Friday's Stock Market Open: US Equities Drop On Disappointing Earnings, Guidance From Tech Giants

Update: 12:05 p.m. EDT:

U.S. stocks incurred heavier losses by noon on Friday.

The Dow Jones Industrial Average dropped 610.54 points to 23,735.18, while the S&P 500 fell 84.11 points to 2,828.32 and the Nasdaq Composite Index tumbled 291.40 points to 8,598.15.

In Europe, Britain’s FTSE-100 dropped 2.34%, while France’s CAC-40 and Germany’s DAX were closed for holidays.

Original story:

U.S. stocks fell on Friday after investors digested gains from April’s rally; and tech behemoths Apple (AAPL) and Amazon (AMZN) issued some cautious earnings reports.

The Dow Jones Industrial Average dropped 445.7 points to 23,900.02, while the S&P 500 fell 56.38 points to 2,856.05 and the Nasdaq Composite Index tumbled 208.28 points to 8,681.27.

Apple’s quarterly earnings beat analysts’ expectations, but revenue growth was flat on a year-over-year basis. Apple also declined to provide guidance for the June quarter. Amazon (AMZN) saw its sales jump by 26% in the first quarter, but its costs have also risen. The e-retail giant warned it plans to spend $4 billion on coronavirus-related measures through June. Amazon also warned of possible second-quarter loss.

"The current crisis is demonstrating the adaptability and durability of Amazon's business as never before, but it's also the hardest time we've ever faced," said Amazon chief Jeff Bezos. "If you're a shareowner in Amazon, you may want to take a seat because we're not thinking small. I'm confident that our long term-oriented shareowners will understand and embrace our approach."

Willie Delwiche, investment strategist at Baird, commented: “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.”

Despite the strong stock performance in April, Phillip Colmar and Santiago Espinosa, strategists at MRB Partners, urged caution.

“The sharp relief rally in equities has now moved ahead of underlying fundamentals, leaving room for near-term disappointments,” they wrote. “Many authorities are looking to reopen their economies but doing so safely and to near previous output levels will require a series of medical breakthroughs and widespread distribution of the treatment.”

More than 3.2 million coronavirus cases have been confirmed around the world, with more than 1 million infections in the U.S. alone.

British Prime Minister Boris Johnson promised to unveil a “comprehensive plan” next week to lift the country’s lockdown.

Overnight in Asia, China’s Shanghai Composite and Hong Kong’s Hang Seng were both closed for holiday, while Japan’s Nikkei-225 dropped 2.84%.

In Europe, Britain’s FTSE-100 dropped 1.84%, while France’s CAC-40 and Germany’s DAX were closed for holidays.

Crude oil futures jumped 5.84% at $19.94 per barrel, Brent crude gained 1.1% at $26.77. Gold futures fell 0.4%.

The euro gained 0.24% at $1.0979 while the pound sterling slipped 0.56% at $1.2523.