Update on the latest business

FINANCIAL MARKETS

Wall Street sinks again as worries about economy weigh

NEW YORK (AP) — Wall Street is falling in another erratic day of trading, weighed down by worries about a slow recovery for the economy.

The S&P 500 was down 2.3% at midday, with the sharpest losses coming for stocks that most need a healthy economy for their profits to grow. Trading was volatile, and the index went from an early loss of 1.1% to a gain of 0.1% and back to more losses, all in the span of 90 minutes. The Dow Jones Industrial Average was down 2.4% and the Nasdaq composite was down 2.6%.

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Oil companies and other energy producers had some of the sharpest losses.

Treasury yields were also lower in another sign of pessimism about the economy and inflation, after Federal Reserve Chairman Jerome Powell warned about the threat of a prolonged recession.

PRODUCER PRICES

US wholesale prices drop record 1.3% in April

WASHINGTON (AP) — Wholesale prices slid a record 1.3% in April led by a 19% plunge in the cost of energy, further signaling the potential threat of deflation in the United States. The Labor Department said Wednesday that its producer price index, which measures inflation before it reaches the consumer, fell by the largest level on records dating to 2009. That follows a Tuesday report showing consumer prices declined 0.8% in April. The decline of prices at both the retail and wholesale levels raise concerns that the seismic evaporation of demand brought on by a pandemic could ignite a destabilizing bout of deflation, something not seen in the United States since the economic collapse of the 1930s.

FEDERAL RESERVE-POWELL

Powell warns of a possible sustained recession from pandemic

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell says the threat of a prolonged recession remains and urged Congress and the White House to act further to prevent long-term economic damage from the viral outbreak.

Both the Fed and Congress have taken dramatic steps to counter the economic downturn resulting from the widespread shutdown of the U.S. economy. But Powell said Wednesday there still could be widespread bankruptcies among small business and extended unemployment for many.

Powell also said that the Fed is not considering taking interest rates below zero, as some investors have been speculating recently.

VIRUS OUTBREAK-GLOBAL ECONOMY

UN forecasts pandemic to shrink world economy by 3.2 percent

UNITED NATIONS (AP) — The United Nations is forecasting that the coronavirus pandemic will shrink the world economy by 3.2 percent this year, the sharpest contraction since the Great Depression in the 1930s.

The U.N.’s mid-year report released Wednesday said COVID-19 is expected to slash global economic output by nearly $8.5 trillion over the next two years, wiping out nearly all gains of the last four years. In January, the U.N. forecast a modest growth of 2.5 percent in 2020. The report said the pandemic is also likely to push an estimated 34.3 million people below the extreme poverty line in 2020.

VIRUS OUTBREAK-PELOSI AP INTERVIEW

AP Interview: Pelosi: Americans ‘worth it’ on $3T virus aid

WASHINGTON (AP) — House Speaker Nancy Pelosi defended the stunning $3 trillion price of tag of Democrats’ pandemic relief package Wednesday as what’s needed to confront the “villainous virus” and economic collapse. “The American people are worth it,” Pelosi told The Associated Press. In an interview with AP, Pelosi acknowledged the proposal is a starting point in negotiations with President Donald Trump and Republicans. They have flatly dismissed the coronavirus relief bill. It’s headed for a House vote Friday. As the pandemic rages, Pelosi had just one message for Trump: “Tell the truth.” She said this is the “biggest disaster” the country has ever faced. “We have to address in a big way,” she said. “The American people are worth it.”

VIRUS OUTBREAK-SMALL BUSINESS RELIEF-RESTAURANTS

Unforgivable? Restaurants fear big COVID-19 loan bills

NEW YORK (AP) — Restaurant owners across the country are worried that the government’s coronavirus relief loans won’t live up to their promise of forgiveness.

Rules written by the Small Business Administration require companies to use their loan money within a specific time period and for specific purposes. But many restaurants that are still unable to reopen or whose revenue has fallen sharply due to social distancing restrictions can’t meet the SBA requirements, and that could force many of them to repay part of their loans within two years.

Congress has proposed some changes that give businesses more time to spend the loan money and more discretion over how to use it. 

VIRUS OUTBREAK-CHINA-US

US says Chinese hackers might be targeting virus researchers

WASHINGTON (AP) — The FBI and the Department of Homeland Security’s cyber division are warning that hackers backed by the Chinese government may be attempting to steal the work of researchers dealing with the response to the coronavirus pandemic. The two agencies issued a public service announcement of the potential threat on Wednesday. It comes amid heightened tensions between the two countries over the source of the outbreak and China’s response. The Department of Justice says in a statement that hackers have been attempting to obtain intellectual property and public health data related to vaccines, treatments and testing. China has denied it’s involved in any attempt to steal virus-related data.

VIRUS OUTBREAK-COUNTERFEIT MASKS

Counterfeit masks reaching frontline health workers in US

WASHINGTON (AP) — Counterfeit face masks that provide inadequate COVID-19 protection have been distributed to frontline health care workers across the country.

An Associated Press investigation has tracked the masks to a U.S.-certified factory in China where legitimate medical masks are made. Adding to the confusion, millions of masks now considered inadequate for medical protection entered the U.S. and are now in use because of the federal government’s relaxed standards.

Meanwhile, state and local governments, hospitals, private caregivers and well wishers have spent hundreds of millions of dollars on the flawed masks. Before the pandemic, N95 masks sold for about 60 cents each. Today they’re priced as high as $6 apiece.

VIRUS OUTBREAK-MEAT EXPORTS

US meat exports surge as industry struggles to meet demand

OMAHA, Neb. (AP) — U.S. meat exports are surging this spring even as the processing industry is struggling to meet domestic demand because of coronavirus outbreaks at processing plants that have sickened hundreds of workers. Although the situation could cause concern that American workers are risking their health to meet foreign demand, experts say it shouldn’t because much of the meat sold to other countries is cuts that Americans generally don’t eat. And at least one of the four major processors says it has reduced exports during the pandemic. The meat industry says that if companies manage to keep plants operating, there should be plenty of supply to satisfy both the U.S. and export markets.

VIRUS OUTBREAK-MEXICO

Prodded by US, Mexico aims to restart industrial plants

MEXICO CITY (AP) — Mexican President Andrés Manuel López Obrador pledged Wednesday to begin reopening Mexico’s economy next week, even as the country saw its largest one-day jump in coronavirus cases, hospitals are reeling, and testing remains inadequate.

Economy Secretary Graciela Marquez said the move would be “gradual, orderly and cautious,” and that by May 18, industries like construction, mining, and car and truck manufacturing would be allowed to resume. A lockdown that began in March will remain in place, but more industries are now being classified as “essential.”

Mexico has been under pressure from U.S. officials to reopen auto plants, in particular, because without them, integrated supply chains would make it hard for plants in the U.S. and Canada to reopen.

VIRUS OUTBREAK-TESLA

Dispute over reopening California Tesla factory may be over

UNDATED (AP) — A dispute between Tesla and San Francisco Bay Area authorities over the reopening of a factory in the face of coronavirus shutdown orders may be coming to an end. The Alameda County Health Department announced on Twitter late Tuesday that the Fremont, California, plant will be able to go beyond basic operations this week. It can start making vehicles Monday — as long as it delivers on worker safety precautions. It wasn’t clear from the statement whether Tesla would face any punishment for reopening last Monday in defiance of county orders.

COAL-CLIMATE CHANGE

States, tribe seek to suspend coal sales from US lands

BILLINGS, Mont. (AP) — A coalition of U.S. states, environmentalists and an American Indian tribe are seeking to revive a moratorium on coal sales from public lands in the West. The moratorium was imposed under former President Barack Obama then dropped by the Trump administration as part of its drive to boost U.S. energy production.

A Wednesday hearing in the dispute was scheduled in U.S. District Court in Montana. The case centers on whether the Trump administration looked closely enough at climate change and other impacts from burning coal. A years-long decline in U.S. coal production has accelerated during the coronavirus pandemic but lease sales continue.

CLINTON-SIMON AND SCHUSTER CEO

Hillary Clinton pays tribute to late CEO of Simon & Schuster

NEW YORK (AP) — Hillary Clinton is mourning the death of Simon & Schuster CEO Carolyn Reidy, whose publishing house has been working with Clinton since she was first lady in the 1990s. Clinton said in an email statement Wednesday to The Associated Press that Reidy “brought compassion, grit and creativity to every project she touched.”

Clinton’s books with Simon & Schuster include the best-selling memoirs “Living History” and “What Happened.” Last fall, she and daughter Chelsea Clinton collaborated on “The Book of Gutsy Women: Favorite Stories of Courage and Resilience.”

Reidy died of a heart attack Tuesday at age 71.

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