Stock Markets Edge Higher: Live Business Updates – The New York Times

Wall Street enters the second half of 2020 on uncertain footing.

Stocks inched higher on Wednesday as investors started a new quarter on a cautious note, balancing tentative signs of economic resilience and a steady climb in coronavirus cases in the United States.

The S&P 500 rose half a percent, while gains in technology stocks led the Nasdaq composite to a record.

Giving stocks a push on Wednesday was news that a Covid-19 vaccine developed by Pfizer and the German biotech firm BioNTech was found to be well tolerated in early-stage human trials. Shares of Pfizer rose abut 3 percent.

But shares of automakers Ford Motor and General Motors fell after they both reported a sharp decline in sales in the second quarter. One standout was the electric-car maker Tesla, which rose 3.7 percent to become the world’s most valuable automaker, surpassing Toyota Motor‘s $202 billion valuation.

Markets on Tuesday completed a topsy-turvy first half of 2020. Over the course of six months, stocks on Wall Street experienced their biggest quarter-to-quarter swing in more than 80 years, propelled by the global pandemic and economic shutdowns, followed by extra big helpings of fiscal stimulus by central banks.

In the three months that just ended, the S&P 500 rose 20 percent, the best calendar quarter for the broad market index since 1998.

What’s ahead is anyone’s call. In the United States, the world’s largest economy, more than 48,000 coronavirus cases were announced on Tuesday, the most of any day of the pandemic. Dr. Anthony S. Fauci, the United States’ top infectious disease expert, said that the virus’s march across states in the South and the West “puts the entire country at risk.”

Lawmakers continue to look for ways to respond to the crisis, and the Senate on Tuesday agreed to extend the application period for a relief program for small businesses, granting five additional weeks for the remaining money left in the program to be spent. The program still has about $130 billion available.

But economists continue to warn that the path ahead will not be as predictable as many investors seem to hope.

“I would hesitate to call this a recovery, because ultimately the virus will determine the pace at which we can go,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said at an event hosted by The Washington Post on Wednesday. “A V-shaped recovery is certainly not something that I think is happening.”

There’s so much uncertainty about the coronavirus crisis that roughly 40 percent of the S&P 500, about 200 companies, have withdrawn their customary forecasts about how their businesses will perform in the months ahead, according to data from S&P Capital IQ.

The companies’ silence has unnerved analysts, who have already cut their expectations for profit growth substantially. They’re now expecting that second-quarter profits will fall more than 40 percent, according to numbers compiled by the data provider FactSet.

— Matt Phillips and Jeanna Smialek

Federal Reserve officials are hoping to provide more clarity on their plans for interest rates and bond-buying in coming months, minutes from their June meeting showed — with the largest group of officials in favor of tying the monetary policy path to price inflation.

The Fed on Wednesday released the minutes of its June meeting, which included a discussion of future policy paths that the rate-setting Federal Open Market Committee could pursue.

Participants at the meeting said “it will be important in coming months for the committee to provide greater clarity regarding the likely path of the federal funds rate and asset purchases,” the minutes showed.

“A number” favored linking their policy plans to inflation, perhaps even signaling that the central bank might overshoot its 2 percent inflation target. “A couple” liked the idea of tying future guidance on policy to the unemployment rate, while “a few others” thought that promising to keep growth-stoking monetary policy conditions in place past a specified date could be effective.

But some officials worried that pledging to leave interest rates low for a long time — a tried-and-true policy meant to coax the economy back at times of weakness — could have bad side effects.

“Regardless of the specific form of forward guidance, a couple of participants expressed the concern that policies that effectively committed the committee to maintaining very low interest rates for a long time could ultimately pose significant risks to financial stability,” the minutes said.

When it came to bond-buying in particular, some at the Fed were worried that it could have limited benefits at a time when long-term rates are already low, and others fretted that the central bank’s balance sheet is already large. The Fed has been bought huge quantities of government-backed debt since mid-March in a bid to keep markets functioning smoothly.

And while officials discussed the possibility of yield curve control — in which central bankers cap certain interest rates — many felt that “it was not clear that there would be a need for the Committee to reinforce its forward guidance” with such a policy.

“All participants agreed that it would be useful for the staff to conduct further analysis of the design and implementation” of such policies, along with their long-term financial and economic effects. — Jeanna Smialek

General Motors and Fiat Chrysler said sales of new vehicles fell by more than a third in the second quarter. But the companies added that demand has improved since April and May, when stay-at-home orders kept people away from dealerships.

“After falling into a deep recession in March, the U.S. economy has begun to recover as it reopens,” G.M.’s chief economist, Elaine Buckberg, said in a statement. “Auto sales are benefiting from historically low interest rates that make now an attractive time to buy a vehicle for many customers.”

G.M. said it expected sales to continue to rebound now that the company’s plants were operating normally. But “the path forward may not be linear, as rising infections in many states may lead to steps backward in the reopening process,” Ms. Buckberg added.

G.M. sold 492,489 cars and light trucks in the quarter, 34 percent fewer than in the same period a year ago. Fiat Chrysler sold 367,086, which represented a drop of 39 percent.

Toyota, which reports sales on a monthly basis, said June sales fell 27 percent, to 148,280 vehicles. — Neal E. Boudette

The Treasury Department plans to bail out a trucking company.

The U.S. government plans to take a nearly 30 percent stake in YRC Worldwide in exchange for a $700 million loan to prop up the struggling trucking company.

The loan is the first that the Treasury Department is making from its $17 billion fund that was created to help companies critical to American national security weather the coronavirus pandemic. The money, which was appropriated as part of the $2.2 trillion stimulus package that passed in March, was originally created with Boeing in mind but the company has thus far avoided taking a government loan.

YRC provides military transportation and hauling services to the Department of Defense.

“We are pleased for Treasury to make this loan pursuant to the CARES Act,” Treasury Secretary Steven Mnuchin said in a statement. “This loan will enable a critical vendor to the Department of Defense to maintain significant employment while providing appropriate compensation to taxpayers.”

The Treasury said that the loan, which will mature in 2024, would protect 30,000 jobs. In exchange for the loan, the Treasury will get 29.6 percent of YRC’s common stock. The company will also commit to maintain employment levels and limit executive pay. YRC’s shares soared 70 percent following the announcement.

Lockdowns across the country have caused shipping volumes to collapse this year, and YRC had to resort to furloughs, layoffs and other cutbacks.

The company said in a statement that the loan would allow it to pay for deferred employee health care and pension costs and to support capital investment.

— Alan Rappeport

United Airlines adds scores of flights to its August schedule.

United Airlines said on Wednesday that it planned to operate about three times as many flights in August as it did in June, increasing its traffic to the equivalent of about 40 percent of its August 2019 schedule.

Even as much of the West and South see a surge in new coronavirus cases, the airline said that it was responding to growing demand for domestic and international flights. In particular, United said it would increase service to vacation destinations such as Aspen, Colo., Bozeman, Mon., and Jackson Hole, Wyo. United will also restart service to Tahiti and add flights to Hawaii, the Caribbean and Mexico.

United’s move comes as some policymakers have criticized airlines for allowing their planes to fill up with vacationers and other travelers at a time when new coronavirus cases are regularly reaching daily highs. The director of the Centers for Disease Control and Prevention, Dr. Robert Redfield, expressed “substantial disappointment” in American Airlines at a Senate hearing on Tuesday for allowing its flights to be fully booked.

The airlines have said they are taking extensive precautions to limit the spread of the virus to passengers and employees.

Still, some of United’s plans appear to be at odds with the approach government officials are taking. For example, United said it would add flights in August to Brussels, Frankfurt, London, Munich, Paris and Zurich. Yet the European Union said this week that it would bar travelers from the United States, along with a number of other countries that have not brought the pandemic under control, when it allows international air travel to resume on Wednesday.

All told, United’s August schedule represents about 48 percent of the domestic flight schedule the airline operated during the same month last year and 25 percent of last year’s international flights. The company’s July schedule was just 30 percent of last year’s domestic schedule and 16 percent of the international schedule. — Niraj Chokshi

Wearing masks may have a major economic impact.

Face coverings have become a flash point in the United States, a matter of dispute between policymakers and a source of conflict — actual, physical conflict — in public.

Economists at Goldman Sachs calculated the economic effect of wearing masks to slow the spread of the coronavirus. In a recent research note, they posit that a national mask mandate could help the United States avoid a second round of lockdowns, even if compliance is patchy.

Greater mask usage would reduce the growth rate of confirmed infections in the hardest-hit states by two-thirds, they estimate. Achieving the same result via stay-at-home orders and other restrictions would reduce G.D.P. by around 5 percent, implying a “sizable” benefit to announcing mandatory mask-wearing rules instead, they write. “Our analysis suggests that the economy could benefit significantly from such moves, especially when compared with the alternative of a return to broader lockdowns.” — Jason Karaian

The Senate on Tuesday evening approved extending the application period for a relief program for small businesses, granting five additional weeks for the remaining money in the program to be used.

Less than four hours before the Paycheck Protection Program was scheduled to close with $130 billion still available for loans to small businesses seeking to maintain their payrolls, the Senate approved extending the application period and allowing small businesses to receive aid until Aug. 8.

The legislation now heads to the House, and will require President Trump’s signature for the program to continue. “The resources are there,” said Senator Benjamin L. Cardin, Democrat of Maryland and one of the architects of the program. “The need is there. We just need to change the date.”

The unexpected approval of the extension, which required agreement from all 100 senators, came as lawmakers began to debate the contours of another coronavirus relief package. With multiple parts of the $2.2 trillion stimulus law set to expire at the end of July and new outbreaks forcing many states to slow efforts to reopen their economies, lawmakers widely recognize that another measure will be necessary. — Emily Cochrane

A major Pizza Hut franchisee files for bankruptcy.

NPC International, the largest franchisee of Pizza Hut in the United States, filed for Chapter 11 bankruptcy on Wednesday, citing financial pressures caused by coronavirus-related shutdowns and increased competition in the restaurant industry.

The company, which operates more than 1,225 Pizza Hut and 385 Wendy’s restaurants across the country, had been plagued for years by financial challenges, including rising labor and food costs, a $1 billion debt burden and slumping sales for Pizza Hut amid intense competition from rival chains like Domino’s Pizza and Papa John’s.

NPC, which employs nearly 40,000 people in 27 states, is seeking Chapter 11 to cut debt and sell some of its restaurants, according to the company’s bankruptcy filing. NPC said its restaurants would continue to operate during the bankruptcy process.

The coronavirus pandemic has taken a toll on many restaurants. CEC Entertainment, which owns the Chuck E. Cheese and Peter Piper Pizza chains, filed for bankruptcy last week. — Gillian Friedman

Catch up: Here’s what else is happening.

• Apple said it would close 30 more of its stores in seven states, including California, Georgia and Nevada, adding to the 16 stores already closed around the country. Apple has 271 stores in the United States.

• The Mexican airline Grupo Aeroméxico, which has been hurt by a sharp drop in travel during the coronavirus pandemic, filed for bankruptcy protection on Wednesday in New York. Delta Air Lines owns about 51 percent of Aeromexico’s outstanding shares, according to the company’s bankruptcy filing. Aeromexico reported a loss of 2.5 billion pesos ($110 million) in the first quarter and its liabilities totaled $5.1 billion at the end of March, up from $4.2 billion at the end of December.

• Aerospace giant Airbus announced Tuesday it would cut 15,000 jobs, or about 10 percent of its global work force, citing a 40 percent slump in commercial aircraft business activity and an “unprecedented crisis” facing the airline industry. It will be the largest downsizing in the history of the company.

Reporting was contributed by Jack Nicas, Niraj Chokshi, Vikas Bajaj, Matt Phillips, Neal E. Boudette, Gillian Friedman, Jason Karaian, Liz Alderman, Christopher F. Schuetze, Emily Cochrane, Michael J. de la Merced and Gregory Schmidt.