NEW YORK —
The number of confirmed cases of the new coronavirus worldwide surpassed 200,000 for the first time Wednesday and the damage being seeded in the global economy is growing more clear. Furloughs and job cuts, from dog walkers, to oilfield workers, have begun. Governments around the world are pushing drastic countermeasures to help workers, particularly those who live paycheck to paycheck.
Following are developments Wednesday affecting various levels of the economy, businesses and workers:
MARKETS ROILING: U.S. futures fell hard enough before the opening bell Wednesday that trading was halted, then at the opening bell, the Dow tumbled more than 1,000 points. A barrel of crude can be had for less than $24, nearing prices nearly two decades ago. Long-term government bonds, considered among the safest of places to park money, were discarded. So was gold, despite a U.S. rescue package that could approach $1 trillion.
Markets tumbled in London and Frankfurt, Shanghai and Tokyo. Technology, manufacturing, banks, as well as retail and leisure sectors, are being hammered. Shares of Boeing, a global titan of manufacturing, plunged 19%. It’s lost more than 60% of its value in the past month.
The CBOE Volatility Index,Wall Street’s fear gauge, appears to have broken from its tether.
CRISIS TO COME: The U.N.’s International Labor Organization estimates that fallout from the virus outbreak could cause nearly 25 million job losses worldwide and drain up to $3.4 trillion worth of income by the end of this year. The Geneva-based agency said “an internationally coordinated policy response” could help mitigate such losses through worker protections, fiscal stimulus, and support for jobs and wages.
To that end: The U.S. Senate turned to a House-passed coronavirus response bill Wednesday, even as lawmakers and the Trump administration worked behind the scenes to fashion a separate massive federal effort to speed emergency checks to Americans, relief to businesses and additional emergency funding for federal agencies. Czechoslovakia devoted 100 billion Czech crowns ($4 billion) to direct business aid, with another 900 billion Czech crowns ($36 billion) in loan guarantees; Greece has promised sweeping financial support for businesses. Tax-payment delays and state funding for payroll support and rental costs would be granted to more than 300,000 affected businesses if they maintained staffing levels.
ENERGY FADES: Energy prices are crashing like they haven’t since the financial crisis. U.S. crude tumbled more than 13%, to less than $24 per barrel. The last time oil was so cheap, the first cell phone with a built in camera was released in the U.S. On Wednesday, Halliburton furloughed 3,500 workers in Houston for 60 days. Those workers will work every other week and maintain benefits. Oil majors including Exxon Mobil, a company that lays out spending plans a decade ahead, have said they will be slashing capital expenditures.
SUPPLY DEMANDED: Sales in almost every sector of the economy has vanished, but not in those selling or producing toilet paper, or canned or packaged foods. Social distancing is evident almost everywhere save for grocery store lines. Shares of Campbell’s Soup Co., which had been on a years-long decline, are hot. The stock has surged 7% in a month. Hormel is up 17% this week. Also in demand, Walmart and Target along with Kroger, some of the nation’s largest grocers.
HEAVY INDUSTRY: Honda said Wednesday that it will shut down plants in North America for a week, starting on Monday because it expects sales to fall. Fiat Chrysler has temporarily closed an assembly plant north of Detroit for a second time in two days after fears that the virus could spread there. The evening shift was sent home Tuesday at the Sterling Heights, Michigan, plant after a worker tested positive for the virus that causes COVID-19. Work resumed early Wednesday, but the company shut the plant down again for deep cleaning “out of an abundance of caution.” The plant makes Ram pickup trucks and employs 7,271 hourly workers.
On Tuesday night Detroit’s three automakers agreed to rotating temporary production suspensions to better clean factories and leave more time between shifts. The move held off a demand from the United Auto Workers for a two-week U.S. production shutdown.
BMW is closing its factories in Europe. It follows Ford, Volkswagen, Renault, Groupe PSA and Fiat Chrysler. It is not only the risk of infection, but the fall-off in demand. Airbus, the global aircraft maker, is halting production in France and Spain for the week. Porsche on Wednesday halted production at its main plant in Stuttgart, and will the same will take place at its plant in Leipzig starting Saturday.
WANDER LOST: States and cities that depend heavily on tourism are capitulating, for now. The governor of Hawaii encouraged everyone to postpone vacations there for at least the next 30 days. The governor of Nevada ordered all casinos to close for the month. Major casinos have already ceased operations on the Las Vegas Strip. Two cruise ships that have been turned away by other ports are headed to Honolulu. Holland America Line’s Maasdam cruise ship, which had its port call for Hilo, Hawaii canceled, will disembark in Honolulu Harbor, state officials said. The Maasdam, with 842 guests and 542 crew, is scheduled to arrive in Honolulu Friday. Norwegian Cruise Line said that one of its vessels, the Norwegian Jewel with 2,000 aboard, had been turned away by Fiji and New Zealand. It is expected to disembark in Honolulu on Sunday. There are no cases of coronavirus on either ship, said Tim Sakahara, a spokesman for Hawaii’s transportation department.
RESPECTING BORDERS: The U.S. and Canada agreed to close their shared border to nonessential travel and the Trump administration is considering a plan to turn back all people who cross the border illegally from Mexico.
Puerto Rico’s governor asked the Federal Aviation Administration to temporarily halt all commercial passenger flights to and from the U.S. territory for two weeks.
The European Union says it’s trying to help repatriate around 80,000 citizens stuck outside Europe, but that it faces huge logistical challenges.
GLOBAL COORDINATION: The leaders of the world’s 20 biggest economies may hold a virtual meeting next week about advancing a coordinated response to the coronavirus pandemic. Saudi Arabia, which currently leads the G20 presidency, said it is communicating with countries to convene the virtual meeting of leaders.
The kingdom said in a statement Wednesday that the Group of 20 countries will act in any way deemed necessary to alleviate the impact of the pandemic and will put forward a coordinated set of policies to protect people and safeguard the global economy.
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