Wall Street's main indexes fell more than 1.5% on Friday as the coronavirus abruptly ended a record U.S. job growth streak of 113 months, intensifying fears of a deep economic slowdown.
Even the loss of 701,000 jobs that Labor Department data showed for March did not completely capture the economic damage from the virus. The survey considered data only until mid-March, before widespread U.S. lockdowns put more people out of work.
The worldwide spread of the virus has forced billions of people to stay indoors and pushed entire sectors to the brink of collapse, triggering mass layoffs and dramatic steps by companies to raise cash. "Even as investors may be bracing for some grim economic reports over the next several weeks, we got a very sober reminder of what is to come by way of today’s jobs report," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Investors were also anxious heading into the weekend due to the possibility for "particularly ugly" weekend news on coronavirus case counts or new hot spots around the country, Luschini said.
The S&P 500 closed down almost 27% from its mid-February record high close, or about $7 trillion in market value, and economists have cut their forecasts for U.S. GDP, with Morgan Stanley now predicting a 38% contraction in the second quarter.
"This is not like December 2018. We're not likely to see a V shaped recovery because we haven't even begun to really tackle the main issue behind why this is happening. That's still an ongoing process. It's going to take time," said Mike Turvey, TD Ameritrade's institutional senior trading strategist
The Dow Jones Industrial Average fell 360.91 points, or 1.69%, to 21,052.53, the S&P 500 lost 38.25 points, or 1.51%, to 2,488.65 and the Nasdaq Composite dropped 114.23 points, or 1.53%, to 7,373.08.
Of the S&P 500's 11 major sectors utilities was the biggest laggard, down 3.6%, followed by materials and financials, with declines of more than 2%.
Only consumer staples rose and ended the day up 0.5% as the sector is seen as a defensive play, with consumers still needing to eat and buy household goods in a recession.
The energy sector was one of the best performers. U.S. President Trump met with U.S. oil company executives at the White House and said Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin both want something to happen to stabilize the global oil market, where prices have fallen by about two-thirds this year.
Walt Disney Co shares fell 3% after it said it would furlough some U.S. employees this month, while sources said luxury retailer Neiman Marcus was stepping up preparations to seek bankruptcy protection.
Raytheon Technologies Corp, formed by the merger of United Technologies and Raytheon Co, shed 7.75% as it pulled its 2020 outlook for its aerospace units.
Tesla Inc rose 5.6% after the electric-car maker said production and deliveries of its Model Y sport utility vehicle were ahead of schedule.
On U.S. exchanges 11.57 billion shares changed hands compared with the 15.75 billion average for the last 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by a 3.53-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 11 new lows; the Nasdaq Composite recorded 5 new highs and 179 new lows.
The Cboe Volatility Index, widely known as "Wall Street's fear gauge," ended at 46.80, its lowest closing level since March 6.
Global stock markets sank on Friday following more signs that the COVID-19 pandemic would take a massive toll on economic growth, while oil prices continued to rally on hopes of a cut to global supply.
Investors sought safe havens in the U.S. dollar and government bonds, pushing U.S. Treasury yields near their lowest in three weeks.
Oil prices recorded their biggest weekly gain in five weeks after U.S. President Donald Trump said on Thursday he had brokered a deal that could result in Russia and Saudi Arabia cutting oil output by an unprecedented 10 million to 15 million barrels per day (bpd), representing 10-15% of global supply. Trump said he had not offered to cut U.S. output.
In Europe, a number of firms flagged a hit to business from the pandemic caused by the new coronavirus, foreshadowing a deeper earnings recession ahead of the reporting season.
MSCI's gauge of stocks across the globe shed 1.39% following broad declines in Europe and Asia.
"Global recession fears are now being confirmed by the incoming economic prints," said Han Tan, market analyst at FXTM. "Until the virus case count peaks and the business earnings outlook improves, risk sentiment may only experience fleeting bouts of positivity."
The pandemic has claimed more than 53,000 deaths as it further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.
Concerns about the extent of the damage to the global economy pushed investors into the perceived safety of government bonds. Benchmark 10-year notes last rose 6/32 in price to yield 0.6072%, from 0.627% late on Thursday.
"You have to take into consideration this isn’t the full impact just yet," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, adding that he expects "further erosion in the job market in the months ahead.”
Brent crude futures gained 15% to $34.43, extending Thursday's record 24.7% surge, while U.S. West Texas Intermediate (WTI) crude rose 12.28% to $28.43.
Saudi Arabia said it would call an emergency meeting of the Organization of the Petroleum Exporting Countries (OPEC), state media reported.
In early March, talks over production cuts between Russia and Saudi Arabia collapsed, leading them to start a price war that has pushed oil prices to their lowest levels in nearly two decades.
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