Global markets rise on optimism of a strong U.S. response.
Global markets rose strongly in Tuesday trading, as investors sought solace in moves in Washington to stabilize America’s stricken economy.
European stocks rose broadly in Tuesday trading, led by a nearly 6 percent morning surge in Germany. The rises followed a similarly strong performance in Asia, where major markets around the region posted increases that ranked among their biggest gains in weeks.
Futures markets suggested Wall Street would open strongly later on Tuesday.
Markets were reacting to the Federal Reserve’s vow on Monday to buy as much government-backed debt as it needed to keep financial markets functioning. They also appeared to be expressing hope that lawmakers in the United States could bridge their differences and pass a $1.8 trillion economic stabilization package.
Other markets signaled improved investor confidence. Prices for futures based on the United States benchmark oil rose 4 percent. The price of the 10-year Treasury bond fell, sending yields higher.
In Asia, South Korea led the charge, with the Kospi index rising 8.6 percent. Tokyo’s Nikkei 225 index ended 7.1 percent higher.
The Shanghai Composite Index in mainland China rose 2.3 percent. Hong Kong’s Hang Seng Index was up 4.5 percent late in the trading day.
In Europe, Germany’s DAX index was up 5.8 percent. France’s CAC 40 rose 4.5 percent. London’s FTSE 100 index rose 3.9 percent.
Report shows economic activity plummeting in Europe.
Business activity in the eurozone plunged in March at unprecedented rates, according to surveys by IHS Markit.
Provisional data for the countries using the euro showed that business activity collapsed, with the composite Purchasing Managers Index dropping to 31.4 points in March from 51.6 in February, the biggest monthly fall since data collection started in 1998. Numbers over 50 indicate an increase in activity and numbers below indicate a drop.
“Business activity across the eurozone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis,” said Chris Williamson, the chief business economist at IHS Markit. He added that “there’s scope for the downturn to intensify further” if stricter lockdowns were to be put in place to deal with the virus.
Toyota suspends some production, citing lowered demand.
The Japanese automaker Toyota plans to suspend production at five of its plants in Japan because of “the condition of overseas markets and demand,” the company said in a statement on Monday.
Toyota said it will pause seven of its vehicle production lines for two to nine days beginning on April 3.
Separately, the company said on Sunday that two factory workers at a plant in the central Japanese prefecture of Aichi have tested positive for the coronavirus, adding that it has temporarily closed the facility and asked an additional 33 workers to self-quarantine.
The pandemic has forced major automakers around the globe to change their production schedules because of concerns over worker health, slackening demand and regional lockdowns that have left workers stuck at home.
Chinese mobile carriers lose millions of subscribers.
China’s mobile carriers have been hit by a rare slump across the industry, a sign of the toll the pandemic has taken on people who can no longer pay for what they once saw as a necessity.
China Mobile, one of the world’s largest cellular providers, lost more than 8 million users throughout January and February, the company reported. China Unicom lost 7.8 million subscribers over the same period, while China Telecom lost 5.6 million subscribers in February, the companies reported.
The relentless user growth over the years has served as an economic barometer in China. The number of mobile users in the country is larger than its entire population, with many residents, especially migrant workers, keeping separate numbers for work and personal use.
The unusual drop in subscribers could indicate the scale to which China’s labor market has been pinched by the outbreak, analysts say.
“People lost their jobs, they have to stay home, they have to be quarantined and have nowhere to go,” said Dickie Wong, executive director of research at Kingston Securities Limited. “They have to cancel their mobile subscription services.”
The Fed’s rescue plan is undermined by a drum beat of bad news.
The Federal Reserve unveiled a vast expansion of its efforts to shore up businesses and keep markets functioning. But the brief boost for Wall Street was soon wiped away as Washington lawmakers failed again to come together on a nearly $2 trillion rescue package.
Across the landscape of American business, grim news abounded Monday as the coronavirus pandemic paralyzed the country.
Boeing said it was temporarily idling 70,000 factory workers in Washington State after about 30 employees tested positive for Covid-19. Twitter said its revenue would take a hit as advertising has declined. Nordstrom, its cash diminished, drew down $800 million in credit. And General Electric said it would cut 10 percent of workers in its aviation unit.
The biggest factor again driving markets was Congress, which hit another wall in its attempt to push through a fiscal stimulus package.
Senate Democrats blocked the progress of the nearly $2 trillion government rescue package for a second time as they continued to negotiate for stronger protections for workers and restrictions for bailed-out businesses.
The S&P 500 fell about 3 percent Monday, adding to a 15 percent plunge last week as traders remained cautious about the Fed’s ability to shift the trajectory of an economy that appears to be in free-fall because of the coronavirus crisis.
As Fox News played down the coronavirus, its chief protected himself.
In the first 10 days of March, some of the commentators on Fox News and Fox Business played down the threat of what would soon be recognized as a pandemic.
Many of the networks’ elderly, pro-Trump viewers responded to the coverage and the president’s public statements by taking the virus less seriously than others.
But one elderly Fox News viewer, a crucial supporter of President Trump, took the threat seriously: The channel’s chairman, Rupert Murdoch, who was to celebrate his 89th birthday on March 11.
On March 8, as the virus was spreading, the Murdoch family called off a planned party out of concern for the patriarch’s health, according to a person familiar with the cancellation. There were about 20 people on the guest list.
The canceled party is perhaps the most glaring instance of the gap between the elite, globally minded family owners of Fox — who took the crisis seriously as reports emerged in January in their native Australia — and many of their nominal stars, who treated the virus as a political assault on Mr. Trump, before zigzagging, along with the president, toward a focus on the enormity of the public health risk.
Reporting was contributed by Elaine Yu, Ben Dooley, Carlos Tejada and Daniel Victor.