Stocks rally…Service sector contracts…Trade deficit rises
NEW YORK (AP) – Stocks are rallying worldwide on Tuesday as more countries relaxed restrictions on businesses, raising hopes for a recovery from the historic plunge sweeping the global economy. The S&P 500 was up 1.4% in morning trading following similar gains in Paris, London and Hong Kong. Crude oil also continued its mini-rally after falling to record lows late last month. The stock market’s gains were widespread, and smaller stocks were doing better than the rest of the market. That’s a sign of rising expectations for coming economic growth. So is a climb in longer-term Treasury yields.
WASHINGTON (AP) – The U.S. service sector plunged into contraction territory for the first time in a decade in April as the shutdowns and layoffs that occurred last month because of the coronavirus took a toll. The Institute for Supply Management said Tuesday that its service-sector index fell to a reading of 41.8 April, compared to a March reading of 52.5. Any reading below 50 signals that the service sector, where the majority of Americans work, is in a contraction. It was the first time the services index has been in contraction since December 2009 and it was the lowest reading since the index stood at 40.1 in March 2009, at the depths of the Great Recession.
WASHINGTON (AP) – The U.S. trade deficit rose in March as the coronavirus outbreak battered America’s trade with the world. The gap between what the United States sells and what it buys abroad rose 11.6% in March to $44.4 billion from $39.8 billion in February. U.S. exports fell 9.6% to $187.7 billion, and imports fell 6.2% to $232.2 billion. Total trade – exports plus imports – came in at $419.9 billion in March, down 7.8% from February and 11.4% from March 2019. The politically sensitive deficit in the trade of goods with China fell 21.3% to $15.5 billion in March as exports rose slightly and imports fell. The coronavirus and the lockdowns and travel restrictions meant to contain it have hammered the world economy and paralyzed global trade.
UNDATED (AP) – The health insurer Humana will pick up the tab for millions of customers when they are ready to ease COVID-19 social distancing and return to the doctor’s office. The insurer said Tuesday that it is waiving deductibles and other out-of-pocket costs for all Medicare Advantage customers who visit their primary care doctor or see a behavioral health specialist. The waiver will run through the rest of the year and applies to care inside the health insurer’s network of doctors and therapists. Humana provides Medicare Advantage plans for more than 4 million people.
DETROIT (AP) – Major U.S. automakers are planning to reopen North American factories within two weeks, potentially putting thousands of workers back on the assembly line as part of a gradual return to normality. Fiat Chrysler CEO Mike Manley said Tuesday that his company plans to start reopening factories on May 18, but that requires an easing of government restrictions. For now, Michigan’s shelter-at-home order remains in effect until May 15. Detroit automakers will likely be on the same timetable because their workers are represented by the same union. The United Auto Workers union on Tuesday appeared to be onboard.