Top Things to Know in the Market on Wednesday, May 6th

• 2020-05-06
• Traiding Idea

US service sector falls into the biggest contraction since 2009

According to the Institute for Supply Management, last month, while the Coronavirus pandemic brought US economic activity to a halt, the US service sector contracted for the first time in a decade.

The ISM nonmanufacturing index fell from 52.5 units in March to 41.8 units in April. This was the worst drop since March 2009, when the index hit 40. 

The sharp drop in the index in April was driven by the lowest amount of business activity in the service sector since ISM debuted the index in 1997. The sharp fall in new orders also lowered this index.

In the United States, The Dow Jones Industrial Average gained 0.56 % to 23,883.49.

The S&p 500 surged 0.9 %, to 2,868.44 while The Nasdaq composite advanced 1.13%, to 8,809.12.

Record number of people claim unemployment benefits in Spain amid COVID-19

Although Spain's unemployment rate rose at a slower pace in April, 3.8 million people losing their jobs this month,  and the number depending on benefits hit a record 5.2 million since the beginning of Coronavirus.

Last month, the number of Spaniards who registered as jobless due to the Coronavirus outbreak and the closure of companies increased by nearly 8%. This is Spain's highest unemployment rate in four years.

People who worked in restaurants and cafes suffered the most, with over 720,000 losing their jobs.

Last week, Spain's economy minister said that the country's economy would record a worse recession this year than the Great Recession of 2008-2013.

The ministry expects that country's gross domestic product (GDP) will shrink by 9.2 % this year.

Also, according to the worst-case scenario, if the Covid-19 quarantine lasts up to 12 weeks, the country's economy may dive by 12 % in 2020.

In London, the FTSE 100 index declined 0.16 % and closed at 5,753.78. French CAC 40 index fell 4.24% and closed at 4,378.23 points.

Also, Germany's DAX 30 index plummeted 3.64 % to 10,466.80 points. In Spain, the IBEX 35 index dropped 3.6% to 6,673.30.

Asian stock markets

Asia stocks rose on Wednesday after a sharp jump in oil prices and the reopening of the world's economies.

In Asian stock markets, Japan's benchmark Nikkei 225 lost 2.84% and closed at 19,619.35. The Hang Seng in Hong Kong advanced 1.49% to 24,102.01.

China's Shanghai Composite slipped 0.03% and ended at 3,911.39. In Australia, the S&P/ASX 200 index fell 0.14% to 5,399.30. Among other major Asian indices, TOPIX (Tokyo Stock Price Index) was down.