Stocks finished sharply lower Friday, and for the week, after the release of the monthly U.S. employment report set a grim tone for trade, showing massive job losses in March, even before the extent of the economic devastation from the coronavirus pandemic has been fully realized.
However, crude-oil prices, another focus for investors, finished the day higher on hopes of a possible detente between Saudi Arabia and Russia at a planned Monday meeting of oil-producing giants.
What are major indexes doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.18% was 360.91 points, 1.7%, lower to end at 21,052.53, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.31% lost 38.25 points, or 1.5%, to close at 2,488.65. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.22% lost 114.23 points, or 1.5%, to end at 7,373.08.
For the week, the Dow lost 2.7%, the S&P 500 declined 2.1% and the Nasdaq put in a weekly drop of 1.7%.
What’s driving the market?
Economic data and the state of oil were the big themes for the week as the market sorts through the outlook for a coronavirus-stricken economy.
The day got off to a downbeat start as the March jobs report showed that 701,000 Americans lost their jobs in March, far exceeding worst-case scenario estimates and highlighting the already-rapid impact the coronavirus shutdowns have had and will have on the economy in the coming months. Friday’s report was the first decline in payrolls since September 2010 and weren’t far from the worst month of job losses during the 2007-09 recession.
The unemployment rate rose to 4.4% from 3.5% in February, as employers just began to trim hiring and cut payrolls ahead of social-distancing practices that have shut down swaths of the U.S. economy to help slow the spread of COVID-19, the deadly infection that was first identified in December but that has already been contracted by more than 1 million people world-wide.
Despite the grimness of the labor-market report, it fails to capture the full damage from the virus because the Labor Department collected data during the week ending March 12, just as the nation began its near shutdown. More relevant has been reports on jobless claims, with Thursday’s showing the number of first-time applications soaring by a previously 6.6 million in the most recent week. That adds to a report from a week ago that showed a then-record 3.3 million people submitting applications for unemployment benefits.
All total, some 10 million people are without jobs, which likely puts the unemployment rate at or near 10%, economists have said, and the data is setting up to get worse from here.
Stocks saw bumpy trade as investors attempted to weigh gauge the depth and duration of the deadly contagion.
Investors have hoped that much of the negative outlook has been priced in but the enormity of the figures have proved daunting to some bulls, but some investors remain optimistic.
“Indeed, investors believe there is a V coming with the stimulus kicking into gear in coming weeks,” economist David Rosenberg told MarketWatch, referring to the shape of an economic recovery that is characterized by a deep decline and a rapid economic rebound.
Meanwhile, oil futures produced another set of double-digit gains as Saudi Arabia, Russia and other major producers are set to debate production cuts of at least 6 million barrels a day on Monday, The Wall Street Journal reported.