Ben Old opened the scoring in the fifth minute, with Nicolas Milanovic and Adam Taggart making it 3-0 by the break at Docklands Stadium.
Apostolos Stamatelopoulos, Jake Hollman, Jordan Courtney-Perkins and Bozhidar Kraev added to the carnage with Newcastle guilty of a string of defensive blunders in the absence of their senior stars.
Manager Eddie Howe made sweeping changes to the side that beat Tottenham 5-4 on penalties in Melbourne on Wednesday after the friendly ended 1-1.
With Bruno Guimaraes and Miguel Almiron heading home to prepare for the Copa America, and the likes of Joelinton and Alexander Isak rested, Howe gave a host of youngsters the chance to shine.
But they were a bundle of nerves against a far more experienced opposition.
"That was a tough one for our young lads... you can see probably the gap between experience and youth," said Howe, who defended not using any of his regular first-team players.
"I don't think we could have done, especially when you combine the travelling time that we've had and the quick time between games, it was too big of a risk of injuries and we couldn't afford that, so we gave an opportunity to the young lads.
"I think just too many mistakes, forced by the All Stars playing well," he added. I think a lot of our players need to reflect on that and see what they need to do to come back stronger."
The Premier League side fell 1-0 behind when Old drilled home from inside the box after some sloppy defending.
Winger Milanovic made it 2-0 on 25 minutes, poking home from close range after a mistake by Newcastle left-back Dylan Charlton gifted him the ball.
The Magpies were constantly chasing the game and another clumsy error, this time from Ciaran Thompson, opened the door for A-League Golden Boot winner Taggart who buried his shot in the corner.
Yet another defensive lapse early in the second half left Stamatelopoulos in acres of space and he capitalised with a well-taken shot before getting his second eight minutes later with a simple tap-in.
England star Kieran Trippier was on the bench but Howe persisted with the youngsters.
They proved no match for a rampant All Stars side who scored three more as Newcastle's defence was repeatedly sliced open.
