The Wall Street Journal - 19.03.2020

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TECHNOLOGY: LAPTOPS ARE SOLD OUT AS REMOTE WORK SURGES B4

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BUSINESS & FINANCE

MARKETS

NYSE to close

trading floor

and go all-electronic

to slow coronavirus.B11

Stocks, bonds and commodi-

ties fell Wednesday in a simul-

taneous selloff as investors

scrambled to raise cash to buf-

fet themselves against the wid-

ening economic damage caused

by the coronavirus pandemic.

The Dow Jones Industrial

Average closed below 20000

for the first time since early

2017, the yield on the one-

month U.S. Treasury bill briefly

turned negative for the first

time in almost five years, and

oil prices tumbled to the lowest

level since 2002.

The carnage in the stock

market was broad and deep.

Myriad stocks were trading at

their lowest levels in five years

or more. Trading was halted in-

traday for the fourth time this

month after the S&P 500 lost

more than 7%, triggering a cir-

cuit breaker.

United Airlines Holdings,

MGM Resorts International

and Carnival all lost more than

25% Wednesday. That extended

a bruising selloff: All three

stocks have lost about three-

quarters of their value over the

past month.

Investors even shunned as-

sets like government bonds and

gold that are normally consid-

ered the safest, which rarely

happens when stocks are also

falling. The yield on the U.S. 10-

year Treasury note rose to

1.259% from 0.994% Tuesday as

bond prices tumbled. Gold fell

3.1%, and silver declined 5.9%.

The selling of government

debt shows the market mental-

ity has completely flipped, said

Peter Boockvar, chief invest-

ment officer at Bleakley Advi-

sory Group.

“Now that they’ve gotten

around to U.S. Treasurys, that

tells you that legitimately noth-

ing is safe,” he said. “There’s no

place to hide other than cash.”

The Dow industrials ended

the day down 1,338.46 points,

or 6.3%, to 19898.92. At one

point, it was down more than

2,300 points.

The S&P 500 dropped 131.09

points, or 5.2%, to 2398.10. The

Nasdaq Composite declined

344.94 points, or 4.7%, to

6989.84. All three indexes are

down about 30% from their

mid-February highs.

The speed and depth of this

downturn has surprised even

veterans of past downturns.

During the financial crisis, the

Dow industrials lost about 54%

from their October 2007 high

to the bottom in March 2009, a

span of 355 trading sessions.

Please turn to page B11

ByPaul Vigna,

Anna Isaac

andXie Yu

Dow Sinks

6.3% With

Widening

Selloff

INSIDE

Online grocery orders awaited delivery at a Whole Foods in Washington, D.C., on Tuesday.

JIM LO SCALZO/EPA/SHUTTERSTOCK

and Russia over their share of

energy markets—has amplified

the decline in fuel prices.

U.S. crude oil extended a re-

cent crash Wednesday, tum-

bling 24% to $20.37 a barrel—

its lowest level in 18 years.

Prices ended last year above

$61.

Meanwhile, the average

price of a gallon of regular

gasoline in the U.S. has fallen

to about $2.20 from $2.55 at

the end of last year, according

to price-tracking company

GasBuddy. That figure could

drop below $2 within a week

and fall toward a 2016 low of

$1.66, said Patrick DeHaan,

head of petroleum analysis at

the firm.

Analysts say the lack of fuel

demand could keep pushing

prices lower, underscoring

how the shutdown in so many

parts of the economy is chal-

lenging investors and policy

makers trying to respond to

“Just when we thought we

were catching up, this over-

whelmed the system again,”

said Pradeep Elankumaran,

founder and chief executive of

Farmstead, a grocery delivery

business in the San Francisco

Bay Area that he said has expe-

rienced a doubling of orders in

recent days. Mr. Elankumaran

said customers who place an

order can expect to wait six

days for it to arrive.

Like other delivery compa-

nies, Farmstead is adding staff

and making other adjustments

to meet the surge, he said. Oth-

ers are expanding delivery

hours and adding more servers

to handle the surge in traffic to

Please turn to page B2

Grocers aren’t meeting the

now-intense demand for their

delivery services, as consumers

endure cancellations and long

waits on orders they are plac-

ing to prepare for long

stretches at home.

Some customers say their

orders have arrived with items

missing or after days-long de-

lays. Websites are crashing

from high traffic.

Jittery over the coronavirus

epidemic, Americans already

had been stocking up on sup-

plies, but demand for grocery

delivery soared even higher in

recent days after officials

across the country barred large

gatherings, instructed many

restaurants to close, and ad-

vised people to stay home.

BYJAEWONKANG

As Demand for Grocery Delivery Soars, Delay Can Be Days

the coronavirus.

“There are just many more

moving parts,” said Torsten

Slok, chief economist at

Deutsche Bank Securities.

“You don’t think about a sud-

den drop-off in people driving,

airlines flying and even truck

driving.”

With more schools closing

and people working remotely,

rush-hour congestion in some

hard-hit cities such as Seattle

and Boston was down by al-

most half on some days last

week, according to an index of

congestion developed by

transportation data provider

TomTom NV.

Andrew Busch, 33 years old,

who lives outside Milwaukee,

said gasoline in his area has

fallen from about $2.60 a gal-

lon toward the end of last year

to below $2 currently. The se-

nior financial analyst at finan-

cial-technology firm Fiserv

Inc. normally drives to work

with his wife, a health-care

worker. Since Mr. Busch is

now working remotely, he said

he plans to still drive his wife

just to get out of the house

Please turn to page B2

Under normal circum-

stances, the recent fall in gas

prices would make Sharon

Sykes happy. But she isn’t

driving much these days.

Her three children are

home from school because of

the coronavirus, and the 45-

year-old living in the Dallas

suburbs has seen her tennis

games and lunches with

friends canceled. Mrs. Sykes’s

husband is working from

home, also cutting down on

the number of trips the family

will take, even with a regular

gallon of gasoline only costing

about $1.75 a gallon locally.

“My tank should last three

weeks,” Mrs. Sykes said.

She isn’t alone. Demand for

fuel around the world has

plummeted because of travel

restrictions and precautionary

measures taken to contain the

new coronavirus, which has

sent markets into a tailspin

and threatens to tip the world

economy into a recession. At

the same time, an expected

glut of crude oil—due to a

clash between Saudi Arabia

BYAMRITHRAMKUMAR

Forced to Stay Home, U.S. Motorists

Miss Out on Declining Gasoline Prices

U.S.crude-oilproduction,

monthly

Sources: Energy Information Administration (production); GasBuddy (price)

12

0

2

4

6

8

10

million barrels a day

2008 ’12 ’16 ’19

Averagepriceforagallonof

regulargasoline,weekly

$3.00

2.00

2.20

2.40

2.60

2.80

a gallon

2017 ’18 ’19 ’20

U.S. crude prices plunged to

their lowest levels in 18 years

on Wednesday, as governments

tightened travel restrictions

across the world and the con-

tinuing Saudi-Russian price war

showed no signs of abating.

West Texas Intermediate fu-

BYDAVIDHODARI

ANDJOEWALLACE

much of the money they save

from cheaper gasoline at the

pump.

“The negatives of the drop

in oil capital expenditures can

easily offset the consumer sav-

ings,” said Andrew Sheets, a

strategist at Morgan Stanley. “I

think the immediate economic

impact is negative and contrib-

utes to the global recession.”

With flights grounded and

borders closing across the

Western Hemisphere, demand

for oil and its refined products

has plummeted, leaving invest-

ment banks scrambling to slash

Please turn to page B5

serve.

However, investors have now

come to the realization that

“the government is a Dutch boy

with his finger in the dike,” Mr.

Marshall said.

The slide in oil prices is al-

ready punishing high-cost pro-

ducers in the U.S. shale patch

and is one factor pushing the

world economy toward reces-

sion, analysts say.

American oil producers are

expected to slash output and

investment, while containment

measures implemented to slow

the coronavirus’s spread may

stop consumers from spending

ward guidance for demand is

being decimated.”

Saudi Arabia’s Ministry of

Energy has instructed the Saudi

Arabian Oil Company to supply

12.3 million barrels a day of

crude to the market in the com-

ing months.

WTI and Brent have both

been hammered this week, fall-

ing 36% and 26%, respectively.

U.S. crude futures had, until

Wednesday, suffered a smaller

blow, partly because the Trump

administration said late last

week that the government

would purchase U.S. crude to

fill its Strategic Petroleum Re-

tures—the main U.S. crude

gauge—dropped 24% to $20.37

a barrel, hitting their lowest

level since February 2002.

Brent crude, the global bench-

mark, fell 13% to $24.88 a bar-

rel, its lowest level since May

2003.

Oil’s losses accelerated

Wednesday due to a combina-

tion of Saudi and Russian plans

to increase output, and “larger

governments taking the corona-

virus risk more seriously and

imposing stronger lockdown

measures,” said Edward Mar-

shall, commodities trader at

Global Risk Management. “For-

Oil Prices Crash to 18-Year Low

Virus lockdowns,

recession forecast and

world glut accelerate

the sector’s losses

Detroit’s car companies have

agreed to temporarily shut

down factories in the U.S., Mex-

ico and Canada to limit the

spread of the new coronavirus,

a work stoppage that will affect

hundreds of thousands of fac-

tory employees.

Executives from General

MotorsCo.,Ford MotorCo.

andFiat Chrysler Automobiles

NV came to the decision

Wednesday following discus-

sions with union leaders and as

concerns among workers were

growing that the virus would

spread rapidly in the plants,

where thousands of employees

work side by side each day.

The companies said they

would soon start suspending

factory operations until at least

March 30 to clean facilities and

develop other preventive mea-

sures to limit the virus’s

spread. GM said it is also mak-

ing the move in part to respond

to “market conditions,” as vehi-

cle sales nationally fall off.

The companies have agreed

to treat the virus-related shut-

down like other routine work

stoppages, when workers are

temporarily laid off. In these

cases, the company is required

to provide affected employees

with extra pay to supplement

unemployment benefits.

Honda MotorCo. andToy-

ota MotorCo. also on Wednes-

day said they would temporar-

ily close their North American

factories next week to respond

to virus concerns and falling

consumer demand. The compa-

nies’ plants will close for six

and two days, respectively.

The virus-related disrup-

tions that halted factories and

tanked sales in China and Eu-

rope are now hitting hard in

the U.S., which for years has

been the world’s most lucrative

car market and the source of

most profit for the Detroit

companies. The shutdowns also

likely will spill over to U.S.

parts suppliers and other firms

dependent on car factories for

business.

The outbreak has begun

Please turn to page B4

BYBENFOLDY

ANDNORANAUGHTON

Car Makers

Shut North

American

Factories

With her children out of school and her husband working at home, Sharon Sykes says, ‘My tank should last three weeks.’

ANDY JACOBSOHN FOR THE WALL STREET JOURNAL

 Demand for General Mills

products rises .......................... B2

BUSINESS

Epidemic empties

workplaces, but some

wanted employees

to show up.B3