The Wall Street Journal - 07.04.2020

© 2020 Dow Jones & Company. All Rights Reserved. ***** THE WALL STREET JOURNAL. Tuesday, April 7, 2020 |B1

TECHNOLOGY: GERMAN FIRMS PLAN TO USE THEIR OWN 5G B4

S&P2663.68À7.03% S&PFINÀ7.46% S&PITÀ8.78% DJTRANSÀ7.29% WSJ$IDXg0.15% LIBOR3M 1.352 NIKKEI(Midday)18808.53À1.25% See more at WSJ.com/Markets

BUSINESS & FINANCE

BUSINESS

SeaWorld’s chief

executive resigned

after about five

months in the post.B3

PERSONAL

TECHNOLOGY

Some online retailers

out-Amazon

Amazon.B4

JOE BURBANK/ORLANDO SENTINEL/ASSOCIATED PRESS

Stocks rallied Monday as
investors cheered early signs
that lockdowns in the U.S. and
Europe may be helping slow
the coronavirus pandemic,
even as Americans brace for
another difficult week.
Major indexes in the U.S.
opened sharply higher, held
relatively steady for most of
the day and then soared in the

final 10 minutes of the trading

session.

A late surge in tech stocks,

includingVisa,Microsoftand

Apple, turbocharged the gains:

the Dow Jones Industrial Aver-

age ended the session up more

than 1,600 points.

All 30 stocks in the index

climbed, as did all 11 sectors in

the S&P 500.

Beaten-down retail and

travel stocks were among the

biggest gainers.Kohl’s,Nord-

strom,CarnivalandMarriott

Internationaleach climbed at

least 19%, though all four

stocks are still down more

The number of daily hospi-

talizations, intubations and

people in intensive-care units

is also down.

“Everyone is just desperate

for good pieces of news,” said

Peter Cecchini, chief market

strategist at Cantor Fitzgerald.

“It doesn’t necessarily reflect

anything fundamental. Noth-

ing’s changed.”

Indeed, with volatility in

the market as elevated as it

has been lately, he said, Mon-

day’s swings are typical.

The Dow Jones Industrial

Average jumped 1,627.46

points, or 7.7%, to 22679.99,

though it is still down 21% this

year. The S&P 500 rose 175.03

points, or 7%, to 2663.68. The

Nasdaq Composite gained

540.15 points, or 7.3%, to

7913.24.

Monday’s gain was the

Dow’s 12th consecutive move

up or down of at least 1%, the

longest such streak since

March 2009, and its 28th con-

secutivemoveupordownat

least 0.5%, according to Dow

Jones Market Data.

A streak like that last oc-

curred in October 1931 during

the Great Depression when the

index rose or fell at least 0.5%

on 33 consecutive trading

days.

The tech sector led the way

in the S&P 500, rising 8.8%.

The late surge pushed Visa

shares up 12%, Apple up 8.7%

and Microsoft up 7.4%.

Whatever path the pan-

demic takes, the damage on

economic growth is going to

be significant, said Fred Can-

non, director of research at

Keefe Bruyette & Woods.

He expects a slow recovery,

with growth at the end of 2021

still about 5% below its level

from before the downturn.

Please turn to page B11

than 50% for the year.

Signs of progress in the

fight against coronavirus

drove the optimism.

New York Gov. Andrew

Cuomo said the number of

daily deaths from Covid-19,

the pneumonialike disease

caused by the virus, have been

“effectively flat” in his state

for the past two days, suggest-

ing social-distancing measures

have proved effective.

ByXie Yu,

Avantika Chilkoti

andPaul Vigna

Dow Surges 1,600 as Tech Stocks Rally

Positive news on virus

provides initial boost,

late jumps in Visa,

Apple give final push

Changeinaverage

weeklynationalpriceof

selectedfoodssincethe

firstweekofJanuary.

250

0

50

100

150

200

%

JJJJJFMA

Source: USDA

A A A A J A

229%

GROUND

BEEF

CHEDDAR

CHEESE

BUTTER CHICKEN HAM

–3%

–15%

–26%

–42%

EGGS

47%

A growing scarcity of oil

storage space is driving some

of the world’s biggest crude

producers to negotiate a truce

this week in a Saudi-Russian

fight for market share that has

contributed—along with the

coronavirus pandemic—to the

recent oil-price rout.

Ahead of a crucial summit

set for Thursday, Saudi Arabia

and others in OPEC are work-

ing to convince oil producers

that there will be very little

space left to store their oil if

they don’t curb production, as

oil traders scramble for empty

vaults in remote corners of the

oil world like Morocco, Malta

and the Caribbean.

As oil demand collapses

amid the viral pandemic, the

Saudi-led Organization of the

Petroleum Exporting Countries

and Russia-led allies are hold-

ing a virtual gathering Thurs-

day to negotiate a truce in the

Saudi-Russian price war and

debate curbs of 10 million bar-

rels a day. The group hopes

North American producers will

join, and it has invited Nor-

way, the U.K. and Brazil to join

the meeting, delegates said.

A spokesman for Norway’s

energy ministry said its offi-

cials would be willing to at-

tend if there is a broad atten-

dance from other countries.

OPEC producers might

make the implementation of

their production cuts contin-

gent on signals that other

Group of 20 nations are will-

ing to join the curbs. The G-20

is considering holding an

emergency energy summit on

Friday, the delegates said.

G-20 organizers in Saudi

Arabia didn’t return a request

for comment.

In recent days, Russia has

accused Saudi Arabia of trying

Please turn to page B11

BYBENOITFAUCON

ANDSUMMERSAID

Shortage

Of Storage

Tries Oil

Producers

PG&E’s plans to secure court

approval to exit bankruptcy by

June 30, a deadline to partici-

pate in a state wildfire fund. To

do so, it needs the support of

fire victims and other creditors,

who have until May 15 to vote

on the plan.

PG&E said in a statement

that all parties that signed the

victims’ settlement understood

that the company’s stock price

could fluctuate and that the ef-

fort to “recut the deal” jeopar-

dized victims’ ability to get

paid quickly.

“Since PG&E entered Chap-

ter 11, the company’s primary

goal has been to get victims

paid fairly and in a timely man-

ner,” the company said.

The company added that its

share price on Monday was

higher than it had been, on av-

erage, during the two months

prior to reaching a settlement

with victims in December.

The San Francisco-based

utility filed for chapter 11 pro-

tection in January 2019, citing

billions of dollars in liability

costs it faces because of its role

in sparking wildfires in 2017

and 2018 that collectively killed

more than 100 people and de-

stroyed roughly 15,700 homes.

The attorneys for the fire

victims have asked U.S. Bank-

ruptcy Judge Dennis Montali for

permission to send a letter to

victims explaining that they will

try to negotiate with PG&E in

coming weeks to address “un-

foreseeable and significant risk”

to the $13.5 billion settlement.

Under the settlement, the

portion paid in shares would go

to a trust that would in turn

distribute payments to the vic-

tims. In addition to concerns

about the value of those shares,

the lawyers have also criticized

last-minute changes PG&E

made to its bankruptcy restruc-

turing plan that they say nega-

Please turn to page B6

The committee that helped

broker a $13.5 billion settle-

ment for California wildfire

victims inPG&ECorp.’s bank-

ruptcy case said it no longer

supports the current deal, a

setback for the giant utility’s

efforts to exit chapter 11.

In a court filing Monday,

attorneys for the fire victims

committee raised numerous

concerns about the settlement

and said they were now advis-

ing victims to hold off on vot-

ing for it until the issues are

resolved.

The deal proposes to pay

victims half their settlement in

PG&E shares. The lawyers are

now concerned the payment in

shares will be less than pro-

jected as the stock market falls

under the weight of the corona-

virus pandemic.

The lack of support from fire

victims threatens to upend

BYKATHERINEBLUNT

PG&E Settlement Fraying as

Fire Victims Group Backs Out

INSIDE

Wholesale egg prices have
more than tripled as consum-
ers’ coronavirus-driven buying
clears supermarket shelves,
piling up costs for grocers as
they struggle to keep the sta-
ple in stock and affordable.
Egg prices for grocers
across the U.S. averaged $3.01
a dozen at the end of last
week, compared with 94 cents
at the beginning of March, ac-
cording to U.S. Department of

Agriculture data.

That rise far outpaces cost

increases for other common

foods like ground beef. Whole-

sale costs for whole chickens,

butter, cheese and ham have

fallen, despite consumers

rushing to stock up, partly be-

cause of plunging demand

from restaurants.

Consumers’ sudden, surging

demand for eggs—with some

supermarkets ordering four to

six times their normal volume,

industry officials estimated—

comes after a money-losing

year for many U.S. egg produc-

ers that prompted some to

shrink their flocks.

Rising egg prices, along

with rapidly changing prices

for other food commodities,

are compounding grocers’

budgeting and planning chal-

lenges as the coronavirus pan-

demic forces Americans to

shift from restaurant dining to

eating at home. Soaring prices

are frustrating some grocery-

chain executives, who are

scrambling to secure supplies

and girding for prices to rise

even higher, while trying to

hold prices stable for consum-

ers.

Retailers anticipate that

egg supplies will stay tight. It

takes four to five months to

raise a hen to egg-laying age,

and few farmers so far plan to

build new barns or signifi-

cantly expand their flocks in

response to the coronavirus-

driven demand surge.

Anthony Hucker, chief exec-

utive of Southeastern Grocers,

said: “Egg is by far the steep-

est and the fastest in terms of

the speed of increase.” Prices

are the highest they have been

since the avian influenza of

2015 and supply is likely to get

tighter, said Mr. Hucker, who

heads the chain of more than

700 stores that includes the

Winn-Dixie and Bi-Lo chains.

The more eggs disappear

from the shelves, the tighter

the squeeze on grocery stores’

profit margins. Over the four

Please turn to page B2

BYJAEWONKANG
ANDJACOBBUNGE

Jump in Egg Prices Pressures Grocers

A Stater Bros. market employee restocks eggs at a store in California. Retailers expect supply to remain at current levels.

WILL LESTER/ORANGE COUNTY REGISTER/ZUMA PRESS

 Meat plants slow output as

some workers get sick......... B2

ily is returning $50 per insured

vehicle. That represents what

the carrier already has saved—

and expects to save through

mid-June—as a result of the re-

duced claim volume. “It is real

dollars we expected to pay out

this year and no longer have to

pay out,” said Telisa Yancy,

American Family’s chief operat-

ing officer. “We are sharing it

back right now when our cus-

tomers probably most need it.”

Compared with last year,

claims were down 20% to 40%

weekly from March 11—when

the World Health Organization

declared the pandemic—

through April 3, Ms. Yancy said.

The Madison, Wis., insurer esti-

mates that policyholders drove

40% fewer miles in the last

three weeks of March. The

company operates in 19 states.

Allstate Chief Executive Tom

Wilson said mileage was down

35% to 50% across the U.S.

since mid-March, including in

states without shelter-in-place

Please turn to page B10

One of the largest car-insur-
ance companies in the country,
AllstateCorp., and a smaller
Midwestern auto insurer are
refunding hundreds of millions
of dollars to their policyhold-
ers, citing a dramatic drop in
accident claims from people
hunkered down in their homes.
Allstate said it would dis-
patch more than $600 million
in shelter-in-place payback
checks, whileAmerican Family
Mutual InsuranceCo. said it is
returning $200 million to its
smaller policyholder base.
The moves highlight a loom-
ing dilemma for the auto-insur-
ance industry: A potentially
large Covid-19 windfall is tak-
ing shape at the same time
many customers are suffering
financially from lockdowns cov-
ering much of the U.S.
Allstate said most of its cus-
tomers would receive 15% of
their monthly car premium in
April and May. American Fam-

BYLESLIESCISM

Car Insurers Refund

Locked-Down Drivers