The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the national and global response, the work place and the spread of the virus.
— Bedding maker Tempur Sealy International anticipates its second-quarter sales will be down 15% compared with a year earlier, as strong sales in May and early June are mitigating a very difficult April.
The company said Wednesday that its quarter-to-date orders have significantly improved from previous expectations. The improvement in order trends has been broad-based geographically, driven by improving wholesale channel trends and more than 125% growth in global online sales for the quarter-to-date.
— J.C. Penney said it started running going-out-of business sales at 136 stores on Wednesday. Penney filed for Chapter 11 bankruptcy protection last month, making it the biggest retailer to do so since the coronavirus pandemic forced non-essential stores to be shut down temporarily. As part of its bankruptcy reorganization, Penney has said it plans to permanently close nearly a third of its 846 stores in the next two years. That would leave it with just over 600 locations.
BANKS: The FDIC says that profits for banks fell about 70% in the first quarter because of COVID-19, and they quadrupled money set aside against expected losses.
Net income totaled $18.5 billion in first quarter 2020, according to the Federal Deposit Insurance Corp. That’s a decline of $42.2 billion from a year ago. Deposits soared to about $1.24 trillion in the first quarter, up from about $258 billion in the previous quarter as many people decided to exit the stock market.
— AT&T has told the Communications Workers of America union that it plans to cut more than 3,400 technician and clerical jobs across the country over the next few weeks. The company also plans to permanently close more than 250 of its Mobility and Cricket Wireless stores, which would impact 1,300 retail jobs.
AT&T said in a statement Wednesday that there will be “targeted, but sizable reductions” in its workforce that will include executives, managers and union-represented employees. The company said it will be eliminating more non-payroll workers — the vast majority of whom are outside the U.S. — than managers or union-represented employees.
— Groupon furloughed or initiated exits with about 2,700 employees during the first quarter as it looked for ways to conserve cash amid the pandemic.
— Many white-collar workers at Ford in the U.S. and elsewhere won’t return to the office until next year, and some may work remotely forever.
When the coronavirus first hit earlier this year, Ford closed its factories and told thousands of white-collar employees to stay home. Factories reopened last month, and salaried workers were to return in September.
But in a companywide conference call Wednesday, executives said Ford will ask workers if they want to stay at home, return to the office, or work a blended schedule. Managers will talk with employees in August to determine where workers will be, spokeswoman Cassandra Hayes said. Ford has about 30,000 white collar workers in the U.S., and 12,000 have to be on site to work. Company polls have shown that a “large majority” want to continue working at home, she said.
Ford is preparing for workers to return starting in September, setting up work stations and securing protective equipment. But it’s possible the work won’t be finished and some employees won’t return until next year, Hayes said.
MARKETS: Wall Street stocks ended mostly lower Wednesday, as markets around the world take a pause following their big rally a day before.
— Shares of cruise operators fell Wednesday as Norwegian Cruise Line Holdings announced it’s extending its suspension of global cruise voyages to include all trips embarking between Aug. 1 and Sept. 30. The extension applies to all three cruise brands, Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. Norwegian is also canceling select voyages through October, including Canada and New England sailings, due to travel and port restrictions.
The cancellations exclude September Seattle-based Alaska voyages.
— Southwest Airlines extended through September its promise to book planes lightly enough to leave middle seats open — although the airline, which doesn’t assign seats, won’t stop people from taking middle seats.
U.S. airlines have promised to step up enforcement of their own requirement that passengers wear masks, with some promising to ban customers who don’t wear them. Airline unions want the government to make masks a federal rule, like the ban on smoking in airplane bathrooms, but the Federal Aviation Administration has declined to step in.
HOUSING: Homebuyers are increasingly looking to make purchases in suburban and rural areas. Realtor.com says that in May, online listing views for its website grew by 13% in suburban zip codes, nearly doubling the pace of growth of urban areas.
While time on the market has slowed nationally due to complications surrounding deal closings during the pandemic, suburban and rural markets are seeing lower increases due to strong consumer interest. Time on market increased by 25% in rural areas, 30% in suburban areas and 35% in urban areas year-over-year. This is the widest gap in percent change since realtor.com started tracking the metric four years ago.