A10 SATURDAY, APRIL 4, 2020 LATIMES.COM
Interest rates
T- bill: 1 year .15 +0.07 -1.44 -2.
T- note: 5 year .36 -0.04 -0.98 -1.
T- note: 10 years. 58 -0.16 -0.95 -1.
T- bond: 30 years 1.22 -0.11 -0.82 -1.Weekly 6 month 1 year
Treasuries Yield change change changeMajor stock indexes
Dow industrials 2 1,052.53 -360.91 -1.69 -26.
S&P 500 2 ,488.65 -38.25 -1.51 -22.
Nasdaq composite 7 ,373.0 8 -114.23 -1.53 -17. 83
S&P 400 1 ,337.95 -37. 40 -2.72 -35.
Russell 2000 1 ,052.05 -33.76 -3.1 1 -36.
EuroStoxx 50 2 ,667. 15 -19.66 -0.73 -21.
Nikkei (Japan) 17,820.19 +1.47 +0.01 -24.
Hang Seng (Hong Kong) 23,236.11 -43.95 -0.19 -17. 57Daily Daily % YTD %
Index Close change change change6 Month CD 0 .48 0.49 0.70 0.
1 Year CD 0 .67 0.68 0.98 1.
2 Year CD 0 .73 0.74 1.02 1.
30 Year Fixed 3 .79 3.80 3.66 3.
15 Year Fixed 3 .20 3.28 2.98 3.
30 Year Jumbo 3 .92 3.90 3.80 4.Week 6 months 1 year
Bank & mortgage rates Rate ago ago agoCommodities
Oil: Barrel May 20
Gold Ounce Apr 20
Silver Ounce Apr 20Delivery Close Weekly 1 year
Commodity: Unit date in $ change change
2 8.34 +6.83 -34.
1 ,633.70 +8.70 + 343.
1 4.44 -0.04 -0.Associated Press (Bank and mortgage rate figures from Bankrate.com)Online updates
For current market coverage plus stock prices and
company data, go to latimes.com/business1800020000220002400026000280003000018000200002200024000260002800030000ONDFAJ MFriday:21,052.
Down 360.Dow: six months
Wall Street’s first reac-
tion to Friday’s stunningly
bad jobs report was to take it
in stride. But U.S. stocks slid
through the day as investors
looked ahead to the likeli-
hood that even worse num-
bers are on the way.
Stocks initially held
steady after the government
said U.S. employers cut
701,000 more jobs than they
addedlast month, the first
drop in nearly a decade.
Many businesses have
slammed to a halt amid at-
tempts to slow the spread of
the coronavirus outbreak,
and investors were fully ex-
pecting to see such abysmal
numbers.
But the market headed
lower as the day progressed
and, as has become typical
in recent Fridays, investors
looked to get out of stocks
ahead of the weekend, which
could be filled with even
more bad news. The losses
accelerated after New York’s
governor announced the
biggest daily jump yet for
deaths caused by the co-
ronavirus in the country’s
hardest-hit state.
“It was interesting to see
that the initial reaction to
the jobs number wasn’t
more significant,” said Lind-
sey Bell, chief investment
strategist at Ally Invest. “As
that sunk in, you started to
see the market start to sell
off after realizing that these
numbers are going to get a
lot uglier.”
The Standard & Poor’s
500 index fell 1.5%. The Dow
Jones industrial average fell
1.7%, to 21,052.53 points, and
the Nasdaq was down 1.5%,
to 7,373.08. Smaller-com-
pany stocks fell far more
than the rest of the market.
The Russell 2000 index
dropped 3.1%.
Potentially scary events
on the calendar include
Thursday’s weekly report on
applications for unemploy-
ment benefits, which has
been the closest thing to a
real-time measure of how fe-
rociously layoffs have swept
the country. Companies willalso soon begin reporting
their profit results for the
first three months of the
year, with reporting season
beginning in earnest in two
weeks.
Next month’s jobs report
may even show the economy
has wiped away the last of
the 22.8 million jobs created
during its nearly decadelong
hiring streak.
Friday’s jobs report likely
didn’t fully capture the ex-
tent of the recent job losses,
which have been accelerat-
ing by the day, because it col-
lected data from before stay-
at-home orders were wide-
spread.
Most of all, investors will
be watching the number of
new coronavirus cases. Only
the peak in that can give
some clarity on how long the
economic downturn will last
and how deep it will be.
“The worry is, there’s just
too much uncertainty,” said
Mark Hackett, chief of in-
vestment research for
Nationwide.
The S&P 500 is down
26.5% since its record set in
February, reflecting the
growing assumption that
the economy is set to slide
into a sudden, extremely
sharp recession.
The panic selling that
dominated the first few
weeks of the sell-off has
eased a bit since Washing-
ton unleashed massive
amounts of aid to help mar-
kets and the economy.
The Federal Reserve has
promised to buy as many
Treasury securities as it
takes to keep lending mar-
kets running smoothly, and
Congress approved a $2.2-
trillion rescue plan for the
economy.
This week the S&P 500
lost 2.1%, a milder swing than
the 10.3% surge and 15% drop
of the prior two weeks.
Markets got a bit of a lift
Friday from another gain in
oil prices.
Benchmark U.S. crude
climbed 11.9% to $28.34 a bar-
rel, adding to its nearly 25%
surge the prior day on expec-
tations that Saudi Arabia
and Russia may dial back
their price war.MARKET ROUNDUP
Stocks fall as dread grows on Wall St.
associated pressThe United States shed
701,000 jobs last month, the
government said Friday in a
grim report that nonethe-
less captured only the early
days of the economic devas-
tation wrought by the co-
ronavirus outbreak.
The March employment
reportwas based on data
from the first half of the
month, before the global
pandemic forced wide-
spread business shutdowns
and mass layoffs across the
country.
Even so, the March de-
cline in payrolls was the larg-
est since the Great Reces-
sion and ended a record
streak of 113 months of job
gains.
The nation’s jobless rate
increased in March to 4.4%
from 3.5% in February — the
biggest one-month increase
in unemployment since Jan-
uary 1975, when the country
was in recession.
That is nothing com-
pared with what economists
said will be a major jump in
next month’s unemploy-
ment rate.
Based on some 10 million
people having applied for
unemployment benefits in
the last two weeks of March
—and still millions more
laid-off workers waiting in
the wings — analysts said
the jobless rate will shoot up
to 10% or higher in the April
data.
Some economists are
predicting that the unem-
ployment rate will approach
20% this spring, which would
be about double the record
high since World War II and
comes frighteningly close to
the 25% level during the
Great Depression.
“The March report is just
a sneak peek of what is to
come,” said economists at
Bank of America.
U.S. Secretary of Labor
Eugene Scalia acknowl-
edged as much.
“We know that our report
next month will show more
extensive job losses,” he saidin a statement. “America’s
workers and their families
are making purposeful sacri-
fices to help save lives.”
The March report,
understated as it was,
showed that the job loss was
far bigger than what many
analysts were expecting,
largely because hotels,
restaurants and drinking es-
tablishments had begun
mass layoffs early in the
month.
The leisure and hospital-
ity sector lost 459,000 jobs in
March, wiping out in one
month nearly all of its gains
over the last two years.
The retail trade shed
46,000 jobs, as clothing
stores, furniture sellers and
sporting-goods outlets be-
gan to shutter. The one retail
business that held steady
was food stores.
Jobs in healthcare and
social assistance fell by
61,000, with dentists and
doctors closing offices or re-
ducing hours and child-care
services starting to close
their doors.
Manufacturing, whole-
sale, finance and trans-
portation, including air-
lines, on the whole saw little
job loss over the month, but
that will change in the April
report.
The unemployment rate
in February reached a 50-
year low of 3.5%, and the
tight labor market in the last
year had begun to draw
more people into the work-
force and provide opportu-
nities for disadvantaged
workers.
But that ended virtually
overnight. Jobless rates in
March rose across gender,
age and education levels.
The biggest jump in un-
employment by age was
among adults ages 20 to 24;
their jobless figure in-
creased to 8.7% last month
from 6.4%.
For workers 25 to 54 years
old, unemployment rose to
3.6% from 3%.
The number of unem-
ployed who reported being
on temporary layoff more
than doubled in March to 1.
million.
Also, there was a sharp
increase of 1.4 million people
who reported working part
time because their hours
had been reduced or they
were unable to find full-time
jobs, the Bureau of Labor
Statistics said.March job losses
reflect just the
start of the crisis
Analysts predict an
unemployment rate of
10% or more for April,
rising as high as 20%in the spring.
By Don LeeTHE RETAIL SECTOR lost 46,000 jobs in March.
The one bright spot in the category was food stores.
Above, a Sephora store in Beverly Hills is boarded up.Al SeibLos Angeles Timesborrowers must give to ob-
tain them. On Thursday,
some banks had warned
their customers to expect
delays.
JPMorgan Chase
emailed small-business cus-
tomers to say it would not be
ready to accept applications
on Friday.
A spokesman for Citi said
it was still reviewing the ad-
ministration’s guidance and
would “begin accepting on-
line loan applications as
soon as possible.”
And Wells Fargo, which
hadn’t made an online appli-
cation available by Friday
evening, told customerson
its website to “check back
often.”
The president of the
Western Bankers Assn.,
Steve Andrews, had issued a
cautionary statement on
Thursday, saying, “Less
than 24 hours before these
loans are to be made avail-
able, our banks are still
awaiting important guid-
ance from the U.S. Treasury
and Small Business Admin-
istration.”
By Friday evening, how-
ever, Trump boasted at a
news conference that on Day
1 of the program, the govern-
ment has processed $3.5 bil-
lion in loans. “That’s way
ahead of schedule,” he said.
Small banks seemed to
be shouldering most of the
work while large ones strug-
gled. Shortly after noon,
Treasury Secretary Steven
T. Mnuchin tweeted that
more than $875 million in
loans had been processed
“almost all from community
banks.”
The program requires
that small businesses spend
three-quarters of the loan
amount to keep their work-
ers employed, or the loan will
not be forgiven.
If they must repay their
loans and fail to do so, their
lending banks can recoup
any losses from the govern-
ment, which is guaranteeing
the loans’ value.
The loans are meant to be
extremely favorable to bor-
rowers. Small businesses
don’t have to make pay-
ments for six months and
the interest rates are low —
so low, in fact, that after
complaints from communi-
ty banks, the government
raised the rate from 0.5% to
1%.
Bank of America was one
of the few large financial in-
stitutions accepting appli-
cations on Friday morning,
but its policy of taking appli-
cations first from customers
with existing loans meant
that some of its longtime ac-
count holders were shut out.
Mark Comon, owner of
Paul’s Photo in Torrance,
said he had been banking
with Bank of America for 30
years. Yet when he logged on
to the bank’s website early in
the morning, he was told he
couldn’t apply for a loan be-
cause he’d never borrowed
money from Bank of Ameri-
ca before.
Before the pandemic
struck, Comon’s camera
store had 18 employees and
did about $10,000 worth of
business on a normal day.
Now that his doors are
closed and he’s relying pri-
marily on phone and online
orders, he’s had to lay off all
but five people. On Monday,
he made $111.
Comon said he needed a
loan so he could do exactly
what members of Congress
and the president have said
they want small-business
owners like him to do: hire
back all of his employees.
Now he’s not sure if he’ll be
able to pay rent.
“We were looking forward
to having this loan so we
could start to rebuild the
business and survive,” he
said. “Being denied access to
the money is a death sen-
tence for our small busi-
ness.”
In an interview on CNBC,
Bank of America Chief Exe-
cutive Brian Moynihan said
the company was giving pri-
ority to current borrowers
because it could process
their applications quickly.
“Then our second pri-
ority will be the customerswho have the core operating
accounting with us,” he said.
By late Friday, a bank
spokesman said it had re-
ceived 85,000 applications
requesting $22 billion.
One way for banks to pro-
tect themselves from risk is
by favoring businesses that
have existing loans or credit
cards, said Rodney Ram-
charan, professor of finance
at USC’s Marshall School of
Business. They have already
combed through these bor-
rowers’ finances, he said,
making it safer to lend.
“In a situation like this
where there’s a lot of uncer-
tainty about what’s coming
down the pike,” Ramcharan
said, “I think most banks are
going to first extend credit to
the businesses that they
know.”
That leaves out custom-ers like Billy Silverman, co-
owner of the restaurant
Salazar in Los Angeles’
Frogtown neighborhood.
Silverman said he contacted
Bank of America repre-
sentatives this week about
the loan process, and they
assured him that the re-
quirements for approval
would be minimal.
“I applied as soon as their
site went live,” he said. But
Silverman soon received an
email saying he was not eligi-
ble because he did not “have
an existing small-business
relationship” with Bank of
America.
“No one I’d spoken with
said that would be the case,
at any point,” he said. “We’ve
been fortunate to not have to
take loans out before, and
now it’s like we’re being puni-
shed for it.”
Silverman had sought to
borrow the maximum loan
amount backed by the
Treasury — 2^1 ⁄ 2 times his
restaurant’s monthly pay-
roll — to cover Salazar’s rent
and other expenses as well.
He is currently trying to get a
loan from another bank.
“It’s a complete disaster
right now, to put it mildly,”
he said. “Nobody has a clue.”Times staff writer Garrett
Snyder in Los Angeles
contributed to this report.BANK OF AMERICAwas one of the few large financial institutions taking applications on Friday from small
businesses seeking loans through the Paycheck Protection Program, but some account holders were shut out.Mark LennihanAssociated PressConfusion
as businesses
seek virus aid
[Loans,from A1]
‘It’s a complete
disaster right now,
to put it mildly.
Nobody has a
clue.’
—Billy Silverman,
co-owner of Salazar, a
restaurant in Los Angeles’
Frogtown neighborhood