24/06/2024 3:29 PM

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Wall Street falls as coronavirus ends record job growth

(Reuters) – Wall Street’s main indexes fell on Friday as the longest period of employment growth on record in the United States came to an abrupt end due to the coronavirus, confirming a recession is underway.

FILE PHOTO: The floor of the New York Stock Exchange. New York, U.S., March 20, 2020. REUTERS/Lucas Jackso

The Labor Department data showed hundreds of thousands of people lost their jobs last month, but it did not completely capture the economic carnage as the survey considered data only until mid-March, before widespread lockdowns put more people out of work.

“There’s a lot of bad news to come. And that’s why I’d be hesitant to say I’d be buying this dip,” said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.

“Expectations are very low now, not only for the economy, but for individual companies as well.”

The S&P 500 is down about 27{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from its mid-February record highs, or over $7 trillion in market value, and economists have cut their forecasts for U.S. GDP, with Morgan Stanley now predicting a 38{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} contraction in the second quarter.

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.

Walt Disney Co (DIS.N) shares fell 3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} 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.

Sportswear retailer Under Armour (UAA.N) shed 1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} after it decided to temporarily lay off employees at its U.S. stores.

Analysts expect corporate profits to fall in the upcoming earnings season, but said actual numbers will likely be given little importance.

“There’s really very little that you can take away from (earnings) other than some insights to actually how are these businesses set up to weather the pandemic and where will they be once it begins to show signs of passing,” Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.

At 12:53 p.m. ET the Dow Jones Industrial Average .DJI was down 429.92 points, or 2.01{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, at 20,983.52, the S&P 500 .SPX was down 48.57 points, or 1.92{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, at 2,478.33 and the Nasdaq Composite .IXIC was down 140.93 points, or 1.88{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, at 7,346.38.

Raytheon Technologies Corp RTX.N, formed by the merger of United Technologies and Raytheon Co, shed 8.4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} as it pulled its 2020 outlook for its aerospace units.

Tesla Inc (TSLA.O) rose 6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} after the electric-car maker said production and deliveries of its Model Y sport utility vehicle were ahead of schedule.

Declining issues outnumbered advancers for a 5.21-to-1 ratio on the NYSE and for a 3.57-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and eight new lows, while the Nasdaq recorded four new highs and 129 new lows.

Reporting by Uday Sampath and Medha Singh in Bengaluru; Additional reporting by Herbert Lash in New York; Editing by Arun Koyyur and Sriraj Kalluvila

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