Following a very strong month of April for the market, stocks are kicking off May on a decidely more downbeat note. Both Amazon and Apple beat revenue expectations last night, but neither stock is helping the market this morning as uncertainty about the next three months, and beyond, is trumping a look back at the last quarter, which was only impacted by the pandemic near its end.
ECONOMIC EVENTS: In U.S. data, Markit's manufacturing PMI was revised slightly lower to 36.1 in the final April print. That's down from the 36.9 flash reading and down 12.4 points from the 48.5 reading in March. The ISM manufacturing index dropped 7.6 points to 41.5 in April. Construction spending increased 0.9% in March.
TOP NEWS: Shares of Amazon (AMZN) are down 7.5% despite the company reporting Q1 revenue that was well above consensus forecasts. The company's profits in the quarter missed expectations and CEO Jeff Bezos warned shareowners "to take a seat, because we're not thinking small." The company would expect to make $4B or more in profit in the coming quarter "under normal circumstances," but "these aren't normal circumstances" and Amazon expects to "spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe," Bezos stated in last nights earnings release. Contrary to the slide in the stock, a number of Wall Street analysts are raising their price targets on Amazon, with several taking their targets up to $3,000 per share.
Apple (AAPL) shares are fractionally lower after the company reported better than expected results for the quarter ending in March, boosted its quarterly dividend by 6% and authorized an additional $50B for share repurchases. However, the iPhone maker gave no formal guidance for its result in the new quarter, which is a break from its typical practice, and said it saw downward pressure on demand, particularly for iPhone and wearables, during the last three weeks of the quarter.
Tesla (TSLA) shares have plunged by 10% following a series of tweets from CEO Elon Musk, including one that said "Tesla stock price is too high imo." In addition to calling the stock price "too high," the tweet calls into question if Musk has broken an agreement with the SEC by commenting on his company's stock via the microblogging service after having previously been in trouble for doing the same.
Boeing (BA) announced a bond offering that includes debt instruments with an aggregate principal amount of $25B across seven tranches with maturities ranging from three to 40 years. In a related statement, Boeing said, "We're pleased with the response to our bond offering today, which is one of several steps we're taking to keep liquidity flowing through our business and the 17,000 companies in our industry's supply chain. The robust demand for the offering reflects strong support for the long-term strength of Boeing and the aviation industry...As a result of the response, and pending the closure of this transaction expected Monday, May 4, we do not plan to seek additional funding through the capital markets or the U.S. government options at this time."
Additionally, shares of Gilead (GILD) are down 7% following the company's earnings report last night. This morning, at least three Wall Street firms downgraded the stock, which has been stronger of late amid optimism about its remdesivir drug being studied as a treatment for COVID-19.
MAJOR MOVERS: Among the noteworthy gainers were Fortune Brands (FBHS) and Clorox (CLX), which gained a respective 6% and 5% following their earnings reports.
Among the notable losers were Exxon Mobil (XOM) and Chevron (CVX), which are down 6% and 4%, respectively, after reporting on their quarterly results and cutting their spending plans in response to the current oil price environment.
INDEXES: Near midday, the Dow was down 607.18, or 2.49%, to 23,738.54, the Nasdaq was down 300.29, or 3.38%, to 8,589.26, and the S&P 500 was down 85.36, or 2.93%, to 2,827.07.