Stocks crash on Wall Street as grim economic news floods in

Shares retreated on Wednesday after other signs accumulated of economic damage from the coronavirus outbreak.

Markets have remained stuck between fear and nascent optimism in recent weeks as investors grapple with the length and depth of the looming recession, with change often reversing overnight or even the same day. Economists lowered their forecasts in anticipation of what they say could be the worst slowdown since the Great Depression, but several reports released on Wednesday were even more dismal than expected.

Retail sales fell a record 8.7% last month as closures across the country to slow the spread of the virus closed stores and kept people at home. A separate survey of trading conditions for New York State manufacturers plunged to an all-time low, by far. Industrial production across the country has also failed to meet economists’ already low expectations.

Global stocks and Treasury yields were already down at the start of Wednesday’s session, and their declines accelerated after the reports were released. Falling yields are a sign that demand for relatively safe investments like US government bonds is increasing.

The S&P 500 was down 2.4% after the first half hour of trading. The Dow Jones Industrial Average fell 494 points, or 2.1%, to 23,455, and the Nasdaq was down 1.9%.

Energy stocks suffered the largest losses after oil prices fell to a new 18-year low. Those of the S&P 500 index fell 5.8%.

Global oil demand will fall by a record amount this year, the International Energy Agency said on Wednesday. Benchmark US crude hit its lowest price since 2002 before rebounding slightly to $ 20.14 per barrel, little change from the previous day. Brent crude, the international standard, fell from $ 1.27 to $ 28.30.

Earlier, the International Monetary Fund said this year’s global economic output will decline by 3%, a larger loss than the 0.1% drop in 2009 during the financial crisis. It was a sharp reversal from the Fund’s 3.3% growth forecast in January before the virus prompted governments to shut down factories, travel and other industries.

“The IMF has predicted a deep economic winter,” Hayaki Narita of Mizuho Bank said in a report. Narita said.

In Europe, the London FTSE 100 lost 2.5% and the Frankfurt DAX lost 3.2%. The CAC 40 in France fell 2.9% to 4,437. The Nikkei 225 in Tokyo lost 0.5% and the Hang Seng in Hong Kong lost 1.2%.

Investors are focusing on how and when authorities can begin to ease business closures and limits on the movement of people imposed to slow the spread of the coronavirus. The S&P 500 had jumped 3.1% a day earlier in hopes the epidemic would stabilize in some hot spots and could lead to parts of the economy reopening.

US President Donald Trump discussed how to reverse federal recommendations on social distancing. U.S. governors are working together on plans to reopen their economies in what will likely be a gradual process to prevent the coronavirus rebound.

China has reopened factories, stores and other businesses after declaring victory over the outbreak, but forecasters say it will take months for industries to return to normal production, while exporters face a depressed global demand.


AP Business Writer Joe McDonald contributed.

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