Economic toll of outbreak deepens, duration remains unknown

The Dow is plunging again and other major indexes like the S&P 500 and the Nasdaq are suffering greater percentage declines

The Dow over the past five days: up 1,293, down 786, up 1,173, down 967. The Dow tumbled 800 points at the opening bell Friday. The VIX, an index known as Wall Street’s fear barometer, is hovering at levels not seen since banks began to fall during the financial crisis. If there was a week that uncertainty and the potential economic damage from the coronavirus became clear, it may be this one. Sectors that cater to almost any public activity … movie theaters, business conference organizers, hotels, airlines, amusement parks, have lost billions in value as stockholders flee to safer ground like U.S. Treasury notes, which now payout close to nothing. Following is a brief look at how things are changing in the economy and the workplace today as the outbreak widens.

HEADWINDS: Germany’s Lufthansa and its subsidiaries Austrian Airlines and Swiss plan to cancel all flights to and from Israel for three weeks after Israeli authorities announced tough restrictions on travelers from several countries because of the new coronavirus. The airline industry is among the hardest hit since the outbreak, forcing carriers to reassess their near-term financial expectations. An industry group said the spreading coronavirus could cost airlines as much as $113 billion in lost revenue. That figure, released Thursday, is four times the number released just two weeks ago by the The International Air Transport Association, which is imploring governments for assistance.

SHIPWRECK: Passengers and crew members aboard a cruise ship being held off the California coast are awaiting coronavirus test results Friday. The Grand Princess lays at anchor near San Francisco on Thursday after a traveler from a previous voyage died of the disease and at least four others became infected. There are more than 3,500 people aboard the 951-foot (290-meter) vessel. Tests were ordered for 45, according to Princess Cruises.

MARKET ROILS: A plunge in global markets that began in the U.S. Thursday gained steam on Friday with rumors that Chinese officials might be overstating the extent to which its industry is getting back on its feet. The Dow tumbled 800 points at the opening bell. The S&P 500 and the Nasdaq are suffering more severe percentage declines. Markets in Germany and France are worse.

BUSINESS NOT AS USUAL: Gap closed its New York office and is asking employees to work from home until further notice after one of its employees was infected. The San Francisco retailer told The Associated Press that the individual was not in the office Thursday and is recovering at home. It could not be learned how the Gap employee contracted COVID-19.

Microsoft has asked its employees who can work from home to do so due to the impact of COVID-19. This means there’s less of a need for many of the company’s hourly workers, but Microsoft said it will continue to pay those workers their regular pay during this period.

Microsoft-owned career networking service LinkedIn said it’s recommending its San Francisco Bay Area employees work from home if they can. LinkedIn, based in Sunnyvale, California, is also postponing all non-essential business travel and not participating in external events in March and April.

Facebook previously announced that it was temporarily closing a Seattle office after a worker was diagnosed with the virus. Amazon this week said one of its employees in Seattle, and two in Milan had contracted the coronavirus. All were quarantined. The company told told its Seattle area employees to work from home if they can.

Walmart Inc. said it was restricting cross-border international travel to the most critical business trips, according to an internal memo shared by the company. In the U.S., Walmart said that trips to its stores and clubs will continue, but that it will restrict travel to conferences, trade shows and other events.

Walmart has canceled the U.S. Customer Conference that was slated to be in Dallas next week. Instead, that meeting will be virtual.

ENERGY: The price of oil fell 6% and a barrel could be had for close to $43. OPEC is pushing for supply cuts, but it doesn’t seem to matter. The global economy was already slowing and the spread of the virus is certain to be a further drag.


The Associated Press receives support for health and science coverage from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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