Wall Street’s main indices on Friday fell more than 1.5 percent as the COVID-19 pandemic abruptly ended a record US job growth streak of 113 months, intensifying fears of a deep economic slowdown.
Even the loss of 701,000 jobs that US Department of Labor data showed for last month did not completely capture the economic damage from the virus. The survey considered data only until the middle of last month, before widespread US 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 LLC 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 hotspots around the US, Luschini said.
The S&P 500 closed down almost 27 percent from its mid-February record-high close, or about US$7 trillion in market value, and economists have cut their forecasts for US GDP, with Morgan Stanley now predicting a 38 percent contraction in the second quarter.
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“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,” TD Ameritrade institutional senior trading strategist Mike Turvey said.
The Dow Jones Industrial Average on Friday fell 360.91 points, or 1.69 percent, to 21,052.53, the S&P 500 lost 38.25 points, or 1.51 percent, to 2,488.65 and the NASDAQ Composite dropped 114.23 points, or 1.53 percent, to 7,373.08.
For the week, the Dow lost 2.7 percent, the S&P retreated 2 percent and the NASDAQ fell 1.5 percent.
Of the S&P 500’s 11 major sectors, utilities was the biggest laggard on Friday, down 3.6 percent, followed by materials and financials, with declines of more than 2 percent.
Only consumer staples rose and ended the day up 0.5 percent 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.
US President Trump met with US oil company executives at the White House, and said Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin 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 percent after it said it would furlough some US employees this month, while sources said luxury retailer Neiman Marcus Group Inc was stepping up preparations to seek bankruptcy protection.
Tesla Inc rose 5.6 percent after the electric-vehicle maker said production and deliveries of its Model Y sport utility vehicle were ahead of schedule.
On US exchanges 11.57 billion shares changed hands on Friday compared with the 15.75 billion average for the past 20 sessions.
Declining issues outnumbered advancing ones on the New York Stock Exchange 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.
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