Wall Street’s three major indexes have closed higher after swinging between gains and losses as investors weighed worries about China-US trade relations and weaker-than-expected US economic data against growing optimism that easing coronavirus restrictions would boost activity this month.
Economic data painted a grim picture on Friday as US retail sales and manufacturing output showed record declines in April due to virus-related stay-at-home orders.
The data came after US President Donald Trump ratcheted up trade tensions with China by moving to block semiconductor shipments to China’s Huawei Technologies from global chipmakers. The trade worries sent the Philadelphia Semiconductor index down more than 2.0 per cent.
China was swift to respond with a report saying it was ready to put US companies on an “unreliable entity list,” according to the Global Times.
The combination of trade tensions and weak data had sent S&P 500 down about 1.3 per cent earlier in the session but for much of the afternoon session it oscillated between positive and negative territory.
“We got the Friday jitters on China trade but late this afternoon the market turned its focus on reopenings,” said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio.
“We’re smack in the middle of May and think this might be the worst of the economic numbers. There’s a chance they start to slowly turn positive,” said Augustine citing moves by most states to at least partially reopen their economies.
The Dow Jones Industrial Average rose 60.08 points, or 0.25 per cent, to 23,685.42, the S&P 500 gained 11.2 points, or 0.39 per cent, to 2,863.7 and the Nasdaq Composite added 70.84 points, or 0.79 per cent, to 9,014.56.
However, for the week S&P 500 fell 2.3 per cent, for its biggest weekly drop since the week of March 20. The Dow dropped 2.7 per cent for the week while the Nasdaq declined 1.2 per cent, marking their biggest weekly drops since the week ended April 3.
Six of the 11 major S&P sectors closed higher, led by a 1.3 per cent gain in communications services. Utilities was the weakest with a 1.4 per cent drop followed by a 0.7 per cent drop in financial stocks.
“Today has very much been about this battle of conflicting factors,” said Ed Perks, multi-asset solutions’ chief investment officer at Franklin Templeton, adding that without “something that’s going to give us direction” investors are viewing it as a lacklustre Friday after a long week.
The small-cap Russell 2000 outperformed, with a 1.6 per cent gain. One of its stocks, Sorrento Therapeutics Inc, closed 158 per cent higher after its experimental antibody candidate showed potential in blocking COVID-19 infections in early studies.
Advancing issues outnumbered declining ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favoured advancers.
The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq Composite recorded 51 new highs and 16 new lows.
Volume on US exchanges was 11.36 billion shares, compared to the 11.39 billion average for the last 20 trading days.