By Ciara Linnane, MarketWatch
Mexico is fourth with 77,646 deaths and seventh with 743,216 cases.
The U.K. has 42,292 deaths and 462,774 cases, the highest death toll in Europe and fifth highest in the world.
China, where the illness was first reported late last year, has 90,555 cases and 4,739 fatalities, according to its official numbers.
What’s the latest medical news?
The U.S. Food and Drug Administration has widened its investigation into AstraZeneca’s /zigman2/quotes/200304487/composite AZN +1.82% /zigman2/quotes/203048482/delayed UK:AZN +2.96% COVID-19 vaccine study, according to a Reuters report, raising the prospect of further delays, MarketWatch’s Lina Saigol and Callum Keown reported from London.
AstraZeneca and its partner, the University of Oxford, voluntarily paused its Phase 3 vaccine study worldwide on Sept. 9, after a volunteer in the U.K. developed an “unexplained illness.”
Regulators in the U.K., Brazil, India and South Africa have since allowed AstraZeneca to resume its clinical trials, but the British drug maker’s late-stage U.S. trials have remained on hold. The FDA has requested further data, the Reuters report said, citing two sources. The data were expected to arrive this week, after which the agency would need time to analyze.
When the British company paused its trials, it said that unexplained illnesses can happen “by chance” in large trials and must be independently reviewed. The FDA declined to comment.
This is how much it costs to develop a vaccine
As the race to create a COVID-19 vaccine continues, here are the expenses that typically go into creating and distributing vaccines.
What’s the economy saying?
Outside of jobless claims, Americans ratcheted up their spending in August for the fourth month in a row, but the increase was the smallest since the U.S. economy began to reopen and pointed to a slower economic recovery, MarketWatch’s Jeffry Bartash reported.
Consumer spending rose 1% in August, the government said Thursday, matching the forecast of economists polled by MarketWatch.
Slower spending stemmed largely from the end of a massive infusion of federal aid for the unemployed. Incomes declined by 2.7%, the biggest drop since early in the pandemic.
Yet many households boosted savings early in the pandemic, giving them more cushion to spend. That’s how they managed to increase spending in August. The savings rate fell again to 14.1%, but it’s still almost twice as high as it was before the pandemic.
The return of millions of people to the workforce and the reopening of more businesses has also kept spending on the up and up.
“Despite slowing momentum, the reduction in unemployment benefits, U.S. consumers are still in decent financial shape,” said senior economist Jennifer Lee of BMO Capital Markets. “This suggests that [the third quarter] is going to be stronger than many expected.”
Separately, the Institute for Supply Management’s manufacturing index fell to 55.4% in September from 56% in August.
What are companies saying?
• Allstate Corp. /zigman2/quotes/201974803/composite ALL +0.51% will lay off employees and close offices in a restructuring plan expected to cost the company nearly $300 million, mostly incurred in the third quarter. The goal is to increase Allstate’s share in the personal property and liability market “by expanding customer access, improving customer value and investing in marketing and technology,” the company said in a statement. Esurance and Allstate brands have merged operations, and Allstate is trying to offer “competitive” prices in auto insurance, which requires cost reductions to maintain margins, it said. About 3,800 employees, mostly in claims, sales, service and support roles, will be affected, Allstate said. “Implementing this plan is difficult as we still deal with the impact of the pandemic but necessary to provide customers the best value,” Chief Executive Tom Wilson said in a statement. The restructuring will result in charges around $290 million, with about $210 million to $220 million in the third quarter. The charges will reduce both net income and adjusted net income, and are primarily due to severance and employee benefits as well as expenses related to office closures.
• Bed Bath & Beyond Inc.’s stock /zigman2/quotes/209801102/composite BBBY +0.66% soared 28.6% after the home goods retailer’s second-quarter earnings and sales beat expectations. Comparable sales grew for the first time since the fourth quarter of fiscal 2016, up 6%. FactSet forecast a 2.1% decline. Digital sales grew 89%. The company generated more than $750 million in cash flow, reduced debt by $500 million and brought its liquidity up to $2.2 billion through cash and a new $850 million secured asset-based lending facility. Bed Bath & Beyond didn’t provide guidance due to the ongoing uncertainty of the pandemic, but expects to achieve the goals laid out in its restructuring program, including annualized EBITDA improvement of $250 million to $350 million, excluding one-time costs, cost savings of about $100 million through the closure of 200 stores over the next two years, and about $150 million in savings from 2,800 job cuts.
• Conagra Brands Inc. /zigman2/quotes/200394144/composite CAG +0.31% reported first-fiscal-quarter earnings that blew past expectations, buoyed by continued demand for food to eat at home. Sales rose across all segments, except food service, which fell 21.8% to $195 million. Conagra brands include Dunkin Hines, Hunt’s and Vlasic. “Now that customers have begun rebuilding inventories and we have increased production capacity in certain areas of our business, we are selectively increasing our marketing support for the businesses where capacity permits,” said Sean Connolly, chief executive of Conagra. Conagra raised its quarterly dividend 29% to $0.275 per share of common stock to be paid on Dec. 2, 2020 to stockholders of record as of the close of business on Nov. 2, 2020. For fiscal second quarter so far, Conagra says it’s seeing increased demand across retail segments and continued COVID-19–related food service declines. For the quarter, Conagra expects organic net sales growth of 6% to 8% and adjusted EPS of 70 cents to 74 cents. The FactSet consensus is for sales of $2.94 billion, suggesting 4.2% growth, and EPS of 72 cents.
• Constellation Brands Inc. /zigman2/quotes/207737284/composite STZ +1.91% posted stronger-than-expected earnings for its second quarter, despite coronavirus-related headwinds, but declined to offer guidance given the uncertainty it has created. The company said it had net income of $512.1 million, or $2.62 a share, in the quarter to Aug. 31, after a loss of $525.2 million, or $2.77 a share, in the year-earlier period. The distributor of Corona beer said EPS including equity losses from its investment in Canadian cannabis company Canopy Growth Corp. /zigman2/quotes/202205609/delayed CA:WEED -0.98% /zigman2/quotes/200603886/composite CGC -0.14% came to $2.76, and excluding Canopy Growth losses came to $2.91. Sales fell 4% to $2.260 billion. The FactSet consensus was for EPS of $2.51 and sales of $2.191 billion.
•JetBlue Airways Corp. /zigman2/quotes/207639051/composite JBLU -1.76% said the U.S. Treasury has agreed to extend loans of up to $1.14 billion until March 26, under the CARES Act, a stimulus program created during the pandemic. The airline drew down $115 million of the loan agreement on Sept. 29, JetBlue said in a regulatory filing. It has issued warrants to the Treasury to purchase 1.21 million shares, as part of the CARES Act agreement. JetBlue also received a payment of $27.1 million on Sept. 30 from the Treasury under the Payroll Support Program Agreement. The airline issued warrants for an additional 85,650 shares in return for the PSP loan.
• Marathon Petroleum Corp. /zigman2/quotes/209634297/composite MPC +4.68% will lay off more than 2,000 employees as it looks to cut costs amid less demand for gasoline and other oil derivatives during the pandemic. The layoffs and the “indefinite” idling of the company’s refineries in Martinez, Calif., and Gallup, N.M., will affect about 2,050 employees, the company said. The layoffs and the open positions that the company decided to keep unfilled represent about 12% of its workforce, Marathon Petroleum said. Most employees will be notified on Thursday, Marathon said. The plan will result in severance charges between $125 million and $175 million in the third quarter, Marathon said.
• PepsiCo Inc. /zigman2/quotes/208744353/composite PEP +0.97% beat earnings estimates for the third quarter. The results, coming during the pandemic, reflect the strength of the company’s snacks and food business, “and a significant improvement in our global beverage business,” Chief Executive Ramon Laguarta said in a statement. The company is now expecting full-year core EPS of about $5.50, compared with a FactSet consensus of $5.36.