1. -- Stock Futures Rise as U.S. Eases Lockdown Restrictions
Stock futures traded higher Tuesday after the United States began easing lockdown restrictions and other countries like Italy started getting back to work after shutting down for weeks in an effort to halt the spread of the coronavirus.
Contracts linked to the Dow Jones Industrial Average were up 255 points, futures for the S&P 500 gained 30 points and Nasdaq futures rose 103 points.
Gov. Gavin Newsom of California, the first state to shut down its economy over the coronavirus outbreak, said stay-at-home rules would be loosened modestly beginning Friday.
The moves to open U.S. states came even as deaths from the virus neared 69,000, according to Johns Hopkins University, and infections in the U.S. grew to 1.18 million.
Stocks finished with gains Monday after tech stocks led makes higher. The Dow gained 0.1%, the S&P 500 rose 0.4% and the tech-heavy Nasdaq finished with a solid rise of 1.2%.
2. -- United Airlines Plans Management Cuts of 30%
United Airlines (UAL) - Get United Airlines Holdings, Inc. Report plans to cut at least 3,400 management and administrative positions in October, a report said, and pilots were told to prepare for a “displacement” that will affect roughly 30% of their ranks.
The management changes were being planned as the coronavirus pandemic has decimated the air travel industry and demand is seen as unlikely to recover.
Reuters reported that United has told employees it expects the airline's management and administrative staff to be around 30% smaller starting in October.
The airline is among several that have accepted U.S. government payroll aid that bans job cuts until Sept. 30, Reuters noted.
“We have to acknowledge that there will be serious consequences to our company if we don’t continue to take strong and decisive action, which includes making decisions that none of us ever wanted or expected to make,” said Kate Gebo, executive vice president of human resources and labor relations, in a memo to United employees.
As for the pilots, one pilot union official told Reuters the group was interpreting the message to mean a 30% reduction as soon as Oct. 1.
3. -- Walt Disney and Beyond Meat Report Earnings
Earnings reports are expected Tuesday from Walt Disney (DIS) - Get Walt Disney Company Report, Fiat Chrysler Automobiles (FCAU) - Get Fiat Chrysler Automobiles N.V. Report, Beyond Meat (BYND) - Get Beyond Meat, Inc. Report, DuPont (DD) - Get DuPont de Nemours, Inc. Report, Allstate (ALL) - Get Allstate Corporation Report, Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report, Electronic Arts (EA) - Get Electronic Arts Inc. Report, Mattel (MAT) - Get Mattel, Inc. Report, Pinterest (PINS) - Get Pinterest, Inc. Class A Report, AMC Networks (AMCX) - Get AMC Networks Inc. Class A Report and Occidental Petroleum (OXY) - Get Occidental Petroleum Corporation Report.
The economic calendar Tuesday includes International Trade for March at 8:30 a.m. ET and the ISM Non-Manufacturing Index for April at 10 a.m.
4. -- Hertz Hires Another Adviser for Planned Bankruptcy Filing
Hertz Global (HTZ) - Get Hertz Global Holdings, Inc. Report tumbled 32.31% in premarket trading Tuesday to $2.43 after The Wall Street Journal reported the car-rental company hired an additional adviser to help prepare for a planned bankruptcy filing.
Hertz, which missed a lease payment last week, hired FTI Consulting to advise it on efforts to streamline operations in advance of a possible chapter 11 filing, the Journal reported, citing people familiar with the matter.
The missed lease payment set off a grace period that expires Monday, the Journal noted. Hertz has been working to secure agreements from lenders to hold off on taking action against the company and to continue negotiations.
Hertz has been working to renegotiate its debt of $17 billion.
Hertz, like its rival Avis Budget Group (CAR) - Get Avis Budget Group, Inc. Report, has been hurt by fewer travel customers during the coronavirus pandemic. Avis on Monday reported a first-quarter loss of $158 million on a revenue decline of 9% to $1.8 billion.
5. -- L Brands Calls Off Sale of Victoria's Secret
Shares of L Brands (LB) - Get L Brands, Inc. (LB) Report fell 7.89% to $11.09 in premarket trading Tuesday after an agreement to sell a controlling interest in its Victoria’s Secret unit to Sycamore Partners was called off.
The $525 million deal had been announced in February, just weeks before the coronavirus pandemic forced widespread shelter-in-place orders that have devastated much of the U.S. and global economy.
Sycamore sued in April to halt the deal, claiming store closings and failure to pay rents were violations of the agreement.
L Brands said it was preparing Victoria's Secret to operate as a separate, standalone company, and was “implementing significant cost reduction actions and performance improvements" at the unit. L Brands also said it would continue to pursue establishing its Bath & Body Works unit “as a pure-play public company."
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