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US stocks mixed as data show early economic hit from virus
NEW YORK, March 19, 2020 (BSS/AFP) – Wall Street stocks gyrated Thursday morning as central banks fortified stimulus efforts and US data showed early effects of a dramatic economic slowdown from the coronavirus.
After a brutal period that has pushed stocks into a “bear market,” major indices were mixed at mid-morning.
Near 1500 GMT, the Dow Jones Industrial Average was down 0.4 percent at 19,823.33. The index has swung nearly 1,000 points between its low and high in just the first 90 minutes of the session.
The broad-based S&P 500 was essentially flat at 2,398.34, while the tech-rich Nasdaq Composite Index gained 1.8 percent to 7,112.06.
Economists are slashing their outlooks as more sectors of the US radically curtail activities, shutting down stores, cutting transportation routes and suspending or slowing manufacturing.
Weekly data on US initial jobless claims jumped 70,000 to 281,000, its highest level since September 2017, according to the Labor Department. Economists expected an increase, but that was far higher than the consensus forecast.
“States reported widespread layoffs related to the coronavirus outbreak, particularly in services industries. We expect the virus to cause significant job losses as the economy sinks into a deep recession,” Oxford Economics said.
“Last week’s jump in claims is likely to look minor in comparison to what lies ahead.”
Meanwhile, the Philadelphia Federal Reserve Bank’s monthly survey of manufacturing showed a collapse in March from a three-year high of 36.7 to -12.7, its lowest reading since July 2012 and the biggest one- month drop on record.
Central banks announced additional stimulus measures, while lawmakers in Washington and beyond advance fiscal measures to prop up the economy.
The Federal Reserve, which has been rolling out new measures to pump liquidity into the economy almost daily, on Thursday unveiled a new facility to provide dollars to emerging markets such as Brazil and Mexico that have seen an outflow of funds during the crisis.
The US central bank also took steps to boost liquidity into money market mutual funds, investment tools for families, businesses and other entities in the real economy that are suddenly straining for cash.
And the European Central Bank late Wednesday announced plans to spend 750 billion euros on “emergency” bond purchases.
Some analysts expect markets to remain highly volatile and under pressure until health authorities get a better grasp of the scale of the outbreak in the United States and how long it will curtail activity.
BSS/AFP/MRU/2116hrs