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Colonial Pipeline Cyberattack and Stock Market Reaction: Live Updates

Colonial Pipeline fuel tanks in Woodbridge, N.J. The company’s pipeline carries nearly half the fuel supplies for the East Coast.
Credit…Colonial Pipeline/Via Reuters

Gasoline prices rose as much as 4.2 percent early on Monday after a major petroleum pipeline in the United States was shut down over the weekend because of a cyberattack. The pipeline’s operator, Colonial Pipeline, hasn’t said when it will reopen, raising concerns about the infrastructure that carries nearly half of the fuel supplies for the East Coast.

By 9:30 a.m. Eastern Standard Time, futures of gasoline for June delivery were up 1.6 percent, the highest level since late 2018. The instability is contained to prices that traders pay for gasoline, but may affect prices at the pump in the coming weeks.

“Should the pipeline be brought online at the start of the week, the impact on prices should be limited,” Giovanni Staunovo, an analyst at UBS Global Wealth Management, wrote in a note. “However, a prolonged shutdown (5 days or longer) is likely to send gasoline prices higher, which already trade close to a 7-year high.”

Oil prices also rose. Futures on West Texas Intermediate, the U.S. crude benchmark, were up 0.8 percent to $65.41 a barrel, after climbing as much as 1.3 percent.

The increase in the price of gasoline and oil has added to what was already a boom in commodity prices. As economies from the United States to China have shown signs of strength, demand for raw materials to power industrial growth has risen. On Monday, iron ore futures rose as much as 10 percent and copper prices extended their record high.

A Bloomberg commodities index, which tracks the prices of 23 commodities from gold and oil to wheat and sugar, was at its highest level since mid-2015. Freeport-McMoRan, an American mining company, and United States Steel both rose more than 3 percent in premarket trading.

  • U.S. stocks opened slightly lower on Monday, with the S&P 500 pulling back from a record.

  • The benchmark stock index had risen on Friday after an unexpectedly weak jobs report tempered expectations about how soon the Federal Reserve would consider withdrawing some monetary stimulus.

  • The Stoxx Europe 600 was flat while the CAC 40 in France and DAX in Germany both fell slightly.

  • The British pound rose 1 percent against the U.S. dollar and the euro after the results of Thursday’s local elections were confirmed. The Scottish National Party, which is pushing for a second independence referendum, fell one seat short of gaining an outright majority in its Parliament. But it will still govern with the support of another pro-independence party.

  • The pound’s gains on Monday were as much about the weak dollar as the election results, Kit Juckes, a strategist at Société Générale, wrote in a note. “I don’t know anyone who thinks the risk of a second Scottish referendum has gone away.” The pound can rise against the dollar because the U.S. currency “remains under pressure from global economic optimism,” he added.

  • The pound was at $1.41, the highest since February.

Colonial Pipeline fuel tanks in Maryland. The company operates the largest petroleum pipeline between Texas and New York.
Credit…Jim Lo Scalzo/EPA, via Shutterstock

The operator of the largest petroleum pipeline between Texas and New York, shut down after a ransomware attack, declined on Sunday to say when it would reopen.

While the shutdown has so far had little impact on supplies of gasoline, diesel or jet fuel, some energy analysts warned that a prolonged suspension could raise prices at the pump along the East Coast and leave some smaller airports scrambling for jet fuel, Clifford Krauss reports for The New York Times.

Colonial Pipeline, the pipeline operator, said on Sunday afternoon that it was developing “a system restart plan” and would restore service to some small lines between terminals and delivery points but “will bring our full system back online only when we believe it is safe to do so.”

The company, which shut down the pipeline on Friday, has acknowledged that it was the victim of a ransomware attack by a criminal group, meaning that the hacker may hold the company’s data hostage until it pays a ransom. Colonial Pipeline, which is privately held, would not say whether it had paid a ransom. By failing to state a timeline for reopening on Sunday, the company renewed questions about whether the operations of the pipeline could still be in jeopardy.

The shutdown of the 5,500-mile pipeline was a troubling sign that the nation’s energy infrastructure is vulnerable to cyberattacks from criminal groups or nations.

Energy experts predicted that traders would view the company’s announcement on Sunday as a sign that the pipeline would remain shut at least for a few days.

Experts said several airports that depend on the pipeline for jet fuel, including Nashville, Tenn.; Baltimore-Washington; and Charlotte and Raleigh-Durham, N.C., could have a hard time later in the week. Airports generally store enough jet fuel for three to five days of operations.

White House officials held emergency meetings on the pipeline attack over the weekend. The White House press secretary, Jen Psaki, said in a tweet that they are looking for ways to “mitigate potential disruptions to supply.”

Is Elon Musk really taking Dogecoin to the moon? That’s what the Tesla chief executive has been pledging to do with the jokey cryptocurrency, mostly in terms of cheering on its skyrocketing price. But on Sunday, he tweeted that one of his other companies, SpaceX, is launching a satellite called Doge-1 on a mission paid for with Dogecoin, the DealBook newsletter reports.

The announcement came the morning after Mr. Musk dropped a few Dogecoin references as host of “Saturday Night Live,” at one point calling the token “a hustle.” Dogecoin, which is based on an internet meme about a Shiba Inu, fell by nearly a third in price on the night of the show. It was such an eventful night for the cryptocurrency that the Robinhood trading app couldn’t keep up. The crypto token is still up more than 10,000 percent in price this year.

SpaceX and Geometric Energy Corporation, a Canadian technology firm, are teaming up to carry a 90-pound satellite on a Falcon 9 moon mission, according to a statement on Sunday. “Having officially transacted with DOGE for a deal of this magnitude, Geometric Energy Corporation and SpaceX have solidified DOGE as a unit of account for lunar business,” said G.E.C.’s chief executive, Samuel Reid. (A company representative confirmed to DealBook that the project was not a joke but declined to explain further.)

Away from the memes and manias, the cryptocurrency industry is maturing, as shown by its growing contingent of lobbyists in Washington and a recent hiring spree of former regulators. This month, the House passed a bill backed by crypto lobbyists to create a working group to examine frameworks for regulating digital assets.

The bill, said Representative Stephen F. Lynch, Democrat of Massachusetts, was a chance “to act proactively toward financial innovation rather than to address gaps in our regulatory framework after the fact.”

The bill is now with the Senate Banking Committee. “Financial regulators have been slow when it comes to protecting consumers from private-sector digital assets that add more risks to our financial system,” Sherrod Brown of Ohio, the committee chair, told DealBook in a statement. He declined to provide a timeline for advancing the legislation.

A United Airlines vaccine clinic at O’Hare Airport in Chicago. Employers are using on-site vaccinations to encourage workers to get shots.
Credit…Scott Olson/Getty Images

As companies make plans to fully reopen their offices across the United States, they face a delicate decision. Many would like all employees to be vaccinated when they return, but in the face of legal and P.R. risks, few employers have gone so far as to require it.

Instead, they are hoping that encouragement and incentives will suffice, Gillian Friedman and Lauren Hirsch report for The New York Times.

Legally, companies seem largely in the clear. The Equal Employment Opportunity Commission issued guidance in December stating that employers are permitted to require employees to be vaccinated. But employers are still worried about litigation, in part because several states have proposed laws that would limit their ability to require vaccines.

“It would seem to me that employers are going to find themselves in a fairly strong position legally,” said Eric Feldman, a law professor at the University of Pennsylvania, “but that doesn’t mean they’re not going to get sued.”

So, companies are resorting to carrots over sticks. Darden offers hourly employees two hours of pay for each dose they receive. Target offers a $5 coupon to all customers and employees who receive their vaccination at a CVS at Target location. And many companies are hosting on-site clinics to make it easier to get vaccinated.

Others are experimenting with return-to-office policies that aren’t all or nothing. Salesforce will allow up to 100 fully vaccinated employees to volunteer to work together on designated floors of certain U.S. offices. Some companies are mandating the shots only for new hires.

A pop-up vaccination site in Miami Beach, Fla. Companies are debating vaccine mandates for their workers.
Credit…Eva Marie Uzcategui/Agence France-Presse — Getty Images

Last week, the DealBook newsletter wrote about one of the most vexing issues facing boardrooms: Should companies mandate that employees get vaccinated before returning to the workplace? Many readers shared opinions, personal experiences and suggestions for handling this complex issue. Here is a small selection, edited for clarity:

  • “The way we’re doing it at our company is, if you submit a reason from your doctor or you have a religious belief or some other valid reason not to get the vaccination yet, you are required to be tested weekly and submit the results to H.R.” — Patricia Ripley, New York City

  • “We don’t know the long-term dangers of these vaccines. They may be bad or good. No one knows. Our employers should not be able to simply ignore any of our worries and concerns.” — Brandon Atchison, Verbena, Ala.

  • “I strongly support employer mandates. A few well-publicized firings will end the ‘hesitancy,’ but the firings must be backed up by classifying them as ‘for cause.’ That means no severance for executives and no unemployment for staff who refuse.” — Paul Levy, Carolina Beach, N.C.

  • “Individual rights are the cornerstone of American democracy — trampling them for the vaccine rollout is a dangerous precedent. People seem to forget that these ‘temporary changes’ end up as permanent, with the result that your employer can now compel greater access to your personal decision-making.” — Anonymous

  • “An unvaccinated person exposes everyone in the office, including visiting customers and clients, to the virus. Why should everyone else be jeopardized because of one person? Simply let unvaccinated people continue to work at home and suffer any consequences to their career paths that may result.” — Joseph Carlucci, White Plains, N.Y.

  • Norwegian Cruise Line is threatening to keep its ships out of Florida ports after the state enacted legislation that prohibits businesses from requiring proof of vaccination against the coronavirus in exchange for services. The company, which plans to have its first cruises available to the Caribbean and Europe this summer and fall, will offer trips with limited capacity and require all guests and crew members to be vaccinated on bookings through at least the end of October.

  • The operator of the largest petroleum pipeline between Texas and New York, which was shut down on Friday after a ransomware attack, would not give a timeline on Sunday on when it would reopen the pipeline. Colonial Pipeline, the pipeline operator, said on Sunday afternoon that it was developing “a system restart plan” and would restore service to some small lines between terminals and delivery points but “will bring our full system back online only when we believe it is safe to do so.”

The Los Angeles area has the nation’s largest concentration of warehouses, contributing to some of the worst air pollution in the country.
Credit…Philip Cheung for The New York Times

The South Coast Air Quality Management District in Southern California on Friday adopted a rule that would force about 3,000 of the largest warehouses in the area to slash emissions from the trucks that serve the site or take other measures to improve air quality, The New York Times’s Hiroko Tabuchi reports.

Southern California is home to the nation’s largest concentration of warehouses — a hub of thousands of mammoth structures, served by belching diesel trucks, that help feed America’s booming appetite for online shopping and also contribute to the worst air pollution in the country.

The rule sets a precedent for regulating the exploding e-commerce industry, which has grown even more during the pandemic and has led to a spectacular increase in warehouse construction.

The changes could also help spur a more rapid electrification of freight tucks, a significant step toward reducing emissions from transportation, the country’s biggest source of planet-warming greenhouse gases. The emissions are a major contributor to smog-causing nitrogen oxides and diesel particulate matter pollution, which are linked to health problems including respiratory conditions.

Empty platforms at the New Jersey Transit station in Secaucus in May.
Credit…Bryan Anselm for The New York Times

Before the pandemic, the trains of New Jersey Transit could be cattle-car crowded, with strangers pressed so closely against you that you could deduce their last meal. That level of forced intimacy now seems unimaginable.

After the outbreak, ridership on New Jersey trains, which in normal times averaged 95,000 weekday passengers, plummeted to 3,500 before stabilizing at about 17,500. A similar pattern held for the Metropolitan Transportation Authority’s Metro-North and Long Island Rail Road lines: in February 2020, nearly 600,000 riders; two months later, fewer than 30,000.

For many months, the commuter parking lots were empty, the train stations closed, the coffee vendor gone. At night, the trains cutting through Croton-on-Hudson in Westchester or Wyandanch on Long Island or in Maplewood, N.J., were like passing ghost ships, their interior lights illuminating absence.

But in recent weeks, as more people have become vaccinated, New Jersey Transit and the M.T.A. have seen a slight uptick, to about a quarter of their normal ridership.

Perhaps this signals a gradual return to how things had been; or, perhaps, it is a harbinger of how things will be, given that many people now feel that they can work just as efficiently from home.

A 2018 Lamborghini Aventador S was one of three luxury cars seized from Mustafa Qadiri, who was indicted by a federal grand jury on charges of fraudulently obtaining more than $5 million in emergency relief funds.
Credit…United States Attorney’s Office

A man in California who received more than $5 million in Payment Protection Program loans intended to help struggling businesses during the coronavirus pandemic was arrested on Friday on federal bank fraud and other charges after he used the money to buy a Lamborghini and other luxury cars, federal prosecutors said.

The man, Mustafa Qadiri, 38, of Irvine, was indicted by a federal grand jury on four counts of bank fraud, four counts of wire fraud, one count of aggravated identity theft and six counts of money laundering, the U.S. attorney in the Central District of California announced.

Federal prosecutors said Mr. Qadiri’s efforts to obtain federal loans started in late May 2020 and netted him nearly $5.1 million by early June. Mr. Qadiri is accused of using that money to go on a spending spree that included buying a Ferrari, a Lamborghini and a Bentley and paying for “lavish vacations,” all of which are prohibited under the Payment Protection Program, prosecutors said.

Online court records did not identify a lawyer for Mr. Qadiri, and efforts to reach him by telephone and email on Sunday evening were not successful.

The 2011 Ferrari 458 Italia can sell for more than $100,000, according to Cars.com, which says in a review that the vehicle “can perform as well as strain gawkers’ necks.”

Numerous people have been arrested and charged with misusing pandemic relief funds. Mr. Qadiri is at least the third person to face charges specifying the purchase of a Lamborghini.

The Federal Aviation Administration said it had fielded 1,300 complaints of unruly passengers since February, the same number of enforcement actions it took against passengers in the past decade.
Credit…Charlie Riedel/Associated Press

Four people are facing nearly $70,000 in civil fines for clashing with airline crews over mask requirements and other safety instructions on recent flights, part of what the Federal Aviation Administration called a “disturbing increase” in the number of unruly passengers who have returned to the skies with the easing of pandemic restrictions.

The latest round of proposed fines, which passengers have 30 days to contest, came just days after the F.A.A. said that it had received more than 1,300 unruly-passenger reports from airlines since February. In the previous decade, the agency said, it took enforcement actions against 1,300 passengers total.

“We will not tolerate interfering with a flight crew and the performance of their safety duties,” Stephen Dickson, the administrator of the F.A.A., said on Twitter on May 3. “Period.”

None of the passengers now facing fines were identified by the F.A.A., which this year imposed a zero-tolerance policy for interfering with or assaulting flight attendants that carries a fine of up to $35,000 and possible jail time.

So far, the F.A.A. has identified potential violations in about 260 of the 1,300 cases referred by airlines, a spokesman for the agency said in an email on Sunday. Officials have begun enforcement actions in 20 of the cases and are preparing a number of additional enforcement actions, the spokesman said.

In 2019, before the coronavirus pandemic, there were 142 enforcement actions that stemmed from unruly passengers, according to the F.A.A. There were 159 in 2018, and 91 in 2017.



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