(For a live blog on the U.S. stock market, click or type LIVE/ in a news window)
* Banks drop ahead of earnings reports this week
* Ford slides on profit warning
* Energy stocks rise after OPEC+ agrees record output cut
* Indexes off: Dow 1.24%, S&P 1.12%, Nasdaq 0.43% (Updates to open)
April 13 (Reuters) - Wall Street’s main indexes slipped on Monday as corporate America launches into what is expected to be a painful quarterly earnings season due to the coronavirus pandemic.
JPMorgan Chase & Co and Wells Fargo & Co will kick off the reporting season on Tuesday, with analysts expecting an uptick in trading revenue to be offset by declines in other businesses and a bleak outlook for the rest of 2020.
The S&P banking subsector shed 2.5%, while the broader financial sector dragged on the benchmark S&P 500 with a 2.4% fall.
Overall, earnings for S&P 500 firms are expected to tumble 9.0% in the first quarter, compared with a Jan. 1 forecast of a 6.3% rise, before plummeting 20.7% in the second quarter as sweeping lockdowns halt business activity and spark furloughs.
“We’re bracing for one of the worst earnings seasons in recent history,” said Jesse Cohen, senior analyst at financial markets platform Investing.com.
The S&P 500 has recovered about 26% since hitting a three-year low in March, powered by aggressive U.S. monetary and fiscal stimulus and early signs of a potential peaking in U.S. coronavirus cases, but remains about 18% below its mid-February record high amid fears of a deep global recession.
“The raft of stimulus from the Federal Reserve has distorted stock prices, which have become disconnected from fundamentals. Combined with the bleak second-quarter data expected to come this month, there is definitely room for more downside,” Cohen said.
U.S. jobless claims topped a staggering 16 million in the three weeks to April 4 and economists expect job losses of up to 20 million this month, as entire sectors shut down to try and contain the pandemic.
The outbreak could reach its U.S. peak this week, a top health official said on Monday, as the White House considers when and how to lift stay-at-home restrictions.
“It’s becoming clear that reaching the virus crescendo does not automatically translate into a timeline for when an economy will re-open,” said Marios Hadjikyriacos, investment analyst at online broker XM in Cyprus.
At 10:08 a.m. ET, the Dow Jones Industrial Average was down 295.12 points, or 1.24%, at 23,424.25, the S&P 500 was down 31.30 points, or 1.12%, at 2,758.52 and the Nasdaq Composite was down 35.15 points, or 0.43%, at 8,118.42.
Energy stocks gained 1.4% following a record oil output cut..
Dish Network Corp shed 3.5% as it announced layoffs and said it was re-evaluating its business to cope better with the fallout from the coronavirus outbreak.
Ford Motor Co fell 3.7% after the carmaker projected quarterly adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.
Declining issues outnumbered advancers more than 3-to-1 on the NYSE and 2-to-1 on the Nasdaq.
The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded seven new highs and four new lows. (Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani, Sriraj Kalluvila and Shounak Dasgupta)
Our Standards: The Thomson Reuters Trust Principles.