US stocks open lower as major companies report lower earnings

US stocks opened lower Friday, reflecting downbeat earnings by major companies and continued fears about the impact of the coronavirus pandemic on the economy.

In early trading, the Dow Jones Industrial Average fell 441.93 points, or 1.82 percent, to 23,899.37. The S&P 500 declined 1.95 percent. The Nasdaq Composite was down 2.16 percent.

The sour opening for the first day in May followed a strong April.

Amazon fell 5.80 percent in early trading after reporting record sales on Thursday but lower earnings.

The company said it will spend $4 billion or more — the predicted operating profit for its entire coming quarter — just on COVID-19-related expenses, such as personal protective equipment, cleaning facilities, higher wages for hourly teams and expanding its own COVID-19 testing capabilities.

Apple declined 0.39 percent. It reported a slight uptick in year-over-year revenue on Thursday despite supply chain disruptions and closure of its stores in China and worldwide due to the coronavirus pandemic. Apple offered no earnings guidance for the current quarter because the pandemic creates too many unknowns.

The Dow closed down 288.14 points Thursday, but finished up about 11 percent for April – the largest one-month gain since 1987. The S&P 500 gained about 12.7 percent in April.

The market bottomed March 23 when the Federal Reserve said it would act aggressively to boost the sagging economy hit hard by the coronavirus pandemic. But the market appears to be betting on trouble ahead.

Consumer spending declined 7.5 percent in March, the US Commerce Department reported Thursday. It was the sharpest monthly drop since 1959. Consumer spending represents about two-thirds of the US economy and the drop pulled the economy down.

The gross domestic product, the value of all goods and services produced in a year, declined 4.8 percent in the first quarter.

Retailers were hit hard as consumers trimmed spending. Shares of Kohl's were off 1.95 percent early in Friday's session. Gap said it was short of cash and suspended rent payments. Upscale retailers Neiman Marcu, Nordstrom and JCrew are reportedly considering bankruptcy.

But Macy's plans to reopen 68 stores next week and hopes to have all 775 stores open in six weeks. Nevertheless, its stock lost 2.90 percent.

The Labor Department said jobless claims for the week ended April 25 reached 3.8 million. Since mid-March, about 30 million people have filed for unemployment benefits.

But the worst may be over. Claims have dropped to 4.4 million and 5.2 million in the last three weeks. However, some analysts believe there could be a second wave of coronavirus-related layoffs.

On Friday, Exxon Mobil reported a $610 million loss in the first quarter – its first quarterly loss in three decades -- after oil prices dropped to historic lows compared with a $2.35 billion profit for the same period a year ago. The company said oil production rose 2 percent year-over-year to 4 million barrels a day.

In early trading, Exxon Mobil lost 1.69 percent.

Competitor Chevron reported a profit of $1.93 a share, beating the consensus Wall Street estimate of 68 cents a share. The company said it hopes to preserve its dividend and plans additional capital spending cuts. In early trading, Chevron dipped 1.73 percent.

Boeing said it had raised $25 billion in a bond offering and therefore would not need to take government aid. The aircraft manufacturer balked at giving the government an equity stake in return for a federal loan. In early trading, Boeing ticked up 0.13 percent.

United Airlines reported a quarterly loss of $2.57 a share, lower than a loss of $3.47 analysts expected. Revenue fell, but the company said it can bounce back when demand for air travel picks up. In early trading, United Airlines fell 2.94 percent.