By: Ella Koeze·Source: Refinitiv
Stock indexes stabilized on Tuesday, after a volatile day of trading on Monday, as Congress passed a $900 billion stimulus package and anxiety about a fast-spreading strain of the coronavirus in Britain eased.
On Wall Street, the S&P 500 was down about 0.5 percent. The index had fallen close to 2 percent at its worst point on Monday, before recovering most of those losses. The Stoxx Europe 600 rose 1.3 percent, after dropping 2.3 percent on Monday. The FTSE 100 in Britain was 0.6 percent higher after it fell 1.7 percent the previous day.
In Washington, after weeks of negotiations, Congress overwhelmingly approved a coronavirus stimulus package that includes billions of dollars for American households and businesses that have been hurt by the pandemic. It restores a supplemental unemployment benefit for millions of unemployed Americans for 11 weeks and includes money for another round of $600 direct payments.
The British pound continued its decline as investors waited for an update on the Brexit trade negotiations. In just nine days, the transition period ends and Britain could lose tariff-free access to its largest trading partner if a deal is not reached. The pound fell 0.4 percent against the U.S. dollar and 0.2 percent against the euro.
The British currency had fallen sharply on Monday as more than 40 countries cut off travel links from Britain in an effort to stop the spread of a new strain of coronavirus that was “out of control” in parts of England. But on Tuesday, the European Commission advised European Union members to lift blanket bans on travelers, recommending testing or quarantines instead. And one vaccine expert said that there was no evidence at the moment to suggest that the current product would have to be adapted.
Peloton jumped 13 percent after it said on Monday it would acquire Precor, a Seattle-based fitness equipment manufacturer, to ramp up production of its stationary bikes and treadmills to keep pace with surging demand during the pandemic. The $420 million deal includes plans to acquire Precor’s factories, with more than 625,000 square feet of manufacturing space.
Apple rose 2 percent, extending a rally that began late on Monday after Reuters reported that it continued to have plans to produce self-driving vehicle for consumers, aiming at 2024 for production.
Congress will allow a decades-old federal program that insures mortgages for thousands of nursing homes to provide emergency financial aid to elder care facilities that have been left hurting for cash because of the Covid-19 pandemic.
The measure was tucked away in the spending package that was approved Monday and awaits President Trump’s signature. It would allow nursing homes posting operating losses because of the pandemic to get emergency loans to cover mortgage payments, insurance and property taxes. The mortgage insurance program is run by the Department of Housing and Urban Development and guarantees mortgages for roughly 15 percent of the nation’s nursing homes.
Nursing homes have borne the brunt of the crisis, reporting more than 100,000 deaths related to the pandemic. The nation’s largest nursing home operator, Genesis Healthcare, warned in November that it might have to file for bankruptcy protection.
Beth Martino, senior vice president of public affairs for the American Health Care Association, which represents thousands of elder care facilities, said the association “has advocated for this proposal so our providers can continue to focus on keeping residents and staff as safe as possible during the pandemic.” She said nursing homes and elder care facilities “are facing the worst financial crisis in the history of the industry.”
The mortgage insurance program, though, has been criticized for not adequately assessing and monitoring nursing home operators and owners.
In 2018, the program incurred its worst loss when a chain of nursing homes in Illinois defaulted on $146 million in mortgages. That prompted a series of investigations and led to federal charges against two former operators, including a Chicago-area rabbi.
Hundreds of dollars in direct payments may start going to American households as soon as next week after Congress overwhelmingly passed a $900 billion stimulus package sending billions of dollars to individuals and businesses grappling with the economic and health toll of the coronavirus pandemic.
The long-sought relief package was part of a $2.3 trillion catchall package that included $1.4 trillion to fund the government through the end of the fiscal year on Sept. 30. It included the extension of routine tax provisions, a tax deduction for corporate meals, the establishment of two Smithsonian museums, a ban on surprise medical bills and a restoration of Pell grants for incarcerated students, among hundreds of other measures.
Though the $900 billion stimulus package is half the size of the $2.2 trillion stimulus law passed in March that provided the core of its legislative provisions, it remains one of the largest relief packages in modern American history. It will revive a supplemental unemployment benefit for millions of unemployed Americans at $300 a week for 11 weeks and provide for another round of $600 direct payments to adults and children.
“I expect we’ll get the money out by the beginning of next week — $2,400 for a family of four — so much needed relief just in time for the holidays,” Treasury Secretary Steven Mnuchin said on CNBC. “I think this will take us through the recovery.”
President-elect Joseph R. Biden Jr., who received a coronavirus vaccine on Monday with television cameras rolling, has insisted that this bill is only the beginning, and that more relief, especially to state and local governments, will be coming after his inauguration next month.
Lawmakers hustled on Monday to pass the bill, nearly 5,600 pages long, less than 24 hours after its completion and before virtually anyone had read it. At one point, aides struggled simply to put the measure online because of a corrupted computer file.
The legislative text is likely to be one of the longest ever, and it became available only a few hours before both chambers approved the bill. In the Senate, the bill passed 92 to 6. It will now go to President Trump for his signature.
Another dose of relief is finally on the way for the millions of Americans facing financial distress because of the pandemic.
Congress on Monday night passed an economic relief package that would provide a round of $600 stimulus payments to most Americans and partly restore the enhanced federal unemployment benefit, offering $300 for 11 weeks. The agreement also contains provisions related to student loans, rental assistance and medical bills.
How quickly the money reaches your pocket will depend on several factors, though. The New York Times’s Tara Siegel Bernard and Ron Lieber have compiled a list of answers to your questions about pandemic relief, including:
Will I receive another stimulus payment?
When can I expect to receive my check?
How does the aid package affect unemployment insurance?
What about relief for housing bills like rent and mortgages?
The pandemic aid bill contains $285 billion for additional loans under the Paycheck Protection Program — the government’s small-business program created under the CARES Act — through March 31, while doing away with the restriction that left more than $100 billion unspent over the summer. The New York Times’s Stacy Cowley reports on what we know based on outlines of the bill circulating among congressional officials on Monday:
The new relief bill offers a second cash infusion for those who meet stricter terms: Borrowers with fewer than 300 employees that had a 25 percent drop in sales from a year earlier in at least one quarter could qualify for an additional loan of up to $2 million.
Hotels and food-service businesses are eligible for bigger loans this time, up to 3.5 times their average monthly payroll. Other borrowers would again be limited to 2.5 times their payroll.
Publicly traded companies are ineligible for the new loans, eliminating a provision that provoked a public outcry as deep-pocketed restaurant chains, software companies and drug makers, among others, collected taxpayer-funded loans.
The new bill expands the list of expenses that a loan could be used to pay, which previously were limited mostly to payroll, rent and utilities. Businesses could now use the money to buy supplies from their vendors, buy protective equipment for their staff or fix property damage “due to public disturbances,” according to a House Small Business Committee summary.
The plan would allow business owners who received loans in the program, which are tax-free, to claim deductions for expenses they paid for with loan proceeds.
The bill would also allocate $50 million to the Small Business Administration for audits and other efforts to address fraud in the program, which was a significant problem in the first round of funding.
The bill includes other aid measures that are not specifically part of the Paycheck Protection Program but could nonetheless help many small businesses. Those include a $15 billion grant fund for closed theaters, museums, zoos and live event venues, and $12 billion for Community Development Financial Institutions, which make loans and grants to people and communities that are often unable to get traditional banks to do business with them.
A month after BuzzFeed announced that it would buy HuffPost, Group Nine Media, the owner of TheDodo, NowThis, Thrillist, Seeker and PopSugar, sent a strong signal that it plans to get bigger.
The company, led by the chief executive, Ben Lerer, formed a special purpose acquisition company, according to an S.E.C. filing on Monday. In the filing, Group Nine said it planned to merge with similar companies but did not cite any agreements with specific partners.
“We initially intend to focus our search on target businesses in the digital media and adjacent industries, including the social media, e-commerce, events, and digital publishing and marketing sectors,” the company said in the filing.
“Our objective,” it added, “is to create a scalable digital media platform.”
Group Nine got its start in 2016, when the companies behind Thrillist, NowThis and TheDodo joined with Seeker, a digital network belonging to Discovery Communications. Discovery kicked in $100 million to help to new company get going, and Mr. Lerer, the former head of Thrillist, became its leader.
Group Nine expanded last year when it acquired PopSugar, a website with a shopping platform, a cosmetics line and a festival business, from the husband-and-wife duo Brian and Lisa Sugar. That deal came as part of a wave of consolidation in the digital media business, after Vox Media’s purchase of New York Media, the company behind New York magazine, and Vice Media’s acquisition of Refinery29.
After the BuzzFeed-HuffPost merger and Group Nine’s federal filing, digital media companies seem likely to continue the trend of joining forces in an industry that is not the wide-open field it used to be. Google and Facebook have grabbed ad revenue away from publishers, while Twitter, Facebook, YouTube and Twitch have monopolized the time and attention of would-be readers. And many legacy media outlets have become web savvy, hiring digital journalists, audience specialists and engineers away from popular sites, while also figuring out ways to persuade their customers to spring for expensive subscriptions.
With the formation of a special purpose acquisition company, a popular financial tool that effectively allows privately held companies to go public without an initial public offering of stock, Group Nine moved closer to making more deals. A Group Nine spokeswoman declined to comment.
Ripple, one of the most valuable companies in the cryptocurrency industry, said on Monday that it expected to be sued by the Securities and Exchange Commission for violating investor protection laws. The suit is expected to accuse the San Francisco-based company of selling unregistered securities when it sold the digital token XRP to investors around the world. Brad Garlinghouse, Ripple’s chief executive, said in an interview that the suit would be against the company along with Mr. Garlinghouse personally, and one of the company’s founders, Chris Larsen.
Google said on Monday that it had not used its multibillion-dollar deals with other large tech firms to protect its position as the dominant online search engine, in the company’s first formal rebuttal to the Justice Department’s accusations that those deals violated antitrust laws. The filing is a paragraph-by-paragraph — and sometimes sentence-by-sentence — denial of the claims made by the government and a group of states that have joined its lawsuit. “People use Google Search because they choose to, not because they are forced to or because they cannot easily find alternative ways to search for information on the internet,” the company said.
The Walt Disney Company on Monday named Alan Bergman, 54, chairman of its movie division, succeeding Alan F. Horn, 77, a venerable figure in Hollywood who has led Walt Disney Studios since 2012. Mr. Horn will continue to serve as chief creative officer. Mr. Bergman joined Walt Disney Studios in 1996 and rose through the business affairs ranks, overseeing finance, technology, legal affairs and human resources. Most recently he served as co-chairman of the division. Mr. Bergman and Mr. Horn will report to Bob Chapek, Disney’s chief executive.
The Department of Housing and Urban Development has extend a moratorium on evictions and foreclosures on home mortgages its insures against default, protecting many first-time home buyers. The moratorium will now run through Feb. 28. It had been set to expire at the end of the month. The foreclosure moratorium applies to mortgages backed by the Federal Home Administration.