Friday May 1st

1-05-2020

Dow set to fall more than 400 points after best month in three decades, Amazon leading tech lower

U.S. stock index futures fell sharply early Friday as shares of Amazon and Apple dropped following their first-quarter results. Dow Jones Industrial Average futures fell about 1.9% and indicated an opening drop of more than 450 points. S&P 500 futures fell 2.1%. Nasdaq 100 futures were down 2.3%. Apple reported quarterly earnings that topped analyst expectations, but its revenue growth remained flat on a year-over-year basis. Also, the company did not offer guidance for the quarter ending in June amid uncertainty over the coronavirus outbreak. The tech giant’s stock traded more than 2.6% lower in premarket trading. Amazon, another tech giant, saw its shares tumble 4.8% in premarket trading after announcing plans to spend all its second-quarter profits on its coronavirus response. The e-commerce behemoth also posted a first-quarter profit that missed analyst expectations. Both Apple and Amazon are among the companies that led the S&P 500′s comeback from the late-March lows and were two of the best performers in April. Amazon rallied nearly 27% in April while Apple jumped 15.3%. “Dependency on a handful of stocks has masked broadly based weakness in the past, and if they falter, could obscure broadly based improvements going forward,” said Willie Delwiche, investment strategist at Baird, in a note. Wall Street was coming off its biggest monthly surge in over 30 years, with the S&P 500 gaining 12.7% while the Dow advanced 11.1%. It was the third-biggest monthly gain for the S&P 500 since World War II. The Dow had its fourth-largest post-war monthly rally and its best month in 33 years.The Nasdaq Composite closed 15.5% higher for April, logging in its biggest one-month gain since June 2000. Stocks in Japan and Australia slipped in Friday afternoon trade, with most major markets in Asia closed for holidays. The Nikkei 225 in Japan slipped 2.47% in afternoon trade, with shares of Tokyo Electron dropping more than 5%. The Topix index also shed 1.81%. Major markets across the region — including China, Hong Kong, South Korea, India and Singapore — are closed on Friday for holidays. Oil prices jumped on Friday, extending the previous session’s gains, buoyed by a lower-than-expected gain in U.S. crude inventories and the start of output cuts in a bid to offset a slump in fuel demand triggered by the coronavirus pandemic. Brent crude for July delivery, which started trading on Friday as the new front-month contract, was up $1.10, or 4.2%, at $27.58 a barrel by 0013 GMT. Brent gained 12% on Thursday. U.S. crude for June delivery climbed $1.37, or 7.3%, to $20.21 a barrel, having gained 25% in the previous session. Gold edged lower in holiday-thinned trade on Friday as optimism over economies easing coronavirus lockdowns prompted investors to book profits, keeping bullion on track for its worst week in more than a month. Spot gold was down 0.1% at $1,678.31 per ounce. Bullion has fallen nearly 3% so far this week, its biggest weekly loss since mid March. U.S. gold futures fell 0.3% to $1,689.60. Most markets were closed for Labour Day in Europe and Asia.