Stock bounce back to claw back losses; Fed's 'Main St.' loan offering start June 1

Regional Fed chief: A slow rebound would boost loan program

Eric Rosengren is president of the Federal Reserve Bank of Boston. File/AP

Stocks rise, recoup Tuesday's losses

NEW YORK — Stocks closed broadly higher on Wall Street Wednesday, clawing back all of its losses from a day earlier and extending its strong gains for the week.

The S&P 500 rose 1.7 percent as the market bounced back from a sudden drop on Tuesday that snapped the index's three-day winning streak. Crude oil prices posted their fifth straight gain.

Technology, the only sector that's holding on to a gain for the year, accounted for much of the market's upward move. Communication services companies and banks also helped drive the market higher. Major stock indexes in Europe and Asia also finished higher. Bond yields moved broadly lower, a sign of caution in the market.

Fresh hope about a potential vaccine for COVID-19 and optimism that the U.S. economic will recover in the second half of the year have spurred stocks higher this week.

"Although this is optimism, this is very cautious optimism," said J.J. Kinahan, chief strategist with TD Ameritrade. "You're seeing people also buy bonds today. That's very surprising seeing the stock market doing well and also seeing people buy bonds."

Fed official gauges Main St. demand

WASHINGTON — The president of a regional Federal Reserve bank that will oversee a groundbreaking business lending program said Wednesday he thinks a slower-than-expected recovery from the economic downturn would lead companies to seek critical support from the program.

Eric Rosengren of the Federal Reserve Bank of Boston said the Main Street Lending Program will provide bridge financing to formerly healthy companies that are struggling because of the pandemic. The program is expected to begin operations by June 1.

"I think many businesses are now realizing ... that this may be a much more extended and slower ramp up than they were hoping," Rosengren said. "Firms may not immediately need the funds. But if this were to be a fairly slow recovery, they may find, as we get into the summer, that they're more in need of the funds and the facility becomes very useful."

The Main Street program marks the first time since the Great Depression that the Fed will lend directly to businesses outside the banking sector.

Virginia port CEO retiring next year

NORFOLK, Va. — The head of the Virginia Port Authority who oversaw an expansion of the port's operations and profits will retire next year.

John F. Reinhart made the announcement about his March 2021 retirement at the authority's commissioners meeting on Tuesday, news outlets reported.

"I am very confident in the long-term future of The Port of Virginia," Reinhart said in a statement. "This port has made tremendous progress during the past six years and we should be proud of what we have accomplished."

Reinhart joined the port in February 2014. In the five years before he started the job, the agency's operating losses totaled $120 million. It started earning profits from its operations in fiscal year 2017, a few years after Reinhart began his tenure. He also oversaw record-setting cargo volume at the port, the Richmond Times-Dispatch reported.

During Reinhart's tenure, the port also began work on a project to create deep port channels on the east coast that will accommodate large cargo ships by 2024. Reinhart's replacement will be chosen by a committee of port board members.

Royal Caribbean lost $1.4B last quarter

NEW YORK — Royal Caribbean lost $1.4 billion in the first quarter after the coronavirus forced its entire fleet to port.

Wall Street overlooked the massive loss Wednesday, focusing instead on bookings for next year, which the Miami company said are within "historical ranges."

Royal Caribbean Cruises suspended its global operations on March 13, a day before the a U.S. no-sail order went into effect, and was forced to cancel 130 cruises during the quarter, when revenue fell to $2 billion down from more than $2.4 billion a year ago.

The line plans to resume at least some cruises on June 12.  

"We understand that when our ships return to service, they will be sailing in a changed world," said CEO Richard Fain. "How well we anticipate and solve for this new environment will play a critical role in keeping our guests and crew safe and healthy."

Rolls-Royce cuts jobs as aviation reels

LONDON — Engine maker Rolls-Royce said Wednesday it plans to cut some 9,000 jobs globally as it grapples with the collapse in air travel due to the COVID-19 pandemic.

The company employs 52,000 people overall, and didn't specify which regions would take the hardest blow. CEO Warren East said most of the cuts will take place in the civil aerospace business, where two-thirds of U.K. employees work. Negotiations are set to begin with unions.

The company immediately came under criticism since it has furloughed some 4,000 workers under a government program to pay some of the wages of people affected by the crisis. The unions insisted taxpayers deserved a more responsible approach to a national emergency.

2 accused of aiding Ghosn's escape

BOSTON — Two Americans accused of helping aid former Nissan chairman Carlos Ghosn flee Japan while awaiting trial on financial misconduct charges were arrested Wednesday, the Justice Department said.

Michael Taylor, 59, and Peter Taylor, 27, were arrested by the U.S. Marshals Service on Wednesday in Harvard, Mass.

The Taylors are wanted by Japan officials on charges that they helped Ghosn escape the country in December after the former Nissan boss was released on bail. Ghosen reappeared in Lebanon, saying he had fled to avoid "political persecution."

Ghosn, who was charged with under-reporting his future compensation and breach of trust, has repeatedly asserted his innocence, saying authorities trumped up charges to prevent a possible fuller merger between Nissan Motor Co. and alliance partner Renault SA.

Norwegian Air gets public loan

COPENHAGEN, Denmark — Low-cost carrier Norwegian Air Shuttle said Wednesday it will get the equivalent of $290 million in loan guarantees from the government as part of its restructuring plan.

It said it had converted $1.3 billion of debt into equity, a move required to get state loan guarantees. Norwegian CEO Jacob Schram said that despite the loans, "the coming months will be demanding as the industry uncertainty remains high."

He said the carrier depended on creditors now that "virtually all of the revenue stream has stopped."

"Our goal has not only been for Norwegian to survive, but for us to come back stronger with a sustainable operation and a structure that will benefit shareholders, customers and colleagues alike," Schram said.

As part of the restructuring, the Chinese government-controlled BOC Aviation has taken 12.67 percent of the outstanding shares and votes in Norwegian Air.

Wire reports

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