Wall St. slips as Trump warns of new tariffs on China By Reuters

By C Nivedita and Shreyashi Sanyal

(Reuters) – Major Wall Street indexes fell on Friday after President Donald Trump threatened to apply new tariffs to China over the coronavirus crisis, while an earnings warning from Amazon added to the gloom.

Trump said Thursday night that his trade deal with China was now of secondary importance to the pandemic, as his administration crafted retaliatory measures on the outbreak.

The threat brought attention back to the trade war between the world’s two largest economies that has kept world financial markets hooked for nearly two years.

“It won’t be easy to repair the corporate butcher shop after this perfect storm,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

“The trade war mattered because the stress was not with the consumer this time; it was on the balance sheets of the companies.”

The tech sector S&P 500 () lost 1.5% in early operations, while the trade-sensitive Philadelphia Semiconductor () index fell 4%.

The consumer discretionary subscript () was also under pressure after Amazon.com Inc (O 🙂 said it could post its first quarterly loss in five years as it was spending at least $ 4 billion in response to the pandemic of coronavirus. Shares of the e-commerce giant fell 6.3%.

Apple Inc (O 🙂 CEO Tim Cook said it was impossible to forecast overall results for the current quarter due to the uncertainty created by the virus after the company reported sales and earnings above expectations.

Shares of the iPhone maker reversed previous losses to trade 0.5% more.

The energy sector () fell 4.7% due to large oil companies Exxon Mobil (N 🙂 and Chevron Corp (N 🙂 reported weak quarterly results, feeling the pain inflicted by falling oil prices.

Given that nearly half of the S&P 500 companies have reported results so far, analysts expect a 14.4% drop in earnings for the first quarter and forecast an even larger decline of almost 37% for the current quarter.

However, aggressive stimulus measures and hopes of reopening the economy from virus-induced restrictions helped the S&P 500 index () post its best month in 33 years in April. The benchmark index is now 18% away from claiming record success in February.

At 10:27 am ET, the Dow Jones Industrial Average () fell 449.62 points, or 1.85%, to 23,896.10, the S&P 500 () fell 59.05 points, or 2.03%, to 2,853.38 and the Nasdaq Composite () fell 179.27 points. , or 2.02%, at 8,710.28.

US manufacturing activity USA It fell to an 11-year low in April, supporting analysts’ views that the economy was plunging further into recession. However, the Institute for Supply Management (ISM) index reading of 41.5 last month was less than the expected drop to 36.9.

“The markets have already gone beyond analyzing the immediate anticipated collapse of economic activity to focus on its duration,” said Binay Chandgothia, portfolio manager at Principal Global Investors in Hong Kong.

“While there are some initial signs of stabilization in the indicators that have already fallen precipitously, markets would like to see continued progress, going from a stabilization phase to a recovery phase.”

United Airlines Holdings Inc (O 🙂 fell 8% after posting a first quarter loss of $ 1.7 billion.

The decreasing numbers outnumbered the overtakers for a 7.15-to-1 ratio on the NYSE and for a 5.66-to-1 ratio on the Nasdaq (NASDAQ :).

The S&P index did not record a new 52-week high and two new lows, while the Nasdaq recorded 12 new highs and six new lows.