Stocks - Dow Kicks off May on Sour Note as Trump Threatens Payback on China
Investing.com
Published May 01, 2020 04:08PM ET
By Yasin Ebrahim
Investing – The Dow ended the week on a sour note, as investor sentiment was rocked by fresh U.S.-China worries as President Donald Trump threatened action against Beijing over the Covid-19 pandemic.
The {{169|Dow Jones Industrial Average}} fell 2.55%, the S&P 500 lost 2.81%, while the Nasdaq Composite fell 3.2%.
Trump suggested that his administration could place tariffs on China or cancel part of its debt obligations to Beijing over its handling of the coronavirus, claiming to have evidence showing the virus had originated at the Wuhan Institute of Virology.
The threat of new tariffs on China stoked investor jitters about a fresh U.S.-China trade war, overshadowing some of recent optimism over the partial reopening of the U.S.
The lockdown measures to contain the outbreak have wreaked havoc on the economy, wiping out all the jobs created since the financial crisis and pushing the economy to contract by more 4% in the first quarter, with fears running high that a prolonged recession looms.
With a vaccine still at the minimum months away, drugmakers are in a race against time to produce Covid-19 treatments that can support efforts to get the wheels of the economy turning once again, with Gilead's (NASDAQ:GILD) remdesivir leading the pack.
The Food and Drug Administration granted the drug emergency use authorization, President Donald Trump said Friday, according to CNBC.
The latest data on manufacturing activity, however, was better than feared, though the sector continued to remain in contraction.
The impact of the virus has also been evident across quarterly earnings reports as companies have pulled guidance, citing coronavirus-led uncertainty.
Amazon.com (NASDAQ:AMZN) fell 7.4% after the e-commerce giant late Thursday reported lower first-quarter earnings and said it expected an operating loss of $1.5 billion to an operating income of $1.5 billion in the second quarter due to a jump in Covid-19-related expenses.
Apple (NASDAQ:AAPL), meanwhile, fell 1.6%, after reporting flat revenue growth and ditching its custom of proving guidance for the June.
Newell Brands (NASDAQ:NWL) slumped 11.4% after the manufacturer reported a decline in quarterly earnings and revenue.
Energy stocks, meanwhile, were among the biggest decliners, shrugging off a climb in oil prices as major oil-producing countries got their agreed output cuts underway in a bid to offset falling demand.
Elsewhere, Tesla (NASDAQ:TSLA) slumped 10.2% after CEO Elon Musk tweeted that the stock price was "too high." The remark comes just days after the electric automaker reported a surprise quarterly profit.
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