Stocks are falling in early trading on Wall Street Monday, as the market gives back a bit more of the gargantuan gains made during its best month in decades.
Airline stocks had some the market's sharpest losses after famed investor Warren Buffett said he'd dumped all his shares in the four biggest US carriers.
Another ramp up in tensions between the Trump administration and China, this time over the origins and handling of the coronavirus pandemic, also weighed on markets around the world.
The S&P 500 was down 0.7 per cent, as of 9:54 am Eastern time.
The Dow Jones Industrial Average fell 256, or 1.1 per cent, to 23,466, and the Nasdaq was virtually flat.
The losses follow up on Friday's 2.8 per cent drop for the S&P 500, which itself came after the 12.7 per cent surge for the index through April.
Many professional investors have been skeptical of the market's huge rally given how much devastation is rolling through the economy.
Millions of workers are filing for unemployment benefits by the week as businesses worldwide shut down in hopes of slowing the coronavirus pandemic.
Even some of Wall Street's optimists said a pullback for the S&P 500 was overdue after it so quickly more than halved its losses from its February record.
Strategists at Morgan Stanley called it a necessary pause that refreshes.
Even while acknowledging the severe recession that everyone sees gripping the world, they say stocks can still resume their climb due largely to seemingly unlimited central bank support, unprecedented fiscal stimulus and a possible deceleration in the shocking numbers coming in on the economy.
Monday's biggest losses were concentrated in airlines, after Berkshire Hathaway disclosed that it sold all its stakes in American Airlines Group, Delta Air Lines, Southwest Airlines and United Airlines.
Berkshire Hathaway's Buffett is one of the stock market's most famous bargain hunters, and investors around the world parse every clue he gives about investing.
Over the weekend, he said he'd made a mistake in how he valued airlines.
Delta fell 7.6 per cent for the largest loss in the S&P 500. American fell 7.5 per cent, United lost 6.7 per cent and Southwest dropped 5.6 per cent.
Also potentially weighing on markets was Buffett saying that he's hanging onto his cash and hasn't made any big deals recently because he hasn't seen any on attractive terms.
Earlier in the day, markets in Asia and Europe also fell to losses after tensions worsened between the world's two biggest economies.
Some markets were also catching up to losses that hit the rest of the world while they were closed for holidays.
Criticised over his handling of the crisis, President Donald Trump has tried to shift the blame to China.
Beijing has repeatedly pushed back on US accusations that the outbreak was China's fault.
The antagonisms threaten to undo the truce in a trade war between Washington and Beijing that was struck just before China began shutting much of its economy down in late January to fight the pandemic.
A 4-page Department of Homeland Security intelligence report dated May 1 and obtained by The Associated Press contends that Chinese leaders intentionally concealed the severity of the pandemic from the world in early January.
It alleges, citing variances in trade patterns, that China was downplaying the severity of its outbreak, first reported in the central Chinese city of Wuhan, while stockpiling medical supplies.
The renewed possibility of the return of the trade war that had plagued markets since at least 2017 once again weighed on sentiment, Jingyi Pan of IG said in a commentary.
There is no public evidence of an intentional plot to buy up the world's medical supplies, though China did muzzle doctors who warned of the virus early on.
But it informed the World Health Organization of the outbreak on December 31; contacted the US Centers for Disease Control on January 3 and publicly identified the pathogen as a novel coronavirus on January 8.
Many of its missteps appear to have stemmed from bureaucratic hurdles.
Stocks in Hong Kong dropped 4.2 per cent, while South Korea's market lost 2.7 per cent.
In Europe, France's CAC 40 fell 4.3 per cent, Germany's DAX lost 3.9 per cent and the FTSE 100 in London slipped 0.2 per cent.
The yield on the 10-year Treasury note fell to 0.62 per cent from 0.64 per cent late Friday.
Yields tend to fall when investors are downgrading their expectations for the economy and inflation.
Benchmark US crude oil was flat at USD 19.78 per barrel. US crude has plunged from its perch of roughly USD 60 at the start of the year on worries about a collapse in demand and strained storage facilities.
Brent crude, the international standard, rose 0.6 per cent to USD 26.59 per barrel.
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