Shares Rally as Jobs Report Indicators Restoration


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By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet

Wall Street snapped its losing streak on Friday after a surprisingly good reading on the American job market refocused investor attention to the brightening outlook for economic growth.

The S&P 500 gained 2 percent, more than reversing Thursday’s 1.3 percent tumble and leading the benchmark to a slight weekly gain after two consecutive weeks in the red.

The rise came after new data showed that the pace of hiring picked up in the United States in February, when the economy created 379,000 new jobs, well above forecasts of roughly 200,000. Parts of the economy that were hard-hit by the Covid crisis — such as leisure and hospitality — bounced back during the month.

On the other hand, the report also contained indications that parts of the economy remain troubled. For instance, the broadest measure of unemployment remained unchanged at 11.1 percent.

“The U.S. labor market is beginning to heal,” economists from Bank of America wrote in a client note on Friday. “However, the preponderance of labor market indicators suggest there is still work to be done.”

Such a situation — with the economy growing but not going gangbusters — seemed to be just want the market wanted see.

Industries tied to the short-term outlook for economic improvement led Friday’s gains. Energy stocks were the top-performing part of the S&P 500, up about 3.9 percent, after the Organization of the Petroleum Exporting Countries decided yesterday to keep a tight lid on supplies of crude oil. Prices for American crude oil climbed 3.5 percent to more than $66 a barrel.

Companies positioned to benefit from the Biden administration’s effort to boost spending fared well on Friday. Engineering and construction firm Granite Construction, which specializes in civil and transportation infrastructure projects, jumped about 4.5 percent. Another engineering, construction and maintenance firm, Dycom, jumped more than 7 percent.

The tone on Wall Street on Friday was distinctly different from recent weeks, when signs of growth, somewhat counter-intuitively, have been a source of consternation to the market.

That was largely because growth is sometimes accompanied by rising prices. And the Federal Reserve, which is responsible for keeping prices under control, has traditionally raised interest rates to cut off the chance that the economy broad-based price surge, known as inflation.

A recent rise in yields on Treasury bonds reflected growing expectations that the Fed could raise rates sooner than many had previously expected.

Low rates are a boon to the stock market. The Fed’s decision to cut rates to near zero in March 2020 was effectively the starting point for a stock market rally that has carried the S&P 500 up more than 70 percent since March 2020.

But on Friday, bond yields showed only muted increases, rising to 1.56 percent. That was a relief to the stock market compared to Thursday, when public statements Jerome H. Powell, the chair of the Federal Reserve, seemed to set off another sharp rise in yields, which then hammered stocks.

In fact, corners of the market that can be most hurt by rising Treasury bond yields — which serve as the basis of borrowing costs for companies and households — did well on Friday.

Home-building stocks, for example, surged. Those companies have been hurt in recent weeks as the rise in Treasury bond yields also pushed mortgage rates higher. But on Friday large homebuilders such as Lennar and D.R. Horton posted their best single day rises since late January, rising 6.9 percent and 5.6 percent.

Credit…Mario Tama/Getty Images

The teacups could soon be spinning again: Disneyland, which has been closed for a year, is poised to reopen this spring.

California officials announced on Friday that theme parks in the state could reopen on a limited basis as soon as April 1. Eligibility, however, will depend on coronavirus transmission statistics in individual counties.

For instance, theme parks in counties where the virus threat remains the most severe (in the purple tier under the state’s system) must remain closed. But parks in areas where the threat of infection has eased somewhat (red tier) will be allowed to reopen at 15 percent capacity. Even less threat (orange tier) will allow for 25 percent capacity.

Attendance will be limited to in-state visitors.

Disneyland is in Orange County, which is in the purple tier. But if coronavirus cases continue to decline in Southern California at the current pace, the county could fall within the orange tier by late April. The Walt Disney Company said last year that reopening a park at less than 25 percent capacity would not make economic sense. A Disney spokeswoman declined to comment on a specific reopening timeline on Friday.

“We are encouraged that theme parks now have a path toward reopening this spring, getting thousands of people back to work,” Ken Potrock, Disneyland’s president, said in a statement.

Disney has said it would take at least four weeks to rehire employees and train them on new coronavirus safety procedures. Before the pandemic, roughly 32,000 people worked at the 486-acre Disneyland Resort, which includes two separately ticketed theme parks, three Disney-owned hotels and an outdoor shopping mall. Most of the Anaheim complex has been closed for a year.

Disney had hoped to reopen its California attractions in July. But unions representing Disneyland employees criticized that timetable as too fast and pressured Gov. Gavin Newsom to withhold approval. He sided with the unions, prompting fans to attack him online. (“Open Disney, or we are taking away your hair gel.”)

In contrast, Florida allowed Disney to reopen its Orlando parks in July. The company endured withering criticism for doing so, but stringent safety procedures, including mandatory masks, resulted in a safer-than-expected environment.

“It has been a success story,” Julee Jerkovich, a United Food & Commercial Workers official, said in October. “As a union rep, I do not say that lightly.”

In addition to Disneyland, theme parks in California include Universal Studios Hollywood, Six Flags Magic Mountain, Knott’s Berry Farm and the Santa Cruz Boardwalk.

An engine that caught fire last month on a Boeing 777 had about 3,000 flights to go before its next inspection was due.Credit…National Transportation Safety Board, via Reuters

An airplane engine fan blade that broke during a United Airlines flight last month had thousands of flights remaining before it was due for a federally mandated inspection, the National Transportation Safety Board said on Friday.

The Pratt & Whitney engine containing that blade caught fire and shed debris over homes minutes after the plane departed Denver for Honolulu on Feb. 20. The pilots turned the plane around and returned to the Denver airport. The failure, similar to an incident in Japan in December and one on another United plane in 2018, forced regulators and airlines around the world to ground more than 120 Boeing 777 planes powered by that particular engine family, the PW4000-112.

The Federal Aviation Administration ordered immediate inspections of the fan blades in those engines. United, which has more than 50 such planes, was the only American airline affected by that order. The tests, known as “thermal acoustic inspections,” are conducted by Pratt & Whitney and involve bombarding the blades with pressure, which heats them, and then looking for temperature abnormalities that could point to internal cracks.

Early evidence suggests that one of the engine’s fan blades fractured during the flight last month and struck and broke another, according to the N.T.S.B., which is investigating the failures. That first blade had flown about 3,000 flights since Pratt & Whitney last subjected it to a thermal acoustic inspection, far short of the 6,500-flight threshold at which blades are regularly inspected using the technique.

That blade was last examined in 2016, and records from that inspection were reviewed in 2018 after the failure of another Pratt & Whitney engine on a Boeing 777 operated by United. After that incident, near Hawaii, Pratt & Whitney updated its inspection recommendations and said the blades should be tested more frequently, putting in place the 6,500-flight recommendation. The F.A.A. later made that interval mandatory. A Japan Airlines Boeing 777 powered by a Pratt & Whitney engine suffered a similar engine failure in Japan in December.

After last month’s failure on the United flight, Pratt & Whitney said it would recommend the inspections every 1,000 flights, according to the N.T.S.B.

Economic officials including Jerome H. Powell, the Federal Reserve chair, and Treasury Secretary Janet L. Yellen tend to cite a broader unemployment rate in addition to the Labor Department’s principal measure. And the alternative measure showed little improvement in the job market in February.

The figure remained at 9.5 percent, substantially higher than the official 6.2 percent jobless rate.

Unemployment rate

By Ella Koeze·Seasonally adjusted·Source: Bureau of Labor Statistics

The adjusted figure adds back two groups of workers left out of the official number: people who have probably been laid off but who have been misclassified as employed, and workers who have dropped out of the labor market since early 2020.

Making those tweaks puts America’s jobless rate near its 2009 high and underscores that the job market is a long way from fully healing. The adjusted number for February was provided by Ernie Tedeschi, an economist with Evercore ISI, using a methodology that closely matches the one the Fed employs.

Officials have long looked at an array of data to gauge the job market — something Ms. Yellen championed while she was a top Fed official and eventually chair. But the pandemic recession has added urgency to that effort.

Millions of people dropped out of the labor market practically overnight at the onset of the crisis. They still aren’t applying for jobs, so they are not officially counted among the unemployed. But there’s little reason to believe they have no interest in coming back to work in the longer run.

As a result, there’s a huge “shadow” work force lingering on the labor markets sidelines. Policymakers are hoping they can pull many of those people back into jobs, shoring up the economy’s most important resource: its labor force.

Black and Hispanic workers still have higher unemployment rates

Unemployment rates for Black, Hispanic, Asian and white men

Unemployment rates for Black, Hispanic, Asian and white women

By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics

The labor market gained 379,000 jobs in February, yet unemployment rates for Black workers rose, underlining the uneven damage the pandemic continued to inflict.

Unemployment among Black workers climbed to 9.9 percent from 9.2 percent in January. In contrast, joblessness for white workers ticked down to 5.6 percent from 5.7 percent in January, and those for workers who identify as either Hispanic or Asian also fell.

Unemployment among Black women over 20 rose to 8.9 percent from 8.5 percent the prior month, while the rate for Black men older than 20 increased to 10.2 percent from 9.4 percent.

The figures can bounce around from month to month, and severe weather across parts of the country may have affected the February data. Still, the picture that emerges is one in which Black workers are making halting progress toward recovering the major job losses they have suffered in the pandemic.

Black people hold 1.5 million fewer jobs than they did a year ago, down nearly 8 percent since the start of the pandemic. White workers, who make up a bigger share of the American population, have lost 6.3 million jobs — down 5 percent.

Economic downturns often have a severe impact on Black workers and hamper their efforts to regain employment afterward. African-Americans had been making strong labor market progress coming into the pandemic, a fact that Federal Reserve officials frequently cite when they talk about their desire to return the economy to the very low unemployment levels that prevailed before the coronavirus struck.

“Over the course of a long expansion, these persistent disparities can decline significantly,” Jerome H. Powell, the Federal Reserve chair, said in a recent speech, though he added that “without policies to address their underlying causes, they may increase again when the economy ultimately turns down.”

Eight years, six legislative sessions and thousands of lawsuits: That’s what it has taken Congress to consider a bill that would provide pregnant women with clearer protections at work. Its prospects for passing into law are now better than ever, Alisha Haridasani Gupta and Alexandra Petri report for The New York Times’s In Her Words newsletter.

The issue has a renewed sense of urgency, as the pandemic pushed millions of women out of work. When the Pregnant Workers Fairness Act, which was first proposed in 2012, was reintroduced last month, it had 225 sponsors, including 19 Republicans.

The law would clarify the “accommodations” that companies should provide for pregnant employees, which are governed by a patchwork of state laws and ambiguous provisions in a 1978 law that made it illegal for employers to consider pregnancy in hiring, firing and promotion decisions.

Courts usually side with employers in pregnancy discrimination cases, a recent four-year study by the advocacy group A Better Balance found. Some of the accommodations that courts have said workplaces were not required to provide included additional bathroom breaks and stools to sit on.

“It’s just a common-sense piece of legislation to help keep women in the work force,” said Representative John Katko of New York, one of the Republican lawmakers backing the bill. It is expected to pass the House in the coming weeks.

Prince Abdulaziz bin Salman, the Saudi oil minister, last year. On Thursday, Saudi Arabia and other oil producers agreed to keep output steady, a move that is expected to lead to higher oil prices.Credit…via Reuters

Oil futures prices hit their highest levels in more than a year on Friday, rising more than 4 percent a day after OPEC and its allies surprised markets by agreeing to hold production mainly steady in April.

Brent crude, the global benchmark, reached as high as $69.60 a barrel, while the U.S. benchmark, West Texas Intermediate, sold for as much as $66.30.

The OPEC Plus group decided not to pump more oil despite rising prices and forecasts of growing demand.

“OPEC’s decision tightens an already tight market,” wrote analysts at Morgan Stanley in a note to clients after the meeting.

The investment bank estimated that the market would be undersupplied by as much as 1.9 million barrels a day later this year. The analysts said that with restrictions intended to curb the pandemic easing, global oil demand could grow by more than one million barrels a day, or about 1 percent, each month for several months in a row later this year.

Even before the meeting, forecasts were predicting oil prices would rise. Goldman Sachs has forecast that Brent crude would sell for $75 a barrel in the third quarter, and Morgan Stanley says that Brent could go as high as $80 a barrel later this year.

Several factors could blunt the upward momentum. OPEC, Russia and other producers are keeping several million barrels a day off the market and may become increasingly impatient at restraining output. Higher prices may also lead shale producers in the United States to step up production.

The Christmas windows at the Saks Fifth Avenue store in Manhattan in December. The changes at Saks will not be visible to customers, who will still see Saks stores and a Saks website.Credit…Jeenah Moon for The New York Times

Saks Fifth Avenue said on Friday that it would separate its e-commerce business and fleet of 40 stores into two units, a move that enables the company to devote more time and money to its online presence, which has become increasingly crucial during the pandemic.

Insight Partners, a venture capital firm, made a $500 million minority equity investment in Saks’ e-commerce business, valuing the digital arm at $2 billion, the retailer said in a release.

The stores will operate as their own entity. Hudson’s Bay, the owner of Saks Fifth Avenue, said on Friday that as separate but related companies, the businesses “will be better able to appropriately plan for and invest in their respective service models.”

The changes will not be visible to customers, who will still see Saks stores and a Saks website. But it will allow the retailer to make new investments in the digital operation, which will lead marketing and merchandising for the whole business. The e-commerce arm will be run by Marc Metrick, who was previously overseeing both parts of Saks. The company said that the stores “will fulfill the physical functions” of the website, like online pickup, exchanges, returns and alterations, establishing a clear hierarchy.

“By separating the dot-com business, we can show investors its value,” Richard Baker, chief executive of Hudson’s Bay, told The Wall Street Journal, which reported the news first on Friday. “Investors don’t want to put their money in bricks-and-mortar retailers right now,” he said.

Lachlan Murdoch sees a “plethora of opportunities” for Fox to do deals. Credit…Mike Cohen for The New York Times

Jason Kilar of CNN’s parent WarnerMedia and Fox Corp.’s Lachlan Murdoch made news on Thursday — that’s their business, after all — at a virtual conference held by Morgan Stanley. The shifting strategies of the media giants are in the spotlight as the Trump era fades and the pandemic enters its final stages (hopefully). The DealBook newsletter highlighted some of the media moguls’ noteworthy comments:

On the news cycle:

From a ratings point of view, “the main beneficiary of the Trump administration was MSNBC,” said Mr. Murdoch. “And that’s because they’re in loyal opposition, right? They called out the president when he needed to be called out. That’s what our job is now with the Biden administration.”

For CNN, “it turns out that the pandemic and the way that we can help inform and contextualize the pandemic, it turns out it’s really good for ratings,” said Mr. Kilar. He added that “CNN is killing it.” (Later, he said on Twitter, “I wish I could go back and be more thoughtful about my communication.”)

On deals:

Mr. Murdoch said there was a “plethora of opportunities” for Fox to make acquisitions, from gaming to streaming and elsewhere. (Fox Sports has the option to buy an 18.5 percent stake in the gambling group FanDuel this summer.) It’s worth noting that the two-year moratorium on deal-making following Fox’s sale of 21st Century to Disney has expired.

WarnerMedia will probably be more of a seller, looking to lighten its debt load like it did when selling a stake in DirecTV to TPG last month. “We will continue to be aggressive and disciplined about our focus,” said Mr. Kilar. “And that may include some things that we bring into the company, but it probably also includes things that are not a part of the company.”

And what about longstanding speculation that the company might sell CNN? Mr. Kilar wasn’t asked about it, and has previously suggested that it wasn’t part of his plans.

Reddit’s chief executive, Steve Huffman, said of going public: “We’re working toward that moment.”Credit…Zach Gibson/Getty Images

The world’s most popular internet message board is thinking about going public.

Reddit, the social network and online bulletin, said on Thursday that it had appointed its first chief financial officer, Drew Vollero, in a move toward tidying up the company’s books before an eventual public offering of its stock.

Mr. Vollero, 55, previously ran financial operations for Mattel, Snap and Allied Universal. His task at Reddit will be building out the financial, audit and accounting functions and leading the company through the process of going public.

“Is Reddit going public?” Steve Huffman, Reddit’s chief executive, said in an interview. “We’re thinking about it. We’re working toward that moment.”

Mr. Huffman said Reddit did not have a timeline, but Mr. Vollero’s appointment indicated that the 15-year-old company was developing its financial operations to be more similar to those of publicly traded peers like Twitter and Facebook. More than 52 million people visit Reddit every day, and it is home to more than 100,000 topic-based communities, or subforums.

For years, Reddit represented a kind of return to the message board era of the internet, where people gathered to discuss topics as varied as makeup and video games. It dabbled in different models and occasionally generated controversy, such as over its role in easing online bullying and the spread of hateful content.

Mr. Huffman, one of Reddit’s co-founders, returned to run the site in 2015. He has changed many parts of the business, working to rein in hate speech and digital abuse and developing the company’s advertising and direct-to-consumer product business. Reddit has revamped its terms of service to outlaw the noxious content that filled some of its subforums in its earlier days.

Reddit has also added to its executive ranks in recent months, hiring a head of security and appointing a new member to its board. In December, the company acquired Dubsmash, a video-focused social app that competes with TikTok. Last month, Reddit raised $250 million in new capital, its largest venture round, valuing the company at $6 billion.

Reddit plans to use the funding to expand its business, including its financial team, Mr. Huffman said. He also wants to make Reddit more mainstream by improving the product or making other investments, he said.

“Reddit can be hard to get at first,” Mr. Huffman said. “It takes a little time. We want to shorten that time.”

Andrew H. Giuliani, right, in 2018 with his father, Rudolph W. Giuliani, center, and Vitali Klitschko, the mayor of Kyiv, Ukraine.Credit…Erin Schaff/The New York Times

Newsmax, the conservative news outlet trying to compete with Fox News in a post-Trump era for viewers skeptical of mainstream media and the Democratic administration in Washington, has a new on-air talent: Andrew H. Giuliani, son of Rudolph W. Giuliani.

The younger Mr. Giuliani, who worked as an aide for former President Donald J. Trump, started this week as a political analyst and correspondent, he said Thursday on a radio show hosted by his father.

“When you walk out of the White House for the last time,” the 35-year-old son said, you wonder “if you’re ever going to do anything in your life that’s going to have the meaning of that.” The Newsmax job is, he added, “obviously a way to continue the meaning that I had found.”

His father, working as a lawyer for Mr. Trump, helped promote the debunked claim that the 2020 presidential election was rigged. The elder Mr. Giuliani has been targeted in defamation lawsuits filed by Dominion Voting Systems and another voting technology company, Smartmatic.

Newsmax already employs Sean Spicer, Mr. Trump’s first White House press secretary, as well as the pro-Trump social media stars Diamond and Silk. One of Mr. Spicer’s successors as press secretary under Mr. Trump, Kayleigh McEnany, has appeared recently on Fox News as a commentator.