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Stocks - Dow Kicks off May on Sour Note as Trump Threatens Payback on China

Published 05/01/2020, 04:08 PM
Updated 05/01/2020, 04:11 PM
© Reuters.

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.

Latest comments

Picture looks like an albino  raccoon
Everybody who help spread the virus must pay high price for that low social responsibility. Do you want meet your friends in NY and make down a bottle of whiskey?
Do you want meet your friends in NY and make down a bottle of whiskey? You must go to a jail!
More black swans.
China must pay for Corona, for virus. This country has 557 active CoV cases for today. How do it possible in high density population place like this?
 Jason Zou You must pay for CoV too! It is impossible for any US president stop virus while nation don’t want to stay home. Trump is innocent in this problem. China is liars and thieves. They also public fake CoV stat. You along with China will pay for that. More sanctions for China, good and different.
LMAO big time, I pay? China pay? Wake up! Liar Mr Trump wanted to be thief chief now? Sanction China? That is really kids talk.
 Yes, you owe me and you will pay. And China will pay. More tarifs, more sanctions, and other beautiful things.
Must be this guy who is responsible for, when he is caught keeps lying!
What have we Americans done that cause US with such a fool in charge, LORD?
this blonde fool is ruining the US economy. If he got elected again, US will continue to suffer as he keeps cutting ties/threatening with global organizations/countries.
Why would anyone say their stock is to High?
someone who wants to increase his participation?
Elon Musk on brink of breakdown wants scrap it all and lead an average life. He just might be the inly normal guy in town
with a world crisis going on and shortage on nearly everything, countries are considering partial export ban. China will likely ignore as they know trumps just putting on a show for voters
He is really a businessman. Always finding excuses not to pay back the debts own. I believe no one wants to do business with America anymore if Trump get reelected.
A failed businessman.
 The BEST leader of American history and he always think he is the BEST.
 he failed many business.
No matter what time we spend here (130+ comments) arguing about the past, none of it will contribute to, nor make our tasks of the future easier and shorter. Better we do some stretching and drink tea and refocus on what lies ahead. There's tons of obligations we're BEHIND ON, aren't we?
Sure you wasted too much time here.
WW 3 on the way.........  If any US President could trigger it, it would be the Donald......
Drumpf is a disaster!
China shut down domestic flights to and from Wuhan but continued to allow international flights out of Wuhan. Guess why? Why on Earth when they knew the Wuhan Virus was spreading like wildfire would they not close down international travel and warn other nations??
 You are lying. Even the NY Times reported on this. "Niall Ferguson's latest column (paywall) notes that on Jan. 23 the Chinese cut off Hubei province from the rest of China -- but they didn't cut it off from the rest of the world. Direct flights out continued. Trump's travel restrictions kicked in only a week later."
And Reuters: "On February 4, the Civil Aviation Administration of China requested that local airlines keep operating international flights to countries that hadn’t imposed restrictions on inbound travel, according to Reuters."
because other countries requested to evacuate their citizens?
Nothing Trump initiates now can erase history of how he acted in response to the news out of China in December 2019. US intelligence agencies must have picked up on the Chinese doctors' online warnings about cv19. It's all documented that Trump was kicking and screaming in the first 90 days of 2020 against clear evidence of cv19, unable to act rationally. __ This temper tantrum of him here now is just the result of WS creating volatility to deflect the stockmarket prices away from historical averages after they were reached.
 -- I have awoken to your words a while ago, and I agree.
You are wasting your time paid China Trolls. The world has awoken to the evil that is China.
you had too much lysol in you body.
When the 73 y.o. white house toddler babbles markets tank Nov 2020 not soon enough
 So you're responsible for the 737 Max crashes. I wouldn't brag about that!
Les Rado us a real genius
 It was better before the merger under mcdonnell D.
Say what you want. Trump is winning. Your pain is his gain. Satan is ready to declare mission accomplished.
no.. no it's not.
Your English, being your first language, is fraughted with errors, is that your or English fault?
David's written English is still a lot better than many Americans posting on here.
China released this virus on the US ( and of course the World) as payback for the original tariffs set. It was their strategy for retaliation.
did china release the virus to italy, spain etc as well? what did they do to china?
Yup, i also can say the dirty hypocrite uncle sam purposely released to China, like how they framed Iraq, Afghanistan n many more...
Dr Steve Wexler -- Your words make sense and I came to the same conclusion a few weeks ago. Donald Trump has a habit of causing a stir in the energies about whatever he touches. He causes a disturbance in whatever his mind touches BECAUSE HIS MIND IS DISTURBED. The recipient of his energies looks for ways to hit back, and so it resulted effectively. The ones' in control of the virus did end up not controlling it, they let it slip through their fingers. Fat Americans now need to reconsider the cause of their eating and acting out and America now needs to look deep inside as to whether they can really make things better for their people and the future.
ok
let's do it
is it election year ?
yeah man , let's do it
Yeah it's China, not the horrible earnings that are on the horizon. Not the huge gap way down there in the indexes that will be filled. Not the rich cashing out with the 6 trillion the govt just put in. Yeah it must be China.
China did this to the world, not just the United States. The rich are doing what the rich always do in a downturn. And, yes, it absolutely must be China. They lied and covered it up while allowing international flights to leave Wuhan for weeks.
 I fully agree that China must pay, I was just commenting on the article stating why the market was down on Friday.  It was a flimsy excuse for a reason that the market was down. There will be many more down days in the future and I don't want to hear lame excuses like this. I totally agree China must pay and I hope Trump goes after them.
Conspiracy theory: if I were China I would argue that Trump & Co. instigated the virus. Usually, the stock market anticipates events at least 6 mos so the fat fingers can drive up the market before they can short it from a higher vantage point, then make a bundle until it reaches the usual bear bounce targets and teach the world a few long-overdue lessons in health care and resetting the markets. Ever since Sep 2019 WS for 6 mos kept buying as if there was no tomorrow. Trump is the type of character who tears everything existing down first because he can not fit into a system because he is a misfit, then he becomes the white knight by resurrecting a new system so that he gets a lot of thanks and so he can prove he is the 'chosen one'. He ain't care that he drives the financial system to the brink coz he also envisions resetting US debt and derivatives and emerge as the king. The fact that old ppl's assets become turned over and the state saves money on senior care are minor windfalls.
Deflection disguised in extortion.
revenge for despicable and unforgiveable crimes against the world..
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