Stock market takes dive as horrendous jobs report sinks in

Stock market takes dive as horrendous jobs report sinks in

US stocks tumbled Friday after a brutal monthly jobs report gave Wall Street more proof of how hard the coronavirus pandemic has hit the economy.

The Dow Jones industrial average dropped as many as 550.35 points, or 2.5 percent, after the feds’ March jobs report that said the US economy lost 701,000 jobs last month, bringing the nation’s nine-year hiring streak to an abrupt end.

The S&P 500 and the Nasdaq Composite each sank as much as 2.6 percent on the heels of the report, which doesn’t account for the massive virus-related job losses seen at the end of the month.

Wall Street has been bracing for the coronavirus crisis to gut the labor market as lockdown measures, which have shuttered restaurants and bars and decimated air travel, effectively froze the US economy.

But the larger-than-expected job losses reported Friday also raised questions about how much worse things could get and how long the recovery will take, experts said.

“We know it’s going to get bad,” said Eric Marshall, director of research at Hodges Capital Management. “But what we don’t know is how long it’s going to last, and I think it’s likely that the market will recover slower than what it took to go down.”

The stock market fell as oil prices continued to surge on hopes of an end to the price war between Russia and Saudi Arabia. Those hopes spurred a Thursday rally on Wall Street as investors shrugged off another record spike in unemployment claims stemming from the virus crisis.

West Texas Intermediate crude futures were up 11.6 percent, at $28.26 a barrel in mid-afternoon trading, building on Thursday’s gains following President Trump’s tweet that the two countries would agree to cut production by as much as 15 million barrels.

But the situation remains fluid ahead of a planned Monday meeting of the Organization of the Petroleum Exporting Countries and its allies.

That and continued concerns about the coronavirus are likely making investors wary of holding onto stocks at the end of the week, according to Quincy Krosby, chief market strategist at Prudential Financial.

“You might have a trader saying, ‘I don’t want to go long over the weekend, because the headlines could turn it around with comments and rumors and chatter,’” Krosby said.

All three major US stock indexes were on pace to post losses for the week on Friday. The Dow was off 223.34 points, or 1 percent, for the week through Thursday’s closing bell, while the S&P was down 0.5 percent and the Nasdaq posted a 0.2 percent drop.

The markets could sink further as investors grapple with the still-evolving pandemic and its devastating effects on the economy, experts say.

“April is likely to be even more difficult than March, on every front,” Brad McMillan, chief investment officer for the Commonwealth Financial Network, wrote in a Thursday commentary. “The pandemic will keep spreading, the economic damage will hit even harder, and markets will keep reacting to that damage. This may well be the toughest month of this crisis.”

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