Dow sinks sharply after Trump threatens China with tariffs over coronavirus: May 1, 2020

By CNN Business

Updated 8:17 p.m. ET, May 1, 2020
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9:37 a.m. ET, May 1, 2020

Stocks kick off May with losses

From CNN Business' Paul R. La Monica

US stocks opened lower Friday after President Trump hinted that there could be new tariffs imposed on China as a result of the Covid-19 outbreak. Trump said late Thursday that the trade deal with China is now "secondary to what took place with the virus" and made the unfounded claim that the novel coronavirus originated in a Chinese lab.

Stocks fell Thursday but still posted sizable gains in April. It was the best month for the Dow and S&P 500 since January 1987. Investors were also weighing uncertain outlooks from tech giants Apple (AAPL) and Amazon (AMZN) and weak results from oil titans Exxon Mobil (XOM) and Chevron (CVX).

8:25 a.m. ET, May 1, 2020

ExxonMobil posts its first loss in decades

From CNN Business' Matt Egan

ExxonMobil (XOM) posted its first quarterly loss following its 1999 merger as the largest US oil company grapples with the crash in crude.

Exxon revealed Friday a surprise loss of $610 million during the first three months of the year. The red ink was driven by the collapse in prices and a $2.9 billion charge linked to writedowns from the collapse in oil prices. 

Exxon has never reported a quarterly loss since its mega merger with Mobil in November 1999. It also announced it will slash its 2020 spending by 30% to $23 billion.

8:18 a.m. ET, May 1, 2020

United shares fall after posting its first loss in six years

From CNN Business' Chris Isidore

United Airlines (UAL) said it expects to burn through $40 million to $45 million a day, on average, during the course of the current quarter, even though it has already grounded about 90% of its flights for the quarter.

But the airline said late Thursday it has the resources to weather the current coronavirus crisis, despite saying that it has taken demand for air travel to "essentially zero." As of Wednesday, the company said it has $9.6 billion.

The guidance comes as United reported its first loss since the first quarter of 2014. Overall it reported a loss excluding special items of $639 million, worse than a loss of about $500 million on that basis forecast by analysts surveyed by Refinitiv. The net loss for the quarter came to $1.7 billion.

The company had already warned of a total pre-tax loss of $2.1 billion. Its executives will speak with investors later this morning.

United shares fell 5% in premarket trading. The stock will be down nearly 70% for the year if premarket losses hold.

7:29 a.m. ET, May 1, 2020

Chevron will cut spending by up to $2 billion to cope with cheap oil

From CNN Business' Matt Egan

Chevron (CVX) is hunkering down to defend its coveted dividend from the oil crash.

For the second time in six weeks, the No. 2 US oil company is trimming its once-ambitious spending plans. Chevron pledged Friday to conserve cash by slashing its 2020 spending targets by up to $2 billion.

That would bring the company's budget 30% below its goals entering the year.

Chevron is hoping the moves will allow the oil giant to avoid having to lower its dividend -- something its European rivals are already doing. Chevron hasn't touched its dividend since the Great Depression.

Read more here.

6:59 a.m. ET, May 1, 2020

Popeyes sales soar thanks to its chicken sandwich

From CNN Business' Danielle Wiener-Bronner

Sales at Popeyes restaurants open at least 17 months soared 26% globally in the first quarter compared to the same period last year, thanks to the wild popularity of the chain's chicken sandwich. In the United States, that figure was 29%.

Popeyes first introduced the menu item in August. Customers flocked to the restaurant chain and the sandwich sold out in less than two weeks. The brand said at the time that the "extraordinary demand" took it by surprise.

The sandwich — a buttermilk battered and breaded white meat filet, topped with pickles and a choice of mayo or a spicy Cajun spread and served on a toasted brioche bun — was billed as Popeyes' "biggest product launch in the last 30 years." After taking great pains to prevent another shortage, the chain brought the menu item back in November

Restaurant Brands International, which owns Popeyes, also owns Burger King and Tim Hortons. Those restaurants took a hit in the first quarter because of the coronavirus pandemic.

Sales at Burger King locations open at least 13 months fell nearly 4% globally compared to last year. At Tim Hortons, sales fell about 10%. Total revenues for the quarter fell to about $1.3 billion, a roughly 3% decline compared to the same period last year.

6:47 a.m. ET, May 1, 2020

The economy is collapsing like never before. Yet US stocks just posted their best month since 1987

From CNN Business' Matt Egan

The coronavirus pandemic has exposed a gaping disconnect between unprecedented economic pain on Main Street and extreme optimism on Wall Street.

The US economy is collapsing as never before. More than 30 million Americans have filed for unemployment. Millions of small businesses have requested forgivable loans to stay alive. And US GDP could decline at a breathtaking annualized rate of 40% during the second quarter.

And yet the stock market is racking up massive gains. Even after retreating on Thursday, the S&P 500 spiked 13% in April. It was the best month for US stocks since January 1987.

It's common for Wall Street to price in a recovery long before Main Street feels it. The stock market is not the economy, after all. Investors look three to six months out into the future.

Yet the risk is that the slingshot in stocks leaves investors ill-prepared for the health and economic challenges that lie ahead.

The market is pricing in something like a smooth-to-perfect recovery. But we shouldn't expect it will go that way because the virus is a wildcard," said Brian Nick, chief investment strategist at Nuveen, which manages more than $1 trillion.

Read more here.

8:44 a.m. ET, May 1, 2020

US futures point to a sharply lower open

From CNN Business' Jordan Valinsky

US stock futures are pointing lower after wrapping up a strong April. The Dow and the S&P 500 both logged their best monthly performance since January 1987.

Tech stocks were the hardest hit after Apple and Amazon posted stronger-than-expected earnings but warned that they face tremendous headwinds in the current quarter during the coronavirus pandemic.

Investors fear tech companies, which have buoyed the market during the past several weeks, may not be able to maintain their strength.

Here's where futures stand at 6:15 am ET:

6:26 a.m. ET, May 1, 2020

Boeing raises $25 billion

From CNN Business' Chis Isidore

Boeing (BA) won't be needing a federal bailout after all.

The troubled aircraft maker said Thursday that it is raising $25 billion through a bond offering — a massive financial boost that Boeing says will keep it from having to tap into the CARES Act.

US lawmakers passed the $2 trillion coronavirus economic rescue package in March, which included provisions to help airlines and other businesses that have been hurt by the coronavirus pandemic. Boeing is eligible for government loans through the act.

"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," Boeing said in a statement.

The company said it also doesn't believe it will need to raise more money in the capital markets after the bond issues, which carry maturities ranging from three to 40 years.

Read more here.

6:28 a.m. ET, May 1, 2020

Ryanair will cut 3,000 jobs and keep 99% of flights grounded through June

From CNN Business' Hannah Ziady

Ryanair (RYAAY) is planning to cut up to 3,000 jobs and operate less than 1% of flights through June after warning that passenger demand and pricing will take at least two years to recover from the coronavirus pandemic.

Europe's largest airline by passenger numbers said in a statement Friday that its restructuring program will begin in July and could result in the loss of as many as 3,000 jobs among pilots and cabin crew, or about 15% of its workforce.

Pay cuts of up to 20% and the closure of a number of aircraft bases across Europe are also on the cards, Ryanair said.

CEO Michael O'Leary will take a 50% pay cut for the rest of the financial year to March 2021, it added.

Read more here.