Wall Street opens lower as questions remain over recovery
Stocks are opening lower on Wall Street as hard questions remain over how and when states will reopen following widespread shutdowns put in place to slow the coronavirus pandemic. The S&P 500 index fell 0.8% in the first few minutes of trading Monday. Marriott fell after the hotel operator reported much lower profit as demand for hotel stays plunged. Even as several countries in Europe made more tentative moves to ease restrictions, they faced a delicate balance of trying to restart their battered economies without causing a second wave of coronavirus infections. U.S. crude oil prices rose and bond yields edged lower.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
Global stocks turned lower on Monday as investors sought clarity on how quickly government plans to ease lockdowns on public life might help economic activity pick back up.
Several European countries were easing their restrictions on business this week as the number of new coronavirus contagions eases. But it remains unclear how quickly that will help workers and business owners return to work, as social distancing measures will continue to be required in most public places.
And with infection numbers still rising in the United States, Brazil and some other countries, analysts warn a global recovery might be some way off.
“While the argument that forward-looking market hopes of recovery should override backward looking economic gloom may not be groundless, it inevitably understates inherent fragilities and risks,” Riki Ogawa of Mizuho Bank said in a report.
In Europe, London’s FTSE 100 was off 0.2% at 5,926 and Germany’s DAX lost 0.7% to 10,830. France’s CAC 40 declined 1.3% to 4,490.
On Wall Street, the futures for the benchmark S&P 500 Index and for the Dow Jones Industrial Average both lost 0.7%.
Economic indicators remain oppressively bad. After new data on Friday showed that American employers cut a record-setting 20.5 million jobs in April, Italy reported Monday its largest ever drop in industrial production. More data reports this week include U.S. unemployment claims and retail sales and Australian jobs.
Companies remain uncertain about the future, with many not providing clear guidance in their latest quarterly earnings reports. On Sunday, one of Latin America’s largest airlines, Chile’s Avianca, asked a New York City bankruptcy court for protection from creditors while the carrier reorganizes amid a travel slump it said has cut revenue 80%.
Earlier, Asian markets were supported somewhat by the Chinese central bank’s promise to use “more powerful” policies to support economic recovery and job creation.
Tokyo’s Nikkei 225 gained 1% to 20,390.66 and the Hang Seng in Hong Kong added 1.5% to 24,602.06. The Shanghai Composite Index recovered from losses to close unchanged at 2,894.80.
The Kospi in Seoul lost 0.5% to 1,935.40 while Sydney’s S&P-ASX 200 added 1.3% to 5,461.20. India’s Sensex gained 0.1% to 31,678.47 and New Zealand, Singapore and Jakarta also advanced.
Investors hoping for reassurance were looking ahead to an appearance by U.S. Federal Reserve chairman Jerome Powell on Wednesday.
“He is certainly not going to walk back any of the Fed extraordinary stimulus measures,” said Stephen Inness of AxiTrader in a report. “If anything, he could lay it down even thicker.”
In energy markets, benchmark U.S. crude lost 64 cents to $24.10 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.19 on Friday to $24.74. Brent crude, used to price international oils, shed 91 cents to $30.07 per barrel in London. It rose $1.51 the previous session to $30.97.
The dollar gained to 107.34 from Friday’s 106.61. The euro declined to $1.0819 from $1.0847.
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