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Home / Business / Stocks rise as the Washington aid package progresses: live updates

Stocks rise as the Washington aid package progresses: live updates



Boeing rose almost 90 percent this week. American Airlines jumped by almost 50 percent. Carnival Corporation has also risen almost as much.

Wall Street was in rally mode when investors offered shares in companies to receive support from Washington’s $ 2 trillion coronavirus relief law.

With the advance of the package by the Senate, profits continued on Thursday. The S&P 500 rose 6.2 percent, even after the government reported an astonishing rise in unemployment claims for workers.

As has been the case throughout the week, investors focused on companies likely to receive assistance from the spending plan approved by the Senate on Wednesday night. The House of Representatives and President Trump are expected to agree to this.

Boeing increased nearly 14 percent on Thursday because the package specifically earmarks $ 17 billion for “companies that are critical to national security” – a language that is at least partially applicable to the aircraft manufacturer and major Pentagon Contractor was intended.

Other companies that were badly hit in the early days of the coronavirus outbreak continued to grow. Americans and Delta Airlines rose by almost 2 percent. The carnival grew by around 14 percent.

Thursday’s gains also spread to Europe, with key benchmarks reversing their losses to end the day significantly higher. The FTSE 100 in the UK rose more than 2 percent.

The three-day rally lifted the S&P 500 by more than 17 percent, according to Howard Silverblatt, senior index analyst for S&P Dow Jones Indices. This is the best run since 1933. Most of these gains came on Tuesday, when stocks rose 9.4 percent, in the growing hope that the big stimulus package would be an economy crippled by the outbreak and efforts to curb the spread of the virus would support.

But the economic crisis is perhaps the most daunting one since World War II. A government report on Thursday showed a record rise in weekly unemployment claims jumped from 282,000 in a week to almost 3.3 million.

So far, the record was set in the fall of 1982, when 695,000 Americans applied for benefits within a week. At that point, the United States had been in recession for more than a year and the unemployment rate had exceeded 10 percent.

The numbers released by the Department of Labor on Thursday are some of the first hard data on the economic burden of the coronavirus pandemic that has brought entire sectors of American life to a standstill.

General Motors said on Thursday that it would indefinitely shut down production at its North American factories, lay off 6,500 employees and cut executive salaries, signaling that the automaker believes coronavirus will seriously impact its business.

“We are actively monitoring the situation and the possible impact of the crisis on consumer demand,” said a G.M. Spokesman David Barnas said. “If we can safely resume production, we will.”

G.M. and other automakers have closed their North American plants in recent days to prevent the virus from spreading. Most had hoped to resume production next week, but have now scaled back those plans.

Ford Motor plans to resume production at several plants in the United States on April 14 and one in Mexico on April 6. Fiat Chrysler said its plants would remain closed until April 14, “depending on the various government contracts that remain in place and the readiness of each plant to return to production. Toyota Motor said its North American plants would remain closed at least until April 17.

The United Automobile Workers union has urged G.M., Ford and Fiat Chrysler to keep their factories closed.

“The only guideline in a boardroom should be to ask management:” Would I send my family – my son or daughter – to the plant and be 100 percent sure that they are safe? “Said Rory Gamble, the union’s president, in a statement.

To reduce costs, G.M. said it would stop developing some new models. Executives will cut wages by 5 percent or 10 percent and postpone 20 percent of their salaries to pay them later. The 6,500 employees who go on vacation receive 75 percent of their normal wages.

Ford has taken similar steps and postponed the salaries of its 300 best executives.

THE HELP PLAN

Legislators restrict the remuneration of managers whose companies receive state support under the law to address one of the criticisms of bailouts of banks and other companies during the 2008 financial crisis. But the limits won’t lift the multi-million dollar payday for company bosses.

  • Executives who earned more than $ 3 million in 2019 could receive $ 3 million plus half of all amounts over $ 3 million. As a result, a director who earned $ 20 million in 2019 would receive compensation of $ 11.5 million or $ 3 million plus half of $ 17 million a year.

  • Supported companies are only allowed to increase the remuneration of executives who earned $ 425,000 in 2019 to $ 3 million one year after the end of government support.

The package includes more than $ 370 billion of much-needed help for small businesses. The law allows banks to grant loans directly to companies, and these loans are secured by the Small Business Administration.

  • It may take at least two weeks for the money to flow after the bill is signed.

  • Small businesses would not have to pay back part of the loans that were spent on employee payments, a mortgage, rent, or utilities. The banks that lend the money would be reimbursed by the Ministry of Finance.

The role of banks in the bailout bill is to provide companies and taxpayers with much-needed capital. “This is about incentivizing banks to lend,” said Mike Mayo, who examines large banks for Wells Fargo.

  • To ensure that access to cash is not hampered by a number of new customer needs or market developments, the Fed has encouraged banks to use the so-called discount window, lending to major banks, and at least eight major financial institutions.

  • Banks can refuse to comply with new federal accounting standards for estimating future credit losses during the statutory period. This rule is called the current expected credit loss.

  • The law revives a crisis program to guarantee all bank debts. This brings taxpayers back on the hook when a bank gets into trouble.

With theater chains across the country closed and the box office declared dead, the National Association of Theater Owners knew that the only way their companies could survive was to receive a federal aid package.

Therefore, the trade association carried out an aggressive lobby campaign, in which two law firms and a PR agency were employed. The group also coordinated an aggressive letter campaign and phone call, in which theater owners of all sizes contacted congress members.

But maybe the piece of resistance was the opinion article that filmmaker Christopher Nolan wrote for the Washington Post and reminded Congress that the film business wasn’t just about Hollywood and celebrities. Nolan called the cinema experience “an important part of social life and wrote:” The film business is about everyone: the people who work on the concession stands, operate the equipment, take tickets, book films, sell advertisements and clean bathrooms in the local theaters . “

“We plastered it all over Congress,” said the theater group’s executive director, John Fithian. “Many of these members are fans of films and cinemas. Hearing from the directors was a moving thing for us. “

THE HELP PLAN

How much money will individuals receive – and how will it be distributed? How are Unemployment benefit changes? Are gig workers included?

The Senate unanimously passed a $ 2 trillion stimulus plan on Wednesday to support tens of millions of coronavirus-affected American households. Its components include payments to individuals, expanded unemployment insurance for the self-employed, loans to small businesses and nonprofits, temporary changes to the rules for withdrawing pension accounts, and more.

The House of Representatives was expected to quickly take up and forward the law and send it to President Trump for signature.

We have collected answers to frequently asked questions about the invoices.

The coverage was provided by Marc Tracy, Neal Boudette, David Gelles, Niraj Chokshi, Vindu Goel, Kate Kelly, Peter Eavis, Neil Irwin, Tara Siegel Bernard, Ron Lieber, Clifford Krauss, Ivan Penn, Matt Phillips, Peter S. Goodman and Patricia composed by Cohen, Edmund Lee, Tiffany Hsu, Kevin McKenna, Ben Casselman, Geneva Abdul, Amie Tsang, Carlos Tejada, Alexandra Stevenson, Su-Hyun Lee and Heather Murphy.


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