Update on the latest business

FINANCIAL MARKETS

Stocks charge higher on hopes for progress in fighting virus

UNDATED (AP) — Stocks charged higher around the world Wednesday following an encouraging report on a possible treatment for COVID-19.

The S&P 500 rose 2.8% in afternoon trading, and stocks in Europe also jumped after Gilead Sciences said its experimental drug proved effective against the new coronavirus in a major U.S. government study that put it to a strict test.

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The news about the drug hit markets at the same moment a report showed the U.S. economy shrank at a 4.8% annual rate in the first three months of the year, the worst showing since the financial crisis in 2008.

ECONOMY-GDP

Economy is sinking into recession, and analysts see no quick rebound

WASHINGTON (AP) — The U.S. economy shrank at a 4.8% annual rate last quarter as the coronavirus pandemic shut down much of the country and began triggering a recession that will end the longest expansion on record. And most economists agree there will be no quick rebound.

The Commerce Department says the gross domestic product, the total output of goods and services, posted a quarterly drop for the first time in six years. Forecasters say the drop in the January-March quarter will be only a precursor of a far grimmer GDP report to come on the current April-June period, with business shutdowns and layoffs striking with devastating force. The Congressional Budget Office has estimated that GDP will plunge this quarter at a 40% annual rate.

With the economy gripped by its worst crisis since the 1930s, Federal Reserve policymakers are expected to offer sweeping assurances that they will act as needed to help prevent the damage from growing even worse. Chairman Jerome Powell will hold his usual news conference virtually after the Fed issues its latest policy statement Wednesday afternoon. The Fed is not expected to unveil any new emergency programs.

VIRUS OUTBREAK-TREATMENT

Gilead drug proves effective against coronavirus in US study

UNDATED (AP) — U.S. government officials say an experimental drug has proved effective against the new coronavirus in a major study. Gilead Sciences’ remdesivir (rehm-DEHZ’-ih-veer) is the first treatment to pass such a strict test against the virus, which has killed more than 218,000 people since it emerged late last year.

The study was led by the U.S. National Institutes of Health and tested remdesivir versus usual care in more than 1,000 hospitalized coronavirus patients around the world. Results released Wednesday showed the drug reduced the time to recovery by 31%, or four days on average, compared to usual care. It is given through an IV and interferes with the virus’s ability to copy its genetic material. 

PENDING HOME SALES

Pending home sales sank 20.8% in March

BALTIMORE (AP) — U.S. home sales showed signs of collapsing in March, as the number of contract signs plunged sharply because of the coronavirus outbreak. The National Association of Realtors says its pending home sales index, which measures signed buyer contracts, plummeted a seasonally adjusted 20.8% in March from the prior month to a reading of 88.2. That is the lowest level since May 2011, when the housing market was still dealing with foreclosures and crashing prices from the Great Recession. Pending sales have fallen 16.3% from a year ago.

VIRUS OUTBREAK-CONGRESS

McConnell now open to state aid in next virus relief bill

WASHINGTON (AP) — Reversing course, Senate Majority Leader Mitch McConnell now says he is “open” to considering additional funds for state and local governments in the next coronavirus relief bill. Democrats want more than $500 billion to help states cover costs of police, fire and other front-line workers. The about-face from McConnell comes after governors criticized his suggestion that states should simply be allowed to go bankrupt. As Congress delves into the next round of aid, Democrats have a new proposal to federalize the nation’s medical supply chain. McConnell insists any new bill must include liability protections from an “avalanche” of lawsuits against businesses that reopen.

TRADE-NOTORIOUS MARKETS

Trump trade office adds Amazon to ‘notorious markets’ list

WASHINGTON (AP) — The United States for the first time added five of Amazon’s overseas operations to its list of “notorious markets’’ where pirated goods are sold. The e-commerce giant dismissed the move as part of the Trump administration’s “personal vendetta″ against it. The Office of the U.S. Trade Representative on Wednesday added the Amazon domains in Canada, France, Germany, India and the United Kingdom to its annual blacklist. USTR cited complaints from U.S. businesses that consumers can’t easily tell who is selling items on the Amazon platforms and that the e-commerce company’s procedures for removing counterfeit goods “can be lengthy and burdensome.’’ President Donald Trump has clashed repeatedly with Amazon and its founder, Jeff Bezos.

VIRUS OUTBREAK-AMAZON

Pandemic brings fortunes to Amazon – and headaches too

UNDATED (AP) — Amazon has spent years honing the business of packing, shipping and delivering millions of products to doorsteps around the world. Now it has a captive audience. With much of the globe in various stages of a lockdown because of the coronavirus pandemic, the world’s largest online retailer has become a lifeline to many shoppers. But it is also grappling with delivery delays and mounting complaints from workers who worry about contagion while on the job. Online research company Comscore reports that Amazon’s website hit 2.54 billion visitors for the entire month of March. That marks a 65% jump from the same period last year.

NFL STREAMING

NFL renews Thursday night streaming deal with Amazon

NEW YORK (AP) — The NFL has renewed its streaming deal with Amazon for Thursday night games for three years. Amazon Prime Video and Twitch also will have exclusive streaming rights to one additional regular-season game in 2020. Amazon Prime Video and Twitch will stream 11 Thursday night games broadcast by Fox, giving access to more than 150 million paid Prime members. The regular-season weekend game streamed on those outlets will be played on a Saturday in the second half of the schedule. That game will be made available on free television in participating teams’ markets.

EARNS-BOEING

Boeing to cut 10% of work force as 1Q revenue, profit slide

UNDATED (AP) — Boeing says it will cut about 10% of its work force and slow production of planes as it deals with the ongoing grounding of its best-selling plane and the coronavirus pandemic.

With air travel falling sharply because of the virus, airlines have delayed orders and deliveries of new planes, reducing Boeing’s revenue. The company announced the job cuts as it reported a loss of $641 million in the first quarter. It earned $2.15 billion in the same period last year. Revenue fell 26% to $16.91 billion. Boeing says jobs will be eliminated through a combination of voluntary exits and layoffs. They will be deepest in the division that makes airline jets, and less severe in the company’s defense and space unit. 

HEALTH INSURERS FORECASTS

Insurers stick to 2020 outlooks as COVID-19 pandemic spreads

UNDATED (AP) — Anthem and Humana are the latest health insurers to announce that they are sticking with their 2020 earnings forecasts, even as the COVID-19 pandemic forces companies in many other sectors to abandon outlooks. The pandemic has shut down large portions of the economy and made those annual forecasts mostly worthless. But insurers say they are still waiting to learn how the virus will hit their businesses. It spread too late in the United States to have much of an impact on first-quarter results. UnitedHealth Group and Centene also reaffirmed their forecasts earlier this month.  

NUCLEAR PLANT-SHUTDOWN

Curtain lowers on nuke plant a stone’s throw from Manhattan

ALBANY, N.Y. (AP) — One of the two operating reactors at an aging nuclear plant in the New York City area will shut down Thursday night. Federal regulators are considering the owner’s proposal to sell the Indian Point Energy Center along the Hudson River to a company that plans to demolish it. Democratic Gov. Andrew Cuomo had long sought the shutdown. He says the plant 24 miles north of Manhattan poses a risk to millions of people. An environmental group complains of fish kills, contamination, emergency shutdowns and vulnerability to terrorism. Owner Entergy Corp. cites low gas prices and operating costs in its decision to close.

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