Despite a stellar month, Wall Street ends day lower

Considering so many coronavirus-induced ups and downs, it was a stellar month for stocks in the United States. Still, today’s negative economic data and mixed earnings sent major indices lower.

The Dow Jones Industrial Average ended the day 1.17 percent lower to 24,345.72 The widely used gauge of US retirement and education savings accounts lost 0.94 percent, to 2,912.43. Meanwhile, Tech-heavy Nasdaq also fell 0.28 percent. Still for the month, all US indices showed some of their best gains in decades, according to refinitiv data.

The six-week tally of unemployment claims topped 30 million, and consumer spending has plummeted, according to the latest round of dismal indicators providing another snapshot of the crushing economic effects of the widespread shutdown.

“The combination of massive layoffs, reduced hours worked, curbed salaries, and financial turmoil led to a steep 2.0 percent decline in disposable income – the largest since 2013 – which was only partially offset by greater benefit payments,” wrote Oxford Economics Senior US Economist Lydia Boussour in a research note.

All 11 major sectors in the S&P 500 were in negative territory, with energy companies suffering the largest percentage loss.

Earnings season continues apace, with 236 of the companies in the S&P 500 having reported quarterly results. Of those, two-thirds have surprised consensus estimates to the upside, according to Refinitiv data.

But there have been 90 negative preannouncements in the first quarter, compared with 40 positive, and analysts see aggregate S&P earnings dropping by a year-on-year rate of 14.4 percent in the first three months of 2020, per Refinitiv.

“On most earnings calls [companies are] saying this quarter is going to be terrible, and they have absolutely no idea what the rest of the year is going to look like,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “On the other hand, we’ve had a great month in April, and people are taking some money off the table.”

For April, the S&P 500 gained 12.7 percent. The Dow enjoyed an 11.1 percent gain. The Nasdaq surged 15.5 percent. Of course, those figures also reflect virus-induced historic lows from which markets rebounded.