The Wall Street Journal - 14.03.2020 - 15.03.2020

B2| Saturday/Sunday, March 14 - 15, 2020 **** THE WALL STREET JOURNAL.

THE SCORE

THE BUSINESS WEEK IN 14 STOCKS

OCCIDENTAL PETROLEUM CORP.

The novel coronavirus is suppressing demand for oil

as the industry weathers a price war. In response,

Occidental Petroleum said Tuesday it will slash

spending and dividends. Companies with high debt

levels like Occidental, which bought rival Anadarko Petroleum

Corp. for $38 billion last year, are particularly vulnerable be-

cause Wall Street isn’t inclined to rescue them. Shares in Oc-

cidentalgained 15% Tuesdayfollowing the announcement.



OXY

15%

PERFORMANCEOFENERGY STOCKS

Source: FactSet

0

• 
  


• 
  


• 
  


• 
  


• 30


• 
  


• 
  

%

Occidental

Petroleum

Chevron

Exxon

Mobil

Mon. Tues. Wed. Thurs. Fri.

Your 401(k) May Do

A Bit Better This Time

Losses in near-retirement target-date funds are

less serious than in the financial crisis—so far

RETIREMENT|ANNE TERGESEN

PHOTO ILLUSTRATION BY EMIL LENDOF/WSJ; PHOTOS: ISTOCK

the end of 2019. The funds have

become staples in workplace re-

tirement plans thanks to a 2006

law that sanctions their use as de-

fault investments for employees

who are automatically enrolled.

Target-date funds for people

close to retirement “are holding up

better, which is important given

that this is when nest eggs are

biggest and it’s really important to

preserve them,” Mr. Acheson said.

The spread of automatic enroll-

ment has driven a surge into these

funds. They accounted for 37% of

the assets in 401(k)-style plans

Vanguard Group administered in

2019, up from 12% in 2010. Target-

date funds attracted 59% of new

contributions to 401(k)-style plans

last year, according to data on

plans Vanguard administers.

LIVE NATION

ENTERTAINMENT INC.

The concert industry is brac-

ing for a rough year as coro-

navirus stands to threaten its

critical summer season. Live

Nation Entertainment, the

world’s largest concert promoter, and ri-

val Anschutz Entertainment Group are

postponing shows at arenas, The Wall

Street Journal reported late Thursday.

Various cities and states have banned

gatherings of certain sizes. The

Coachella Valley Music and Arts Festival,

initially slated for April, was also post-

poned six months, while big-name art-

ists such as and Cher have called off

tours. Sharesgained 18% Friday.



LYV

18%

AMAZON.COM INC.

Some Amazon sellers have
been taking advantage of cor-
onavirus panic as anxious
shoppers turn online for face
masks, hand sanitizer and
other products that are be-
coming hard to find. Amazon has said it
has removed 530 , 000 offers and sus-
pended 2 , 500 accounts because of coro-
navirus-related price gouging, and re-
moved millions of products that make
unsupported claims about the coronavi-
rus. Other online marketplaces such as
eBay Inc. and Facebook Inc. have fea-
tured similarly high prices and question-
able products. Amazon.com sharesfell
3.8% Wednesday.



AMZN

3.8%

FIAT CHRYSLER

AUTOMOBILES NV
Italy’s coronavirus outbreak is
hitting that country’s big
manufacturers. Fiat Chrysler
Automobiles said Wednesday
it will lower production and
boost efforts to contain the spread of
the virus, including intensive sanitization
of work and rest areas, changing rooms
and washrooms. The auto giant has fac-
tories across Italy, including several in
the part of the country hardest hit by
the virus. Since last month, the com-
pany has asked most office-based em-
ployees to work from home and it says
all administrative work has proceeded
as normal. Sharesfell 3.6% Wednesday



FCAU

3.6%

AMERICAN AIRLINES GROUP

INC.

Airlines are cutting flights,

parking planes, freezing hiring

and reducing executive pay.

American Airlines said it

plans to cut domestic flying

by 7. 5 % and reduce international flying

by 10 % for the summer peak travel sea-

son. Coronavirus’s rapid impact on de-

mand has sent airlines reeling, and the

companies are preparing for the pros-

pect that recovery could take months,

rather than the quick bounceback many

first anticipated. To reduce costs, airlines

have started offering voluntary unpaid

leave to employees. American Airlines

sharesadded 15% Tuesday.



AAL

15%

CARNIVAL CORP.

Princess Cruises canceled all

its voyages for the next two

months and will cut short

some current trips, after two

of its ships suffered coronavi-

rus outbreaks. The Carnival-

owned cruise line is the first ocean car-

rier to suspend sailings as a result of

the new coronavirus. The suspension ap-

plies to voyages departing March 12 to

May 10 , Princess said Thursday. Current

trips with less than five days remaining

will continue, but those extending be-

yond March 17 will be cut short. The

cruise operator and the industry have

suffered greatly from the pandemic. Car-

nival sharesfell 31% Thursday.



CCL

31%

WALT DISNEY CO.

The happiest place on Earth

is shutting down as coronavi-

rus spreads. Walt Disney an-

nounced late Thursday it is

closing its Disneyland Resort,

Walt Disney World Resort

and Disneyland Paris through the end of

the month. Earlier that day, California

imposed a ban on public gatherings of

more than 250 , exempting movie the-

aters, theme parks and casinos. Disney

is also suspending new departures for

its Disney Cruise Line beginning Satur-

day and lasting at least until the end of

the month. The company said it will

continue to pay cast members. Disney

sharesadded 12% Friday.



DIS

12%

FACEBOOK INC.

The European Union is reviv-

ing an alliance formed last

year with U.S. tech compa-

nies to combat online political

disinformation. Its new focus:

false coronavirus information.

The European Commission, the bloc’s

executive body, has renewed a self-re-

porting system it created with Facebook,

Alphabet Inc.’s Google, Microsoft Corp.,

Twitter Inc. and Mozilla Corp. to ensure

that measures against disinformation

about the novel coronavirus are shared

quickly with the commission. The tech

companies promised to take down con-

tent deemed harmful to public health.

Facebook sharesfell 9.3% Thursday.



FB

9.3%

SLACK TECHNOLOGIES

The spreading coronavirus is

providing more business for

Slack. The company said late

Thursday that the global fall-

out from the pandemic is re-

sulting in a surge of interest

in its workplace-collaboration software,

though the impact isn’t reflected in its

fiscal 2020 earnings. Slack is seeing a

rush in free use of its service, but a

global slowdown in travel over virus

concerns could make it harder to close

new deals, said Allen Shim, the com-

pany’s chief financial officer. Slack’s

earnings outlook reflected that uncer-

tainty, Mr. Shim said. Sharesfell 8.2%

Friday.



WORK

8.2%

STARBUCKS CORP.

Not everyone can work from
home. U.S. food service work-
ers at chains like Starbucks
risk exposure to the novel
coronavirus and face pressure
to keep stores cleaner than
ever to reassure customers. Starbucks
said Wednesday it would pay any U.S.
workers in a 14 -day quarantine after ex-
posure to the coronavirus, as well as all
employees who are over 60 years old,
pregnant or have underlying health con-
ditions. The pandemic is already weigh-
ing on Starbucks’s bottom line after the
company temporarily shut down or lim-
ited hours at stores abroad. Starbucks
sharesfell 9.1% Thursday.



SBUX

9.1%

BANK OF AMERICA CORP.

Calming words from leaders of the biggest U.S.

banks failed to reassure investors as the stock

market officially entered bear territory. During a

White House meeting on Wednesday, attendees

from Bank of America, Citigroup Inc. and others said the

banks are in good shape despite the recent market turmoil.

The meeting failed to halt investor doubts, and Bank of

America sharesfell 9.5% Thursday.



BAC

9.5%

PERFORMANCEOFBANK STOCKS

Source: FactSet

0

• 35


• 30


• 
  


• 
  


• 
  


• 
  
  
  
  • 
    
  
  
  
  

%

Bank of

America

Citigroup

Goldman

Sachs

Mon. Tues. Wed. Thurs. Fri.

XEROX HOLDINGS CORP.

Xerox is taking a pause in its
campaign to take over HP
Inc., a sign that the coronavi-
rus pandemic is affecting deal
making. The company said
Friday that it is postponing
additional presentations, interviews with
the press and meetings with HP share-
holders. “Xerox needs to prioritize health
and safety of its employees, customers,
partners and affiliates over and above
all considerations,” Xerox Vice Chairman
and Chief Executive John Visentin said.
Both companies’ shares have fallen this
year as equities plunged into the bear
market on coronavirus concerns. Xerox
sharesgained 0.3% Friday.



XRX

0.3%

BROADCOM INC.

Broadcom pulled its financial

projections for the year, citing

uncertainty around the coro-

navirus pandemic. Instead,

the chip maker offered a rev-

enue forecast for the current

quarter, saying it expected revenue of

$ 5. 7 billion, falling short of analysts’

projections. Apple Inc., which accounted

for roughly 20 % of Broadcom’s revenue

last year, warned last month that it

would likely fall short of quarterly reve-

nue projections. Broadcom also said

Thursday that it would push debt pay-

ments to the second half of the year or

earlier if conditions improve. Sharesfell

11% Thursday.



AVGO

11%

LVMH MOET HENNESSY

LOUIS VUITTON SE

First China’s coronavirus out-

break weighed on demand

for luxury goods. Now Italy’s

outbreak could weigh on pro-

duction. Companies such as

LVMH Moët Hennessy Louis Vuitton are

straining to keep factories open while

adopting precautionary measures to

fight the spread of the disease in its

ranks. The makers of luxury goods are

providing workers with protective gear,

closing workplace cafeterias and warn-

ing employees to keep their distance

from each other. American depositary

shares of LVMHfell 6.3% Wednesday.

—Francesca Fontana



LVMUY

6.3%

In 2008, investors
were shaken when
many in or near re-
tirement saw a sig-
nificant percentage
of their 401(k) bal-
ances disappear.
Even those in so-called target-date
funds, generally designed to mini-
mize large swings close to retire-
ment, saw losses of 25% or more.
This time, amid fears of a global
economic slowdown tied to the
spread of the coronavirus, the hit
to those investors hasn’t been
nearly as large. That is, so far. It’s
still impossible to know how much
more damage we might be in for.
During the 2008 financial melt-
down, target-date portfolios for
people planning to retire by 2010
plunged by 36% on average from
the market’s precrisis peak on Oct.
9, 2007, to March 9, 2009, when
stocks began to rebound, accord-
ing to Morningstar Direct, a data-
base from Morningstar Inc. In con-
trast, from Feb. 20 through
Thursday, such portfolios for peo-
ple planning to retire in 2020 fell
close to 13%, on average.
From Feb. 20 through Thursday,
the S&P 500 stock index declined
27%. Friday’s rebound reduced the
drop to about 20%. The index fell
55% over the financial crisis.
During the financial crisis, the
36% loss by near-retirees in target-
date funds represented more than
two-thirds of the 53% decline suf-
fered by workers who were 30
years from retirement. By con-
trast, losses by people close to re-
tirement today are about half of
the 24% decline posted by funds
for workers who expect to retire
around 2050.
Over the past decade, due in
part to lessons learned during the
financial crisis, “the target-date
fund industry has matured signifi-
cantly,” said Leo Acheson, a direc-
tor at Morningstar.
Target-date funds, which take
an increasingly conservative ap-
proach as you near retirement age,
held about $2.3 trillion in assets at

As they have become more pop-

ular, these funds have also become

“more homogenous,” Mr. Acheson

said. In 2008, funds with similar

target dates posted widely diver-

gent results due, in part, to differ-

ing approaches to risk manage-

ment. While a 2010 fund in a

series from Wells Fargo that in-

vested conservatively lost 11% that

year, for example, the Oppen-

heimer Transition 2010 fund—sad-

dled with soured bets on mort-

gage-backed securities—sank 41%.

Since then, the performance gap

has narrowed considerably,

amounting to about 13 percentage

points for 2020 portfolios during

the recent stock-market selloff

through Thursday, according to

Morningstar. While the Putnam

RetirementReady 2020 fund lost

4.63% between Feb. 20 and March

12, the T. Rowe Price Retirement

2020 fund—which has a signifi-

cantly higher allocation to stocks—

declined 17% in that period.

Many target-date funds are de-

signed for people to stay in after

retirement. Joe Martel, a target-

date portfolio specialist at T. Rowe

Price Group Inc., said target-date

funds are “meant to be held for

decades.” The company believes

“the level of equity in our target-

date funds is necessary to help in-

vestors overcome the risk of run-

ning out of money in retirement.”

Many target-date funds have re-

vamped their approaches to man-

aging risk since 2008, said Mr.

Acheson. Portfolios closest to re-

tirement have an average of 45%

in stocks now, down from 50% in

2009, according to Morningstar.

With more assets flowing into

index-based target-date funds,

fewer managers are making large

bets that may result in perfor-

mance that significantly differs

from the benchmarks, said Brian

Miller, a senior product manager

in Vanguard’s portfolio-review de-

partment. He noted that some of

the funds that fared poorly in

2008, including the Oppenheimer

Transition funds, are now gone.

Internet Explorer web browser

with Windows, at one point rais-

ing the prospect of the company

being broken up on antitrust

grounds.

The eventual settlement with

the Justice Department placed

limits on how Microsoft operates

but kept the software giant in-

tact.

The success of Windows

helped turn Mr. Gates, a Harvard

University dropout, into one of

the world’s richest people. He has

plowed some of that wealth into

his foundation and other philan-

thropic causes.

Mr. Gates in 2008 scaled back

involvement in day-to-day opera-

tions of Microsoft, focusing more

on work the Bill & Melinda Gates

Foundation.

In 2014, when Mr. Nadella was

appointed CEO of the company,

Mr. Gates stepped down as chair-

man but stayed on as a board

member and technology adviser.

He continued to influence strate-

gic decisions at Microsoft and

visit its offices.

James Whittaker, a former dis-

tinguished engineer at Microsoft

who left the company in 2019,

said Mr. Gates continued to show

up at Microsoft’s campus once or

twice a month. He would fre-

quently weigh in on issues affect-

ing the company. “Whatever Bill

says becomes law,” Mr. Whittaker

said.

Berkshire Hathaway Chairman

and CEO Warren Buffett said for-

mer American Express Co. CEO

Kenneth Chenault would replace

Mr. Gates on the conglomerate’s

board.

Continued from page B

Gates Exits

Microsoft

Board