Stocks open lower on Wall Street, extending losses for week
NEW YORK (AP) — Stocks are off to a weak start on Wall Street, extending the market’s losses for the week, as more evidence comes in of the crippling damage being done to the economy by coronavirus shutdowns. The S&P 500 fell 0.8% in the first few minutes of trading Friday. Before trading opened the government reported that retail sales sank by a record 16.4% from March to April as business lockdowns kept shoppers away. The Federal Reserve also reported that industrial production plunged a record 11.2% in April. Overseas, Germany’s economy shrank in the first quarter, meaning that Europe’s largest economy is in a recession.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
Global shares wavered between gains and losses Friday as investors weighed an improvement in data about China’s economy against new figures showing Germany has fallen into recession.
Factory output rose in April as China’s virus-battered economy reopened but job losses depressed consumer spending, a key driver of growth, challenging the ruling Communist Party’s push to revive normal activity.
Investment in factories and other fixed assets also improved as businesses reopened after China’s deepest economic slump since at least the 1960s, official data showed Friday.
In Germany, official figures showed Europe’s largest economy fell into recession in the first quarter, like France and Italy, with a 2.2% quarter-on-quarter decline in GDP. The data fills in detail on earlier released GDP figures that had shown a 3.8% contraction in the 19-country eurozone.
European indexes lost some of their early gains, with France’s CAC 40 flat at 4,273 and Germany’s DAX up 0.9% at 10,425. Britain’s FTSE 100 gained 0.6% to 5,773. U.S. shares appeared set to slip on the open, with Dow and S&P 500 futures both down 0.7%.
China, where the pandemic began in December, was the first economy to shut down to fight the virus and the first to start reopening in March. Automakers and some other manufacturers say production is back to normal, but retailing and other industries are struggling.
The signs of progress in getting growth back on track in the world’s second biggest economy remain overshadowed, however, by worries over possible future waves of coronavirus outbreaks, while comments by President Donald Trump suggest a risk of another flare up in trade tensions between the U.S. and China.
“Bright spots in the markets and the economy should not breed complacency about being out of the woods,” Riki Ogawa of Mizuho Bank said. “Fact is, even as economies prepare to emerge from varying degrees of lockdown, restoration of ‘normalcy’ is a much longer road.”
Japan’s benchmark Nikkei 225 recouped earlier losses to finish at 20,037.47, up 0.6%. South Korea’s Kospi gained 0.1% to 1,927.28 Australia’s S&P/ASX 200 added 1.4% to 5,404.80. Hong Kong’s Hang Seng lost 0.1% to 23,799.42, while the Shanghai Composite inched down less than 0.1% to 2,868.46.
Japan on Friday ended its state of emergency for many regions less affected by COVID-19 outbreaks. It is gradually easing requests for people to stay home and for some businesses to stay closed despite rising numbers of cases overall.
The Keidanren, which represents more than 1,000 Japanese companies and regional economic groups, released guidelines for safer work, including instructions on having office workers coming into the office just three days each week to minimize commutes, and adapting workplaces for social distancing.
Recently, worries about renewed U.S.-China tensions have also weighed on markets. A bruising trade war between the two had dragged on the global economy before the pandemic hit.
“I have a very good relationship,” with China’s leader, Xi Jinping, Trump said in an interview with Fox Business Network, “but I just — right now, I don’t want to speak with him. I don’t want to speak with him.”
In other trading, U.S. benchmark crude picked up 46 cents to $28.02 a barrel in electronic trading on the New York Mercantile Exchange. It gained $2.20 to $27.88 a barrel on Thursday.
Brent, the international standard, added 54 cents to $31.67 a barrel.
The dollar fell to 107.00 Japanese yen from 107.25 yen. The euro inched down to $1.0803, from $1.0805.
Joe McDonald in Beijing contributed to this report.