Bleak data shows extent of economic disaster due to COVID-19 outbreak

The New York Times: Stocks tumbled on Wednesday as investors faced a stream of bad news about the economic damage caused by efforts to contain the coronavirus pandemic, including data that showed a historic plunge in retail sales and a slump in factory output.

The S&P 500 dropped more than 2 percent. Stocks in Europe were also lower, and Asia had a downbeat day.

The retreat Wednesday came the day after the S&P 500 hit a one-month high.

Though still far from the record reached on Feb. 19, stocks in the United States have been steadily climbing in recent weeks as investors have begun to focus on the prospect of an eventual rebound from the economic collapse set off by the pandemic.

But on Wednesday, they were confronted by a number of reports that highlight just how badly the economy is faring.

The Commerce Department said that retail sales in March dropped 8.7 percent as consumers were forced to stay home, and the Federal Reserve said industrial production and manufacturing output in the United States fell by the most since 1946.

The German Economy Ministry said economic output in Europe’s largest economy was likely to plunge almost 10 percent from April through June.

As they reported earnings, the nation’s banks also raised more warnings about the potential for a wave of defaults on loans, saying that they are stockpiling cash in anticipation of losses.

Bank of America and U.S. Bancorp both dropped more than 6 percent after reporting results.

JPMorgan Chase and Wells Fargo, which reported a downbeat reports yesterday, were also sharply lower.

Goldman Sachs, which reported better-than-expected results on Wednesday, was a relative standout with a small gain after its trading unit performed better than expected in the first quarter.

The collapse in American retail sales slammed the stocks of apparel retailers. Nordstrom, L Brands and Gap all fell sharply.