US stocks are having another dismal day: April 1, 2020

By CNN Business

Updated 6:12 a.m. ET, April 2, 2020
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9:36 a.m. ET, April 1, 2020

This is the first major oil bankruptcy since the crash. It won't be the last.

From CNN Business' Matt Egan

Whiting Petroleum is the first major oil producer to file for bankruptcy since the crash in oil prices to 18-year lows.

The Denver-based driller said Wednesday it filed for Chapter 11 in US Bankruptcy Court for the Southern District of Texas.

Whiting (WLL), valued at nearly $5 billion as recently as late 2018, had been a rising star in the shale industry with properties in the Bakken oilfield of North Dakota.

CEO Bradley Holly cited the "severe downturn in oil and gas prices" caused by the price war between Saudi Arabia and Russia as well as the coronavirus pandemic.

The other problem is that the bond markets have been closed to debt-riddled companies, especially in the energy industry. That makes it very difficult for oil companies to roll over their debt and could spark a wave of bankruptcies.

As part of the bankruptcy, Whiting reached a deal with creditors that would allow the company to slash its debt by more than $2.2 billion by exchanging debt for equity.

Whiting has nearly $600 million of cash on its balance sheet and continues to operate during the restructuring.

9:10 a.m. ET, April 1, 2020

Wireless router company seeing 'unprecedented demand' as people work from home

From CNN Business' Paul R. La Monica

I wrote this blog post from home. You're probably reading it while working at home. That's why one firm that makes 4G and 5G mobile hotspots is expecting boom times ahead.

Wireless equipment company Inseego (INSG) said Wednesday that it has already doubled production of its routers and it has the manufacturing capacity to ramp up production to five to six times normal volume.

“We’re seeing unprecedented demand for our wireless mobile broadband devices, spurred by the dramatic change in how we are living, working and learning from home," said Inseego chairman and CEO Dan Mondor in a release.

Shares of Inseego shot up more than 11% in early trading Wednesday, adding to the stock's gains for the year. Analysts are currently predicting a year-over-year increase in revenue of nearly 20% this year and a more than 25% jump in 2021. The company is still losing money, but it is expected to turn a profit next year.

And Mondor thinks this is only the beginning of a surge in sales.

"We’re prepared to scale up quickly, not only during the COVID-19 pandemic, but as mobile data traffic continues to grow, unabated, year after year, and drives the need for more 5G networks,” he said.

8:33 a.m. ET, April 1, 2020

Private payrolls slipped in March -- before the worst of the coronavirus layoffs

From CNN Business' Anneken Tappe

Private payrolls fell by 27,000 jobs in March, according to this morning's ADP employment report.

That's a much smaller decline than economists had expected: Economists surveyed by Refinitiv forecast a drop of 150,000 jobs.

Still, it was the worst ADP report since September 2017, when private payrolls dropped by 39,000 jobs.

All of the job declines were in small businesses with less than 50 employees. Payrolls for mid-sized and large companies actually increased last month. Jobs in the services sector and trade, transportation and utilities industries declined the most.

The services sector has been hit particularly hard by the coronavirus outbreak, as social distancing measures are keeping customers away.

The ADP report is often considered an indicator for the Labor Department's jobs report, which is due at 8:30 am ET on Friday. That report is expected to show some -- but not all of the job destruction the pandemic has wrought.

Although coronavirus has costing millions of Americans their jobs, the survey was taken mid-month, and economists expect the Labor Department to report the US economy shed 100,000 jobs in March.

7:13 a.m. ET, April 1, 2020

Macy's just got booted from the S&P 500

From CNN Business' David Goldman

Macy's, which is struggling mightily during the coronavirus pandemic, has been kicked out of the S&P 500.

Although the S&P 500 is nominally the 500 companies with the largest values on the US stock market, that's not technically true. The stock index currently contains 505 companies, and S&P Dow Jones Indices, which manages the S&P 500, is patient when companies go through some tough times. It doesn't change the index all that often, so it hangs onto some companies even when their market caps fall below those of other non-S&P-500 companies.

But it just couldn't hang onto Macy's (M) for any longer. The department store's market cap has plunged to just $1.5 billion as its stock price cratered 71% this year. Macy's recently furloughed the majority of its staff as stores remain closed during the pandemic. Macy's was the least-valuable member of the S&P 500 and one of only five stocks on the index worth less than $2 billion.

Macy's is being replaced by Carrier Global, a spin-off of United Technologies.Otis International is also joining the index.

6:47 a.m. ET, April 1, 2020

Xerox drops hostile takeover attempt of HP

From CNN Business' Jordan Valinsky

Xerox (XRX) has been attempting to takeover HP (HPQ) for several months, despite the latter repeatedly rejecting it. Well, now it's done for good.

In a statement late Tuesday, Xerox said that the "resulting macroeconomic and market turmoil" caused by the coronavirus has forced it to dropits bid. It's also no longer attempting to nominate directors to HP's board, it said.

"While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations," Xerox said in the release.

Both stocks are down roughly 2% in premarket trading.

6:17 a.m. ET, April 1, 2020

US stocks are heading for a dismal open

Even with the nationwide adoption of stringent mitigation efforts, between 100,000 and 240,000 Americans could die in the coming weeks, the White House warned on Tuesday.

The world's largest economy is quickly becoming the epicenter for the pandemic. Here's where futures stand as of 6 am ET:

  • Dow (INDU) futures sank 584 points, or 2.68%
  • S&P 500 (SPXfutures fell 2.81%
  • Nasdaq (COMP) futures were down 2.43%

Stock markets are reacting to "a likely increase in the duration and breadth of coronavirus lockdowns in the US and elsewhere, which is pointing to a potentially deeper and longer-term hit to economic activity than was anticipated even a week ago," Stephen Innes, a strategist at AxiCorp, wrote in a research note.

6:30 a.m. ET, April 1, 2020

Global stocks fell amid coronavirus pandemic fears

Global stocks declined Wednesday after the White House warned that up to 240,000 Americans could die as a result of the coronavirus pandemic and as the economic shockwaves continued to reverberate around the world.

Data in Asia revealed a widespread slowdown in manufacturing across the region.

  • Japan's Nikkei 225 (N225closed down 4.5%
  • Hong Kong's Hang Seng Index (HSIslumped 2.2% 
  • Shanghai Composite (SHCOMPdipped 0.6%

European markets followed suit:

  • Germany's DAX (DAX) and France's CAC 40 (CAC40shed more than 3% in early trading.
  • The FTSE 100 (UKXdipped nearly 4% in London after major UK banks canceled dividend payments after regulators asked them to prioritize help for struggling businesses and households.
6:27 a.m. ET, April 1, 2020

Carnival seeks $6 billion as pandemic devastates cruise industry

From CNN Business' Sherisse Pham

Carnival Corporation (CCL) is seeking at least $6 billion to weather an unprecedented crisis that has decimated business, after coronavirus outbreaks aboard its cruise ships killed several passengers and sickened hundreds more.

The cruise operator announced on Tuesday that it intends to raise $3 billion of secured notes and $1.75 billion of convertible notes — both due in three years — as well as $1.25 billion of new shares.

Wedbush analyst James Hardiman said in a note on Tuesday that Carnival is suffering "a monthly cash burn of approximately $500 million" and the fresh injection of cash should keep the company afloat for the next 12 to 13 months.

Shares in Carnival fell 2% in premarket trading. The stock is down 75% for the year.

Read more here.