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* U.S.-China trade spat back in spotlight
* Amazon slides as it sees possible Q2 loss
* U.S. manufacturing skids to 11-year low in April
* Indexes down: Dow 1.85%, S&P 500 2.03%, Nasdaq 2.02%
(Updates to open)
By C Nivedita and Shreyashi Sanyal
May 1 (Reuters) - Wall Street's main indexes fell on Friday
after President Donald Trump threatened to slap new tariffs on
China over the coronavirus crisis, while a profit warning from
Amazon added to the gloom.
Trump said late on Thursday his trade deal with China was
now of secondary importance to the pandemic, as his
administration crafted retaliatory measures over the outbreak.
The threat pulled attention back to the trade war between
the world's two largest economies that has kept global financial
markets on tenterhooks for nearly two years.
"It will not be easy to repair corporate carnage after this
perfect storm," said Peter Cecchini, chief market strategist at
Cantor Fitzgerald in New York.
"The trade war mattered because the stress was not with the
consumer this time; it was within companies' balance sheets."
The S&P 500 technology sector .SPLRCT shed 1.5% in early
trading, while the trade-sensitive Philadelphia Semiconductor
index .SOX fell 4%.
The consumer discretionary subindex .SPLRCD also came
under pressure after Amazon.com Inc AMZN.O said it could post
its first quarterly loss in five years as it was spending at
least $4 billion in response to the coronavirus pandemic. The
e-commerce giant's shares tumbled 6.3%. Apple Inc's AAPL.O Chief Executive Officer Tim Cook said
it was impossible to forecast overall results for the current
quarter because of uncertainty created by the virus after the
company reported sales and profits above expectations.
Shares of the iPhone maker reversed earlier losses to trade
0.5% higher. The energy sector .SPNY fell 4.7% as big oil firms Exxon
Mobil XOM.N and Chevron Corp CVX.N reported weak quarterly
results, feeling the pain inflicted by crashing oil prices.
With nearly half of the S&P 500 companies having reported
results so far, analysts expect a 14.4% fall in profits for the
first quarter and foresee an even sharper decline of nearly 37%
for the current quarter.
However, aggressive stimulus measures and hopes of reopening
the economy from virus-induced curbs helped the S&P 500 index
.SPX post its best month in 33 years in April. The benchmark
index is now 18% away from reclaiming a record high hit in
February.
At 10:27 a.m. ET the Dow Jones Industrial Average .DJI was
down 449.62 points, or 1.85%, at 23,896.10, the S&P 500 .SPX
was down 59.05 points, or 2.03%, at 2,853.38 and the Nasdaq
Composite .IXIC was down 179.27 points, or 2.02%, at 8,710.28.
U.S. manufacturing activity plunged to an 11-year low in
April, supporting analysts' views the economy was sinking deeper
into recession. However, the Institute for Supply Management's
(ISM) index reading of 41.5 last month was a smaller than the
expected drop to 36.9. "Markets have already moved beyond analysing the anticipated
immediate collapse in economic activity to focusing on the
duration of it," said Binay Chandgothia, portfolio manager at
Principal Global Investors in Hong Kong.
"While there are some initial signs of stabilization in
indicators that have already dropped precipitously, markets
would like to see continued progress – moving from a
stabilization phase to a recovery phase."
United Airlines Holdings Inc UAL.O slipped 8% after
posting a first-quarter loss of $1.7 billion.
Declining issues outnumbered advancers for a 7.15-to-1 ratio
on the NYSE and for a 5.66-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and two new lows,
while the Nasdaq recorded 12 new highs and six new lows.