Wall Street slides on gloomy economic data, bank earnings
By Medha Singh (Reuters) - The S&P 500 recoiled on Wednesday from a four-week high, as dire forecasts for the worst economic downturn since the Great Depression were strengthened by a crash in business activity and dismal first-quarter earnings reports. The S&P energy sector slumped 7.3% and was on track for its worst day in nearly a month as oil prices sank after reports suggested persistent oversupply and collapsing global demand
By Medha Singh
(Reuters) - The S&P 500 recoiled on Wednesday from a four-week high, as dire forecasts for the worst economic downturn since the Great Depression were strengthened by a crash in business activity and dismal first-quarter earnings reports.
The S&P energy sector <.SPNY> slumped 7.3% and was on track for its worst day in nearly a month as oil prices sank after reports suggested persistent oversupply and collapsing global demand.
The banking subsector <.SPXBK> fell 5.8%, as the biggest U.S. lenders set aside billions of dollars to prepare for an expected flood of loan defaults as the coronavirus pandemic all but halted business activity. The flight from risky assets also hit Treasury yields.
Bank of America
In the latest evidence of economic damage from the outbreak, U.S. retail sales plunged 8.7% in March, manufacturing output dropped by the most in over 74 years and a survey showed manufacturing activity in New York state plunged in April to its lowest in the series' history.
"Investors need a strong stomach to stick with stocks through some bad earnings reports in the coming days, weeks and months," said David Trainer, chief executive officer of investment research firm New Constructs in Nashville, Tennessee.
"Earnings and coronavirus are tightly intertwined and the more progress there is on coronavirus, the sooner economic activity resumes and earnings rebound."
Analysts expect earnings for S&P 500 firms to slide 12.8% in the first quarter, while the International Monetary Fund has predicted the global economy would this year witness its sharpest slump since the 1930s.
The benchmark S&P 500 <.SPX> has climbed about 26% from its March trough, lifted by a raft of U.S. monetary and fiscal stimulus and on early signs that coronavirus cases were peaking in some hotspots, but the index is still down about 18% from its record high.
At 11:45 a.m. ET, the Dow Jones Industrial Average <.DJI> was down 667.62 points, or 2.79%, at 23,282.14, the S&P 500 <.SPX> was down 80.14 points, or 2.82%, at 2,765.92 and Nasdaq Composite <.IXIC> was down 167.40 points, or 1.97%, at 8,348.35.
The CBOE volatility index <.VIX> rose to 42.30 after closing Tuesday at its lowest level since March 5. The S&P tech sector <.SPLRCT> fell 2.5% and was the biggest drag on the benchmark index.
J.C. Penney Co Inc
The biggest U.S. health insurer UnitedHealth Group Inc
Declining issues outnumbered advancers more than 10-to-1 on the NYSE and 5-to-1 on the Nasdaq.
The S&P index recorded five new 52-week highs and one new low, while the Nasdaq recorded 13 new highs and 18 new lows.
(Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.