Stock market live Friday: Dow down 600, Amazon drops 7%, Musk says Tesla is ‘too high’

U.S. equities fell on Friday, the first trading day of May, following the biggest monthly gain for stocks in more than 30 years in April. Stocks were weighed on heavily by technology earnings, specifically e-commerce giant Amazon, which said plans to spend all its second-quarter profits on its coronavirus response. Investors also grew worried about an escalation in tensions between the U.S. and China. Here’s what happened:

• Declining stocks outpaced advancing stocks 2,537 to 435 or almost 6 to 1 on the NYSE
• S&P 500 closed down 2.81% for its third negative day in four and worst day since April 21
• This week: S&P 500 closed down 0.21% for its second straight negative week     
• This year: S&P 500 is down 12.38%, on pace for its worst year since 2008
• From record: S&P is 16.58% below its intraday all-time high of 3,393.52 from Feb. 19
• From March 23 52-week Low: S&P is 29.15% off its 52-week low of 2,191.86
• Dow closed down 2.55% for its worst day since April 21 when the Dow lost 2.55%
• This week: Dow closed down 0.22% for its second straight negative week    
• This year: Dow is down 16.87%, on pace for its worst year since 2008
• From record: Dow is 19.77% below its intraday all-time high of 29,568.57 from Feb. 12
• Nasdaq Composite closed down 3.2% for its third negative day in four
• This week: Nasdaq closed down 0.34% for its second straight negative week   
• From record: Nasdaq is 12.54% from its intraday all-time high of 9,838.37 from Feb. 19 — Francolla

U.S. stocks closed the first trading day of May with sharp declines, closing around their session lows. The Dow Jones Industrial Average fell 617 points or 2.53%. The S&P 500 and Nasdaq Composite fell 2.79% and 3.2%, respectively. Amazon registered a 7.6% decline on Friday. — Fitzgerald 

The Food and Drug Administration has granted emergency use authorization for Gilead’s remdesivir drug to treat the coronavirus, President Donald Trump announced Friday. Gilead shares pared losses, but were still down 4% in trading Friday. Earlier in the week, White House health advisor Dr. Anthony Fauci said data from a coronavirus drug trial testing Gilead’s drug showed “quite good news” and sets a new standard of care for Covid-19 patients.— Feuer

Bank of America CEO Brian Moynihan said on CNBC’s “Closing Bell” that the bank is seeing consumer spending creep upward in areas such as clothing, restaurants and gas. “The good news is, given all that’s gone on, it came down about 30%, it’s kind of hit a flat space, and you’re seeing it grow. But the aggregate amount of activity is more similar to the fall of ’17,” Moynihan said. Moynihan also said that the bank currently has about 231,000 loans set up through the Paycheck Protection Program, totaling roughly $15 billion to $20 billion, and that the bank is in the process of sending promissory notes out to those clients. —Pound

The major U.S. stock averages were down sharply with one hour left in the trading session as a massive drop in Amazon shares led big tech lower. Investors also sold equities amid concerns over a potential increase in U.S.-China tensions. The Dow traded about 600 points lower, or 2.5%. The S&P 500 slid 2.8% while the Nasdaq Composite was down 3.1%. —Imbert

Shares of Tesla dropped more than 10% on Friday after Elon Musk tweeted that the electric-car maker’s shares are priced “too high.” Believe it or not, it’s not the first time the CEO has talked in negative terms about his own stock. And if history is any guide, the negative commentary could serve as a good selling opportunity for Tesla investors. Baird Equity Research reviewed the past four incidents where Musk spoke negatively about Tesla’s stock price. In the three most recent events, the shares turned negative in the following year, while in the 2013 episode, Tesla plunged 30% in the following month. It eventually recovered over the one-year period. –Li

When the Treasury makes its quarterly refunding announcement Wednesday, some bond strategists expect it to include the new 20-year bond it said it would issue this year. The Treasury last issued a 20-year in 1986. The bond should be well received in a market looking at a 10-year with barely a yield, at just 0.63%.The 20-year was announced in January when the U.S. was looking at just a $1 trillion deficit. But with emergency spending already more than $2 trillion to battle the coronavirus, the deficit is ballooning and so will the Treasury’s issuance. When it was first announced, strategists thought the Treasury would reduce its issuance of 10-year or 30-year bonds, but it now appears the Treasury will just add it in to the mix to expand its refunding.Michael Schumacher, director strategy at Wells Fargo, said he expects the Treasury to announce it will auction $21 billion 20-year notes in the second quarter. He also expects Treasury to announce that it will issue $330 billion in notes and bonds this quarter, up from $240 billion in the first quarter. He said Treasury is issuing a stunning $1.9 trillion in bills in the second quarter to fund aid programs, but it is expected to reduce that issuance sharply next quarter. He estimates bill issuance will be about $260 billion in the third quarter, as the Treasury again ups its issuance of bonds.  — Domm

The Wall Street Journal asked Tesla CEO Elon Musk if his tweets about Tesla’s stock price being too high were a joke and if they were vetted before he sent them, and Musk responded, “No.” As part of an agreement with the Securities and Exchange Commission, Musk is supposed to be limited in what information he can share on Twitter about his company. Shares of Tesla were down about 10% in afternoon trading. —Pound

Softbank’s international unit has cut about 10% of its workforce according to a source familiar with the matter, CNBC’s Deirdre Bosa reports. The layoffs impact about 2,000 employees total, but not in any of Softbank’s portfolio companies. Softbank is slated to report quarterly earnings later this month. Bloomberg first reported news of the layoffs. Softbank declined to comment. —Pound

More than eight stocks fell at the New York Stock Exchange for every advancer on Friday as Wall Street started the new month on the wrong foot. Overall, 2,566 NYSE-listed stocks were down while 304 traded higher, FactSet data shows. —Imbert

New York Gov. Andrew Cuomo announced on Friday that the state’s schools and colleges will remain closed for the remainder of the academic year and will continue distance learning to curb the spread of the Covid-19 outbreak. Cuomo said state officials don’t believe schools could develop a plan to reopen that would keep students and educators safe in time. He said a decision on summer school will be announced at the end of May.  “We want schools now to start developing a plan to reopen,” Cuomo said. “The plan has to have protocols in place that incorporate everything that we are now doing in society and everything that we learned.” —Higgins-Dunn, Kim

The major averages were sharply lower around midday as Amazon shares sold off while concerns over U.S.-China tensions increased. The Dow traded about 600 points lower, or more than 2%. The S&P 500 slid 2.8% while the Nasdaq Composite dropped 3.1%. Wall Street was coming off its biggest one-month rally in over 30 years before Friday’s sell-off. —Imbert

The coronavirus pandemic has devastated the airline industry, and Evercore ISI said in a new note that American Airlines may be in one of the worst positions.The bank slashed its price target on the stock by 90% to $1 per share, saying falling revenues and rising debt levels make for an “unsustainable” situation.  —Pound

Elon Musk’s tweet that Tesla shares are too high – which caused shares to immediately drop 7% — is not the first time the active twitter user has moved his company’s stock price with a tweet. In 2018 he tweeted that he had “funding secured” to take Tesla private, which kicked off an investigation by the Securities and Exchange Commission. Musk and the SEC came to an agreement in April 2019, which outlined topics that he could not tweet about without first obtaining “pre-approval of an experienced securities lawyer.” The list included “the Company’s financial condition, statements, or results, including earnings or guidance” as well as things like “potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures.” After outlining a list of prohibited topics, the agreement included a footnote which reads: ” This list is not intended to be an exhaustive list of topics that may be material for purposes of the federal securities laws.” – Stevens

Shares of Tesla dropped 7% on Friday after CEO Elon Musk commented on the price of the stock. “Tesla stock price is too high imo,” he said in a tweet. – Stevens

Even as major stock market averages have been surging higher off their March lows, investor money has largely flocked to the sidelines. That’s evident in the swelling balances of money market funds, which have taken in $1.1 trillion over the past nine weeks, according to Bank of America Global Research. That has come at a time when the Dow Jones Industrial Average has soared 31% from March 23. The global market cap gain since then has been $15 trillion, BofA said, but the move to the sidelines indicates that retail investors have not participated in the rally. – Cox

National Economic Council director Larry Kudlow told CNBC on Friday that the United States would hold China accountable for the coronavirus pandemic. “On the China business, it’s up in the air. They are going to be held accountable for it. There’s no question about that. How, when, where and why — I’m going to leave that up to the president,” Kudlow said on CNBC’s “Squawk on the Street.” China has been criticized by the U.S. and other countries for a lack of transparency about the coronavirus outbreak. President Donald Trump said Thursday that he was considering slapping new tariffs on China due to the country’s handling of the outbreak. —Pound

The U.S. manufacturing slump intensified in April, though not by as much as economists feared amid the coronavirus pandemic. The ISM Manufacturing Index fell to 41.5, better than Wall Street estimates of 35 but down sharply from March’s 49.1. The measure is a diffusion gauge, measuring the percentage of firms seeing expansion, so a reading below 50 indicates contraction. While virtually every category showed sharp declines, the overall index was held higher by inventories, which showed a reading of 49.7, which actually was up 2.8 percentage points from the March reading. New orders were at 27.1, while production fell to 27.5. — Cox

Clorox on Friday reported that its fiscal-third quarter sales climbed 15% as consumer demand for its cleaning products soared in response to the coronavirus pandemic. The company also raised its fiscal 2020 forecast. Clorox reported fiscal third-quarter net income of $241 million, or $1.89 per share, up from $187 million, or $1.44 per share, a year earlier. Net sales rose 15% to $1.78 billion. Organic sales jumped 17% in the quarter. Clorox’s cleaning segment, which includes its namesake disinfectant wipes, bleach and Pine-Sol, saw sales growth of 32% in the quarter. Shares of Clorox rose 4.7% in morning trading on Friday, while the broader market tanked. —Lucas, Fitzgerald 

Exxon Mobil on Friday reported its first loss in years as oil prices dropped to historic lows. The oil giant lost $610 million in the first quarter due to $2.9 billion in writedowns tied to falling oil prices. Exxon posted a GAAP loss of 14 cents per share, and a non-GAAP profit of 53 cents per share. In the same quarter a year earlier the company earned $2.35 billion, or 55 cents per share, on revenue of $63.63 billion. The company said that oil-equivalent production rose 2% year-over-year to 4 million barrels per day. “COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” CEO Darren Woods said in a statement. Shares of Exxon slipped 1% on Friday. – Stevens

U.S. equities opened in negative territory on the first trading of May. The Dow Jones Industrial Average dropped 420 points or 1.7%. The S&P 500 and the Nasdaq Composite fell 1.85% and 2.16%, respectively. — Fitzgerald 

Shares of Boeing were up 2% premarket, making it one of the only major stocks in positive territory, after announcing that it raised $25 billion in a bond offering. The aerospace giant said that it will not seek federal help as it struggles through the coronavirus pandemic. The bond issuance includes seven different bonds with maturities ranging from three to 40 years, the company said. — Pound, Josephs

The damage the coronavirus is having on the casino industry became clear on Friday on news that revenue in Macau fell 96.8% in April. Gambling revenue in the Chinese territory is down 68.7% this year. Shares of Wynn Resorts and Las Vegas Sands fell 3% in premarket trading on Friday. Shares of MGM Resorts dropped 7% before the opening bell. — Fitzgerald 

Chevron CEO Michael Wirth said that the drop-off in demand wrought by the coronavirus pandemic has likely reached a bottom. “This quarter looks like in our industry we’re seeing a bottom … first quarter we were on a bit of a downward trajectory through the quarter, certainly accelerating as we went through the month of March. I think in April and May we’re finding a bottom in demand,” he said on CNBC’s “Squawk Box.” The comments came after the company reported first quarter earnings results. Chevron reported EPS of $1.93, which included $660 million in one-time favorable items, and $31.5 billion in revenue, helped by downstream margins and increased production in the Permian. The company also announced additional cuts to its 2020 capital spending plan. In the same quarter a year earlier the oil giant earned $1.39 per share on $35.20 billion in revenue. Looking ahead, Wirth said that it’s going to be a “very, very tough quarter” despite a potential rebound in demand, while reiterating that the company is committed to maintaining its dividend. – Stevens 

April’s rally wasn’t enough to put the November-April six month stretch in the green, which could signal a choppy next six months, according to a note from Jeffrey Hirsch and Christopher Mistal from the Stock Trader’s Almanac.The Dow was down 10% over the last six months, which is often referred to as the “best six months” as the flipside to the “sell in May” adage. Historically, that means that stocks are likely to lose ground in the next six months as well, the note said. “When the market is down during the ‘Best Six Months’ it’s an indication that there are more powerful forces than seasonality at work and when the bullish season is over those forces may really have their say,” the note said. — Pound

Stocks linked to the reopening of the economy — retailers and airlines— fell in premarket trading on Friday. Reopening stocks were leading the charge in April on hopes of an earlier than expected lifting of stay-at-home orders and a rebound in consumer behavior. Shares of Tapestry fell 3.5% in premarket trading. TJX Companies and Macy’s dropped more than 3% and Nordstrom fell nearly 6%. Kohl’s dropped 5%. American Airlines ticked 5% lower and United and Delta Air Lines fell about 4.5% each. Southwest Airlines fell nearly 3%. —Fitzgerald 

The tech giant reported mixed earnings on Thursday after the bell but analysts say Apple is well-positioned as the 5G cycle begins to ramps up. “We remain positive on the long-term eco-system and product development opportunities, coupled with a strong balance sheet and brand position,” Baird said. “With increased confidence in the 5G iPhone launch and stretched iPhone replacement cycles, Apple remains top pick,” Morgan Stanley added. — Bloom

Shares of Apple were down about 2.6% in premarket trading after the company declined to announce guidance for its fiscal third quarter. The tech company did report better than expected earnings and revenues for its second quarter, but iPhone revenue was down 7% compared with the same quarter last year. Apple’s stock jumped 15.3% in April. — Pound

Shares of Amazon fell 4.6% in premarket trading after the technology giant warned that it planned to spend all of its second quarter profit on dealing with the coronavirus pandemic. “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Amazon CEO Jeff Bezos said in a press release announcing its first quarter results. The company did beat Wall Street estimates for revenue for its first quarter but missed on profits.  Amazon rallied nearly 27% in April. — Pound

April was the biggest monthly gain for stocks in over 30 years, largely driven by hopes of reopening the economy sooner-than-expected from the coronavirus shutdown. 

It was the third-biggest monthly gain for the S&P 500 since World War II. The Dow had its fourth-largest post-war monthly rally and its best month in 33 years. The S&P 500 rose 12.7% in April and the Dow gained 11.%. The Nasdaq Composite closed 15.5% higher for April, logging in its biggest one-month gain since June 2000. — Fitzgerald 

U.S. equity futures fell on Friday and pointed to sharp losses at the open, dragged down by technology earnings. Dow Jones Industrial Average futures fell about 450 points or about 2%. S&P 500 futures fell 2%. Nasdaq 100 futures were down 2.6%.

Dragging down the futures was e-commerce giant Amazon, which fell 5% in premarket trading and Apple, which fell nearly 3%. Both technology stocks reported quarterly earnings that did not satisfy investors.  Both Apple and Amazon are among the companies that led the S&P 500′s comeback from the late-March lows and were two of the best performers in April. 

On Thursday, Wall Street finished out its biggest month in over 30 years, with the S&P 500 gaining 12.7% while the Dow advanced 11.1%. Stocks, however, fell on Thursday as investors digested another week of jobless claims. — Fitzgerald 

—with reporting from CNBC’s Michael Bloom, Jeff Cox and Fred Imbert.

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