Global markets continue Wall Street’s strong start.
Stock markets around the world on Tuesday maintained Wall Street’s Monday rally amid continued signs that the coronavirus outbreak may be peaking in a number of hard-hit places.
Major European markets opened significantly higher after Asian markets picked up steam later in their trading day. Futures markets were predicting a robust opening when trading begins in the United States.
The global economy still faces daunting challenges before it can get back on track. But the two-day rally was fueled in part by signs of progress in the fight against the coronavirus outbreak in the United States and Europe.
Other markets signaled improved investor confidence as well. U.S. Treasury bond prices fell, signaling sharper appetite for riskier investments. Oil prices rose too on hopes that Russia and Saudi Arabia could reach a price war truce.
In Japan, the Nikkei 225 index ended 2 percent higher. Hong Kong’s Hang Seng index was up 2.1 percent. In mainland China, the Shanghai Composite index was up 2.1 percent. South Korea’s Kospi rose 1.8 percent.
In London, the FTSE 100 index was up 3.2 percent in early trading. France’s CAC 40 index was up 3.5 percent, while the DAX index in Germany rose 4.4 percent early.
The cruise industry scrambles to survive.
Cruise ship companies have virtually no revenue. They have become symbols of deadly contagion. And despite assurances from President Trump, they were left out of the $2 trillion stimulus package Congress passed last month.
The Carnival Corporation, which serves nearly 11.5 million travelers a year, or roughly 50 percent of the global cruise market, is at the center of the crisis. Over the last couple of months, the company has had highly publicized outbreaks on several of its ships, including the Diamond Princess and the Zaandam, which has been trying to unload sick passengers in Florida.
Since the beginning of the year, the company’s share price has plummeted more than 80 percent, though it rose to $10.21 a share on Monday after Saudi Arabia’s state investment fund said it had acquired an 8 percent stake in the company. And last week, Carnival, which has already drawn on bank credit lines, began an attempt to raise $6 billion by selling stock, bonds and other securities. It was selling some of those bonds with a suggested 12.5 percent interest payment to investors, a strikingly high figure.
Carnival’s chief executive, Arnold Donald, said in interview that the sale would generate enough cash for the company to survive without revenue for the rest of the year and into 2021.
“If you run out of cash, you lose the company, and we can’t live with that,” Mr. Donald said. “So we want to make sure we’re prepared for an extreme case.”
The high interest rate on the debt deal “is absolutely going to be a challenge to us,” he said. “It’s not fun to be floating equity at the share price it is.”
The two major cruise lines besides Carnival — Royal Caribbean and Norwegian Cruises — are also looking for cash. Norwegian has tapped an existing $1.55 billion credit line. In March, Royal Caribbean secured a $2.2 billion loan, using its ships as collateral — an unusual step for a cruise line.
Wall Street began the week with a big rally.
Stocks rallied on Monday as investors seized on signals that the coronavirus outbreak may be peaking in some of the world’s worst-hit places.
The number of new confirmed deaths and infections is slowing in parts of Europe, and the number of deaths in New York has been steady for two days. In Italy and Spain, the total number of patients continues to climb, but the rate of new infections is no longer rising.
Wall Street analysts have been closely tracking the growth path of infections, with some spotlighting recent news as an indication that the outbreak could be near a peak in the United States. Analysts highlighted the tentative deceleration of infections in New York as a good sign for other virus hot spots in the country, as well as for stock market sentiment.
“This does not mean that the all clear is immediate, nor does it mean that the U.S. economy will quickly recover. But the light at the end of the tunnel is starting to emerge,” Dan Clifton, a partner at Strategas Research Partners, a financial and economic consulting firm, wrote in a note.
The optimism drove U.S. shares sharply higher. The S&P 500 rose 7 percent, its biggest gain since March 24, when it climbed more than 9 percent.
Still, there was a strong defensive tilt to trading. The utilities sector — typically an area dominated by risk-averse investors — was one of the best performing in the S&P 500, with a gain of almost 8 percent.
That suggests investors still see plenty of reason to be cautious.
Catch up: Here’s what else is happening.
Abercrombie & Fitch said on Monday that it would furlough its store employees in Africa, Europe, the Middle East and North America on April 12. The affected workers will still receive benefits. The retailer also announced it would cut the pay and work hours of some of its corporate employees and that its executive salaries would be reduced 10 percent to 33 percent.
Samsung Electronics said it expects that its operating profit for the first quarter rose slightly, to $5.2 billion, compared with $5.1 billion a year earlier, with the coronavirus boosting the sale of chips for data centers and laptops used by workers forced to stay home. But the pandemic was expected to eat into demand for smartphones, televisions and other consumer electronics over the coming year.
Reporting was contributed by David Yaffe-Bellany, Carlos Tejada, Daniel Victor and Austin Ramzy.