By Gunjan Banerji,Anna Hirtenstein and Chong Koh Ping 

U.S. stocks and government bond yields fell Friday, capping another week of declines, after new data revealed that the pandemic's toll on Americans has increased by the day.

The monthly jobs report showed that employers shed 701,000 jobs in March, the start of a labor-market slowdown stemming from the coronavirus pandemic. It's a jarring shift for a job market that was booming just a few weeks ago, with unemployment hovering near multidecade lows.

Meanwhile, Gov. Cuomo said New York, the hardest-hit state, saw its highest single increase in deaths since the outbreak started.

The S&P 500 fell 38.25 points, or 1.5%, to 2488.65. The Nasdaq Composite lost 114.23 points, or 1.5%. The Dow Jones Industrial Average fell 360.91 points, or 1.7% to 21052.53.

Major U.S. indexes ended the week with modest declines after logging the worst quarter since the financial crisis. All three are down more than 24% from their mid-February highs.

Many investors were bracing for disappointing jobs numbers due to the profound effect of the coronavirus on people, businesses and markets around the world in recent weeks.

"I don't think anybody's surprised that it was a terrible month," said JJ Kinahan, chief market strategist at TD Ameritrade. "We know it's going to be brutal. These are hard times."

Friday's report marked the first time since 2010 that employers shed more workers than they added. Still, many were girding for even gloomier figures to be released in coming weeks. The latest monthly jobs report doesn't reflect the millions of unemployment-insurance claims that people filed in the last two weeks of March.

A record 6.6 million Americans applied for unemployment benefits last week -- double the number two weeks ago -- as the country shut down parts of the economy in an effort to contain the virus.

Investors were also wary of fresh data that shows the spread of the coronavirus across the U.S.

"We could be entering the next few weeks of peak fear," said Rusty Vanneman, chief investment officer of Orion Advisor Solutions. "I think that some of the worst data is yet to come."

As stocks fell, investors turned to the relative safety of government debt. The yield on the 10-year U.S. Treasury note fell to 0.587% after settling at 0.624% in the previous session, capping off a third straight week of declines. Bond yields fall as prices rise.

Investors said they were continuing to track containment measures in the U.S. and countries around the world. Some investors attributed the smaller gyrations this week to the moves by the Federal Reserve, which they said made it easier to trade across asset classes.

In Europe, economic data out Friday showed the brutal impact the coronavirus is having on economic growth. Purchasing Managers' Indexes for the services sector in the eurozone fell to the lowest level ever. The pan-continental Stoxx Europe 600 dropped 1%.

In Asia, major stock indexes were largely flat. The Shanghai Composite Index closed down 0.6%. The People's Bank of China eased monetary policy, indicating that the Chinese economy is still in need of support despite people returning to work. To encourage more lending, it cut reserve ratio requirements for small- and medium-size banks by 1 percentage point and lowered rates for commercial banks' excess reserves to 0.35% from 0.72%.

On Thursday, Brent leapt 21%, marking its largest one-day percentage gain on record, based on data going back to 1988. President Trump said he expected Russia and Saudi Arabia to agree to cut production. Moscow denied talking to the Saudis, but the kingdom's officials said it would consider substantial output cuts if other nations joined the effort.

Luca Paolini, chief strategist at Pictet Asset Management, said Friday's stock declines show the market is skeptical about oil-production cuts. It would take coordinated action from all the major oil producers, including the U.S., to make a lasting difference.

"If there's an agreement for a production cut, I would see that as a positive," he said.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Chong Koh Ping at chong.kohping@wsj.com

(END) Dow Jones Newswires

April 03, 2020 20:41 ET (00:41 GMT)