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The news is terrible, but Wall Street had its best month in decades.Apple and Amazon report higher sales as consumers turn to tech.Shipping containers stack up around the world as supply chains fill to the point of bursting.Social networks leave up Trump’s comments on disinfectants.Catch up: Here’s what else is happening.ImageCredit…Johannes Eisele/Agence France-Presse — Getty Images
The news is terrible, but Wall Street had its best month in decades.
Stocks fell on Thursday, giving up some of their gains from the day before, after reports that showed millions more Americans applied for weekly unemployment benefits and consumer spending collapsed.
The S&P 500 closed down nearly 1 percent, but it was a small retreat in an otherwise strong month for Wall Street. Even with the decline on Thursday factored in, the S&P 500 had its best month since January 1987, a gain that came despite it becoming increasingly clear that the coronavirus crisis was pushing the United States into a dire economic downturn.
The nearly 13 percent gain this month means the S&P 500 is now up roughly 30 percent from its March 23 low. It’s a rally that has surprised even the most ardent bulls.
“Frankly, I’m shocked by the speed of the rally,” said Julian Emanuel, chief equity and derivatives strategist at the brokerage firm BTIG, who has been expecting a rebound since before the rally began.
The rally, coming even in the face of crushing economic data, highlights investors’ confidence that things will return to normal sooner than they thought when stocks were collapsing in late February and early March.
Both the Federal government and the central bank have pumped trillions of dollars into the economy and financial markets. And lockdown measures appear to be having some success in reducing rates of infection, with some states laying out the conditions for reopening.
Apple and Amazon report higher sales as consumers turn to tech.
With most of the nation on lockdown, technology companies like Amazon and Apple benefited as consumers found other ways to spend their money.
Apple said on Thursday that its revenue grew by nearly 1 percent in the first three months of the year as the company was able to make up for sales declines in China, which was locked down for much of the quarter because of the coronavirus.
The company’s income was bolstered by surging sales of its internet services and the Apple Watch and AirPods.
Apple typically forecasts its sales for the next quarter but declined to do so on Thursday. Analysts expect the current quarter to be much uglier because of virus-related shutdowns around the world.
Apple showed confidence in its financial footing though by announcing another $50 billion in stock buybacks.
The spread of the coronavirus played right into the hands of Amazon’s core businesses, as consumers shopped more online and companies spent more on cloud computing. Those two pillars of Amazon’s business drove sales to their highest on record outside of the holiday shopping season, the company said on Thursday.
Amazon reported that it had $75.5 billion in sales in the latest quarter, up 26 percent from a year earlier, surpassing analysts’ expectations. Profit fell about 29 percent, to $2.5 billion, because it cost more to meet the increased customer demand.
Amazon’s chief executive, Jeff Bezos, signaled that the company’s profits may continue to fall in the near future. The company would typically expect to make around $4 billion in operating profit in the next quarter, but “we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe,” he said in a statement.
Shipping containers stack up around the world as supply chains fill to the point of bursting.
One of the stranger side effects from the coronavirus pandemic is this: piles of 40-foot steel containers packed with unwanted Chinese goods that are now piling up at docks in South Korea, Morocco and Togo in West Africa.
Two months ago, retailers and manufacturers in the West worried that they might run out of goods from factories in China that had been temporarily closed because of the virus. Now the worry lies not in empty supply chains, but supply chains that are full to bursting.
Department stores in the United States, for example, have been canceling and postponing orders. But a flood of goods has already left factory gates in China and is heading for stuffed warehouses and padlocked stores in the West.
Two of the world’s largest container shipping lines, Maersk and Mediterranean Shipping, are offering unorthodox solutions. They are each promoting programs that allow huge numbers of containers to be dropped off and stored at ports that previously were just transit points, such as Busan, South Korea; Las Palmas, Spain; Tangier, Morocco; Salalah, Oman; or Lome, Togo.
“Slow down your supply chain by increasing the ocean lead time,” Maersk now promises.
The accumulation of full containers may not last, for a reason that Chinese exporters and their workers also will not like. Surveys released on Thursday of Chinese purchasing managers showed that few orders are now arriving at Chinese factories for any further exports.
Social networks leave up Trump’s comments on disinfectants.
Mark Zuckerberg said last month that it would remove posts promoting bleach as a cure for the coronavirus, and Twitter last month announced it would delete virus tweets “that could potentially cause harm.” But Facebook, Twitter and YouTube have declined to remove statements by President Trump suggesting disinfectants and ultraviolet light as possible treatments.
By Friday, the day after Mr. Trump’s comments at a White House briefing, mentions of a disinfectant cure on social media and television broadcasts surged to 1.2 million, up from roughly 400,000 on Thursday, according to Zignal Labs, a media insights company. A New York Times analysis found 768 Facebook groups, 277 Facebook pages, nine Instagram accounts and thousands of tweets pushing UV light therapies that were posted after Mr. Trump’s comments and that remained on the sites as of Wednesday.
The social media companies have always tread delicately when it comes to Mr. Trump. Yet their inaction on posts echoing his remarks on UV lights and disinfectants stands out because the companies have said for weeks that they would not permit false information about the coronavirus to proliferate.
Most of the tech companies developed health misinformation policies “with the expectation that there would be a competent government and reputable health authority to point to,” said Renee DiResta, a technical research manager who studies misinformation at the Stanford Internet Observatory. Given that false information is coming from the White House, the companies have been thrown for a loop, she said.
YouTube said Mr. Trump’s comments did not violate its misinformation policy. Twitter said satire and discussions of Mr. Trump’s remarks that do not include a call to action, as well as Mr. Trump’s comments themselves, did not violate its policies. Facebook, which owns Instagram and WhatsApp, did not respond to requests for comment.
Catch up: Here’s what else is happening.
Boeing said on Thursday that it had raised $25 billion in a bond offering in an effort to inject liquidity into its business. As a result, the aerospace giant said, it would not seek additional funding through capital markets or aid from the federal government.
United Airlines reported a net loss of $1.7 billion in the first quarter and said it had about $9.6 billion in cash on hand to weather the crisis. The airline expects to burn through cash in the second quarter at an average daily rate of $40 to $45 million, on par with its peers.
Reporting was contributed by Keith Bradsher, Jack Nicas, Karen Weise, Gregory Schmidt and Niraj Chokshi.