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Wall Street tumbles as renewed tariff threat adds to uncertainties

Stock MarketsMay 01, 2020 04:55PM ET
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© Reuters. FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

By Stephen Culp (NYSE:CULP)

NEW YORK (Reuters) - Wall Street sold off sharply on Friday after President Donald Trump revived a threat of new tariffs against China in response to the COVID-19 pandemic, which has brought global economies to a grinding halt.

All three major U.S. stock averages closed down well over 2%, and for the week they all lost ground.

May is often marked by sell-offs, and on the month's first day, with jitters on the rise as some U.S. states begin easing coronavirus shutdowns, the adage held true.

"Markets had a very strong April as they looked through the valley of economic weakness to a point when stimulus will reignite economic growth," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "But it could be a longer and deeper valley than many hoped."

Indeed, stocks had a remarkable run in April, with the S&P 500 and the Dow both posting their strongest monthly percentage gains in 33 years.

Trump said his administration was crafting retaliatory measures against China as punishment for the coronavirus outbreak, once again sparking tariff fears that rattled markets through much of the last two years. Trump has blamed China for what he says is "misinformation" when the virus emerged from the Chinese city of Wuhan and then quickly spread around the world.

"Trump poking China was the last thing markets needed given so much present economic and financial uncertainty," Carter added.

A mixed bag of earnings, particularly a disappointing report from Amazon.com (O:AMZN), along with a fresh round of dismal economic data, also weighed on sentiment.

U.S. manufacturing activity skidded to an 11-year low last month as lockdowns shuttered factories, according to the Institute for Supply Management's purchasing managers index.

The Dow Jones Industrial Average (DJI) fell 622.03 points, or 2.55%, to 23,723.69, the S&P 500 (SPX) lost 81.72 points, or 2.81%, to 2,830.71, and the Nasdaq Composite (IXIC) dropped 284.60 points, or 3.2%, to 8,604.95.

All 11 sectors of the S&P 500 closed in the red, with energy companies (SPNY) suffering the largest percentage drop.

The corporate reporting season has crossed the midpoint, with 275 of the companies in the S&P 500 having reported quarterly results. Of those, 68% have beaten consensus estimates.

In aggregate, first-quarter S&P 500 earnings are seen having fallen 12.7% from a year ago, a stark reversal from the 6.3% annual growth forecast that stood on Jan. 1.

Tesla Inc (O:TSLA) plunged 10.3% after company Chief Executive Elon Musk said in a tweet that the electric car maker's stock price was "too high."

Amazon.com (O:AMZN) shares slid 7.6% after the online retailer warned pandemic-related expenses could lead to its first quarterly loss in five years.

Apple Inc's (O:AAPL) quarterly results beat expectations, but the iPhone maker declined to provide current-quarter forecasts. Its shares lost 1.6%.

Exxon Mobil (N:XOM) dropped 7.2% after the company reported a drop in profit due to a massive $3 billion writedown on plummeting oil demand and prices.

Rival Chevron Corp (O:CVX) posted a 38% profit increase, boosted by asset sales, and slashed spending plans. Its shares dipped 2.8%.

Declining issues outnumbered advancing ones on the NYSE by a 5.23-to-1 ratio; on Nasdaq (NASDAQ:NDAQ), a 4.40-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and two new lows; the Nasdaq Composite recorded 17 new highs and 12 new lows.

Volume on U.S. exchanges was 10.17 billion shares, compared with the 12.19 billion average over the last 20 trading days.

Wall Street tumbles as renewed tariff threat adds to uncertainties
 

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Comments (23)
Johnny Soler
Johnny Soler May 01, 2020 3:32PM ET
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Just started pumping 7 trillion into the economy hold on to your set and more too come...
Midway Eholdings
Midway Eholdings May 01, 2020 2:06PM ET
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A drop is healthy for the market. However selling is a mistake till we have the all clear rally.
steven gitt
steven gitt May 01, 2020 1:34PM ET
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dropping because everything is dummping after a massive market dead cat....notice how all these positive headlines pummping all these companies have suddenly turned negative today
Al Vlaj
alvlaj May 01, 2020 1:22PM ET
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Very stable genius ...
Muhamed Jaffir
Muhamed Jaffir May 01, 2020 1:15PM ET
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I'm pretty sure CHIDS already invalidated the trade deal. Chinese AIDS.
Pwr Strk
Pwr Strk May 01, 2020 1:09PM ET
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Reuters at it again, defending their Chicom bosses
David David
David9 May 01, 2020 1:06PM ET
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Looks like 2nd half of the year, we will see many companies fall like flies. If Trump puts on more tariff, we can say goodbye to many US struggling companies. How can they pay more with less revenue and economy is spiraling down? My bet is that Trump will slide big in the polls and he will have to reverse course.
Zachary Buszta
Zachary Buszta May 01, 2020 12:54PM ET
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We might get a 10 % drop in May before going back up again.
Jeremy Williams
Jeremy Williams May 01, 2020 12:54PM ET
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Good luck with that.
Zachary Buszta
Zachary Buszta May 01, 2020 12:54PM ET
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I did not like what Trump did. He should have never threatened to enforce new tariffs on China.
Rob Omes
Rob Omes May 01, 2020 12:26PM ET
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Trump? Get rid of that man! He only earns big money for insiders.
gary ross
gary ross May 01, 2020 12:03PM ET
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Everything trump touches turns to *** He is a fat orange walking disaster with blood on his tiny little girly hands.
Van Doza
Van Doza May 01, 2020 12:03PM ET
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I take it you are being paid by the CCP or the DNC to write this drivel? No one intelligent enough to write coherently in english is stupid enough to believe that trash!
Midway Eholdings
Midway Eholdings May 01, 2020 12:01PM ET
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Ha! Nice try commie bots!! ****China take all their money here
Harding Tom
Harding Tom May 01, 2020 11:24AM ET
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Never did the president say that he would impose tariffs for “retaliation for the coronavirus crisis.”  What I heard the president say in response to a leading question from a reporter is that given two options, tariffs are a better approach to not paying interest on the debt.  The president repeatedly has said that he wants to know China’s role in the virus.   That’s all.  Certainly the president’s comments aren’t affecting the markets any more than Markets are down because Trump talks about his mashed potatoes.
Yong Kwet Ming
Yong Kwet Ming May 01, 2020 10:59AM ET
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Trump thinks that he has to bash China hard , then he will win the election .
shuai deng
shuai deng May 01, 2020 10:59AM ET
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Says the burning man
Alex Malmstrom
BrassTacks1 May 01, 2020 10:44AM ET
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The one time China produces something with a longer product cycle than a month it's a global epidemic, well at least they tried, but hard to give them credit for that.
Rehoboam IO
Rehoboam May 01, 2020 10:11AM ET
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Loving all the China trolls here. Shows how scared China is a their massive F up. Just released a plague on the world and they're worried about violating a trade pact - that China violates every day. LOL
Paolo Sarvia
Paolo Sarvia May 01, 2020 10:11AM ET
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Trump has no need of others' comments to discredit himself. He's a professional, nobody could do it better.
Mike ND
Mike ND May 01, 2020 10:11AM ET
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China trolls should type something bad about dictator Xi so they disappear.
Geese Dude
Geese Dude May 01, 2020 9:35AM ET
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At this point you have to believe Trump is insider trading, himself being the biggest insider
William Hineser
William Hineser May 01, 2020 9:34AM ET
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Vital businesses must be brought back to the US.
Cool Mavis
Cool Mavis May 01, 2020 9:22AM ET
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dont make a double front line.
Brad Dover
Brad Dover May 01, 2020 8:57AM ET
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Hoover did this  and the great depression last TEN YEARS trump has made the exact same mistakes that Hoover made and doing it in a recession equal too or greater than that one he also failed to learn the lessons of the pandemic of 1918 and failed to listen to experts and condemned 10s of thousands of us to die
Tre Hsi
Tre Hsi May 01, 2020 8:57AM ET
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Trump is not interested in listening to anyone other than his larger than usual gut...
Me comment
Me comment May 01, 2020 8:57AM ET
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Trump wants the markets and economy to skyrocket, with more tariffs it will only crash. Trump is the markets and US economies worst nightmare.
Howie Zoukl
Howie Zoukl May 01, 2020 8:20AM ET
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won't this move violate the trade agreement phase 1 signed and dotted in January?
Howie Zoukl
Howie Zoukl May 01, 2020 8:20AM ET
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this is why no one can trust Americans flip flops everytime like fish out of water
Jerry Li
Jerry Li May 01, 2020 8:20AM ET
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indeed
Michael Redden
Michael Redden May 01, 2020 8:20AM ET
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Considering china released a biological weapon id say do it
Hawthorne Post
Hawthorne Post May 01, 2020 8:20AM ET
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sure, mad cow disease, chronic wasting disease, and rabies are all biological weapons from a lab too. Good grief, you know nothing. there are terrifying diseases just floating around all over the world, including the US. Covid-19 is just the beginning.
Ann Yong Wong
Ann Yong Wong May 01, 2020 7:49AM ET
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Trump must win this re-election otherwise he is dead carcass as his businesses will collapse like dominoes.
john lim
john lim May 01, 2020 7:49AM ET
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If he lose the election,I think he will commit suicide.
GJ DJT
GJDJT May 01, 2020 7:49AM ET
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his business is fine, got millions from his own government.
Adrian White
Adrian White May 01, 2020 7:49AM ET
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More likely he'll go to jail since he'll no longer have immunity from prosecution.
Randy Randy
randy00 May 01, 2020 7:49AM ET
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john lim  We should be so lucky.
Jan Buyle
Jan Buyle May 01, 2020 7:25AM ET
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Can someone please send a psychiatrist to the White House?
Ji Go
Ji Go May 01, 2020 7:25AM ET
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He just broke the glass on his emergency approval rating fix kit.
Ma Ma
Ma Ma May 01, 2020 7:25AM ET
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Every body hate usa!
 
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