Asian shares fall after Wall St slips on grim economic news

Shares fell in Asia on Friday after a crush of dismal data about the economy helped send markets lower overnight in a meek ending to a historic, juggernaut month for stocks.

Most regional markets were closed for May Day holidays. But Japan's Nikkei 225 index slipped 2.3% to 19,730.41 while the S&P/ASX 200 in Australia gave up 3.9% to 5,308.90. Futures for the S&P 500 and Dow industrials were more than 1% lower.

The S&P 500 fell 0.9% on Thursday after reports showed millions more US workers filed for unemployment benefits last week and the European economy crumpled to its worst performance on record last quarter, among other lowlights.

It was the biggest loss for the U.S. stock market in more than a week, but just a wiggle within the S&P 500's 12.7% gain for April, its best month in decades.

Maybe it was the whole month-end malaise, or maybe they just need to hear something new and impactful, and that we're ultimately seeing buying fatigue," Chris Weston of Pepperstone said in a commentary.

Promises from the Federal Reserve and other central banks to do whatever it takes to prop up the economy through the coronavirus crisis have supported buying by investors betting that a recovery will come soon. Professional investors say that optimism may be premature.

The rebound in April was an assumption that this was going to be a short, V-shaped recovery, both economically and at the corporate and business level, said David Lyon, global investment specialist at J P Morgan Private Bank.

In our view, it probably has gotten a little ahead of itself. We think it's going to be a longer and slower recovery.

The month's gains for stocks came in the face of mayhem in the oil market, where prices in one corner dipped below zero for the first time, and as investors continued to rush into US government bonds in search of safety.

Reports piled up by the day showing the severe hits the economy is taking from widespread stay-at-home orders meant to slow the spread of the virus.

Early Friday, US benchmark crude was up 84 cents, or 4.4%, at $19.68 per barrel in electronic trading on the New York Mercantile Exchange. It's still way below the roughly $60 level where it started the year as worries pile up about the effects of a collapse in demand and as storage tanks fill close to their limits.

Brent crude, the international standard, gained 52 cents to $27.00 per barrel.

The deluge of dour economic data Thursday along with some investors looking to sell after weeks of gains was enough to send 86% of stocks in the S&P 500 down and European stocks sharply lower.

The S&P 500 fell 27.08 points to 2,912.43. The Dow Jones Industrial Average lost 1.2% to 24,345.72, and the Nasdaq fell 0.3% to 8,889.55.

Besides the jobless figures in the United States, which brought the total to 30 million in just six weeks, data released on Thursday showed that consumer spending plunged a record 7.5% in March from the prior month. That's crucial for an economy where consumer spending makes up 70% of the total.

Among European countries that use the euro, the economy shrank by 3.8% in the first three months of the year from the quarter before. That's the biggest contraction since records began in 1995. Discouraging data also came in on China's economy, which is concerning for anyone expecting a first-in-first-out economic wave.

This is the saddest day for the global economy we have ever seen in the 50 years that economists at High Frequency Economics have been following economic data, they wrote in a report.

The statistical offices of the economies we watch pumped out 19 economic reports overnight. They revealed historic declines of activity and surging unemployment on a scale we have never seen before. We are sad.

The yield on the 10-year Treasury edged down to 0.62% from 0.63% late Thursday. It started the year close to 1.90%. Treasury yields tend to fall when investors are downgrading their expectations for the economy and inflation.

In currency trading, the dollar fetched 107.11 Japanese yen, down from 107.13 yen on Thursday. The euro was at $1.0947, down from $1.0955.