Business Highlights
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How some companies survive, even thrive, in viral crisis
WASHINGTON (AP) — The COVID-19 pandemic has been an epic catastrophe for American business. Economic life is all but frozen. Stores are idle. Sales have sunk as people isolate at home, slash spending on autos and appliances and halt shopping trips, restaurant meals and movie outings. Many iconic retailers are reeling. Gap warns it may run out of cash. Neiman Marcus and J.C. Penney could be headed for bankruptcy protection. Yet by dint of circumstance, resourcefulness or just plain luck, some companies have positioned themselves to withstand, even thrive, in the crisis.
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Gov’t OKs $50B in small biz loans, banks complain of snags
NEW YORK (AP) — The government says it has approved an additional $50 billion in loans to small businesses, although banks are complaining that a bottleneck at the Small Business Administration is severely slowing the process. Banking industry groups say the SBA’s loan processing system is still unable to handle the volume of loan applications from business owners trying to get aid under the Paychceck Protection Program, part of the government’s $2 trillion coronavirus aid program. The SBA has said the slowdown is due to its attempts to limit the amount of loans any bank can submit at one time. But some banks say they’re not able to get any applications into the system.
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Google’s growth slows as pandemic infests advertising market
BERKELEY, Calif. (AP) — Google reported its weakest revenue growth in nearly five years as the pandemic-driven recession began to shrivel its advertising sales in the first quarter. The results provide the first window into how the digital ad market has fared amid widespread orders requiring consumers to stay at home. Those restrictions have given most advertisers little incentive to market their products and services. First-quarter revenue at Google’s corporate parent rose 13% from the same time last year to $41.2 billion. That is the company’s smallest gain since the summer of 2015. It’s an incomplete picture because ad demand wasn’t hit hard until late February and early March.
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Ford posts $2B 1Q loss blamed largely on coronavirus
DETROIT (AP) — Ford posted a $2 billion net loss in the first quarter that it blamed largely on the impact of the coronavirus outbreak. The automaker said Tuesday that its revenue from January through March fell nearly 15% to $34.3 billion as most of its factories were shut down for the final week of the quarter. Excluding one-time items the company lost 23 cents per share. Analysts polled by FactSet had expected a loss of 8 cents per share. Earlier this month the Dearborn, Michigan, company floated $8 billion in bonds in an effort to prepare for the downturn.
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Slumping tech favorites pull major US stock indexes lower
NEW YORK (AP) — Stock indexes were mixed on Wall Street Tuesday. Several investor favorites fell, including health care companies, big tech titans and winners of the stay-at-home economy, such as Netflix and Amazon. Those are big companies, which give their movements outsized effect on the S&P 500. The index fell 0.5%, but nearly twice as many stocks rose in the S&P 500 than fell. Among the winners were travel companies, shopping-mall owners and other businesses that got hammered after widespread stay-at-home orders locked away their customers. The price of oil swung wildly again as concerns remain about crashing demand and a lack of storage space.
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Starbucks sales fall as virus cripples global operations
SEATTLE (AP) — Starbucks says its global sales plunged in the first three months of the year as coronavirus-related shutdowns crippled its global operations. The Seattle-based coffee giant said 98% of its stores in China have reopened, but many are operating with reduced hours and seating. In the U.S., the company has temporarily closed half of its 8,000 company-owned stores. The company said sales at its established stores fell 10% in the January-March period. It expects conditions to worsen in its fiscal third quarter before moderating later this year. It said it is withdrawing most 2020 financial guidance as a result.
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Companies seek to limit legal liability for virus infections
NEW YORK (AP) — Business groups are pushing Congress to limit liability from potential lawsuits filed by workers and customers who were infected by the coronavirus. Last week, President Donald Trump proposed shielding businesses from lawsuits. And his top economic adviser Larry Kudlow has said businesses shouldn’t be held liable to trial lawyers whose cases will likely get thrown out by the courts. Still, many executives and legal experts call for the right balance.
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Southwest posts 1st quarterly loss in almost a decade
DALLAS (AP) — Southwest Airlines has posting its first quarterly loss in almost a decade and doesn’t see any improvement in air travel on the horizon. Chairman and CEO Gary Kelly said the U.S. economy is at a standstill and the airline’s outlook for the second quarter shows no improvement in air travel trends. On Tuesday, the Dallas carrier said it swung to a loss of $94 million for the quarter ended March 31, from a $387 million profit last year.
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The S&P 500 index fell 15.09 points, or 0.5%, to 2,863.39. The Dow Jones Industrial Average slipped 32.23 points, or 0.1%, to 24,101.55. The Nasdaq fell 122.43, or 1.4%, to 8,607.73. The Russell 2000 of smaller-company stocks climbed 16.20, or 1.3%, to 1,298.08.