Wall Street pauses after April's surge, airline stocks fall
Stock indexes are down slightly in midday trading on Wall Street Monday, as the market takes a pause following its best month in decades.
Airline stocks had some of the market’s sharpest losses after famed investor Warren Buffett said he’d dumped all his shares in the four biggest U.S. carriers. A ramping up of tensions between the Trump administration and China over the origins and handling of the coronavirus pandemic also weighed on markets around the world.
But big tech stocks, whose momentum has been nearly unstoppable in recent years, continued to rally and helped the market trim its early losses.
Tech stocks in the S&P 500 rose 0.9%, though, and they make up roughly a quarter of the index by market value, which gives them particularly big sway over the market. Microsoft, the biggest company in the index, rose 1.9%.
Earlier in the day, markets in Asia and Europe also fell to losses after tensions worsened between the world‘s two biggest economies.
Criticized over his handling of the crisis, President Donald Trump has tried to shift the blame to China. Beijing has repeatedly pushed back on U.S. accusations that the outbreak was China’s fault.
The antagonisms threaten the truce in a trade war between Washington and Beijing that was struck just before China began shutting much of its economy down in late January to fight the pandemic.
“We’re still battling with the notions of how and when we’ll bottom and how things will be different at the end of” the pandemic, said Keith Buchanan, senior portfolio manager at Globalt.
Reintroducing a tariff dispute just “adds another worrying point for the market,” he said.
Stocks in Hong Kong dropped 4.2%, while South Korea’s market lost 2.7%. In Europe, France’s CAC 40 fell 4.4%, Germany’s DAX lost 3.5% and the FTSE 100 in was down 0.1%.
Monday was the first opportunity for France, South Korea and other markets to catch up to the rest of the world, following their closures for holidays last week. Stock markets in Tokyo, Shanghai and Bangkok were among those closed for holidays on Monday.
The yield on the 10-year Treasury note dipped to 0.63% from 0.64% late Friday, and it‘s still well below the roughly 1.90% that it yielded at the start of the year. Yields tend to fall when investors are downgrading their expectations for the economy and inflation.
Benchmark U.S. crude oil rose 0.5% to $19.87 per barrel. U.S. crude has plunged from its perch of roughly $60 at the start of the year on worries about a collapse in demand and strained storage facilities. Brent crude, the international standard, fell 0.5% to $26.31 per barrel.
This will be another busy week for markets, with more than 150 companies in the S&P 500 scheduled to report their quarterly results. On Friday, the government will also show how many jobs were lost during April.