The day got off to a downbeat start as the Labor Department jobs report showed that bigger than expected 701,000 Americans lost their jobs in March, after jumping by an upwardly revised 275,000 jobs in February, highlighting the already-rapid impact the coronavirus shutdowns have had and will have on the economy in the coming months. Friday's report was the first decline in payrolls since September 2010. The unemployment rate last month rose to 4.4% from 3.5% in February, as employers just began to trim hiring and cut payrolls ahead of social-distancing practices that have shut down swaths of the U.S. economy to help slow the spread of COVID-19. The data comes after a separate report on Thursday showed a record 6.6 million Americans applied for unemployment benefits last week. That was double the previous week's job losses of 3.3 million. It raised the total number of Americans who are out of work due to the coronavirus-driven downturn to almost 10 million.
In other economic data, two reports on the U.S. service sector activity showed sharply different pictures of that segment of the economy in March. The IHS Markit U.S. services purchasing managers index was at 39.8, but the nonmanufacturing index from the Institute for Supply Management was 52.5 down from 57.3, showing growth but at slowest pace since August 2016. A reading of at least 50 shows improving conditions while anything below that threshold signals contraction.
Banking stocks showed a substantial move to the downside on the day, dragging the KBW Bank Index down by 3.4%. Significant weakness was also visible among housing stocks, as reflected by the 3.4% nosedive by the Philadelphia Housing Sector Index. Steel, oil service and computer hardware stocks also saw considerable weakness on the day, moving lower along with most of the other major sectors.
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