Market Brief: July 8, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Wednesday, July 8, 2020
Bounceback. Stocks ended on a strong note Wednesday after spending much of the session hovering near unchanged levels, with tech shares leading the way higher. The gains followed Tuesday’s session, when worries about the economic impact of the coronavirus caused stocks to close lower. The Dow Jones Industrial Average on Wednesday rose around 177 points, or 0.7%, to finish near 26,067, according to preliminary figures, while the S&P 500 advanced around 25 points, or 0.8%, to end near 3170. The tech-heavy Nasdaq Composite rose nearly 149 points, or 1.4%, finishing near 10,493.
DJIA 26,067.28 177.10
S&P 500 3,169.94 24.62
NASDAQ 10,492.50 148.61
US 10-Year Note 0.66 0.02
Dollar Index 96.46 -0.42
Crude Oil 40.86 0.24
Gold 1,818.70 8.80
Global Dow 2,889.08 6.90
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
United Airlines Warns of Mass Layoffs. It’s an Industry Headwind.
A wave of layoffs seems to be coming in the airline industry, with United Airlines warning employees that it may have to furlough nearly half of its U.S. workforce this fall.

United told 36,000 employees on Wednesday that mass furloughs might be necessary, because of continuing losses caused by the coronavirus pandemic and collapse in air travel. The warnings came during town hall meetings with employees. A senior executive told The Wall Street Journal that mass furloughs would be a “last resort.”

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New Quarantine Rules Land Another Blow to Air Travel
The recovery in air travel is hitting a new headwind with domestic quarantine rules being imposed by states and cities, as Covid-19 cases surge in parts of the country.

Airlines have been back adding flights and expanding their schedules this summer, banking on a leisure travel recovery to kick in. But with Covid cases surging—recently reaching record daily highs—the recovery may prove short-lived. At least 14 states now require visitors to quarantine for two weeks if they have traveled from areas with high or rising levels of coronavirus cases. The rules vary by state and include a variety of exemptions and penalties. New York, New Jersey, Connecticut, Pennsylvania, and Rhode Island now appear to be the most restrictive, with quarantine rules impacting travelers from 16 other states.

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Brooks Brothers Files for Bankruptcy as It Seeks a Sale
Brooks Brothers is looking for a new owner, and on Wednesday filed for Chapter 11 bankruptcy to facilitate its search.

The privately held chain is the latest retailer to file for bankruptcy protection in response to the coronavirus pandemic. Sales at many major retailers slid earlier this year as state and local governments asked nonessential businesses to close to prevent further spread of the virus.

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Facebook Moves Set Back Civil Rights: Audit
Facebook has made a series of decisions that undermined civil rights, including allowing posts from President Donald Trump that violate the values of the leading social network, an independent audit report said Wednesday.

The audit commissioned by Facebook in 2018 found the California giant had taken “important steps forward in building a long-term civil rights accountability structure” but that those steps “are not sufficient and should not be the end of Facebook’s progress.”

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Mortgage Applications Snap Two-Week Decline Thanks to Pent-Up Demand
A housing gauge that showed some signs of slowing in late June has bounced back up, according to the most recent Mortgage Bankers Association weekly survey.

Following two week-over-week declines, the trade group’s purchase index, which measures the volume of applications for a loan to purchase a home, increased 5% on an adjusted week-over-week basis, and rose to levels 33% higher than the same time in 2019 on an unadjusted basis, according to the release for the week ending July 3, 2020.

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Twitter Job Listing Shows It’s Considering a Subscription Service of Some Sort
Twitter shares spiked higher Wednesday on several reports that the company is considering launching a subscription service.

The company posted a job listing for a “senior full-stack software engineer” to work on a platform code-named Gryphon. “We are building a subscription platform, one that can be reused by other teams in the future,” reads the listing, which was first picked up by The Verge. Bloomberg also reported that the company is considering a subscription service, citing an unnamed source “familiar with the company’s plans.”

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Disney World Is Reopening This Weekend Despite Florida’s Covid-19 Surge
Walt Disney is planning to reopen Disney World in Florida this weekend, despite the ongoing surge in coronavirus cases in the state, as the entertainment giant scrambles to balance public safety with profit.

Disney had already reopened the retail operations of the park with enhanced safety protocols in May, and on Saturday the Magic Kingdom Park and Animal Kingdom Park will also come back online. EPCOT and Disney’s Hollywood Studios will follow on July 15.

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Rocket Mortgage’s Parent Files for IPO
Rocket Companies, the parent of Rocket Mortgage and Quicken Loans, filed for an initial public offering Tuesday. The company intends to list an undisclosed number of Class A shares on the New York Stock Exchange under the symbol RKT, according to its Form S-1.

“Our digital-first brand is a driver for growth in this highly-fragmented market,” Quicken Loans CEO Jay Farner said in a letter contained within the filing. “Even with the title of largest mortgage lender, we believe there is significant opportunity ahead and fresh strategies to reach even more clients.”

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Biogen Submits Its Troubled Alzheimer’s Drug for FDA Approval
Not so long ago, the saga of Biogen’s experimental Alzheimer’s therapy aducanumab was, perhaps, the biggest story in biotech. Covid-19 changed all that, driving investor focus to the race for a vaccine. But Biogen is still moving forward with aducanumab, and on Wednesday, the company took a major step toward getting the once-dead program onto pharmacy shelves.

Biogen said Wednesday morning it had finished submitting its application for approval for aducanumab to the Food and Drug Administration. That submission was originally expected to be completed in early 2020. Shares fell in April when the company said it wouldn’t be done with the application until the third quarter of this year.

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Levi Strauss Posts Wider-Than-Expected Loss, Announces Layoffs
Apparel companies have been hammered by the pandemic, and Levi Strauss & Co. is no exception, with the jeans maker late Tuesday reporting worse-than-expected second-quarter results and announcing it would lay off 15% of its workforce.

Levi lost 48 cents a share, on revenue that fell 62.1% year over year to $498 million. Analysts were expecting a 43-cent loss on revenue of $564.36 million.

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