• Bank of America, Goldman Sachs and Citigroup all reported big profit declines in 1Q
  • US retail sales plunged by 8.7% in March
  • WTI futures dropped below $20 per barrel

Update: 12:05 p.m. EDT:

U.S. stocks were sharply lower as of Wednesday noon as traders ploughed through some grim economic data.

The Dow Jones Industrial Average dropped 641.46 points to 23,308.30, while the S&P 500 fell 79.02 points to 2,767.04 and the Nasdaq Composite Index tumbled 170.79 points to 8,344.95.

In Europe markets finished lower, as Britain’s FTSE-100 dropped 3.34%, France’s CAC-40 skidded 3.76% and Germany’s DAX fell 3.9%.

WTI crude oil futures plunged 3.28% to $19.45 per barrel.

Original story:

U.S. stocks opened lower on Wednesday as first quarter profit declines among major banks suggest how the coronavirus pandemic is hurting businesses across the country.

The Dow Jones Industrial Average dropped 551.12 points to 23,398.64, while the S&P 500 fell 65.88 points to 2,780.18 and the Nasdaq Composite Index tumbled 158.68 points to 8,357.06.

As the number of coronavirus cases around the world approached 2 million, President Donald Trump said on Tuesday that some states will be able to relax social distancing measures before the end of April.

“The plans to reopen the country are close to being finalized,” Trump said. “The day will be very close because certain states as you know are in a much different condition and are in a much different place than other states.”

“The bending of the virus curve simultaneously across this country and around the globe has brought widespread and serious national conversations about restarting the economy,” said Leuthold Group’s chief investment strategist Jim Paulsen. “For a crisis whose primary tagline for investors was ‘that is completely unknown,’ this is perhaps the first time there is some semblance of clarity as to a timeline for the end of this sad situation.”

Bank of America (BAC) said it posted first quarter profit of $4.01 billion, or $0.40 per a share, below analysts estimates of $0.46 per share. The bank set aside $3.6 billion for loan loss reserves due to the coronavirus pandemic. BAC's profits dropped 45%.

Goldman Sachs (GS) earned $3.11 a share in the first quarter, versus analysts’ expectations of $3.35 a share. Goldman's profits fell 46%.

Citigroup (C) also saw its first quarter profit plunge by 46%.

“It’s really going to be about forward guidance,” said Erin Gibbs, president and CEO at Gibbs Wealth Management. “What we’re really going to be looking for is, are companies giving us an idea of when they think they’ll return to profitability, or, are they talking about more layoffs?”

Economic data were gloomy.

The Commerce Department said on Wednesday that retail sales plunged by 8.7% in March, the biggest decline it has ever recorded, after dropping by a revised 0.4% in February.

“The economy is almost in free fall,” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. “We will see the bottom when the coronavirus infection rates stabilize. It’s going to be a pretty deep bottom from which to come up.”

“In general consumer spending is going to look about as bad as it has ever been, although there will be some categories of resilience,” Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “The panic buying at grocery stores cannot offset the retrenchment in spending that we will see in other categories.”

The Empire State Manufacturing Index for April plunged to minus-78.2, its worst showing ever.

“New orders and shipments declined at a record pace. Delivery times lengthened, and inventories fell. Employment levels and the average workweek both contracted at a record pace,” the New York Federal Reserve said. “Input price increases slowed considerably, while selling prices declined modestly. Though current conditions were extremely weak, firms expected conditions to be slightly better six months from now.”

Overnight in Asia, markets were lower. China’s Shanghai Composite slipped 0.57%, Hong Kong’s Hang Seng dropped 1.19% and Japan’s Nikkei-225 fell 0.45%.

In Europe markets traded lower, as Britain’s FTSE-100 dropped 2.87%, France’s CAC-40 skidded 3.1% and Germany’s DAX fell 3.38%

Crude oil futures dropped 0.99% at $19.91 per barrel, Brent crude plunged 4.39% at $28.30. Gold futures dropped 1.13%.

The euro fell 0.95% at $1.0877 while the pound sterling dropped 1.24% at $1.2466.