By Avantika Chilkoti and Stuart Condie 

Global stocks slumped Friday after Apple and Amazon.com reported earnings that highlighted the impact the coronavirus pandemic is having on the world's biggest companies.

Futures linked to the S&P 500 fell 1.8% early Friday, suggesting U.S. markets could open lower and extend Thursday's losses. The U.K.'s FTSE100 dropped 2.4%. Japan's Nikkei 225 closed down 2.8% and Australia's S&P/ASX 200 closed 5% lower. Markets in China, Hong Kong and across most of Europe were closed globally for the May Day holiday.

On Thursday, Amazon announced record revenue but disappointed on profits as coronavirus-related costs such as employee testing and higher wages added to expenses. Apple held off on providing guidance for the current quarter for the first time since late 2003. Both stocks have led markets higher in recent weeks.

"The biggest risk to markets from here is if the market starts to question the resilience of the big tech stocks," said Mike Bell, global market strategist at J.P. Morgan Asset Management.

After reporting earnings, shares in Apple dropped 3.2% and Amazon fell 5.4% in off-hours trading.

U.S. stock benchmarks clocked their largest percentage gains since 1987 last month. The S&P 500 was up 12.7% in April, while the Dow Jones Industrial Average gained 11.1%. The tech-heavy Nasdaq Composite jumped 15.5%, its biggest monthly gain since June 2000.

"If you have been involved in the market, there's a few reasons to take a little bit off the table and a pullback would be healthy," said Chris Weston, head of research for Pepperstone brokerage in Australia.

Investors will watch closely as a string of companies publish results Friday, including energy majors Exxon Mobil and Chevron.

The Institute for Supply Management is set to publish its manufacturing index reading for April later Friday. Analysts predict a sharp contraction as supply-chains were disrupted and demand for factory goods plummeted.

Brent crude, the global oil benchmark, dropped 0.8% to $26.26 a barrel, a muted move given wild swings in energy markets in recent weeks. Analysts expect demand for fuel to rise as lockdown rules are gradually lifted and supply eases as output cuts agreed by the Organization of the Petroleum Exporting Countries come through.

The yield on the 10-year U.S. Treasury note fell to 0.600% from 0.619% Thursday. Yields fall as bond prices rise.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

May 01, 2020 06:03 ET (10:03 GMT)

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