Markets: Darkest days for the Dow
The Dow “suffered its worst day since the Black Monday market crash in 1987” as fear of a global slowdown gripped Wall Street this week, said Fred Imbert in NBC.com. The blue-chip index’s decline of 12.9 percent, or 2,977.10 points, earlier this week represented its third-worst day ever, behind the 22 percent rout in 1987 and a 13 percent drop in October 1929. Actions by the Federal Reserve did little to reassure panicked investors. Since hitting a record high on Feb. 12, the Dow is down more than 31 percent.
Autos: U.S., European makers stop production
The big three U.S. automakers said this week they will temporarily shut down production, said Peter Valdes-Dapena and Vanessa Yurkevich in CNN.com, joining European carmakers who had already announced “the closure of 35 manufacturing facilities across Europe.” The United Auto Workers had asked Ford, General Motors, and Chrysler to delay production, and the automakers reached an agreement with the union on “rotating partial shutdowns” to deep-clean the plants. But facing swiftly falling demand, the automakers opted to simply shutter their factories until at least March 30. Honda and BMW also announced they would close U.S. plants.
Aerospace: Boeing faces a cash shortage
Boeing’s shares tumbled to a six-year low this week after a rating downgrade from Standard & Poor’s, said Rachit Vats in Reuters.com. The rating agency lowered the plane maker’s credit standing from “A-” to “BBB” as Boeing falls deeper into debt because of the extended grounding of the 737 Max and the coronavirus. S&P estimates Boeing’s free cash flow for 2020 could go down to negative $12 billion, noting that its debt doubled to $27.3 billion last year. After the downgrade, Boeing’s stock fell 22 percent, shaving 100 points off the Dow.
WeWork: SoftBank pulls out of payout
“SoftBank is backing away from part of its planned bailout of WeWork,” said Liz Hoffman and Eliot Brown in The Wall Street Journal. The tech investment firm said this week that “regulatory probes into the startup’s business” give SoftBank a way to avoid the planned purchase of $3 billion of WeWork shares from existing investors. Those include WeWork’s high-flying founder, Adam Neumann, “who had the right to sell up to $970 million in stock.” The coronavirus could have a devastating effect on WeWork’s business, but the floundering office rental company “is still on the hook for its payments to landlords.”