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US stock indices fell on Friday after President Donald Trump threatened to apply new tariffs to China over the coronavirus crisis, while Apple and Amazon became the latest companies to warn of more pain in the future.
In the closing bell, the Dow Jones Industrial Average fell 622.03 points, or 2.55 percent, to 23,723.69. The S&P 500 fell 2.81 percent and the Nasdaq compound lost 3.2 percent, both near session lows.
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.
He said that after seeing evidence that the outbreak started after the virus escaped from a Chinese virology laboratory, he was considering punitive tariffs on China’s $ 1 trillion imports.
The American flag is seen on the New York Stock Exchange on Thursday. Stocks ended April with their biggest monthly gains since the 1980s, but sank again on Friday.
Trump’s threat brought attention back to the trade war between the world’s two largest economies that has kept global financial markets hooked for nearly two years.
Meanwhile, new data showed that US manufacturing activity. USA It crashed to an 11-year low in April when the pandemic wreaked havoc on supply chains, suggesting the economy was plunging further into recession.
The Institute for Supply Management (ISM) survey on Friday added to a series of grim data this week, including a collapse in consumer spending in March and a 30.3 million increase in the number of Americans who have filed claims for benefits. unemployment in the last six weeks.
The ISM said its national manufacturing activity index fell to a reading of 41.5 last month, the lowest level since April 2009, from 49.1 in March. A reading below 50 indicates a contraction in the manufacturing sector, which represents 11% of the US economy.
The monthly decline in the ISM index was the largest since October 2008.
Robert Glorioso, chief of construction engineering operations for the New York Stock Exchange, rings the opening bell on Friday to thank Samantha Moriarty and the GE Healthcare team from Melrose, Massachusetts, who continue to ensure that ventilators operate safely.
Vice President Mike Pence is touring a GM plant in Indiana Thursday where fans are manufactured. Overall, manufacturing in the United States is at its lowest level since April 2009
“The backdrop for manufacturers is very bleak, with the collapse of global demand, continued disruptions to the supply chain and high levels of uncertainty posing very significant challenges,” said Oren Klachkin, chief economist at Oxford Economics In New York. “We don’t expect production losses to recover until 2021.”
Sentiment also weighed on a 2.6 percent drop in Apple’s shares in premarket trading after the company said it was impossible to forecast overall results for the current quarter, even when it reported optimistic quarterly results.
Amazon shares fell 5 percent after the company said it could post its first quarterly loss in five years as it was spending at least $ 4 billion in response to the coronavirus pandemic.
Clorox reported its largest sales increase in nearly a decade, helped by an increase in disinfectant sales. Shares rose 6.7 percent on the previous market.
Sales at the company’s cleaning division, which accounts for almost 38 percent of total sales and includes its namesake chlorine products, as well as Formula 409 and Pine-Sol, increased 32 percent in the first quarter.
Clorox reported its largest sales increase in nearly a decade, helped by an increase in disinfectant sales during the coronavirus pandemic.
In their earnings reports on Friday morning, Exxon Mobil and Chevron said they are holding back U.S. oil shale oil production at a time when crude oil prices and fuel demand have plummeted due to blockades. global.
Exxon posted a loss of $ 610 million in the first quarter, its first quarterly loss in three decades, in an inventory reduction of nearly $ 3 billion reflecting lower margins and prices.
Chevron posted a $ 3.6 billion gain in asset sales and better refining results, and also said it would further reduce spending this year.
United Airlines’ shares sank 4.7 percent when the company posted a loss of $ 1.7 billion, the largest since 2008. The loss was expected, as United said last week that it suffered a pre-tax loss of $ 2.1 billion.
The airline is reducing its flight schedule by 90 percent in May and probably a similar amount in June.
