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FINANCIAL MARKETS
Turbulent day for stocks after surprise rate cut
NEW YORK (AP) — Stocks are whipping up and down after the Federal Reserve swooped into the market with an emergency rate cut in hopes of shielding the economy from the effects of the fast-spreading virus.
Tuesday's surprise move gave stocks a strong, brief boost, but it took just 15 minutes for the gains to evaporate. After popping to a 1.5% gain shortly after the Fed's announcement, the S&P 500 swung between modest gains and losses for about an hour before turning decisively lower in the late morning.
Everything from bond yields to a gauge of traders' fear in the stock market swung sharply following the Fed's cut. Markets have been on edge for nearly two weeks, as the virus spreads beyond China and companies across continents and industry say they expect it to hit their profits.
Traders are debating how much the cut can help and whether more aid is coming to stabilize the market.
VIRUS OUTBREAK-FED
Virus spread prompts Fed to slash rates in surprise move
WASHINGTON (AP) — In a surprise move, the Federal Reserve cut its benchmark interest rate by a sizable half-percentage point in an effort to support the economy in the face of the spreading coronavirus.
Chairman Jerome Powell said at a news conference that the virus “will surely weigh on economic activity both here and abroad for some time.”
It was the Fed's first rate cut since last year, when it reduced its key short-term rate three times. It is also the first time the central bank has cut its key rate between policy meetings since the 2008 financial crisis and the largest rate cut since then.
The Fed's announcement of a steep rate cut signaled its growing concern that the coronavirus, which is depressing economic activity across the world, poses an escalating threat and could trigger a recession.
VIRUS OUTBREAK-G7
G7 pledges to use all tools to deal with virus
WASHINGTON (AP) — Seven major economies have pledged to use “all appropriate tools" to deal with the spreading coronavirus.
The group of major industrial countries, referred to as the G-7, said Tuesday that it was “ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy.”
The joint statement from the United States, Japan, Germany, Britain, France, Italy and Canada was issued after an emergency conference call among the finance ministers and central bank presidents. It was led by U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell.
VIRUS OUTBREAK-TRADE SHOWS
Trade show blues: Exhibitions go virtual as virus spreads
FRANKFURT, Germany (AP) — Trade events are quickly going dark across the globe due to the new coronavirus. And that is taking away sales opportunities that may be difficult to make up for companies.
Some are taking their shows online with virtual events they stream from their headquarters to reach customers anyway. But marketing experts and executives warn that there is no substitute for face-to-face contact with potential clients.
With the virus still spreading across the world, exhibition companies are totaling up the losses being suffered by an industry that also pumps billions into hotels, restaurants and cabdriver's wallets.
The Geneva International Motor Show resorted to putting automakers' product unveilings and news conferences online Tuesday after this year's show was canceled. BMW presented its sleek i4 electric concept car at a digital news conference from Munich, while competitors Daimler and Volkswagen held their own online events.
TARGET
Target warns of shipping delays, posts solid results
NEW YORK (AP) — Like many retailers, Target is wrestling with the growing uncertainty of a spreading new virus as it upends supply networks.
Target says there could be periodic shipping delays in merchandise from China while it scrambles to stock up on more household essentials.
In the U.S., customers have been crowding online services as well as grocery and discount stores to stock up on all types of basics from cleaning products to canned food.
That comes as the discounter posted strong earnings during the crucial holiday season, although sales were disappointing.
Target joins a string of other retailers with disappointing sales during the shortest holiday shopping season since 2013. Walmart had a rare sales shortfall, while Macy's and J.C. Penney saw sales decline during the period. Kohl's also posted disappointing holiday sales but on Tuesday reported that fourth-quarter earnings and revenue beat Wall Street expectations.
UAW-CORRUPTION
UAW, stung by corruption, seeks $1.3M for vacation home
DETROIT (AP) — The United Auto Workers is seeking $1.29 million for the Michigan vacation home of its former president.
The Detroit News reports that the home's design plan included granite counters, stainless-steel appliances, a fireplace and hidden storage room. It was built for Dennis Williams, who retired as president in 2018.
The UAW said in November that it planned to sell the property, which was searched by federal agents during a corruption investigation. Nine union officials and an official's spouse have pleaded guilty. Williams hasn't been charged.
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