Stocks fall…Industrial production, retail sales and bank earnings plunge
NEW YORK (AP) – Stocks are swinging back down in early trading on Wall Street amid more signs of how severely the coronavirus outbreak is damaging the economy. Markets have been stuck cycling between fear and budding optimism in recent weeks as investors try to guess how long and deep the looming recession will be, and several new reports highlighted how dismal the outlook is becoming. Retail sales sank a record 8.7% last month, a survey of New York manufacturers plunged to its lowest level in history and a measure of industrial production across the country failed to meet economists’ already low expectations.
WASHINGTON (AP) – American industry collapsed in March as the pandemic wreaked havoc on the U.S. economy. Manufacturing and overall industrial production posted the biggest drops since the United States demobilized after World War II. The Federal Reserve say manufacturing output dropped 6.3% last month, led by plunging production at auto factories. Overall, industrial production, which includes factories, utilities and mines, plummeted 5.4%. The drops were the biggest since 1946 and were worse than economists had expected. Auto production went into freefall, dropping 27.2%. The lockdowns and travel restrictions imposed to combat COVID-19 have brought economic activity to a near-standstill. Output dropped 3.9% at utilities and 2% at mines.
WASHINGTON (AP) – The Commerce Department reports that retail sales plummeted 8.7% in March, a record drop as the viral outbreak closed down thousands of stores and shoppers stayed home. Sales fell sharply across many categories: Auto sales fell 25.6%, while clothing store sales collapsed, dropping 50.5%. But grocery store sales jumped by nearly 26% as Americans stocked up on food and consumer goods to ride out the pandemic. A category that mostly includes online shopping rose 3.1%.
NEW YORK (AP) – The major banks in the U.S. are anticipating a flood of loan defaults as households and business customers take a big financial hit from the coronavirus pandemic. Bank of America and Citigroup said today that their profits sank more than 40% in the first quarter as both set aside billions for potentially bad loans. A day earlier, JPMorgan Chase and Wells Fargo reported even steeper drops in profit. Even the investment banks were not immune to the pandemic. Goldman Sachs’ first-quarter profit dropped by 46% from a year earlier, due to significant losses on its own investments as well as a buildup in reserves for potential loan defaults.
PARIS (AP) – Amazon is threatening to suspend all activity in France after a French court found it wasn’t doing enough to protect its workers. The online giant says it plans to appeal Tuesday’s emergency ruling, which requires Amazon to stop selling nonessential goods for a month while it works out new worker safety measures. Amazon insists that it is providing adequate security measures for staff, but the court says the company isn’t doing enough to enforce social distancing and ensuring that turnstiles, locker rooms and warehouses are virus-free.