Asian markets mixed as investor enthusiasm wanes.
Asian markets were mixed on Wednesday amid ebbing optimism over global progress in fighting the coronavirus.
Japanese stocks led the gainers at midday, though China-related markets were lower. Futures markets were predicting a weak opening for European stocks but a stronger morning for Wall Street later in the day.
Prices for U.S. Treasury bonds were higher, in a sign of market skittishness. Oil prices were largely flat.
Stocks in the United States tumbled the day before on news that undercut optimism from earlier in the week. Experts quoted by Stat, a medical news site, said they did not have enough data to assess whether a promising new vaccine would be effective in fighting the coronavirus. U.S. officials told lawmakers on Tuesday that an American economic recovery would be slow and difficult, though they offered somewhat different prescriptions for fixing it.
In Japan, the Nikkei 225 average was 0.7 percent higher at midday. Hong Kong’s Hang Seng index was down 0.2 percent. In mainland China, the Shanghai Composite index was down nearly 0.5 percent. South Korea’s Kospi was up 0.2 percent.
Stocks on Wall Street fell on Tuesday, giving up some of Monday’s gains, as investors regrouped after the S&P 500 had one of its biggest rallies in weeks.
The S&P 500 fell 1 percent to end the day, after treading water for most of the session as investors assessed testimony from the Federal Reserve chair, Jerome H. Powell, and Treasury Secretary Steven Mnuchin. Both had addressed Congress about their response to the coronavirus pandemic, and what was still to come from both the Fed and the Treasury.
Late in the day, drug company Moderna slid after the medical-news website Stat questioned the robustness of its early stage trial of a coronavirus vaccine. Moderna’s announcement on Monday that the vaccine had shown some progress had helped set off the market’s rally of more than 3 percent — the best daily performance for the S&P 500 in six weeks.
Stat, citing vaccine experts, said the information released by Moderna on Monday was not detailed enough to know whether the vaccine was as promising as it might have seemed. Moderna’s shares fell more than 10 percent.
Other negative news began to sink in on Tuesday, including more signs of rising tensions between the United States and China. Investors also were cheered on Monday after Germany backed the idea of collective European debt to help countries hit hardest by the outbreak, but on Tuesday, the lack of details and the prospect of a long and slow recovery weighed on sentiment.
The U.S. economy faces irreparable damage from the fallout of the coronavirus pandemic, the nation’s top economic policymakers warned lawmakers on Tuesday, as the Congress and the White House grapple with how to restart business activity and how much additional government support is needed.
In a joint appearance before lawmakers, Treasury Secretary Steven Mnuchin and the Federal Reserve chair, Jerome H. Powell, offered a stark assessment of the fragile state of the economy, warning of more severe job losses in the coming months. But they offered contrasting views of how best to buttress the economy, with Mr. Powell suggesting that more fiscal support to states and businesses might be needed to avoid permanent economic damage and Mr. Mnuchin suggesting that, without an expeditious reopening, the economy might never fully recover.
“There is the risk of permanent damage” if states delay reopening, Mr. Mnuchin told members of the Senate Banking Committee.
The hearing, which was held by video conference, came at a pivotal moment, as Congress and the White House are beginning to debate the outlines of a second major economic relief bill and potentially inject trillions of additional taxpayer dollars into the economy.
Mr. Mnuchin’s comments reflect the change in tone among administration officials, who have begun trying to shift the economic discussion away from more financial support to allowing states to reopen. In his opening remarks, Mr. Mnuchin said “it is so important to begin bringing people back to work in a safe way.”
Mr. Powell sounded a more cautious tone, explaining that a full recovery will not come until the health crisis is resolved.
“The No. 1 thing, of course, is people believing that it’s safe to go back to work, and that’s about having a sensible, thoughtful reopening of the economy, something that we all want — and something that we’re in the early stages of now,” Mr. Powell said. “It will be a combination of getting the virus under control, development of therapeutics, development of a vaccine.”
More highlights from Tuesday’s hearing:
Mr. Powell suggested that the central bank might expand its program to buy municipal debt and agreed that state and local governments could slow the economic recovery if they laid off workers amid budget crunches.
Mr. Mnuchin warned that the economy may never fully recover if states extend their shutdowns for months — citing a risk of “permanent damage” — comments that reflect a change in focus by the Trump administration, which has tried to shift the economic discussion away from more financial support to allowing states to reopen.
Lawmakers grilled Mr. Mnuchin and Mr. Powell over whether their efforts to shore up the economy were doing enough to help workers and smaller companies, and warned that they should not help large corporations alone. Lawmakers repeatedly urged the pair to get the midsize business “Main Street” lending program up quickly.
Mr. Powell warned that the economy could face long-term damage if the policy response was not forceful enough, and reiterated that the economy might need more help to make it through the coronavirus period without lasting scars.
Mr. Mnuchin, who previously said he expected that the Treasury would return all $454 billion from Congress, changed that benchmark on Tuesday, saying the “base case” now is that the government will lose money. “Our intention is that we expect to take some losses on these facilities,” he said.
Pandemic lockdowns have halted a booming film industry in the Hudson Valley.
The Hudson Valley in upstate New York has for two decades beckoned filmmakers looking for bucolic settings. They used old towns, abandoned warehouses, office parks and rustic locales to produce some 500 movies, and in the process pump more than $250 million into the local economy.
This year, film production in the area was on the rise, and additional studio space was planned. But since the pandemic lockdown, work has ground to a halt.
“Things aren’t as they were, and they may never again be the same,” said Laurent Rejto, founder and director of the Hudson Valley Film Commission, a nonprofit organization based in the town of Woodstock that helps producers find locations, housing and crews.
Mary Stuart Masterson, the actress and founder of Upriver Studios, hoped to turn 104,000 square feet of a light-industrial complex in Saugerties, N.Y., into a state-of-the art film studio. But with the coronavirus pandemic, the rented space remains as it was, with the building conversion delayed and productions indefinitely paused.
“The timing is, who knows?” said Ms. Masterson, who remains optimistic that “there is a tomorrow.”
Catch up: Here’s what else is happening.
Urban Outfitters, which also owns Anthropologie and Free People, reported a 32 percent drop in net sales to $588 million in the first quarter and a net loss of $138 million, a decline that comes as apparel retailers continue to struggle with temporary store closures brought on by the pandemic. The retailer, which is known for its attractive and often large stores, said on an earnings call that it was negotiating with landlords on lease terms and cost reductions. It added that it was not willing to work with those who think “it’s 1995 and they can command any rent they wish.”
Reporting was contributed by Carlos Tejada, Eugene L. Meyer, Mohammed Hadi, Jeanna Smialek and Sapna Maheshwari.