Dow rises slightly, but loses more than 2% on week

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Stocks finished Friday with slight gains but the major indexes capped the week with significant losses between a slew of somber economic reports and increasing tensions between China and the U.S.

The Dow Jones Industrial Average advanced on Friday by 60.08 points, or 0.25%, to 23,685.42, but ended the week lower by 2.65%. Earlier in the day, the 30-stock average dropped more than 270 points.

The S&P 500 finished Friday’s session up 0.39% at 2,863.70 while the Nasdaq Composite added 0.79% to close at 9,014.56.

The major averages clawed back their losses throughout the afternoon as retail stocks turned around despite a record decline in monthly retail sales. The SPDR S&P Retail ETF (XRT) rose 2% after sliding more than 1.4% earlier in the session. Best Buy, Kohl’s and Nordstrom rose. Walmart and Home Depot each advanced 2%.

Friday’s turnaround also followed better-than-expected data on U.S. consumer sentiment. The University of Michigan’s consumer sentiment index unexpectedly rose in early May as U.S. fiscal stimulus measures “improved consumers’ finances and widespread price discounting boosted their buying attitudes.”

For the week, however, the Nasdaq Composite and S&P 500 were down 1.1% and 2.2%, respectively, with the latter notching its worst week since March.

“Given the amount of uncertainty about this crisis that still looms, we should not be surprised by the setbacks we’ve seen in markets this week,” said Scott Knapp, chief market strategist at CUNA Mutual Group.

U.S. monthly retail sales fell by 16.4% in April, a record. Economists polled by Dow Jones expected a decline of 12.3%. So-called core retail sales —which exclude auto, gas, food and building materials sales — dropped 15.3%.

“I guess you could say we knew it was weak,” said John Briggs, head of strategy at NatWest Markets. “The problem is you can’t dismiss all this bad news for April. If you have a deeper hole, you’re starting point is lower.”

Stocks initially tumbled on the retail data. Market sentiment also took a hit amid rising trade tensions between China and the U.S.

The Trump administration moved to block semiconductor shipments to Chinese company Huawei. The Commerce Department said it would “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”

Meanwhile, Hu Xijin, editor-in-chief of Chinese state-run publication Global Times, tweeted on Friday that China would “restrict or investigate” U.S. companies including Qualcomm, Cisco Systems and Apple if the U.S. takes further action to block Huawei’s supply chain. Hu’s Twitter account was closely followed last year by traders looking for insight on the U.S.-China trade war.

Hu Xijin 胡锡进

@HuXijin_GT

Based on what I know, if the US further blocks key technology supply to Huawei, China will activate the “unreliable entity list”, restrict or investigate US companies such as Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes.

2,225 people are talking about this

Shares of semiconductor makers Applied Materials and Skyworks Solutions both declined. Apple shares slid 0.5% while Qualcomm fell 5.1%.

“This is not an ideal time to be ratcheting up the trade war with China,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “I don’t really quite understand what the rationale is there.”

“Clearly, the administration wants to see the market do better, but the things they’re doing with China right now are making it worse,” he said.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Cavani rescues point for Man Utd at Newcastleon December 27, 2021 at 10:44 pm

Edinson Cavani comes off the bench to score an equaliser for Manchester United to dash Newcastle's hopes of a priceless win.Edinson Cavani comes off...

Watford 0-0 Everton: Toffees’ Premier League fate remains in balance after drawon May 11, 2022 at 8:45 pm

Everton's Premier League fate remains in the balance after Frank Lampard's side are held to a goalless draw by relegated Watford at Vicarage Road.

Jane Campion: Netflix may be more picky over projects after subscriber fallon July 7, 2022 at 11:16 pm

Her Oscar-winning Power of the Dog was made by Netflix but she fears others may not get a chance.Her Oscar-winning Power of the Dog...

Reward doubled to find ‘world’s longest rabbit’ stolen from gardenon April 16, 2021 at 4:24 pm

Concerns are growing for 12-year-old Darius who vanished from his Worcestershire home on Saturday.image copyrightWest Mercia PoliceA reward offered in a bid to trace...

Arrest after Nottinghamshire women report nightclub needle attackson October 19, 2021 at 10:49 am

Ellie Simpson says her sister felt "a pinch on the back of her arm" as she left a nightclub.A man has been arrested as...
Home of Science
Follow me