Wall Street has ended mixed in a mostly tame finish to a week of strong gains, as investors gauged China-US tensions and amid ongoing uncertainty about the pace of economic recovery from the coronavirus.
President Donald Trump’s warning on Thursday that the US would react strongly to China’s plan for a national security law in Hong Kong has raised concerns over Washington and Beijing’s possibly reneging on their Phase 1 trade deal.
Late in Friday’s session, stocks edged lower after the US Commerce Department said it was adding 33 Chinese companies and other institutions to an economic blacklist for human rights violations and to address US national security concerns.
The increasing rhetoric between Washington and Beijing has knocked Wall Street off multi-month highs, although the three main indexes still all rose around three per cent for the week, fuelled by optimism about an eventual coronavirus vaccine and the easing of virus-related curbs.
Eric Freedman, chief investment officer at US Bank Wealth Management, said fears about the relationship between Washington and Beijing were growing.
“We still think COVID-19 concerns are in the driver’s seat, but we could see US-China relations move back into the front seat,” he said.
US stock exchanges will be closed on Monday for the Memorial Day holiday.
The Nasdaq index is down about five per cent from its February 19 record high, helped in recent weeks by gains in Microsoft, Amazon and other heavyweight companies seen coming out of the economic downturn stronger than their smaller rivals.
The S&P 500 real estate sector index jumped 2.2 per cent, leading the 11 sectors, while energy dropped 0.7 per cent as oil prices sank about 3 per cent.
A 1.9 per cent drop in Chevron weighed on the Dow.
The Dow Jones Industrial Average fell 0.04 per cent to end at 24,465.16 points, while the S&P 500 gained 0.24 per cent, to 2,955.45. The Nasdaq Composite climbed 0.43 per cent to 9,324.59.
For the week, the Dow added 3.3 per cent, the S&P 500 rose 3.2 per cent, and the Nasdaq climbed 3.4 per cent.
Mixed earnings from retailers Walmart, Best Buy and Home Depot earlier this week showed online shopping gaining traction with the lockdown orders, a trend that could damage brick-and-mortar players already feeling pressure from internet rivals.
On Friday, Chinese e-commerce giant Alibaba reported better-than-expected quarterly profit, but its shares tumbled almost six per cent.
Smaller rival Pinduoduo’s US-listed shares surged over 14 per cent after the company posted upbeat results.
Nvidia climbed 2.9 per cent after forecasting strong quarterly revenue as demand surges for its data centre chips.
KKR rose 1.1 per cent after India’s Reliance Industries said the private equity firm would buy a 2.3 per cent stake in its digital unit for 113.67 billion rupees ($US1.5 billion).
Data analytics software maker Splunk jumped over 12 per cent after it said it expects more demand for its cloud services.
Volume on US exchanges was 8.75 billion shares, compared to the 11.2 billion average for the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favoured advancers.
The S&P 500 posted six new 52-week highs and no new lows; the Nasdaq Composite recorded 62 new highs and nine new lows.