U.S. Markets close in 5 hrs 48 mins

Dow slides 360 points, capping volatile week as US reports job losses in March

Jessica Menton, USA TODAY

U.S. stocks posted a third week of losses in the past four, capping a volatile stretch after the government reported a big loss in jobs last month because of the coronavirus pandemic.

The Dow Jones industrial average dropped 360.91 points to close at 21,052.53. The Standard & Poor’s 500 fell 1.5% to end at 2,488.65, as energy shares gave back gains after crude prices eased. For the week, the Dow fell more than 2.5% while the S&P 500 shed 2%. 

The U.S. lost 701,000 jobs in March, the Labor Department said Friday, the first decline in job creation in a decade. The unemployment rate last month rose to 4.4% from 3.5%. 

The data comes after a separate report on Thursday showed a record 6.6 million Americans applied for unemployment benefits last week. That was double the previous week’s job losses of 3.3 million. It raised the total number of Americans who are out of work due to the coronavirus-driven downturn to almost 10 million.

Coronavirus: A record 6.6M Americans file for unemployment benefits as virus wreaks havoc on economy

Rent: What happens if you can't pay rent on April 1 because coronavirus forced you out of work?

Stocks had held steady at first Friday, but headed lower after energy stocks gave up gains as crude prices lost momentum. The fresh bout of volatility signaled that investors were selling riskier assets like stocks heading into the weekend, analysts say.

Of the 13 Friday's so far in 2020, the S&P 500 index has booked losses in ten of those days, averaging a decline of 0.4%, according to Bespoke Investment Group. 

"The jobs report didn't really have a lot to do with Friday's declines," says Nick Giacoumakis, president and founder at New England Investment & Retirement Group. "The unemployment figures certainly didn't help things, but investor sentiment was also weighed down by a combination of more deaths due to the virus and the lack of earnings guidance from companies.”

Traders expect more volatility in financial markets until numbers of new coronavirus cases begin to decline, which forecasters say might be weeks away. But the panic selling that dominated the first few weeks of the sell-off has calmed a bit since Washington lawmakers unleashed massive amounts of aid to help markets and the economy. 

"This could be a good sign for investors since it appears markets have already priced in dismal economic numbers," Peter Essele, head of portfolio management at Commonwealth Financial Network, said in a note. "It’s likely that the next wave of gloomy economic reports could pass without any further erosion in stock prices in the next couple weeks."

To be sure, experts say the March unemployment report won’t capture the full picture of how the pandemic has affected the economy since it’s based on a survey taken earlier in the month. The first post-shutdown jobs report for April will be released on May 8.

"Job losses spiked in March, led by almost half a million fewer jobs in restaurants and hospitality, clearly one of the hardest-hit sectors in the economy thus far," Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, said in a note. "As bad as this month’s employment numbers were, given the rapid jumps in claims, we fully expect that next month will show even larger job losses."

Trader Gregory Rowe works on the floor of the New York Stock Exchange, March 6, 2020. Stocks are opening sharply lower on Wall Street and bond yields are sinking to more record lows as investors fear that economic damage from the spreading coronavirus outbreak will be longer than previously thought.

Many respondents in the household survey indicated that they are on temporary furlough, Fratantoni said, which could provide a quicker path for an economic recovery since economists expect most that are unemployed to be called back to work once the crisis abates.

“These jobs will come back. They didn’t disappear because of some defect in the economy,” Burt White, chief investment officer at LPL Financial, said in a note. “Lots of us are looking forward to going back to our favorite restaurant or taking a trip as soon as the all-clear is sounded, and we’re all hoping sooner rather than later.”

The U.S. surpassed 6,000 deaths from the coronavirus pandemic Friday. There were more than 245,600 confirmed coronavirus cases in the U.S. early Friday, according to the Johns Hopkins University data dashboard. Worldwide, the death toll topped 55,000.

Markets got a bit of a lift Friday from another gain in oil prices. Benchmark U.S. crude climbed 11% to $28.10 per barrel, adding on to its nearly 25% surge the prior day on expectations that Saudi Arabia and Russia may dial back their price war.

In Europe, the FTSE 100 in London sank 1.2% and Frankfurt’s DAX shed 0.5%. The CAC 40 in Paris lost 1.6%. In Asia, the Shanghai Composite Index lost 0.6% and Tokyo’s Nikkei 225 was flat. The Hang Seng in Hong Kong lost 0.2%.

Contributing: The Associated Press

This article originally appeared on USA TODAY: Dow: Stocks fall after US reports job losses in March