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Stocks close lower, erase weekly gains
01-May-20 16:15 ET
Dow -622.03 at 23723.69, Nasdaq -284.60 at 8604.96, S&P -81.72 at 2830.71

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 declined 2.8% on Friday, as investors increased profit-taking efforts after Amazon (AMZN 2286.04, -187.96, -7.6%) underwhelmed investors with its earnings report and U.S.-China tensions appeared to escalate. The Dow Jones Industrial Average lost 2.6%, the Nasdaq Composite lost 3.2%, and the Russell 2000 lost 3.8%.

Amazon warned that coronavirus-related expenses would likely wipe out its expected $4 billion operating income in Q2, providing investors a good excuse to take some profits after a 50% rally off its March low. The notion that stocks have come too far, too fast was bluntly put by Tesla (TSLA 701.32, -80.56, -10.3%) CEO Elon Musk tweeting that Tesla's stock price is too high.

As for the broader market, investors had to contend with President Trump threatening new tariffs on China for its handling of the coronavirus outbreak, as well as the ISM Manufacturing Index for April declining to its lowest level since 2009 with a 41.5% reading (Briefing.com consensus 39.0%). The latter wasn't too shocking for investors.

All 11 S&P 500 sectors opened and closed in negative territory. The energy (-6.0%) and consumer discretionary (-4.6%) sectors took the biggest hits, while the consumer staples sector (-1.2%) declined the least.

Aside from Amazon, Apple (AAPL 289.07, -4.73, -1.6%), Exxon Mobil (XOM 43.14, -33.33, -7.2%), Chevron (CVX 89.44, -2.56, -2.8%), and Visa (V 175.57, -3.15, -1.8%) also succumbed to losses after reporting earnings. Note, Apple shares still rose 2.1% this week.

Separately, the FDA approved Gilead Sciences' (GILD 79.95, -4.05, -4.8%) remdesivir for emergency use in treating COVID-19. Shares recouped some losses after the news.

U.S. Treasuries saw modest selling pressure despite the weakness in equities. The 2-yr yield and the 10-yr yield increased two basis points each to 0.20% and 0.64%, respectively. The U.S. Dollar Index finished little changed at 99.03. WTI crude increased 6.4%, or $1.19, to $19.77/bbl.

Reviewing Friday's economic data, which featured the ISM Manufacturing Index for April:

The ISM Manufacturing index for April registered a 41.5% reading (Briefing.com consensus 39.0%), marking the lowest level since April 2009. The headline number was better than expected, but when you look within the report, it was mostly bad.
The key takeaway from the report is that the better-than-expected reading was a function of a sizable uptick in the index for supplier deliveries (to 76.0% from 65.0%) that is the result of supply chain disruptions and an uptick in the index for inventories (to 49.7% from 46.9%), which is really an indication of weak demand as inventory is sitting around longer because of weak demand.
Total construction spending increased 0.9% m/m in March (Briefing.com consensus -3.5%) on the heels of a downwardly revised 2.5% decline (from -1.3%) in February. Residential spending was up 2.3% m/m while nonresidential spending declined 0.1% m/m.
The key takeaway from the report is that it is dated. It's nice to see that things held up reasonably well in March, but the enthusiasm for the increase in construction spending should be mitigated by the expectation that it is unlikely to be repeated in April.

Looking ahead, investors will receive Factory Orders for March on Monday.

Nasdaq Composite -4.1% YTD
S&P 500 -12.4% YTD
Dow Jones Industrial Average -16.9% YTD
Russell 2000 -24.5% YTD

Market Snapshot
Dow 23723.69 -622.03 (-2.55%)
Nasdaq 8604.96 -284.60 (-3.20%)
SP 500 2830.71 -81.72 (-2.81%)
10-yr Note +1/32 0.630
NYSE Adv 434 Dec 2483 Vol 923.3 mln
Nasdaq Adv 563 Dec 2670 Vol 3.7 bln

Industry Watch
Strong: Consumer Staples
Weak: Consumer Discretionary, Energy

Moving the Market

-- Stocks close lower in broad-based retreat, erase weekly gains

-- Amazon (AMZN) falls 7.6% after reporting earnings

-- President Trump threatens new tariffs on China for its handling of the coronavirus outbreak

WTI crude gains 6%
01-May-20 15:25 ET
Dow -584.61 at 23761.11, Nasdaq -272.00 at 8617.56, S&P -79.04 at 2833.39

[BRIEFING.COM] The S&P 500 is down 2.7% and is on pace to end the weekly marginally lower.

One last look at the S&P 500 sectors shows energy (-5.8^) and consumer discretionary (-4.4%) leading the retreat, while the consumer staples sector (-0.9%) remains the lone sector down less than 1.0%.

WTi crude settled up $1.19 (+6.4%) to $19.77/bbl. For the week, it was up 16.1%.