Yahoo Finance Coronavirus: Stocks slide as US suffers record 32.9% collapse in GDP
European and US markets tumbled on Thursday, as gloom over dire US and German GDP data, a flurry of weak earnings and infection rates in several parts of the world hit stocks.
New data on Thursday showed a record 32.9% collapse in second-quarter GDP in the US, and Germany also suffered a record 10.1% contraction. US president Donald Trump also said the presidential election should be delayed, alarming investors.
The figures exacerbated declines in Europe that followed Fed chair Jerome Powell’s speech on Wednesday and worse-than-expected earnings at some of the continent’s biggest companies.
Powell’s vow to keep interest rates near zero for as long as it takes and use all the central bank’s “tools” lifted US stocks on Wednesday, but failed to lift European stocks on the open.
READ MORE: Fed warns recovery will depend 'significantly on the course of the virus'
Russ Mould, investment director at AJ Bell, said there was “disappointment” among investors at the Fed’s warning recovery depended on the course of the virus. The US now has over 4.2 million reported cases of COVID-19, with the death toll edging toward 150,000.
In Britain the FTSE 100 (^FTSE) had opened flat but was down 2.5% on Friday afternoon. Lloyds (LLOY.L), one of the UK’s largest banks, became the latest lender to set aside billions more to deal with bad loans because of COVID-19, while new data also showed British carmakers suffering their worst quarter since 1954, hitting car stocks.
The DAX (^GDAXI) lost 3.5% in Germany after worse-than-expected GDP data and first-half losses at Volkswagen. In France, the CAC 40 (^FCHI) was down 2.1% as Renault suffered record losses. The pan-European Stoxx 600 index (^STOXX) was down 2.2%.
The S&P 500 (^GSPC) was down 1.5% at around 10am eastern time, while the Dow Jones (^DJI) was down 1.9% and the Nasdaq (^IXIC) lost 1.1%.
READ MORE: UK car industry cuts 11,000 jobs with production worst in decades
