× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Wall Street returns to losses as Buffett dumps airlines, China tensions flare

By Reuters | May 5th 2020

US stocks were set to fall on Monday as a US-Chinese spat about the origins of coronavirus outbreak worsened while billionaire Warren Buffett’s admission he had dumped his airline shares crushed major US carriers.

Delta Air Lines, American Airlines Co, Southwest Airlines Co and United Airlines fell between 9 per cent and 11 per cent in premarket, after Berkshire Hathaway chief Buffett told reporters of the move over the weekend, saying “the world has changed” for the industry.

The comments, and fall in airline operators, also shaved more than 4.7 per cent off planemaker Boeing Co’s shares.

Berkshire itself posted a record loss of nearly $50 billion (Sh5.3 trillion) and Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, said Buffett’s relatively bleak reading of the market had hit home with investors.

“I did not get the sense that he sees an enormous amount of opportunity out there right now, but is instead holding up a very high level of cash,” he said.

On China, US Secretary of State Mike Pompeo said there was “a significant amount of evidence” that coronavirus emerged from a Chinese lab. An editorial in China’s Global Times said Pompeo was “bluffing”.

The statements follow a grim start to May for Wall Street last week as President Donald Trump revived the threat of new tariffs against China in response to the pandemic. “When you think how nervous markets got about the US-China trade war then if this theme continues you can’t help thinking that the end game is far worse than it would be from a simple trade war,” said Jim Reid, a strategist at Deutsche Bank.

The S&P 500 index’s 29 per cent recovery from its March lows stands to be tested as investors weigh renewed US-China tensions and the economic damage of the health crisis.

Investors are also awaiting factory orders data for March, expected to show a sharp decline.

With more than half of the S&P 500 companies having reported earnings so far, analysts now see first-quarter S&P 500 earnings falling 12.7 per cent from a year ago, and an even sharper 37.8 per cent decline for the second quarter.

Tyson Foods tumbled 7.3 per cent as the company said it would temporarily close plants as needed and expects meat sales to fall in the second half of this year as shutdowns hammer restaurants and other food outlets.  

Covid 19 Time Series


Share this story
Remittances dry up as Covid-19 crisis ravages the world
Some 270 million migrants sent Sh59 trillion home to developing countries in 2019
Absa Bank net profit for 3 months up 24pc
The performance was mainly driven by growth in interest income, particularly in the small and medium enterprises.