say a beleaguered country badly needs. Most Republicans oppose it say it’s simply a bloated election-year Democratic wish list. Democratic leaders were pressing ahead despite grumbling from moderates about the measure’s massive price tag and liberals who wanted bolder steps, like money to cover workers’ salaries.

The bill will never pass the GOP-run Senate or get President Donald Trump’s signature. House Speaker Nancy Pelosi has already said the 1,815 measure is Democrats’ opening offer in what is expected to lead to bipartisan negotiations.  

HUAWEI-SANCTIONS

U.S. ramps up sanctions on Chinese tech giant Huawei

WASHINGTON (AP) — The U.S. government is imposing new restrictions on Chinese tech giant Huawei (WAH’-way) by limiting its ability to use American technology to build its semiconductors. The Commerce Department said Friday the move aims to cut off Huawei’s undermining of existing U.S. sanctions. The new restriction is separate from an ongoing Trump administration reprieve on U.S. technology sales to Huawei.

The U.S. government blacklisted the Chinese tech company a year ago, deeming it a national security risk, but the limited reprieve allows wireless companies to keep offering service in remote parts of the U.S. The Commerce Department said this week that reprieve is being extended for another 90 days. Numerous loopholes have been exploited, especially as U.S. companies continued to supply Huawei with chips made outside the United States.

AUSTRALIA-CHINA TRADE

China uses trade as weapon to silence virus criticism

WELLINGTON, New Zealand (AP) — Trying to silence criticism over the coronavirus pandemic, China is deploying a well-used weapon — trade sanctions. Beijing has blocked some imports of Australian beef after Prime Minister Scott Morrison’s government, endorsed by Washington, called for a robust inquiry into the origins of the outbreak and rebuffed Chinese demands to back off. The move is the first time Beijing has used access to its huge markets as leverage in its campaign to deflect blame for the outbreak. But it has used the tactic regularly against governments from Norway to Canada in political disputes over the past decade.

FACEBOOK-GIPHY

Facebook buys Giphy, popular tool for creating animated GIFs

UNDATED (AP) — Facebook has bought Giphy, a popular tool for creating the animated images known as GIFs that pepper conversations around the internet.

The companies did not disclose financial terms. Citing unnamed people familiar with the matter, Axios said the deal is valued around $400 million.

Facebook said in a blog post Friday that it plans to integrate Giphy into Instagram but added that Giphy will still work outside of Facebook’s properties. The company said about half of Giphy’s traffic comes from Facebook’s apps — Instagram, Facebook, Messenger and WhatsApp. Giphy is also widely used on Twitter and in messaging apps.

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