Friday's Stock Market Open: US Equities Open Lower As Employers Slashed 701,000 Jobs In March, Oil Jumps

Update: 12:05 p.m. EDT:

U.S. stocks continued to incur losses as of noon Friday.

The Dow Jones Industrial Average fell 331.68 points to 21,081.76, while the S&P 500 dropped 37.88 points to 2,489.02 and the Nasdaq Composite Index tumbled 102.93 points to 7,384.38.

In Europe markets finished lower, as Britain’s FTSE-100 fell 1.18%, France’s CAC-40 dropped 1.57% and Germany’s DAX slipped 0.47%.

Original story:

U.S. stocks opened lower on Friday after the March payrolls data suggested the beginning of a catastrophic period of job losses.

The Dow Jones Industrial Average fell 63.01 points to 21,350.43, while the S&P 500 slipped 5.41 points to 2,521.49 and the Nasdaq Composite Index dropped 11.53 points to 7,475.78.

The Labor Department said on Friday that nonfarm payrolls plunged by 701,000 in March, the first such decline in payrolls since September 2010. The unemployment rate rose to 4.4%. However, these figures do not include the full impact of coronavirus-related shutdown due to the methodology used by the Labor Dept. over the past two weeks, more than 10 million people filed for unemployment claims.

Diane Swonk, chief economist at Grant Thornton, tweeted: “[Job] losses broad based and represent the tip of the millions in job losses we have already experienced. Things will get much worse. Government employment one of only sectors to post a gain -- not actually significant in the context of the report. COVID indiscriminate [with] job losses.

“The main message is the labor market conditions started to slip in March, but obviously with the last two initial claims reports we’ve seen, we know April will be a disaster for labor markets,” said Michael Gapen, chief U.S. economist at Barclays. “We still have two more weeks, and we’re probably looking at an unemployment rate of more than 10% in April. The suddenness with which it all slipped off a cliff in two weeks is shocking. We now have stay-at-home orders in states that account for 82% of GDP.

The U.S. jobs data will surely get even worse.

“My sense is that when we get April data a month from now, we’ll see that the economy lost somewhere between 10 and 15 million jobs,” said Mark Zandi, chief economist at Moody’s Anlaytics, said earlier this week. “That would be consistent with the initial claims for unemployment insurance data that we’re getting.”

IHS Markit said its measure of services and manufacturing in the euro zone suggested an annualized economic contraction of about 10%.

Markit’s composite Purchasing Managers Index dropped to 29.7 in March, down from 51.6 in February and well below the 50 line that separates growth from contraction. Almost every euro zone country in the survey had a record-low reading.

“No countries are escaping the severe downturn,” said Chris Williamson, chief business economist at IHS Markit. “But the especially steep decline in Italy’s service sector PMI to just 17.4 likely gives a taste of things to come for other countries as closures and lockdowns become more prevalent and more strictly enforced in coming months.”

“We are not going to have the real recovery in the market until what we think is the peak in the amount of infections and deaths,” said Stephen Dover, head of equities at Franklin Templeton. “We are going to continue to have very wide volatility until we can get over this uncertainty.

Overnight in Asia, markets were mostly lower. China’s Shanghai Composite fell 0.6%, while Hong Kong’s Hang Seng slipped 0.19%, and Japan’s Nikkei-225 edged up 0.01%.

In Europe markets traded lower, as Britain’s FTSE-100 fell 0.78%, France’s CAC-40 dropped 1.12% and Germany’s DAX slipped 0.17%.

Crude oil futures surged 8.1% at $27.37 per barrel, Brent crude jumped 11.82% at $33.48. Gold futures slipped 0.04%.

The euro slipped 0.59% at $1.0793 while the pound sterling fell 0.83% at $1.2292.