(Reuters) – Wall Street dipped on Friday as the novel coronavirus abruptly ended the longest spell of U.S. employment growth on record, but declines were limited by a surprise expansion in the U.S. services sector.

FILE PHOTO: The floor of the New York Stock Exchange. New York, U.S., March 20, 2020. REUTERS/Lucas Jackso

The Labor Department’s report said a recession was underway as business activities have come to a standstill, but investors feared it did not reflect the full extent of the economic damage as the survey only considered data until mid March.

With the S&P 500 already down about 25% from its mid February record highs, or nearly $7 trillion in market value, analysts said the magnitude of the decline in payrolls had been priced in to a large degree.

“The market already knew that job losses recently have been historic and tremendous,” said Russell Price, chief economist at Ameriprise Financial Services Inc in Troy, Michigan.

“We are coming to terms with just how significant this is going to be. The data will be very bad before it gets much worse in April and May, before we start seeing improvements.”

The worldwide spread of the virus has forced billions of people to stay indoors and pushed entire sectors to the brink of collapse, leading to mass layoffs and dramatic steps by companies to raise cash.

Walt Disney Co (DIS.N) said on Thursday it would furlough some U.S. employees this month, while sources said luxury retailer Neiman Marcus was stepping up preparations to seek bankruptcy protection.

Disney’s shares fell 1.6% and were the biggest drag in the communication services index .SPLRCL, while Under Armour (UAA.N) shed 4.5% after saying it would temporarily lay off employees at its U.S. stores.

Economists have slashed their forecasts for U.S. GDP, with Morgan Stanley now expecting a 38% contraction in the second quarter. Analysts also foresee an earnings recession for Corporate America.

Data showed a reading of ISM’s services activity index fell to 52.5 in March from 57.3 in February, but was better than the 44.0 economists had feared, which would have indicated an outright contraction.

At 10:43 a.m. ET the Dow Jones Industrial Average .DJI was down 318.23 points, or 1.49%, at 21,095.21, the S&P 500 .SPX was down 31.04 points, or 1.23%, at 2,495.86 and the Nasdaq Composite .IXIC was down 86.76 points, or 1.16%, at 7,400.55.

Engine maker Cummins Inc (CMI.N) fell 1.6% after saying it would cut salaries of all U.S. employees to reduce costs, while Ford (F.N) dropped 2.9% after extending a temporary suspension at most of its European manufacturing sites until May 4.

Raytheon Technologies Corp RTX.N shed 4% as it pulled 2020 outlook for its aerospace units.

Tesla Inc (TSLA.O) jumped 8% after the electric-car maker said production and deliveries of its Model Y sport utility vehicle were ahead of schedule, as it delivered the highest number of vehicles in any first quarter to date.

Reporting by Uday Sampath and Medha Singh in Bengaluru; Additional reporting by Herbert Lash; Editing by Sagarika Jaisinghani and Arun Koyyur

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