Dow futures fall more than 500 points after Wall Street wraps up best month in three decades

Stock futures fell sharply in Friday early morning trade as investors pored through the latest batch of big tech earnings after Wall Street wrapped up its best month in decades. Dow Jones Industrial Average futures traded 512 points lower, implying a Friday opening drop of about 472 points. S&P 500 and Nasdaq 100 futures also pointed to Friday opening declines for the two indexes.

Apple reported quarterly earnings that topped analyst expectations, but its revenue growth remained flat on a year-over-year basis. Also, the company did not offer guidance for the quarter ending in June amid uncertainty over the coronavirus outbreak. The tech giant’s stock traded more than 2% lower in after-hours trading.

Amazon, another tech giant, saw its shares tumble 4.8% in after-hours trading after announcing plans to spend all its second-quarter profits on its coronavirus response. The e-commerce behemoth also posted a first-quarter profit that missed analyst expectations.

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. Amazon rallied nearly 27% in April while Apple jumped 15.3%.

“Dependency on a handful of stocks has masked broadly based weakness in the past, and if they falter, could obscure broadly based improvements going forward,” said Willie Delwiche, investment strategist at Baird, in a note.

Wall Street was coming off its biggest monthly surge in over 30 years, with the S&P 500 gaining 12.7% while the Dow advanced 11.1%. It was the third-biggest monthly gain for the S&P 500 since World War II. The Nasdaq Composite closed 15.5% higher for April, logging in its biggest one-month gain since June 2000.

Those gains were driven in part by hopes of a potential treatment for the coronavirus. Earlier in the week, Gilead Sciences said a study of its remdesivir drug conducted by National Institute of Allergy and Infectious Diseases met its primary endpoint.

Dow futures fall more than 500 points after Wall Street wraps up best month in three decades, CNBC, May 1