Estimated read time: 7-8 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
FINANCIAL MARKETS
Stocks, yields slide as fear about virus grips markets again
NEW YORK (AP) — Fear swept back through financial markets Thursday, and stocks fell sharply on worries about the fast-spreading virus outbreak. It's the latest shudder in Wall Street's wildest week in more than eight years.
Major indexes lost roughly 3% in afternoon trading Thursday, and Treasury yields sank deeper toward more record lows in their latest yo-yo move. The slide nearly wiped out the surge that stocks had ridden just a day earlier, in part on hopes that more aggressive moves by governments and central banks around the world could help contain the economic fallout.
The S&P 500 is on track to move more than 2% a fourth straight day, the first time that would have happened since the summer of 2011.
Losses are widespread, and all 11 sectors that make up the S&P 500 index fell. Energy and financial stocks had the sharpest losses, at 4.9%.
Gold climbed as investors piled into investments seen as safe. It rose $26.20 to $1,669.20 per ounce.
Crude oil fell even though OPEC members proposed a deep cut of production to shore up prices. Oil has been sliding on worries that a global economy weakened by the virus will burn less fuel.
MORTGAGE RATES
A record low on average 30-year fixed mortgage: 3.29%
WASHINGTON (AP) — The average rate on a 30-year fixed mortgage has hit a record low of 3.29%, driven down by investors shifting money into the safety of U.S. Treasurys as the coronavirus outbreak has deepened.
Mortgage buyer Freddie Mac said Thursday that the average on the benchmark 30-year loan tumbled this week from 3.45% last week. The new rate is the lowest since Freddie Mac started tracking it in 1971. The average rate on a 15-year fixed mortgage sliding this week to 2.79% from 2.95% last week. The 15-year rate is now at its lowest level since 1991.
The fall in long-term mortgage rates came in a week when the Federal Reserve made a surprise emergency cut in its benchmark interest rate to aid the economy in the face of the spreading coronavirus.
PRODUCTIVITY
US productivity increases at 1.2% rate in fourth quarter
WASHINGTON (AP) — U.S. productivity rebounded in the final three months of last year but by a smaller amount than initially reported, while labor costs increased at a slower pace than first thought.
The Labor Department said Thursday that productivity grew at a seasonally adjusted annual rate of 1.2% in the fourth quarter. That was down slightly from an initial estimate of a 1.4% gain but still an improvement over a productivity decline of 0.3% in the third quarter.
Labor costs were up at a rate of 0.9% in the fourth quarter, lower than the 1.4% gain reported a month ago, but an acceleration from a tiny 0.2% increase in the third quarter.
For all of 2019, productivity was up 1.9%, the best annual showing in nearly a decade, since a 3.4% gain in 2010.
Productivity, the amount of output per hour of work, is a major ingredient in rising living standards because it allows employers to pay higher wages funded by the increased output.
VIRUS OUTBREAK-AIR TRAVEL
Industry group: Virus outbreak could cost airlines $113B
SINGAPORE (AP) — The International Air Transport Association says the virus outbreak that began in China could cost airlines as much as $113 billion in lost revenue due to the collapse of air travel.
Representatives of the airline industry group said Thursday after a working meeting in Singapore that the industry urgently needs help from governments in waiving some requirements, taxes and fees to alleviate the burden on struggling carriers.
The British regional airline Flybe stopped flying as of Thursday, done in by longstanding financial troubles and the impact of the worldwide blow to travel from the outbreak.
An earlier estimate just two weeks ago put the potential cost of the downturn in travel at less than $30 billion. That was before the number of cases outside China skyrocketed, taking the total to nearly 100,000. So far, more than 3,200 people have died of COVID-19, the disease caused by the new coronavirus.
OPEC MEETING
OPEC calls for big production cut, but will Russia agree?
VIENNA (AP) — The OPEC oil cartel is calling for a deep production cut to keep crude prices from falling further as disruption to global business from the coronavirus slashes demand from air travel and industry.
Oil ministers from the 14 OPEC countries decided at a meeting Thursday to push for a cut of 1.5 million barrels a day, or about 1.5% of total world supply.
It remains unclear, however, whether that can stabilize a market as demand is falling sharply because of the virus outbreak's impact on businesses around the world. OPEC's move appears aimed at keeping prices roughly where they are.
The OPEC proposal calls for its members to cut output by 1 million barrels a day, with another 500,000 barrels to be cut by non-member allies, like Russia, who have been coordinating production measures with the cartel in recent years. Members and non-members will meet Friday to decide. Russia's agreement is not certain, however.
EXXON-OIL PRICES
Exxon to cut activity in Permian Basin as oil prices plummet
NEW YORK (AP) — Exxon Mobil plans to reduce the number of oil rigs operating in an oil-rich region in the Southwest and may cut planned capital expenditures as the spreading coronavirus saps energy demand.
The price of a barrel of oil has fallen more than 20% since the start of the year, and 8% in the last month, with energy demand expected to shrink as the outbreak drags on the global economy.
Oil prices were already under pressure due to signs of a slowing economy at home and abroad. Energy demand dropped dramatically as flights to and from China were halted and factories slowed production.
Exxon will reduce the number of rigs in the Permian basin, a region that stretches across the border of New Mexico and Texas.
Exxon expects to produce 360,000 of oil per day in the Permian Basin this year, which is down from its previous estimate of 380,000 barrels per day. But the company says it’s on track to produce more than 1 million barrels per day from the Permian in 2024.
TRUMP-TEMPORARY WORKERS
Trump administration to allow more foreign temporary workers
WASHINGTON (AP) — The Trump administration said Thursday that it will allow an additional 35,000 temporary foreign workers to come to the U.S. to fill non-farm seasonal jobs amid a tight labor market.
The additional visas, on top of the 66,000 allowed in each year under U.S. law, is the highest annual total allowed under President Donald Trump.
A total of 10,000 of the additional H-2B visas will be set aside for the first time for people from Guatemala, El Salvador and Honduras because those countries agreed to work with the administration to take in people seeking asylum in the United States along its southern border, according to the Department of Homeland Security.
Season workers with H-2B visas are permitted to work in the U.S. for less than a year. They work in such areas as landscaping, construction, hotel and restaurant work and seafood and meat processing plants.
Many American businesses and politicians of both parties have called for an increase, especially amid the tight labor market.
UAW CORRUPTION
Former UAW President Gary Jones charged with corruption
DETROIT (AP) — Prosecutors on Thursday charged the former president of the United Auto Workers with corruption, alleging he conspired with others at the union to embezzle more than $1 million.
The federal government has been marching toward Gary Jones for months, after an embarrassing public search of his Detroit-area home and a series of guilty pleas from others in a sweeping investigation of UAW leaders living the high life.
Jones was president for about 1 1/2 years before quitting in November. He was charged with conspiracy in a document titled a criminal “information,” which signals that a guilty plea is likely.
Nine union officials and an official's spouse have pleaded guilty since 2017. The investigation began with the discovery that Fiat Chrysler money from a Fiat Chrysler-UAW job training center was stolen. It then stretched to embezzlement of union funds.
The court filing against Jones describes a scheme to pocket cash and enjoy luxuries, starting in 2010, long before he rose to the presidency. The cost: more than $1 million.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
