U.S. Stocks End the Week Lower After Tech Earnings – The New York Times

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Amazon and Target were the focus of renewed labor protests on Friday over the health risks of working during a pandemic.

In addition to earlier demands to keep workers safe, the protests featured a newer goal: to discourage employers from rolling back safety measures in a rush to return to business as usual, especially as states lift stay-at-home orders.

The companies are not unionized, and the scattered protests were organized ad hoc.

Some Amazon workers said they were alarmed that the company was ending a policy of unlimited unpaid time off, which many workers had taken advantage of to avoid coronavirus exposure in warehouses.

Jordan Flowers said he had declined to return to work Friday at an Amazon warehouse on Staten Island. “They’re going to have to fire me,” said Mr. Flowers, who joined more than a dozen people, not all of them employees, in a protest nearby. “I choose my life over this.”

An Amazon spokeswoman said that there was “no measurable impact on operations” from the protest and that the company was extending a $2-an-hour pay increase and double overtime pay in the United States and Canada through May 16. She did not dispute that the policy on unpaid time off had changed but said Amazon was providing a range of other leave-of-absence policies.

At Target, some workers expressed concern that the company was again allowing customers to return goods to stores, a practice that had been suspended to reduce potential virus exposure.

“That’s a point of frustration,” said Adam Ryan, a Target worker in Christiansburg, Va., who helped organize a protest there. “When they stopped accepting returns from guests, we thought that was a good call.”

A Target spokeswoman confirmed that returns were again being accepted in stores, citing cleaning, safety and social distancing measures now in place. She said that the company knew of fewer than 10 of its 340,000 front-line workers who had taken part in the protest, and that it had extended a $2-an-hour wage increase until May 30.

Monty Bennett’s sprawling hospitality company is the biggest known beneficiary of the government’s small-business relief program. The Texas conservative has remained unwilling to return his loans even as public anger builds over large companies getting the funds — a fact now drawing the scrutiny of a key lawmaker.

Hotels and subsidiaries overseen by Mr. Bennet’s firm, Ashford Inc., have applied for $126 million in forgivable loans from the Paycheck Protection Program. According to company filings, about $70 million of that has been funded, the largest known amount to benefit a group of closely related companies since the program began in early April. The next biggest known recipient, Ruth’s Hospitality Group, asked for about one-sixth as much and has since decided to return the money. The average loan size in the program’s first round was $206,000.

On Friday, Senator Chuck Schumer, the minority leader, sent a letter to the Small Business Administration demanding a thorough review of use of the program by Mr. Bennett’s companies, saying that he is “deeply concerned that large, publicly traded companies, like Ashford, may be exploiting” it.

“It is imperative that limited taxpayer dollars go to help legitimate small businesses,” he said in the letter to Jovita Carranza, the small business administrator.

U.S. stocks fell on Friday as investors reacted to signs of growing tensions between China and the United States and earnings reports by Apple and Amazon that showed the depth of the coronavirus impact on big business.

Both the S&P 500 and the tech-heavy Nasdaq composite fell about 3 percent.

Amazon shares dropped by more than 7 percent. Despite the delivery and web services giant reporting surging sales in the first quarter, investors focused on the rising costs of delivering products amid the pandemic. Jeff Bezos, the company’s founder, said the expense of protecting workers, including protective equipment and Covid-19 tests, could swing it to a loss of as much as $1.5 billion in the current quarter.

Apple stock dipped, after the company refused on Thursday to give any estimates for the current quarter. But the tech giant signaled confidence by announcing another big stock buyback, and said that its first-quarter revenue rose nearly 1 percent to $58.3 billion, despite lockdowns in China, where it assembles nearly all of its products.

Investors also grew leery of signs of returning tensions between the Trump administration and China. In recent days, the Trump administration has ratcheted up rhetoric blaming China for the spread of the pandemic. On Thursday, President Trump speculated that a Chinese laboratory could have released the coronavirus, either by mistake or intentionally, according to The Associated Press.

“The China issue is definitely playing a large role today,” Matt Maley, chief market strategist at Miller Tabak, a trading and asset management firm, wrote in an email. He added that declines in previously high-flying stocks such as Tesla and Amazon were also weighing on the market.

Regardless of the reason, the market was due for a cooling-off period.

For more than a month, stocks have rallied despite a steady drumbeat of negative news about the state of the American economy. Even with a retreat on Thursday, Wall Street closed out the month of April with a gain of nearly 13 percent, its best performance since 1987. And despite the slide on Friday, the S&P 500 remains up more than 25 percent since it hit bottom on March 23.

Most financial capitals in Asia and Europe were closed on Friday for the celebration of Labor Day, but the few that were open fell significantly. On holidays, markets can be susceptible to big swings because of the relatively few transactions being made.

While restaurant dining rooms sit empty, many people have started treating drive-throughs like grocery stores, making only occasional trips but placing larger orders.

At many chains, including McDonald’s, the drive-through accounted for as much as 70 percent of revenue before the crisis, generating billions of dollars for the industry every month. During the pandemic, sales have mostly held steady. In March, drive-throughs generated $8.3 billion across the fast-food industry, an increase from $8 billion in sales over the same period in 2019, according to data from the NPD Group, a market research firm.

The drive-through has shielded fast-food companies from the worst economic effects of the pandemic, but it has become a dangerous place for some low-wage workers, who cook and serve food in cramped conditions, often without access to protective equipment. In a number of states, workers at McDonald’s and other chains have staged walkouts and called for increased safety precautions.

The federal government has distributed stimulus loans worth more than $1 billion to public companies as part of a program meant to protect payrolls at small businesses, according to an analysis of public filings and company announcements by The New York Times.

In total, more than 300 publicly traded firms have disclosed receiving loans from the roughly $660 billion Paycheck Protection Program, which is administered by the Small Business Administration.

The loans have set off an outcry, and led the agency to issue new guidance pushing the public companies to return the money, especially as many smaller operations were left empty-handed in the early stages of the program. In recent weeks, at least 32 public and private companies have disclosed that they had returned loans, including the burger chain Shake Shack and car dealerships like AutoNation.

At least 4,193 workers at 115 meatpacking plants in the United States have been infected with the coronavirus, according to a report released Friday by the Centers for Disease Control and Prevention.

Twenty of those workers have died, the report said. And the data almost certainly understates the scale of the problem, because not all states with infections at meat plants have reported figures to the C.D.C.

In total, the meat and poultry processing industry employs about half a million people, many of whom work in cramped conditions in slaughterhouses where social distancing is practically impossible. Over the last month, dozens of meatpacking plants have been forced to close because of outbreaks, straining the country’s meat supply.

This week, President Trump issued an executive order that gave officials at the Department of Agriculture the authority to take some limited actions to keep plants running, even when local authorities call for them to close.

The C.D.C. report also lays out recommendations for meatpacking plants to keep workers safe, like installing barriers between workers and requiring face covering.

From New York to Kansas City to Los Angeles, tenants rights groups and community nonprofit organizations are encouraging tenants to withhold payments today, the due date for May rent, aiming to create pressure for an expansion of affordable housing and tenant-friendly legislation.

As unemployment soars across the country, the groups have rallied around an audacious goal: to persuade the government to halt rent and mortgage payments — without back payments accruing — for as long as the economy is battered by the coronavirus.

The effort has been brewing on social media, with the hashtag #CancelRent and online video rallies, as well as in-person protests, frequently held in cars to maintain social distancing.

Representative Alexandria Ocasio-Cortez, a New York Democrat, endorsed the campaign, encouraging her progressive base to embrace a movement to upend the housing market.

But in New York and other cities, landlords say they too are struggling to pay their bills because many tenants have already been unable to pay rent.

They call the advocates’ efforts reckless and say that withholding rent would create cascading consequences, including leaving property owners without the means to pay mortgages and property taxes or to maintain buildings.

Approximately 36,000 employees of news media companies have been affected by layoffs, pay cuts or furloughs since the coronavirus crisis began in earnest in the United States in March, according to New York Times estimates.

Recent weeks have brought layoffs at The New York Post and Protocol and other outlets, such as Condé Nast, continue to ponder them. But on the other hand, the hundreds of billions of dollars in federal stimulus money have begun to arrive in bank accounts. The Vermont weekly newspaper Seven Days even brought five laid-off employees back after receiving its Paycheck Protection Program loan. But such loans still may not go to newspapers owned by large chains.

Next week, the general public will begin to get a fuller look at how the crisis has affected newspapers in particular as Gannett, Lee Enterprises and The New York Times Company all make their quarterly earnings reports.

All of the forecasts point in the same direction: A wave of small-business bankruptcies is coming.

More than 40 percent of America’s 30 million small businesses could close permanently in the next six months because of the coronavirus pandemic, according to a poll by the U.S. Chamber of Commerce.

“It’s a crisis that will impact our economy for generations,” said Amanda Ballantyne, the executive director of Main Street Alliance, an advocacy group for small business.

Commercial bankruptcies in the first quarter of 2020 ticked up 4 percent from a year earlier, according to data from the American Bankruptcy Institute. And many of those filings were made before the pandemic, when the economy was healthy. Now, some owners are waiting to find out whether they will receive federal stimulus aid before deciding on bankruptcy.

Many may just disappear. For some, though, a bankruptcy law that took effect in February, the Small Business Restructuring Act, could help them survive the pandemic.

• Taubman, the shopping mall owner, said that it would reopen three major shopping centers on May 6 as retailers aim to return to business: International Plaza in Tampa, Fla., The Mall at University Town Center in Sarasota, Fla., and City Creek Center in Salt Lake City, Utah. The company made its plans known after Simon Property Group, the biggest mall operator in the United States, said that it planned to reopen 49 malls this weekend across 10 states. Macy’s, which also owns Bloomingdale’s and Bluemercury, said on Thursday that it planned to open 68 stores on Monday.

• Exxon Mobil said on Friday that it lost $610 million in the first three months of the year, compared with a gain of $2.4 billion the year before, even though combined oil and natural gas production was up 2 percent. It was the first time since the merger of Exxon and Mobil in 1999 that the company lost money in a quarter.

• Toyota Motor said it was delaying the restart of production at its U.S. factories until May 11, one week later than it had previously expected. The decision was based on “an extensive review with our supplier and logistics network,” the company said in a statement. “The health and safety of our employees and stakeholders remain a top priority.”

• Chevron reported first-quarter earnings on Friday of $3.6 billion, up $1 billion from the year before. Sales were down by more than 10 percent as the company warned that its profits would be curtailed by low oil prices this year.

Reporting was contributed by Marc Tracy, David McCabe, Noam Scheiber, Jeanna Smialek, Vikas Bajaj, David Yaffe-Bellany, Clifford Krauss, Tamir Kalifa, Tara Siegel Bernard, Amy Haimerl, Kevin Granville, Alexandra Stevenson, Su-Hyun Lee, Austin Ramzy, Keith Bradsher, Geneva Abdul, Jack Nicas, Karen Weise, Gregory Schmidt and Niraj Chokshi.