Stocks slide after big three-day rally

Stocks on Wall Street fell Friday but still notched big gains for the week as investors held out hope that Washington’s $2-trillion rescue package will cushion U.S. businesses and households from the economic devastation that the coronavirus is wreaking.

The Standard & Poor’s 500 index lost 3.4% for the day but was still up 10.3% for the week, its biggest oneweek gain since March 2009. That follows two weeks of relentless selling. The Dow Jones industrial average’s 12.8% weekly gain was its biggest since 1938, thanks largely to Boeing, whose stock soared 70.5% this week.

Stocks had leaped the previous three days as the relief bill moved closer to becoming law. It passed the House on Friday, and after markets closed, President Trump signed it. The bill includes direct payments to households, aid to hard-hit industries such as airlines and support for small businesses. Despite the help, analysts expect markets to remain turbulent until the outbreak begins to wane.

Even after the rally this week, the market is still down 25% from the all-time high it reached a month ago. The outbreak has forced widespread shutdowns that have ground much of the U.S. economy to a halt.

This week, more than 3 million people filed for unemployment benefits, shattering records. It’s the first of what is sure to be many grim signs of the toll the virus is taking on the economy.

Investors have yet to get a clear picture of exactly how badly the crisis has hurt corporate profits, the ultimate driver of stock prices. Very few companies have dared to issue forecasts capturing the damage, though traders are girding for discouraging results in the next few weeks as earnings reporting season begins. Many companies have withdrawn their profit forecasts altogether.

At the start of this year, analysts expected S&P 500 companies’ earnings would grow 4.4% in the Januarythrough-March quarter. They now expect earnings will be down 4.1%, according to FactSet.

Airlines — which have been hit by lost bookings — are expected to report catastrophically bad earnings. Delta went from an expected 2.2% decline to a 108% plunge.

Even the current forecasts may not yet reflect the size of the potential earnings declines this year. Only 15% of analysts have adjusted their estimates in the past couple of weeks, according to a report by Credit Suisse.

Friday’s sell-off left the S&P 500 down 88.60 points, or 3.4%, at 2,541.47. The Dow slumped 915.39 points, or 4.1%, to 21,636.78. The Nasdaq declined 295.16 points, or 3.8%, to 7,502.38. The Russell 2000 index of smaller-company stocks retreated 48.33 points, or 4.1%, to 1,131.99.

Cruise operators Norwegian Cruise Line and Carnival were Friday’s biggest decliners in the S&P 500. The industry has been among the hardest hit by the economic fallout from the coronavirus. The companies are down more than 70% so far this year.

The price of crude oil slid 4.8% to $21.51 a barrel.