Coronavirus update: Case and death tolls keep rising, but shock increase in U.S. jobs suggesting the worst may be over, for now


While the number of confirmed cases of COVID-19 and death tolls keep rising, a surprise increase in U.S. jobs and a drop in unemployment in May suggest the worst of the pandemic is over as businesses recover from lockdowns enforced to combat the disease.

Wall Street’s benchmark stock indexes all rose Friday to levels seen before the World Health Organization declared COVID-19 a pandemic on March 11 and sectors hardest hit by shelter-in-place measures enjoyed broad rallies.

Total cases topped 6.75 million worldwide on Friday, and the number of deaths grew to over 395,500, while about 2.9 million people have recovered, according to data aggregated by Johns Hopkins University.

But in a surprise announcement from the U.S. Labor Department, the U.S. economy added 2.5 million jobs last month and the unemployment rate fell to 13.3% from 14.7%, while economists surveyed by MarketWatch had been expecting 7.25 million jobs lost with unemployment rising to 19.0%.

“Today was a shocking jobs number — and for the first time this year it was a positive shock — it’s very encouraging to see workers being recalled back by their employers and the unemployment rate dropped back down in May,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “At 13.3%, we are still at a higher rate than any that we hit during the financial crisis in 2007-2009, but as long as that continues to move lower, it will show that the reopening of the economy is proceeding smoothly.”

Also on Friday, President Donald Trump signed into law a bill easing conditions for small businesses tapping the government’s Paycheck Protection Program.

The Nasdaq Composite Index

was up 2.1% Friday afternoon, and surpassed in intraday trading its Feb. 19 record closing price, while the S&P 500 index

climbed 2.6% and the Dow Jones Industrial Average

ran up 803 points, or 3.1%, with both indexes on track for their highest closes since Feb. 24. The WHO had declared COVID-19 a pandemic on March 11. See Market Snapshot.

Don’t miss: ‘We don’t inevitably have to have a second wave’ says Anthony Fauci, nation’s leading infectious disease doctor.

A recent beacon of Wall Street’s optimism has been the airline sector. The U.S. Global Jets exchange-traded fund

has spiked up nearly 40% this week, a record for the sector tracker. Leading the group higher was American Airlines Group Inc.’s stock
which rose 10% on Friday, after a record one-day rally of 41% on Thursday. The airline said this week it expected flights in July to be more than half what they were during the same month a year ago, compared with a previous announcement of a 70% capacity reduction in June and 80% reductions in April and May. Read more about American Airlines’ stock’s record gain on record volume.

Shares of cruise operators also reflected hopes of a faster recovery, with Norwegian Cruise Line Holdings Inc.

rallying more than 40% this week, Carnival Corp.

climbing over 35% and Royal Caribbean Cruises Ltd.

rallying nearly 35%.

This optimism has been tempered by those expressing concern about a potential spike in cases in the coming weeks, as nationwide protests of the police killing of George Floyd leave crowds of people ignoring calls for social distancing and as states continue to reopen businesses.

Don’t miss: Protesters have a ‘civic duty’ to get tested for coronavirus, Cuomo says.

In the face of these concerns, New York City Mayor Bill de Blasio announced Thursday that a second phase of its reopening process, which includes outdoor dining, could begin in early July, about a month after the first phase of reopening, which is set to commence on Monday.

Elon Musk takes aim at Amazon

Tesla Inc.

Chief Executive Elon Musk, who has fought with state officials over lockdown measures, fired off an angry tweet suggesting regulators should break up Inc.

, because monopolies “are wrong!”

The tweet was in response to Amazon rejecting a book that questioned the risk of the COVID-19 pandemic. Amazon said the book was removed in error, and was soon reinstated.

Coronavirus Update: Antimalarial-Drug Studies Retracted, Musk Slams Amazon
Latest tallies

The U.S. continues to lead the world by a large margin, both in cases of COVID-19, which rose to 1.89 million on Friday, and in deaths, which grew to 108,708. About 485,000 people have recovered, the Johns Hopkins data shows.

Within the U.S., case tolls are still trending higher in nearly half the states, with states including Arizona, Arkansas, Texas and Tennessee seeing new peaks in cases a day.

Outside the U.S., Brazil remained the new hot spot, with cases surging to nearly 615,000 cases and deaths climbing to over 34,000.

Russia has 449,256 cases and 5,520 fatalities.

The U.K. has 284,730 cases and 40,344 deaths, the highest death toll in Europe and second highest in the world after the U.S.

Early hot spot Spain was fifth in the world in cases with 240,978, with a death toll of 27,134, while Italy has 234,531 cases and 33,774 deaths.

India moved past Italy with has 236,060 cases, and has 6,649 deaths. France has 190,180 cases and 29,114 deaths, while Germany has 184,924 cases and 8,658 deaths.

Peru, Turkey, Iran, Chile, Mexico, Saudi Arabia, Canada and Pakistan are next, all ahead of China, where the illness was first reported late last year. China has 84,174 cases and 4,638 deaths.

Latest Medical news

Novavax Inc.

said Friday that it was awarded a contract by the U.S. Department of Defense, which could provide up to $60 million in funding to produce several components of its potential COVID-19 vaccine candidate, NVX-CoV2373.

As part of the contract, the biotechnology company agreed to deliver 10 million doses of NVX-CoV2373 this year to the DoD, that could be used in phase 2/3 clinical trials, or under Emergency Use Authorization if approved by the Food and Drug Administration.

The company had announced in late-May that it had enrolled its first participants in a phase 1/2 trial of NVX-CoV2373, with preliminary safety results from the phase 1 portion of the trial expected in July.

See related: Hope dims for hydroxychloroquine even as medical study detailing the drug’s failure is retracted.

AstraZeneca PLC

said it has started producing the University of Oxford’s potential COVID-19 vaccine, and has doubled its capacity to two billion doses, even before seeing trial results.

The U.K. drugmaker said it reached a $750 million agreement with two health organizations backed by Microsoft Corp. co-Founder Bill Gates and his wife Melinda to provide and distribute 300 million doses fairly across the world.

Also read: Vaccine summit calls for coronavirus vaccine to be free, available to everyone.

What the U.S. economy is saying

Within the U.S. May jobs report, the Bureau of Labor Statistics said 2.7 million people who temporarily lost their jobs because of the COVID-19 crisis returned to work, as every state began to reopen their economies to some degree during the month. That added to recent data showing that the economy was starting to bounce back. See MarketWatch’s Coronavirus Economic Recovery Tracker.

The data showed that bars and restaurants recalled 1.4 million workers in May, the employment rebounded by 368,000 in retail, 464,000 in construction and 312,000 in the health-care industry. See Economic Report.

What companies are saying

• Gap Inc.

said it has reopened 1,500 stores across North America, with these locations generating about 70% of last year’s sales performance. Old Navy is showing “particular strength,” according to Katrina O’Connell, Gap’s chief financial officer, speaking on the retailer’s late Thursday earnings call.

The apparel retailer reported late Thursday fiscal first-quarter results that came in below expectations, as sales took a hit from store closures related to the coronavirus pandemic.

• Tribune Publishing Co.

reported Friday first-quarter losses that widened nearly 10-fold, as the COVID-19 pandemic required the newspaper publisher, which papers include the Chicago Tribune, New York Daily News and The Baltimore Sun, to accelerate cost-cutting measures and to grow its digital-only subscriber base given the continued decline in revenue. The net loss for the quarter was $45.3 million, or $1.26 a share, compared with $4.7 million, or 13 cents a share, in the year-ago period. Revenue fell 11.5% to $216.5 million, as advertising revenue declined 20.6% and circulation revenue decreased 3.1%. “We recognize that coming out of the pandemic, the Company must accelerate its digital footprint and position itself as a smaller, more nimble operation in order to sustain itself for the long term,” said Chief Executive Terry Jimenez.

• DocuSign Inc.

, which makes technology that allows companies to obtain electronic signatures, reported late Thursday earnings and revenue that beat expectations, as results showed a boost from companies looking for digital ways to executive agreements as the COVID-19 crisis made in-person meetings more difficult. Chief Executive Dan Springer said on the company’s earnings call that DocuSign has picked up new customers during the pandemic and seen greater uptake of its services among existing customers. “Even when the COVID-19 situation is behind us, we don’t anticipate customers returning to paper or manual-based processes,” he told investors on the call.

• Slack Technologies Inc.

reported late Thursday quarterly revenue that topped $200 million for the first time, as the business communication software company has been reaping the rewards of a national work-from-home shift during the COVID-19 pandemic. Slack reported a loss of $74.4 million, or 13 cents a share, on revenue of $201.7 million, up 50% from $134.8 million a year ago. After adjusting for stock-based compensation and other factors, Slack reported a loss of 2 cents a share, compared with a loss of 23 cents a share a year ago. Analysts surveyed by FactSet had expected adjusted losses of 6 cents a share on sales of $186.2 million. “There is a generational change in the way people work,” Butterfield told MarketWatch in a phone interview late Thursday.

Also read: Opinion: Slack was judged by Zoom standards, and it didn’t end well.

• GameStop Corp.

said late Thursday it expects quarterly sales to drop by as much as a third and that a majority of its stores were closed in March. The videogame retailer said it expects global sales to decline from “33% to 35% from $1.5 billion in the prior year fiscal quarter,” which would result in revenue of $1.01 billion to $1.04 billion. Analysts surveyed by FactSet expect revenue of $1.13 billion. GameStop also expects same-store sales for the quarter to drop about 30% to 31%, while analysts had forecast a decline of 26.4%. The company said that about 76% of its international stores were closed temporarily in March, and that all of its U.S. locations were closed in March with 65% of those offering curbside pickup service.

• La-Z-Boy Inc.

said late Thursday it will lay off about 10% of its workforce, or 850 employees, across its business and including an upholstery factory in Mississippi. Production will be shifted to available capacity at the company’s plants in Tennessee, Missouri, and Arkansas, La-Z-Boy said. The Mississippi plant, built in 1960, employs about 300 people and accounts for about 10% of the company’s upholstery production as well as making the company’s recliners and other furniture. The coronavirus pandemic “has had a far-reaching impact,” Chief Executive Kurt L. Darrow said in a statement.

• Domo Inc.

reported late Thursday a narrower-than-expected loss in its fiscal second quarter and sales were above Wall Street expectations. The software company said it lost $24.9 million, or 88 cents a share, in the quarter, compared with a loss of $35.5 million, or $1.32 a share, in the year-ago period. Revenue rose 19% to $48.6 million, Domo said. Analysts polled by FactSet had expected a net loss of 91 cents a share on sales of $46 million. “We are pleased we could help the governors of three states have access to the actionable data they need to manage through the current health crisis,” founder and Chief Executive Josh James said in a statement, without naming the states.

Source : MTV