US Stocks Skid as Virus Toll Worsens 04/01 15:35
Wall Street and markets around the world fell sharply Wednesday as the
economic and physical toll caused by the coronavirus outbreak mounts -- and as
experts say they still can't predict when it will end.
NEW YORK (AP) -- Wall Street and markets around the world fell sharply
Wednesday as the economic and physical toll caused by the coronavirus outbreak
mounts -- and as experts say they still can't predict when it will end.
The S&P 500 lost 4.4% after the White House said anywhere from 100,000 to
240,000 Americans could die from COVID-19, even if the country follows
guidelines to avoid shopping trips, eating at restaurants and other activities
through April. Florida's governor became the latest to issue a statewide
Such restrictions have already deeply gashed the economy, and Whiting
Petroleum, one of the biggest drillers in the Bakken shale formation, filed for
Chapter 11 bankruptcy protection Wednesday, with the price of oil near $20 a
barrel. Automakers also reported sharp drops in U.S. sales for March, including
a 43% plunge for Hyundai. Mortgage applications tumbled 24% from year-ago
levels as open houses are all but shut down.
"There is a lot of uncertainty," said Megan Horneman, director of portfolio
strategy at Verdence Capital Advisors. "The negative news is really taking
The negative news was also global. Japanese stocks took some of the world's
heaviest losses, down 4.5%, after a survey of business sentiment there fell to
its worst result in seven years. Britain's FTSE 100 fell 3.8% after big banks
there scrapped dividend payments, part of a worldwide effort by companies and
households alike to conserve cash.
Stocks have plunged this year as the coronavirus pandemic forces economies
into what is expected to be a steep, sudden recession. The S&P 500 just closed
out its worst quarter since 2008 with a 20% loss.
"The challenge for investors is you don't know how deep and how wide this
downturn may be," said Rob Haworth, senior investment strategist at U.S. Bank
Wealth Management. "It ends up being a true leap of faith that the forecast and
the duration of the pandemic will be accurate."
A report on Wednesday said that private U.S. employers cut 27,000 jobs last
month, which was actually much milder than economists were expecting. The
survey used data from March before the number of people seeking unemployment
benefits exploded to a record.
Even Friday's more comprehensive jobs report from the government may not
show the full scale of the layoffs sweeping the country, according to Rhea
Thomas, senior economist at Wilmington Trust. Small businesses are seeing the
sharpest declines in employment, and some firms that closed may not be
responding to the survey.
The government's weekly jobless claims report may offer a better view. The
next batch of numbers comes Thursday, and economists say it could blow past
last week's total of nearly 3.3 million initial claims, which itself was
quintuple the prior record.
The number of infections keeps rising, which worsens the uncertainty. The
United States has more than 206,000 cases, according to a tally by Johns
Hopkins University. That leads the world, which has more than 911,000 confirmed
For most people, the coronavirus causes mild or moderate symptoms, such as
fever and cough that clear up in two to three weeks. For some, especially older
adults and people with existing health problems, it can cause more severe
illness, including pneumonia, and death.
Stocks had cut some of their severe losses in recent weeks as Washington
swooped in with aid for the economy and markets.
The S&P 500 jumped nearly 18% in just three days last week as Congress
struck a deal on a $2.2 trillion rescue package for the economy and the Federal
Reserve promised to buy as many Treasurys as it takes to get lending markets
House Democrats are already collecting ideas for a possible fourth round of
aid for the economy, and Trump has tweeted his support for a $2 trillion
infrastructure package. But top Republicans in Congress say they first want to
see how well their just-approved programs do.
The S&P 500 fell 114.09 points to 2,470.50, and all 11 sectors that make up
the index lower. Among the few gainers were Kellogg, Dollar General and other
companies selling day-to-day essentials that households are stocking up on to
ride out stay-at-home orders.
On the losing end was Macy's, whose drop Wednesday brought its loss for 2020
so far to nearly 74%. So much of the company's market value has vanished that
S&P Dow Jones Indices is removing it from the S&P 500 index of big U.S.
companies, skipping its index of mid-sized stocks and placing it into its
small-stock index, effective Monday.
The market's hardest-hit areas included banks, utilities and other dividend
"There are more worries now about this rippling through dividend payments
and cutting back on the income investors are getting," said Jeffrey Kleintop,
chief global investment strategist at Charles Schwab.
The Dow Jones Industrial Average lost 973,65, or 4.4%, to 20,943.51, and the
Nasdaq composite fell 339.52, or 4.4%, to 7,360.58.
The yield on the 10-year Treasury dropped to 0.60% from 0.70% late Tuesday.
A bond's yield drops when its price rises, and investors buy long-term
Treasurys when they're fearful because they see U.S. government bonds as having
virtually no risk of default