Shares of industrial and transportation companies rose amid bets that central-bank action would offset the impact of the coronavirus on global economic growth.
The Institute for Supply Management’s manufacturing index, based on a survey of U.S. factory operators, fell to 50.1 in February, on the cusp of crossing the line between perception of expansion and contraction.
The survey “shows tangible evidence that the coronavirus” will have an impact on the U.S. economy, said Eric Winograd, senior economist at AllianceBernstein, in a note to clients. The global economy will slow sharply this year as governments attempt to contain the coronavirus epidemic, although the scale of the setback is highly uncertain, the Organization for Economic Cooperation and Development said.
In its “best case” scenario, the Paris-based research body said the global economy would grow by 2.4%, weaker than the previous 2.9% expansion, but the OECD also allowed that the slowdown could be much more drastic, depending on developments with the epidemic.
Similarly, analysts at brokerage Goldman Sachs Group slashed their 2020 profit targets to a projection of flat earnings growth for the broad Standard & Poor’s 500.
“This bleak profit forecast for 2020 is consistent with recent company preannouncements and survey responses from firms with operations in China,” said the strategists at Goldman Sachs, in a note to clients.
Railroad Amtrak Chief Executive Richard Anderson is stepping down after three years and will be replaced by William Flynn, the former chief executive of Atlas Air Worldwide Holdings, which leases passenger charters and cargo aircraft.
Electronics-manufacturing services company Plexus warned fiscal second-quarter revenue could miss expectations because of the Covid-19 outbreak, partly due to workforce disruptions in the supply chain.
Jack Welch, who led General Electric through two decades of unparalleled growth and transformation, died Sunday at age 84. Shares of GE rose after Stephen Tusa, an analyst at JPMorgan who was a longtime skeptic about the conglomerate’s business structure and cash flow, boosted his rating on the company to neutral.
Write to Rob Curran at [email protected]
(END) Dow Jones Newswires
March 02, 2020 16:31 ET (21:31 GMT)
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