Mounting Virus Woes And Historic US Data Shock Hit Markets

US and European equities mostly fell Thursday on mounting evidence from corporations and governments of a coronavirus-induced downturn, crystalized by the worst quarterly drop in US growth since records began after World War II.

The slide came on the heels of a gloomy Federal Reserve warning over a US spike in COVID-19 infections, adding to fears of more job losses amid a pandemic that continues to pound the global economy.

Major Asian trading hubs had managed to limit losses before the US Commerce Department revealed that the world's largest economy contracted by one-third in the second quarter -- the worst decline on record.

In Frankfurt, the benchmark DAX index closed 3.4 percent lower on data showing that Germany's powerful economy shrank by a record 10.1 percent in the second quarter.

Elsewhere, London's FTSE 100 lost 2.3 percent and Paris fell by more than two percent on an avalanche of gloomy corporate earnings tied to the impact of the pandemic.

Investor alarm spread in Europe on news of disappointing losses from the likes of aircraft manufacturer Airbus, steelmaker ArcelorMittal and energy giants Eni and Royal Dutch Shell.

Wall Street also had a fairly gloomy session, with the Dow and S&P 500 finishing solidly lower after the Commerce Department reported the US economy contracted a stunning 32.9 percent in the second quarter due to business shutdowns.

Perhaps more troubling was new Labor Department data showing that the US saw its second consecutive weekly increase in initial claims for unemployment benefits, with another 1.43 million filed last week.

Congress is currently locked in debate over the size and composition of the next spending bill, with Democrats fighting to retain the $600 additional weekly payment made to unemployed workers set to expire Friday.

Republicans want to cut that money and offer businesses that reopen protection if employees become infected.

"The staggering news of the historic decline of the gross domestic product in the second quarter should shock us all," US Chamber of Commerce Executive Vice President Neil Bradley said in a statement.

The data "should compel Congress to move swiftly" to provide assistance to unemployed workers and businesses.

While US stocks mostly fell, the Nasdaq was a bright spot, working its way into positive territory and closing up 0.4 percent ahead of a deluge of earnings reports from big tech companies.

Apple, Amazon, Facebook and Google parent Alphabet all reported higher profits. Shares of those companies rose in after-hours trading, but the gains came after the stocks won huge increases in recent months that could leave them vulnerable to a sell-off, analyst say.