Live Stock Market: Trading Updates – The New York Times

Wall Street had its worst week since 2008 as the threat of a severe recession appeared ever more likely in the face of the spreading coronavirus.

The Dow Jones industrial average fell more than 4.5 percent on Friday, ending below where it stood on the day before President Trump was inaugurated, erasing the so-called Trump bump that the president has trumpeted throughout his presidency as evidence of his success. The S&P 500 is not far from that mark as well.

Stocks have collapsed more than 30 percent in a month, wiping out trillions in value and ending an 11-year long bull market. For both the S&P 500 and the Dow, the drop this week was the worst since the financial crisis more than a decade ago.

Policymakers are working feverishly to offset the economic impact from the virus pandemic, but their promises have so far failed to fully soothe investors. The persistent volley of bad news continued this week as the number of confirmed coronavirus infections in the United States climbed. California has imposed a “shelter in place” restriction on the state, New York’s governor told residents to stay indoors and ordered nonessential businesses to keep workers home, and a wave of jobless claims is only just beginning to swell.

Congress is preparing a $1 trillion stimulus package to help workers and prop up the economy, and central bankers in the United States and Europe have used their financial firepower to bolster the markets.

On Friday, traders clearly focused on the negative. The S&P 500 fell about 4 percent, after rising earlier in the day, as the mood grew increasingly dour.

It was another sharp turn in a market that has come to be characterized by dizzying changes in direction over the past month as investors have grappled with the barrage of developments. On Friday, the United States said it would shut down its borders with Mexico and Canada, both of which are critical trading partners.

Analysts at the hedge fund Bridgewater on Thursday estimated that corporate revenue in the United States — among public and private companies — could fall by $4 trillion. “That is a very dangerous decline, and, if not mitigated, it will lead to a long-lasting ripple,” they wrote on Bridgewater’s website.

On Friday, United Airlines warned that it would have to lay off workers or lower wages if it did not get government assistance by the end of the month.

Oil prices, which have cratered along with expectations for economic growth this year, fell 10 percent on Friday, dragging shares of energy companies lower.

Hedge fund managers have mostly managed to stem their losses from the market sell-off. Now they’re trying to figure out how to make money again.

Some hedge funds are looking to invest in beaten-down companies poised for a rebound. King Street Capital Management, a $20 billion firm, told investors in a note reviewed by The New York Times that it had begun looking to invest in “high quality companies that have seen their bonds or loans caught up in the sell-off.”

The hedge fund billionaire Kenneth C. Griffin is starting up a new fund at Citadel to take advantage of the volatility and price discrepancies caused by the selling pressure in the bond market.

But with the usual relationships between stocks, bonds and other securities breaking down, there are few safe bets. Already there have been winners and losers.

The hedge fund manager Boaz Weinstein said in a note to investors in his $2.7 billion firm, Saba Capital Management, that he had positioned his portfolios to profit from bets on defaults and bankruptcy filings by companies with lots of high-yield, or junk, bonds. According to the note, which was reviewed by The Times, his main fund was up 33 percent this month.

One of the hardest hit is Bridgewater Associates, the $160 billion colossus led by Ray Dalio, which manages money for dozens of pensions and sovereign wealth funds. The firm’s eight main portfolios reported losses for the year ranging from 9 percent to 21 percent.

The European Commission on Friday activated its “general escape clause,” a panic button that lifts stringent spending rules and allows countries to run big deficits to respond to a crisis.

The clause, an emergency economic measure that would have been unimaginable just weeks ago, means Europe is abandoning its expectations that countries keep their deficits and debt loads small. It’s the first time in the European Union’s history that it has turned to this measure.

The 27 countries in the European Union and the institutions that run the world’s richest bloc of nations are scrambling to fight the coronavirus and mitigate its economic impact. Suspending rules that limit spending and cap how much state aid can be funneled to ailing businesses is a key part of the response.

Next in the European arsenal to combat the crisis will be a deeply political debate about the idea of issuing joint debt to fund the enormous stimulus needed to cushion the economic catastrophe.

The Federal Reserve will backstop municipal money market mutual funds, helping to ensure that investment vehicles holding local debt can meet redemptions as people and businesses cash out their holdings.

The Fed will accept short-term, highly rated municipal debt as loan collateral in one of its emergency programs, it announced on Friday. That will give banks an incentive to buy such debt from money market mutual funds, allowing them to offload the securities to come up with cash quickly.

The move could keep the funds, which are popular investments among ordinary people and companies, from crashing as investors cash out. It could also help to soothe some pain in local bond markets, which have seen interest rates surge as investors flee amid coronavirus economic fears.

The orders by Gov. Gavin Newsom of California and Gov. Andrew M. Cuomo of New York that residents stay in their houses as much as possible effectively puts 60 million people on lockdown, raising profound implications for the American economy.

California, with a population of 40 million, is a $3 trillion economy — the world’s fifth largest if it were a country. It is highly integrated with global commerce through its large export industries, its huge farming sector and its role as a hub of international trade. Most U.S. imports from China move through the state’s ports and airports before heading to inland warehouses and then being shipped by trucks and trains to supply auto dealers, factory floors and retailers across the United States.

New York, which has about 20 million residents, is the nation’s third-largest state economy, after California and Texas. New York City’s economy is dominated by finance, media and professional services like law and accounting, work that may be able to be done remotely in some form. But more than 300,000 New York City residents — and more than 600,000 statewide — work in bars and restaurants, and hundreds of thousands more work in hotels, retail stores and entertainment venues.

New York is also a major hub of international tourism, virtually all of which will come to a halt. The Port of New York and New Jersey is the nation’s second largest by tonnage, after the California ports of Los Angeles and Long Beach. The state is no longer known for its factories, but upstate New York still has a substantial manufacturing sector.

They are a new class of emergency medical workers: the more than two million Americans reporting to work each day to sell food and other household staples amid the coronavirus pandemic.

As shoppers swarm stores, snapping up everything from milk to toilet paper, cashiers are there to ring them up. Stockroom employees replenish shelves as soon as shipments arrive. Their presence is a source of calm, signifying that, even as demand has surged, supply chains remain intact and the essentials that people need remain available.

But these same employees are growing tired and, because they constantly interact with customers, fearful of getting sick themselves.

Amy Askelson, a grocery worker in Kalamazoo, Mich., said she uses hand sanitizer after each interaction with a customer. But Ms. Askelson, 36, still feels vulnerable. She has multiple sclerosis, meaning her immune system is impaired. And she worries about passing the virus to her 72-year-old mother, who has been helping take care of her children.

“I’m going to work every day with the general public and coming over to look at my kids, and I know I’m giving her those germs,” she said. “We’re supposed to be standing six feet away, but I work in the self-checkout where you have to be right next to the customer.”

• The top two executives at United Airlines asked employees in a letter on Friday to contact members of Congress and urge them to bail out the aviation industry, noting that deep cuts would have to be made if government assistance does not materialize by month’s end. Delta disclosed that the company expected second-quarter revenue to fall 80 percent compared with the same period last year.

• WhatsApp, the global messaging service owned by Facebook, said on Friday it had partnered with the World Health Organization to distribute verified information about COVID-19. Users sign up for the program through a link on the W.H.O. website, and a chatbot then doles out up-to-date information about death statistics, the latest news and articles, and how to protect oneself from contracting the virus.

• Bank employees are considered essential workers under the federal government’s emergency declaration, which means banks can require workers to keep coming into work.

Reporting and research were contributed by Matthew Goldstein, Kate Kelly, Alexandra Stevenson, Ben Dooley, Jason Karaian, Adam Satariano, Amie Tsang, Jeanna Smialek, Matina Stevis-Gridneff, Conor Dougherty, Emily Flitter, C.J. Hughes, Ben Casselman, Niraj Chokshi, Michael de la Merced, Mike Isaac, Daniel Victor and Kevin Granville.