Wall Street was mostly lower on Monday as shares of companies poised to benefit from increased economic growth over the next year rose while high-flying tech stocks tumbled.
The S&P 500 fell 0.5 percent after spending most of the day in positive territory. Large technology stocks like Apple, Amazon, Microsoft, Facebook, Netflix and Alphabet were all lower.
The tech-heavy Nasdaq composite fell 2.4 percent, ending the day well more than 10 percent off its January peak. A drop that large is known as a correction, a Wall Street term of art that indicates something more serious than a garden-variety downturn.
The Dow Jones industrial average rose 1 percent, ending the day at a record. Disney led the gains in the Dow, climbing 6.3 percent after officials in California said that theme parks in the state could start to reopen as soon as April 1.
Segments of the S&P 500 that tend to do well during periods of high growth, rising prices and increasing interest rates fared the best in Monday’s session. Banks, which will benefit from an economic rebound and rising interest rates, rose. Goldman Sachs gained more than 2 percent, while JPMorgan Chase rose more than 1 percent. The S&P 500 financial sector increased 1.7 percent.
Airlines also rallied, with United Airlines up 7 percent and Southwest gaining 6.4 percent. Among other companies that will benefit from a return to normal shopping and work habits, Gap rose nearly 6 percent, and the office-building owner Vornado Realty climbed 7 percent.
Yields on 10-year U.S. Treasury notes rose to 1.59 percent, their highest closing level in more than a year.
Elsewhere in markets
Most European stocks were higher, with the Stoxx Europe 600 rising more than 2 percent.
On Monday, Andrew Bailey, the governor of the Bank of England, said there was growing economic optimism in markets and consumer and business confidence. But he added “a note of realism” that the recovery was from a low starting point. Low interest rates and the central bank’s bond-buying program were “amply” justified.
Oil futures were lower, and shares of energy producers also fell. West Texas Intermediate, the U.S. crude benchmark, fell to about $65 a barrel. The price was higher overnight at nearly $68 after an attack on oil sites in Saudi Arabia. The attack was intercepted and production was unaffected, according to reports.
Greensill Capital, a financial firm backed by SoftBank and advised by former Prime Minister David Cameron of Britain, on Monday filed for administration, a type of bankruptcy protection in Britain, after a swift collapse.
Greensill, which provides financing to companies, is a complicated web of businesses around the world dependent on insurance and easy access to capital markets. When Greensill’s insurer refused on March 1 to renew its coverage for the company’s loans, everything fell apart in a matter of days. Apollo Global Management, an American hedge fund, is reportedly in talks to buy some parts of the business.
Greensill Capital declined to comment.
The company was founded in 2011 by Lex Greensill, who had moved to Britain from Australia in his 20s and worked at Morgan Stanley and Citigroup. Mr. Greensill set up his company after his parents, who had a sugar cane and melon farm, struggled financially because of long waits for payments for their produce, the company said on its website. Greensill offers supply chain financing by paying suppliers on behalf of companies and collecting the payments from the buyers later. Greensill also helps companies raise money in credit markets using their invoices as collateral.
The loans Greensill makes to the companies are put into funds and then sold. Credit Suisse, which had sold $10 billion in investment funds based on assets put together by Greensill, froze the funds last week. The Swiss bank said on Friday that it would liquidate the funds and begin returning cash to investors within days. The Financial Times reported on Monday that Credit Suisse was also demanding the repayment of a $140 million loan to Greensill that the company could not pay back.
Lawyers for Greensill in Australia, where the parent company is registered, told a court last week that without the insurance, more than 50,000 jobs were at risk. The insurance covered about $4.6 billion in Greensill assets from 40 clients. The court documents suggest that the insurer had been investigating its relationship to Greensill since the summer.
Last week, Germany’s bank regulator froze activities at Greensill’s unit there, Greensill Bank. BaFin, the regulator, said an audit had uncovered evidence that assets reported by the bank did not exist.
German prosecutors in Bremen, where the Greensill unit is based, have opened an investigation.
In the past decade, Mr. Greensill has risen through the ranks of the British establishment. He advised Mr. Cameron’s government on supply chain financing just a year after setting up his company. In 2017, he received the honor of Commander of the British Empire, and the next year, Mr. Cameron became an adviser to Greensill.
In 2019, SoftBank invested $1.46 billion in Greensill, which was used to fuel international expansion. That year, Greensill said it extended $143 billion to more than eight million customers. SoftBank declined to comment on the bankruptcy filing.
Michael de la Merced, Jack Ewing and Stanley Reed contributed reporting.
The American Rescue Plan that was passed by the Senate and is now back before the House of Representatives would put pump $1.9 trillion into the economy.
The New York Times’s personal finance experts, Ron Lieber and Tara Siegel Bernard, combed through the bill to explain what it means in real terms to real people. Here are some of the questions they answer:
Apollo Global Management announced a deal to take over the insurance and lending firm Athene Holding, as the private equity giant prepares for a future without Leon Black.
The deal, which values Athene at $11 billion, will give Apollo majority control of the insurer it helped establish more than a decade ago. The merged company will be led by Marc Rowan, an Apollo co-founder who will replace Mr. Black as the private equity firm’s chief executive officer by July.
Mr. Rowan was the driving force behind the creation of Athene, which has emerged as a major provider of retirement and insurance services. Apollo owned about 28 percent of Athene’s outstanding shares before the merger.
In January, Apollo announced that Mr. Rowan would succeed Mr. Black as chairman following the release of details about Mr. Black’s extensive business dealings with Jeffrey Epstein, the disgraced financier and registered sex offender who killed himself in August 2019 while facing federal sex trafficking charges. Mr. Black paid $158 million in fees to Mr. Epstein for tax and estate planning services and also loaned him nearly $30 million.
Apollo also announced an additional step it would take to improve its corporate governance in response to the controversy over Mr. Black’s dealings with Mr. Epstein. By early next year, it will move to simplify its share classes to effectively allow all shareholders to have equal voting status — a change that will somewhat reduce the voting power of firm’s founders, Mr. Black, Mr. Rowan and Joshua Harris.
As Georgia Republicans push through measures that critics say will restrict Black citizens’ voting rights, opponents of the effort are calling on big companies based in the state to step up their defense of civil liberties. One of those bills has already passed the House, while another could go to a vote in the State Senate as soon as this week.
Here’s what corporate giants told DealBook about the proposed voting restrictions:
Coke described voting as “a foundational right” and said it supported efforts by the Metro Atlanta Chamber and the Georgia Chamber of Commerce to “help facilitate a balanced approach to the elections bills.”
Home Depot said that “elections should be accessible, fair and secure and support broad voter participation.” It referred to an internal get-out-the-vote initiative and a donation of 9,200 plexiglass dividers across the state to bolster poll station safety.
UPS said it “believes in the importance of the democratic process and supports facilitating the ability of all eligible voters to exercise their civic duty.” It added that it was working with the Atlanta and Georgia chambers of commerce “to ensure equitable access to the polls and the integrity of the election process across the state.”
Delta Air Lines called voting “a vital part” of the company’s values. “Ensuring an election system that promotes broad voter participation, equal access to the polls, and fair, secure elections processes are critical to voter confidence and creates an environment that ensures everyone’s vote is counted.”
Inspire Brands, the owner of Dunkin’ Donuts and Arby’s and one of the biggest restaurant companies in the United States, did not have a comment.
These statements aren’t enough, activists say. “Just simply saying we support elections — free, fair and accessible elections — without actually addressing the issues currently underway has no teeth,” the Rev. James Woodall, the president of the Georgia N.A.A.C.P., told DealBook.
Companies have played a role in Georgia civil rights battles before. In 2015, businesses like Coca-Cola, Delta, Home Depot and UPS opposed “religious liberty” legislation meant to give companies legal cover to avoid hiring L.G.B.T.Q. workers, citing not only company values but also potential harm to Georgia’s business reputation. Many big companies also publicly pledged to work toward racial equity after the killing of George Floyd and others this past summer.
Mr. Woodall said that it was harder now for Georgia-based companies to both promote moderate social policies and cater to local politicians pushing the voting restrictions bills. “Georgia celebrates being the best state to do business,” he said “But that will change if people feel that businesses don’t support them or their lives are literally at stake.”
Since they were first deployed in 1956, the boxy shipping containers that get stacked on top of one another aboard giant vessels have revolutionized global trade. They allow goods to be packed into standard receptacles and hoisted off the boats by cranes onto rail cars and trucks.
Containers are how flat-panel displays made in South Korea are moved to plants in China that assemble smartphones and laptops, and how those finished devices are shipped across the Pacific to the United States.
Over the past year, the pandemic has disrupted every part of those journeys and disrupted international trade to an extraordinary degree, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery. The coronavirus has thrown off the choreography of moving cargo from one continent to another.
No one knows how long the upheaval will last, though some experts assume containers will remain scarce through the end of the year, as the factories that make them — nearly all of them in China — scramble to catch up with demand.
“I’ve never seen anything like this,” said Lars Mikael Jensen, head of Global Ocean Network at A.P. Moller-Maersk, the world’s largest shipping company. “All the links in the supply chain are stretched. The ships, the trucks, the warehouses.”
E-commerce saved many retail companies over the past year, as online shopping provided a lifeline after stores were shut, city centers went vacant and customers stayed home.
But for small businesses, the benefit was wildly uneven, Andrew Lipsman, principal analyst with eMarketer, tells Amy Haimerl of The New York Times. There were winner sectors, such as grocery, health and fitness, and direct-to-consumer brands, but apparel boutiques and other specialty retailers — especially those without existing e-commerce platforms — struggled.
The experience of Amina Daniels, the owner of Live Cycle Delight fitness studio in Detroit, underscores the logistical challenges small businesses faced building and competing online.
To produce on-demand video classes, she built a mini production studio inside her spin room, investing thousands in microphones, lights and a film crew. Still, it’s hard to go up against Peloton, which has entire teams producing its digital classes.
About 30 customers left Live Cycle Delight for Peloton, Ms. Daniels said, but she found support in other ways. With the movement to support Black-owned businesses, people donated to her, and there was healthy demand for the studio’s branded merchandise, such as Pilates balls, T-shirts and booty bands, the stretchy bands that add resistance to a workout.
Between the products, outdoor classes in the summer and memberships, she has been able to keep the three-year-old business open. The shift to e-commerce hasn’t been perfect, she said, but it’s been worth it. She reminds herself why she started the studio: to make fitness more accessible and inclusive.
“Peloton is just one kind of experience,” she said. “We’re still here providing clients with an option to join us on the quest of better.”