US STOCKS-Wall Street dips as record job growth ends

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* Data shows employers cut 701,000 jobs last month
* Morgan Stanley expects U.S. real GDP to plunge 38% in Q2
* Indexes down: Dow 1.49%, S&P 1.23%, Nasdaq 1.16%

(Updates to open)
By Uday Sampath Kumar and Medha Singh
April 3 (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.
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.