Dow soars on vaccine and bailout optimism: May 18, 2020

By CNN Business

Updated 8:41 a.m. ET, May 19, 2020
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10:59 a.m. ET, May 18, 2020

Hertz soars 15% after naming new CEO

From CNN Business' Jordan Valinsky

Hertz (HTZ) has named a new CEO to help the the troubled car rental company turn things around. Shares soared nearly 15% in early trading.

Paul Stone will take charge of Hertz effective immediately, replacing Kathryn Marinello after a nearly four-year tenure.

Stone was previously chief retail officer at outdoor retailer Cabela's and was also a vice president at Sam's Club.

The near-zero travel demand during the coronavirus pandemic has battered Hertz, which rents cars under the Hertz, Dollar and Thrifty brands in the United States.

The company missed an important payment that was due to a group of lenders in late April, though the creditors granted Hertz a temporary lifeline in early May.

12:40 p.m. ET, May 18, 2020

Low-income earners are hit the hardest in coronavirus recession

From CNN Business' Anneken Tappe

Although the pandemic has hurt people of all backgrounds, the burden of job losses is far worse for low income earners, according to a working paper from the National Bureau of Economic Research.

The paper says employment among lowest-income workers fell by 35%. Meanwhile, only 9% of the highest-income workers lost their jobs during the pandemic.

Overall, private sector employment declined by 22% between mid-February and mid-April, the authors said.

"This downturn differs from modern U.S. recessions in both the speed and magnitude of its job loss," they wrote.

This echos a recent survey from the Federal Reserve, which said that nearly 40% of those with a household income below $40,000 reported a job loss in March.

Most jobs were lost in the hospitality and leisure industry, where the bulk of salaries tends to be lower.

12:46 p.m. ET, May 18, 2020

New FedEx and Microsoft partnership aims to make business logistics high-tech

From CNN Business' Clare Duffy

A new FedEx (FDX) and Microsoft (MSFT) partnership will bring advanced tools like artificial intelligence and data analytics to the shipping giant's enterprise customers.

The first new offering, FedEx Surround, will combine FedEx's shipment scanning tools and Microsoft AI -- giving companies access to nearly real-time data surrounding supply chain shipments, including temperature and current zip code.

They can also tap into data on external factors like weather and traffic patterns, and adjust shipment routes on the fly to avoid delays. 

FedEx Surround will roll out in the coming months as part of the partnership, which comes as FedEx has suffered bruising recent quarters.

The logistics giant already relied heavily on technology to power its massive physical network, but FedEx COO Raj Subramaniam told CNN Business the Microsoft partnership will bring it to the next level. 

"We [have] almost 700 aircraft and 180,000 motorized vehicles ... We are one of the very, very few systems in the world that can pick up a package anywhere in the world and put it down anywhere else in the world," Subramaniam said.

But "we think now is the time to reimagine what the future of FedEx is going to be."

9:33 a.m. ET, May 18, 2020

Stocks rally at the open

From CNN Business' Anneken Tappe

US stocks shot higher at Monday's opening bell, boosted by hopes for a coronavirus vaccine and more fiscal and monetary stimulus to support the economy.

Drug maker Moderna (MRNA) reported encouraging results from the human safety trial of a potential Covid-19 vaccine. The company's stock soared 30% at the open.

Meanwhile, Federal Reserve Chairman Jerome Powell said the central bank, as well as Congress, might need to more to support the American economy through the coronavirus recession, during an interview with CBS' "60 Minutes" Sunday night.

9:11 a.m. ET, May 18, 2020

Commodities are soaring, too

From CNN Business' Anneken Tappe

Aside from stocks, which are soaring, commodities are rallying as well.

Gold prices rose to near eight-year highs, up 0.8% at $1,767.70 an ounce.

Meanwhile, US oil prices are up 9.6% at $32.25 a barrel. 

1:14 p.m. ET, May 18, 2020

Stocks are set to climb higher on hopes for vaccine and more stimulus

From CNN Business' Anneken Tappe

Futures for the Dow and the broader stock market are higher Monday morning, boosted by hopes for both a coronavirus vaccine and more monetary and fiscal stimulus.

Dow futures are about 750 points, or 3.2%, higher, while those for the S&P 500 -- the broadest measure of Wall Street -- are up 2.9%. Nasdaq Composite futures are up 2%.

Drug maker Moderna (MRNA) said it saw encouraging early data from the human safety trial of a potential Covid-19, which was green-lit by the Food and Drug Administration at the start of the month. The company's shares were up nearly 38% in pre-market trading.

Meanwhile, Federal Reserve Chairman Jerome Powell said both the central bank, as well as Congress, might have to do more to get the US economy through the coronavirus recession during a Sunday night interview with CBS' 60 "Minutes."

Still, Powell was confident about the eventual recovery of the economy: "But I would just say this. In the long run, and even in the medium run, you wouldn't want to bet against the American economy."

8:58 a.m. ET, May 18, 2020

Don't bet against the American economy, says Jerome Powell

From CNN Business' Anneken Tappe

The US economy is going through an unprecedented recession and a recovery will take time. Even so, you don't want to bet against America's economy, said Federal Reserve Chairman Jerome Powell on CBS' News '60 Minutes' Sunday night.

Business ground to a halt this spring as people stayed home and companies shut down to stop the spread of Covid-19. Mass layoffs forced 36.5 million Americans to file first-time claims for jobless benefits since mid-March.

The unemployment rate shot up to 14.7% in April — the highest number since the Bureau of Labor Statistics began collecting this data in 1948 — and is expected to climb even higher in May.

Recovering from this will take some time.

But I would just say this. In the long run, and even in the medium run, you wouldn't want to bet against the American economy," Powell said in a prime-time interview.

"This economy will recover. And that means people will go back to work. Unemployment will get back down. We'll get through this," he said.

Read more here.

9:05 a.m. ET, May 18, 2020

SoftBank loses Jack Ma from its board and posts worst loss ever

From CNN Business' Sherisse Pham

SoftBank lost a major name from its board and confirmed historic losses on Monday — signs of turmoil at the Japanese conglomerate after it was battered by the coronavirus pandemic and a series of tech bets gone bad.

SoftBank reported an annual operating loss of 1.36 trillion yen ($12.7 billion) — its worst ever.

The losses were in line with the company's own recent forecasts and driven almost entirely by the Vision Fund, the $100 billion tech fund steered by SoftBank founder and CEO Masayoshi Son.

The Vision Fund and affiliated funds suffered operating losses of 1.9 trillion ($17.7 billion) for the fiscal year that ended in March, as the values of Uber (UBER), WeWork and other portfolio companies cratered due to Covid-19.

Read more here.