US Stocks Retreat On Earnings, Sino-US Tensions

US stock markets went into reverse again on Friday following disappointing results from Amazon, Exxon Mobil and other companies amid worries of increased tensions between China and the United States as the White House points the finger over the coronavirus.

The Dow Jones Industrial Average dropped 2.6 percent, or more than 620 points, to finish at 23,723.

The S&P 500 shed 2.8 percent to 2,830, while the Nasdaq Composite Index dropped 3.2 percent to 8,604.

The losses marked an ugly start to a new month after major indices scored their biggest monthly gains in decades in April.

Amazon plummeted 7.6 percent after the company cautioned that earnings in the second quarter would be entirely wiped out by expenses related to Covid-19 as it works to keep up with surging demand at a time when many brick-and-mortar stores are closed.

Exxon Mobil was another big loser, shedding 7.1 percent as it reported a US$610 million loss in the first quarter, its first loss in decades. The oil giant faced sceptical questions from analysts on its rising debt levels and continued support for a generous dividend.

Analysts also pointed to comments from President Trump claiming that the coronavirus originated in a Chinese lab.

Trump threatened tariffs on Beijing, escalating a blame game between the two biggest economies and reviving investors' trade war worries.

Trump "clearly wants to make China bashing a central platform for his re-election campaign," said LBBW's Karl Haeling.

"Let's hope he just talks but doesn't really do anything" significant, he said.

Friday's session punished several travel-oriented companies that clawed back some of their losses in April after devastating drops in March. These included American Airlines, down 11.4 percent, Marriott International, down 6.8 percent, and Boeing, down 5.5 percent.

Tesla also plunged, losing 10.3 percent after Chief Executive Elon Musk said on Twitter that shares were overvalued. (AFP)