Update on the latest business

FINANCIAL MARKETS

Wall Street’s rally rolls into Day 4 on reopening hopes

NEW YORK (AP) — Stocks are rising again on optimism that the economy can climb out of its current hole more quickly than earlier feared.

The S&P 500 was up 1.1% in midday trading, heading for its fourth straight gain as lockdowns loosen around the world and raise hopes for a coming economic recovery. Treasury yields also pushed higher in a sign of improved confidence after reports suggested that while the U.S. economy is still getting pummeled, it may not be as bad as economists had feared.

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Companies that would most benefit from a growing economy led the market, continuing a recent trend as hopes rise that the economy and life in general can return closer to normal as business-shutdown orders lift.

Financial stocks in the S&P 500 jumped 4.1% for the largest gain among the 11 sectors that make up the index. Smaller stocks were also among the market’s biggest winners, as they often are when expectations are rising for the economy’s strength. The Russell 2000 index of small-cap stocks was up 3%.

ADP-JOBS REPORT

Survey: 2.76 million layoffs in May, far fewer than expected

BALTIMORE (AP) — U.S. businesses shed 2.8 million jobs in May, significantly less than the 9.3 million job losses that were expected.

The payroll company ADP reported Wednesday that businesses have let go of a combined 22.6 million jobs since March, with the bulk of the layoffs occurring in April. The virus forced employers to shutter offices, factories, gyms and schools, while demand for gasoline, clothing, airline tickets, hotel rooms and restaurant meals quickly vanished.

Barring a second wave of the outbreak and with some additional government support, Mark Zandi, chief economist at Moody’s Analytics, said the COVID-19 recession appears to have only lasted three months. On a call with reporters, Zandi said: “It will be the shortest recession on record, but it will be among the most severe.”

The damage was concentrated in two sectors. Manufacturers cut 719,000 jobs in May. The trade, transportation and utilities sector let go of 826,000.

ECONOMY-SERVICES

US service sector contracts for second month in May

WASHINGTON (AP) — The U.S. services sector shrank for a second month in May as the coronavirus pandemic triggered shutdowns and layoffs around the country.

Activity did rise from levels last month that had not been seen since the recession.

The Institute for Supply Management said Wednesday that its service sector index stood at 45.4 last month, up slightly from an April reading of 41.8.

Any reading below 50 signals that the service sector, where the majority of Americans work, is in contraction. The April decline broke a string of more than 10 years of expansion in the services sector.

US-CHINESE AIRLINES

Trump administration moves to block Chinese airlines from US

WASHINGTON (AP) — The Trump administration moved Wednesday to block Chinese airlines from flying to the U.S. in an escalation of trade and travel tensions between the two countries.

The Transportation Department said it would suspend passenger flights of four Chinese airlines to and from the United States starting June 16.

The decision was a response to China’s failure to let United Airlines and Delta Air Lines resume flights this week to China, which were suspended earlier this year in response to the coronavirus pandemic that started in China’s Wuhan province.

The Transportation Department said that China was violating an agreement between the two countries covering flights by each other’s airlines.

The department said President Donald Trump could put the order into effect before June 16.

EUROPE-ECONOMY

European jobless rate up modestly, Germany mulls stimulus

BERLIN (AP) — Europe’s unemployment rate ticked up modestly last month, contained by use of labor programs that have kept millions of workers on payrolls and as some people stopped looking for work.

Statistics agency Eurostat reports the jobless rate in the 19 countries that use the euro rose to 7.3% in April, the first full month when pandemic lockdowns hit the continent, from 7.1% in March, said Wednesday.

Europe’s rise in unemployment has been moderate by international standards because employers are making extensive use of government-backed short-time work programs that allows them to keep employees on the payroll while they await better times.

AUSTRALIA-ECONOMY

Pandemic brings 1st Australian recession in 29 years

CANBERRA, Australia (AP) — The coronavirus pandemic pushed Australia’s economy into recession for the first time in 29 years in the first quarter of the year, and the situation is expected to get worse.

Treasurer Josh Frydenberg said Wednesday the current June quarter will be the second in a row in which the Australian economy has contracted.

A recession is defined as at least two straight quarters of contraction. Data released on Wednesday showed the economy shrank 0.3% in the January-March quarter due to destructive wildfires and the early stages of Australia’s coronavirus lockdown.

Weak household consumption was a major factor behind the decline, as millions have lost their jobs.

VIRUS-OUTBREAK-EUROPE

Italy opens borders ahead of neighbors, beckoning tourists

ROME (AP) — Rome’s Leonardo da Vinci airport sprang back to life Wednesday as Italy opened regional and international borders in the final phase of easing its long coronavirus lockdown, but it was still an open question how other nations would accept Italian visitors.

Families and loved ones separated by the global pandemic could finally reunite but normalcy was a long way off.

Italy is the first European country to fully open its international borders, dropping the 14-day quarantine requirement for visitors. But most European nations see Italy’s move — which aims to boost its collapsed yet critical tourism industry — as premature. Many of them are moving to open only on June 15 — and some even much later than that.

RUSSIA-OIL SPILL

Emergency declared in Siberia after diesel fuel leak

MOSCOW (AP) — Russian President Vladimir Putin has declared a state of emergency in a region of Siberia after an estimated 20,000 tons of diesel fuel spilled from a power plant storage facility and fouled waterways.

The spill took place Friday at a power plant in an outlying section of the city of Norilsk, 1,800 miles northeast of Moscow. Booms were laid in the Ambarnaya River to block the fuel; the river feeds a lake from which springs another river that leads to the environmentally delicate Arctic Ocean.

Putin on Wednesday ordered officials to minimize the consequences of the spill. But Alexei Knizhnikov of the World Wildlife Fund’s Russia operation said the damage to fish and other resources could exceed 1 billion rubles. That’s about $13 million.

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