US STOCKS-Wall Street falls as coronavirus cuts into U.S. payrolls

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* Data shows employers cut 701,000 jobs last month
* Disney slips 3% as it furloughs some employees
* Morgan Stanley expects U.S. real GDP to plunge 38% in Q2
* Indexes down: Dow 1.71%, S&P 1.72%, Nasdaq 1.8%

(Updates to late afternoon, adds commentary, changes byline,
adds New York dateline)
By Sinéad Carew
NEW YORK, April 3 (Reuters) - Wall Street's main indexes
fell on Friday as the coronavirus abruptly ended a record U.S.
job growth streak of 113 months, leaving little doubt that the
economy is in a recession.
And even the loss of 701,000 jobs that Labor Department data
showed for March did not completely capture the economic
carnage. The survey considered data only until mid-March, before
widespread U.S. lockdowns put more people out of work.
The worldwide spread of the virus has forced billions of
people to stay indoors and pushed entire sectors to the brink of
collapse, triggering mass layoffs and dramatic steps by
companies to raise cash.
While relatively flat volatility indexes suggested that
investors getting used to market swings, Mike Turvey, TD
Ameritrade's institutional senior trading strategist sees
institutional investors taking a shorter term view with many
still very cautious ahead of the weekend market close.
"This is not like December 2018. We're not likely to see a V
shaped recovery because we haven't even begun to really tackle
the main issue behind why this is happening. That's still an
ongoing process. It's going to take time," said Turvey.
"Everybody's outlook has changed to very short term. The
reality is that a lot of things happen over the weekend and a
lot of people don't want that exposure,"
The S&P 500 was down about 27% from its mid-February record
high, or over $7 trillion in market value, and economists have
cut their forecasts for U.S. GDP, with Morgan Stanley now
predicting a 38% contraction in the second quarter. At 3:00PM ET, the Dow Jones Industrial Average .DJI fell
365.26 points, or 1.71%, to 21,048.18, the S&P 500 .SPX lost
43.38 points, or 1.72%, to 2,483.52 and the Nasdaq Composite
.IXIC dropped 135.09 points, or 1.8%, to 7,352.22.
However the CBOE market volatility index .VIX , also known
as Wall Street's fear gauge fell 1.9 points. And while the small
cap Russell 2000 .RUT index was down 4% on the day the Russell
volatility index .RVX was essentially flat on the day.
"You have to interpret it as a small positive. You don't see
the same reach for protection," said TD Ameritrade's Turvey.
"The market is accepting the fact we're going to have these 3-4%
swings on a regular basis."
Of the S&P 500's 11 major sectors utilities .SPLRCU and
financials .SPSY were the biggest laggards with declines of
more than 3%.
Walt Disney Co DIS.N shares fell 3% after it said it would
furlough some U.S. employees this month, while sources said
luxury retailer Neiman Marcus was stepping up preparations to
seek bankruptcy protection. Analysts expect corporate profits to fall in the upcoming
earnings season, but some strategists said that actual numbers
will likely be given little importance.
"There's really very little that you can take away from
(earnings) other than some insights to actually how are these
businesses set up to weather the pandemic and where will they be
once it begins to show signs of passing," Robert Pavlik, chief
investment strategist at SlateStone Wealth LLC in New York.
Raytheon Technologies Corp RTX.N , formed by the merger of
United Technologies and Raytheon Co, shed 10.2% as it pulled its
2020 outlook for its aerospace units.
Tesla Inc TSLA.O rose 5% after the electric-car maker said
production and deliveries of its Model Y sport utility vehicle
were ahead of schedule. Declining issues outnumbered advancing ones on the NYSE by a
4.50-to-1 ratio; on Nasdaq, a 3.11-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 10 new lows; the
Nasdaq Composite recorded 4 new highs and 166 new lows.

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