'The situation is about to get worse': Stocks slide as surging US unemployment and coronavirus cases stifle stimulus hopes

Initial jobless claims rocketed to almost 3.3 million last week more than four times the previous weekly record.
The US passed 82,000 coronavirus cases on Thursday, overtaking China as the world leader in confirmed infections.
"The situation is about to get worse in the coming weeks," one analyst said.
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Stocks slid on Friday as sharp increases in unemployment and novel coronavirus cases in the US tempered investors' excitement about a $2 trillion economic relief package intended to combat the pandemic's fallout.

Data published on Thursday revealed that initial jobless claims spiked to almost 3.3 million last week, dwarfing the previous weekly record of about 700,000, set in 1982. Moreover, the US has now recorded more than 82,000 cases of the novel coronavirus, surpassing China as the country with the most confirmed infections in the world.

US lawmakers are scrambling to pass a sweeping stimulus bill that would help distressed industries such as airlines, state and local governments, small businesses, healthcare providers, and households weather the pandemic. The Senate approved the legislation earlier this week, and the House of Representatives is expected to hold a vote later today.

Despite the uncertain backdrop, the S&P 500 notched its biggest three-day advance in nine decades between Tuesday and Thursday, according to Bloomberg . The Dow Jones Industrial Average also surged 21% over that period, technically entering a bull-market phase and ending the 11-day-old bear market.

Market commentators warned the recovery could prove short-lived.

"The situation is about to get worse in the coming weeks," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, warned in a morning email, citing the surges in US unemployment and coronavirus cases.

"If recovery is not as swift as hoped for, equity markets will suffer another hit," Neil Wilson, chief market analyst for Markets.com, said in a morning note.

Jasper Lawler, head of research at London Capital Group, invoked the Christmas comedy "Elf" to emphasize that coronavirus crises in the US and Italy could mean lockdowns are extended beyond Easter, and more government support might be needed.

"Buddy the Elf might tell this market recovery "'You sit on a throne of lies!'," he said in a morning note.

Here's the market roundup as of 9:30 a.m. in London (5:30 a.m. ET):

European equities dropped, with Germany's DAX down 2%, Britain's FTSE 100 down 3.9%, and the Euro Stoxx 50 down 2.%.
Asian indexes were mixed, with China's Shanghai Composite up 0.3%, Hong Kong's Hang Seng down 0.1%, and Japan's Nikkei up 3.9%.
US stocks were set to open lower. Futures underlying the Dow Jones Industrial Average , the S&P 500 , and the Nasdaq fell between 1.8% and 2%.
Oil prices were mixed, with West Texas Intermediate up 0.4% at $22.70 a barrel, and Brent crude down 1.5% at about $25.90.
The benchmark 10-year Treasury yield fell below 0.78%.
Gold slid 1.6% to $1,626.
Bitcoin rose about 0.8% to around $6,680.