Stocks rally…IMF predicts worst year since the Great Depression…Bank profits plunge
UNDATED (AP) – Stocks are broadly higher in morning trading on Wall Street as the White House and a number of state governors weigh how to gradually reopen the economy. Traders also have their eye on earnings reports from several big companies for the first three months of the year. Technology stocks are powering much of the rally. The Nasdaq composite index was up about 3.4% in the early going. The S&P 500 rose 2.8%, recovering all of its losses yesterday. The Dow Jones Industrial Average jumped more than 600 points, or 2.6%.
WASHINGTON (AP) – The International Monetary Fund says the world economy in 2020 will suffer its worst year since the Great Depression of the 1930s because of the coronavirus pandemic. The IMF expects the global economy to shrink 3% this year before rebounding in 2021 with 5.8% growth. However, it cautions that prospects for a rebound next year are clouded by uncertainty. The IMF’s assessment represents a breathtaking downgrade. In its previous forecast in January, before COVID-19 emerged as a grave threat, it had forecast moderate global growth of 3.3% this year. But measures to contain the pandemic have suddenly brought economic activity to a near-standstill across much of the world.
NEW YORK (AP) – Wells Fargo says its profits plunged nearly 90% in the first quarter as the bank had to set aside billions of dollars to cover potentially bad loans due to the coronavirus pandemic. Wells boosted the money in reserve for potentially bad loans to $3.83 billion from $845 million a year ago as borrowers face the possibility of defaulting on their loans. Meanwhile, JPMorgan Chase said that its first-quarter profit plunged nearly 70%, as the bank was forced to set aside billions of dollars to cover potential losses.
NEW YORK (AP) – Johnson & Johnson is cutting its profit expectations for the year as the coronavirus disrupts economies worldwide. Medical procedures, hospital and doctor visits in particular have been upended by the outbreak and Johnson & Johnson on Tuesday becomes the first major U.S. drug and medical supply company to post quarterly earnings. The company racing to develop a vaccine for the coronavirus.
DETROIT (AP) – Fiat Chrysler is recalling more than 550,000 pickup trucks and SUVs worldwide because the windshield wiper arms can come loose and stop the wipers from working properly. The recall covers certain 2019 and 2020 Ram 1500 pickups, 1500 Classic pickups and Jeep Compass SUVs. Documents posted by the National Highway Traffic Safety Administration say loose wiper arms can reduce a driver’s visibility. Fiat Chrysler says in a statement that it has no reports of crashes or injuries from the problem. Most of the recalled vehicles are in the U.S. and Canada.