U.S. stocks tank as bleak news mounts on health, economic fronts

Stocks descended deeper into their month-long funk Wednesday as the nation entered one of its most dire periods in memory. Coronavirus deaths are rapidly piling up, vast swaths of the population are stuck in their homes, and tens of millions are hurting while the health crisis squeezes the life out of the economy.

As the country looks for a whisper of good news on the health or economic fronts, Wednesday's waterfall plunge in stock markets says Wall Street is bracing for economic damage after just finishing one of its worst quarters ever.

Investors read President Donald Trump's admonition on Tuesday that the country should be prepared for a "a hell of a bad two weeks" as a signal that the economy would not be spared in the upcoming carnage.

"We are in for shockingly bad labor market numbers in Thursday's unemployment claims," said Luke Tilley, chief economist at Wilmington Trust. "We are in for the sharpest quarterly decline in economic activity that we have ever seen. And the recovery in the second half of the year is going to be slow, challenging and disappointing. It's going to get a lot worse before it gets better."

The Dow Jones industrial average finished Wednesday's session with a 973-point loss, about 4.4 percent, at 20,943 as investors bake in more bad news on the coronavirus front. The Standard & Poor's 500 dropped 113 points, or 4.4 percent, to close at 2,470. The tech-heavy Nasdaq gave back 340 points, or 4.4 percent. The Nasdaq finished close the session at 7,360.

All three indexes are deep in the hole for 2020 after hitting record highs a few weeks ago. The Dow has lost 26 percent since the start of the year. The S&P has lost 23 percent and the Nasdaq is down 17 percent.

Overseas markets had a difficult slog on the heels of President Trump's warning for the upcoming month. Britain's FTSE 100 lost 3.83 percent, the German Dix 3.9 percent, the French CAC 40 nearly 4 percent and the Pan-European Stoxx 600 dropped 2.90 percent. Japan's Nikkei 225 led Asian markets into the red with a 4.5 percent loss. Hong Kong's Hang Seng and the Shanghai index also dropped

The global plunge came as no surprise following the White House's bleak outlook Tuesday for the pandemic's spread in the United States. President Trump said the mitigation tactics employed by health officials presented a best-case scenario of 100,000 to 240,000 fatalities. Confirmed U.S. cases topped 200,000 on Wednesday as the nation broadens its testing to fight the wildfire-spread of the disease.

Thursday's eagerly-awaited unemployment numbers is an early indicator of what is expected to be a long winter of discouraging financial, business and employment data.

"In the upcoming earnings season, most corporate managements will have nothing to offer but uncertainty about how bad their results will be over the rest of the year," said Ed Yardeni, president of Yardeni Research. "After accentuating the positives in the war against the virus last week and rotating out of bonds and into cheap stocks, investors are hunkering down in the trenches again."

Investor anxiety surfaced alongside the coronavirus' contagion in the U.S. several weeks ago. The result has been big stock market swings not seen in years. Numerous milestones, from daily point plunges to percentage gains to worst monthly and quarterly declines, have fallen or nearly fallen. The Dow capped its worst-ever first quarter on Tuesday with a 400-point loss.

All but two of the Dow 30 shares finished in the red Wednesday, with aerospace giant Boeing and American Express the biggest drags. Boeing had been on a resurgence last week, nearly doubling its price as investors calculated that the $2 trillion federal relief package would aid the airplane manufacturer. But Boeing's share price has retreated in the last few sessions, and on Wednesday it was hovering around $130 per share. Late last week the price was $180.

Walmart and Procter & Gamble were the only blue chips scoring gains Wednesday. Utilities and real estate were the worst performers among the 11 S&P stock sectors, all of which were in the red for the day. Utilities, real estate firms and banks could get hurt if consumers lose their jobs and are unable to pay mortgage and power bills.

An epic decline in oil prices continues to wreak havoc on markets, threatening millions of jobs and the rich dividends prized by shareholders. Whiting Petroleum Wednesday was the first shale oil company to declare bankruptcy as debt-burdened shale drillers - also known as frackers - are pressed by the decline in prices.

The price of a barrel of U.S. crude oil inched to $21.04 on Wednesday after Trump announced that he would meet with oil executives on Friday in an effort to limit supply and push prices higher. Oil prices are currently less than half of what many U.S. producers need to make a profit and meet obligations. Once known for jawboning the Saudis to pump more oil and thereby lower the price, the president now finds himself in the uncomfortable position of trying to raise oil prices so U.S. energy companies can earn a profit.

Oil prices fell the most ever last month due falling demand and a nasty, race-to-the-bottom price war between Russia and Saudi Arabia, two of the worlds biggest suppliers.

It also was a historically bad quarter for the S&P 500, which saw 20 percent of its value disappear and is 24 percent below the all-time high it set Feb. 19. The broad index stumbled 1.6 percent Tuesday to close at 2,584.59. The Nasdaq finished the three-month period at 7,700.10, falling nearly 1 percent on the day and 14 percent for 2020.

"The market is down on the expectation for really bad numbers on unemployment claims on Thursday," said Jamie Cox, managing partner of Harris Financial Group. "It's also down because overnight, several of the U.K. financials, Barclays, Royal Bank of Scotland, HSBC, stopped paying their dividends so they can weather the storm. That's unusual. When you add it all up, markets are realizing that the next couple of weeks are going to be very difficult."

Though analysts had cautioned that more volatility was in the cards this week, there were some optimistic signs Tuesday that pointed to a V- or U-shaped recovery by late summer. Consumer confidence fell, but not as sharply as expected. Oil for most of the day was climbing, a signal of consumer demand, until those advances were washed out. Goldman Sachs forecast a troublesome second quarter - with as much as 15 percent unemployment in the late spring and early summer - but a ferocious comeback when the economy zooms back to normal.