US open: Tech stocks slump amid heightened US-Sino tensions
Wall Street stocks opened lower on Friday as global Covid-19 cases surpassed 15.5m and a flare-up in US-Sino tensions weighed on sentiment.
As of 1540 BST, the Dow Jones Industrial Average was down 0.49% at 26,522.62, while the S&P 500 was 0.69% softer at 3,213.21 and the Nasdaq Composite started out the session 1.35% weaker at 10,320.03.
The Dow opened 129.71 points lower on Friday, extending losses recorded in the previous session after the Labor Department revealed initial jobless claims rose unexpectedly in the week ended 18 July.
Tensions between Washington and Beijing were firmly in focus at the bell on Friday after China ordered the US to close its consulate in Chengdu in retaliation for a similar move made by the White House regarding the Chinese consulate in Houston.
SpreadEx's Connor Campbell said: "Having already seen heavy losses on Thursday night, the Dow Jones avoided the kind of declines suffered in Europe – despite a pair of disappointing PMIs, and fears over US-China tensions.
"Heading into the weekend, investors are going to be anxiously scanning the papers not only for the latest Covid-19 numbers, but for signs the relationship between the US and China is about to take another turn for the worse."
Also in focus, the total global tally of confirmed cases of Covid-19 topped 15.5m on Friday, according to John Hopkins University - with 4.04m total cases and a death toll of 144,305 in the US alone and Louisiana governor Jonathan Bel Edwards warning that the state's healthcare system was approaching breaking point due to the outbreak and its management.
Shares in the likes of Amazon, Alphabet, Apple, Netflix, PayPal, eBay and Tesla were weighing on major indices in early trading amid concerns of another technology bubble.
Intel shares recorded the largest declines by far and large - down more than 17% - after posting disappointing guidance and being downgraded to 'hold' from 'buy' by analysts at Bank of America.
In earnings news, Honeywell shares were down in early trading after posting a 30% fall in quarterly profits, while American Express was also in the spotlight after revealing second-quarter net income had tumbled from $18bn a year ago to $257m in 2020.
On the macro front, business activity increased to a six-month high in July, according to data firm IHS Markit, but businesses revealed a drop in new orders amid a resurgence in new Covid-19 cases across the US. IHS Markit's flash US Composite PMI Output Index rose to a reading of 50.0 for July - up from 47.9 in June to end a run of five straight monthly contractions.
Elsewhere, sales of new US homes rose a sharp 13,8% in June, a second straight monthly increase following the country's exit of strict Covid-19 lockdown measures. The Commerce Department said June's gain pushed sales of new homes to a seasonally adjusted annual rate of 776,000.