Markets fall on record US and German contraction

Markets fell on Thursday.

The S&P 500 fell 0.4 percent, the STOXX Europe 600 plunged 2.2 percent and the Shanghai Composite fell 0.2 percent.

Stocks were hit by a report that US GDP fell at a 32.9 percent annualised pace in the second quarter, the worst in history, although US stocks did recover most of its earlier loss by the end of the day.

“This is really a day that will live in infamy,” said Kent Engelke, chief economic strategist and managing director of Capitol Securities. “I could see the wall of worry increasing to a gargantuan cliff.”

In Europe, a preliminary reading showed Germany’s GDP shrank by 10.1 percent in the second quarter.

“Germany’s record drop in GDP fuels extra concern that the rest of Europe might have a deeper slump,” Edward Moya, a senior market analyst at Oanda, wrote in a note.