How does the op-amp deals with negative inputs?
It can only work with a negative input if a supply voltage is applied to Vs- that is more negative than the input. In the case of the 741, about -8V supply to be sure of it working with a -5V input. 

Then, from the reference point of Vs-, all inputs are positive by 3V or more. The 741 does not have a GND pin- all it cares about is the input and output voltages with respect to Vs- and Vs+.