Stocks close in the red despite Fed's rescue efforts: March 23, 2020

By CNN Business

Updated 5:14 p.m. ET, March 23, 2020
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10:12 a.m. ET, March 23, 2020

GE is laying off about 2,600 workers at its jet engine business because of coronavirus

From CNN Business' Matt Egan

General Electric announced plans Monday to lay off about 2,600 employees in its jet engine division as the coronavirus crisis deals a crushing blow to the aerospace industry.

GE Aviation said it will reduce its total US workforce by about 10%.

The division, GE's largest by revenue, employed about 52,000 people around the world at the end of 2019. GE confirmed that about half of those employees are based in the United States.

GE (GE) signaled that overseas aviation jobs may also be cut.

The aviation industry is getting slammed by the pandemic, which has caused global air travel to ground to a near-halt. Airlines have suspended routes and grounded planes. 

GE Aviation added that there will be a temporary lack of work impacting about half of its US maintenance, repair and overhaul employees for 90 days.

The moves are part of GE's efforts to save about $500 million to $1 billion in the aviation division, which was once the company's strongest. GE Aviation had previously instituted a hiring freeze, canceled merit salary increase and slashed non-essential spending.

David Joyce, GE's vice chairman and CEO of GE Aviation, will forgo half his 2020 salary. GE CEO Larry Culp also announced plans to forgo his full 2020 salary.

10:03 a.m. ET, March 23, 2020

Winnebago suspends production

From CNN Business' Jordan Valinsky

Winnebago is temporarily suspending production of its famous RVs because of the coronavirus pandemic.

For now, the suspension will last until April 12. Winnebago said in a release it will pay its employees for the first two weeks of the shutdown.

“As we take precautionary measures in the best interest of both our employees’ health and our long-term business prospects, we remain confident in the strength of our balance sheet and in our cash position to allow us to provide the appropriate pay and benefits to our employees and weather a period of business interruption from this health crisis,” CEO Michael Happe said. 

Winnebago (WGO) shares fell 6% in early trading. The stock is down 60% for the year.

9:38 a.m. ET, March 23, 2020

US stocks open lower

From CNN Business' Anneken Tappe

US stocks kicked off in the red on Monday, despite the Federal Reserve’s new significant new stimulus measures aimed at keeping the US economy functioning.

The Fed action had turned stock futures green in premarket trading.

The indexes bounced back from their initial lows in the first minutes of trading and the Nasdaq even briefly flipped back into positive territory.

3:18 p.m. ET, March 23, 2020

Fed to the rescue

From CNN Business' Anneken Tappe

The Federal Reserve's new slew of monetary stimulus measures has pushed stock futures higher -- and analysts are getting excited for a Fed that is willing to do whatever it takes.

The Federal Reserve is now throwing everything at financial markets -- essentially what is unlimited QE," wrote James Knightley, ING's chief international economist. "The fear is that if they aren't successful the strains will only exacerbate what is already a desperate economic situation."

The package of measures should help to ease financial conditions in the corporate bond market and provide a backstop to the assistance and loans that are expected to come out of Washington's stimulus package, said Michael Pearce, senior US economist at Capital Economics.

Obviously, that's encouraging, and while the Fed's actions are an enormous help, the only way the markets are going to find sustainable improvement is when the economy is allowed to come back to life, or at least there is a real path in place for how that is going to happen," said Bespoke Investment Group co-founder Paul Hickey.
9:04 a.m. ET, March 23, 2020

Boeing suspends dividend, pay for CEO and chairman

From CNN Business' Chris Isidore

Boeing (BA) is suspending its dividend for the first time nearly 80 years.

The company, which paid $4.6 billion in dividends last year even as it dealt with mounting costs from the 737 Max crisis, said it has suspended the dividend as it tries to preserve cash. The company said paid a dividend on common stock every year since 1942.

Boeing is seeking a $60 billion in government loan guarantees for aerospace makers such as it self as it tries to weather the plunge in air traffic that is likely to force airlines to delay or cancel orders for new planes.

The company also said that it would continue to refrain from share repurchases. It suspended buybacks in April because of the grounding of the 737 Max and the halt in deliveries. And it said that CEO Dave Calhoun and Chairman Larry Kellner will forgo all pay until the end of the year. Calhoun, who began the job in January, was due to receive base pay of $1.4 million and bonuses that could have taken his total compensation package up to $28 million.

8:46 a.m. ET, March 23, 2020

US stock futures bounce higher after Fed injects more stimulus

From CNN Business' David Goldman

US stock futures were down by so much that they couldn't fall any further -- literally. They were at their maximum "limit down" just a few moments ago.

Then the Fed injected a boatload of stimulus into the US economy, and stock futures are bouncing higher.

The Dow, S&P 500 and Nasdaq are now all pointing at a modestly higher open. The Dow, which is now set to gain about 300 points this morning, had been pointing at another 1,000-point drop at the open.

Oil also reversed its course and is now trading 4% higher.

8:29 a.m. ET, March 23, 2020

Papa John's is hiring 20,000 workers

From CNN Business' Jordan Valinsky

Papa John's (PZZA) is the latest US company looking for help fast. The pizza chain wants to hire 20,000 new employees for its restaurants for a variety of roles, including delivery.

The company said that in "most cases" applicants can be interviewed and start the same day.

Domino's (DPZannounced last week it was hiring 10,000 employees as people shift their eating habits to takeout or delivery amid restrictions surrounding the growing coronavirus pandemic.

8:22 a.m. ET, March 23, 2020

Fed unveils open-ended QE, promises emergency Main Street lending program

From CNN Business' Matt Egan

The Federal Reserve accelerated its coronavirus rescue Monday by announcing unlimited bond-buying, unveiling three new credit facilities and promising to launch a Main Street lending program.

The US central bank vowed to support American households and businesses, but acknowledged "our economy will face severe disruptions."

"The coronavirus pandemic is causing tremendous hardship across the United States and around the world," the Fed said in a statement.

Major steps announced include:

-Open-ended quantitative easing (QE). Just over a week ago, the Fed had set a limit of $700 billion on these bond-buying programs

-Two lending facilities to large companies: Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for existing corporate bonds

-Bringing back the crisis-era Term Asset-Backed Securities Loan Facility (TALF) to support the flow of credit to consumers and businesses

-Expanding the money market mutual fund liquidity facility to include wider range of municipal bonds

-Expanding the commercial paper credit facility

And the Fed said it expect to soon launch a Main Street Business Lending Program to support small and medium sized businesses.

All of this is part of the Fed's efforts to prevent a full-blown credit crisis.

8:19 a.m. ET, March 23, 2020

Unemployment rate could hit 30%, St. Louis Fed president warns

From CNN Business' Jordan Valinsky

James Bullard, the president of the Federal Reserve Bank of St. Louis, told Bloomberg that the US unemployment rate could hit 30% because of the shutdowns sparked by the coronavirus pandemic.

He also predicts a 50% drop in annualized gross domestic product in the second quarter and $2.5 trillion in lost income.

That's significantly more dire than some of the most bearish estimates from Wall Street banks, including Goldman Sachs, which predicted Monday the US economy would shrink by a rate of 33% next quarter.

Bullard said that "everything is on the table" in terms of lending programs to help save the economy.