Stocks rose yesterday as investors bet the U.S. economy could start to reopen soon, while oil prices jumped for a fifth straight day.
The Institute for Supply Management’s survey of non-manufacturing companies plummeted to 41 in April from 52% in March, breaking a string of 112 straight months of positive readings. Any number over 50% is considered a sign of growth; readings below 50% signal contraction or even recession. The massive losses suffered by retailers, restaurants, hotels, airlines and other service-oriented companies caused the key economic bellwether to plunge to the lowest level since the 2007-2009 Great Recession.
Walt Disney’s profit dove more than 90% in the second quarter, an example of the drastic effects on the company from the pandemic, which executives said cost the media giant more than $1 billion in sales just in its theme-parks division.
Shares of Norwegian Cruise Line took a dive, after the cruise operator issued a “going concern” warning. Norwegian’s warning also weighed heavily on the stocks of rivals Carnival and Royal Caribbean Cruises. The stocks’ selloffs come despite Norwegian also announcing a series of financial transactions that if completed would provide enough liquidity to fund operations even if its cruises remain suspended for over 12 months.
With Northwest Quadrant Wealth Management, I’m Tyler Simones