S&P swings as investors weigh weak data, trade woes with reopening optimism

NEW YORK (Reuters) – The S&P 500 zig-zagged on both sides of unchanged on Friday as investors weighed worries about Sino-U.S. trade relations and weaker-than-expected retail sales data against optimism over the reopening of the U.S. economy after coronavirus lockdowns.

Economic data painted a grim picture as U.S. retail sales and manufacturing output showed record declines in April as the virus’ effects were felt in the second quarter.

President Donald Trump said on Friday the U.S. government would invest in all the top coronavirus vaccine candidates and said a list had been narrowed to 14 promising possibilities with a plan to narrow further.

Earlier in the day, the S&P 500 fell as much as 1.3% as Trump moved to block semiconductor shipments to China’s Huawei Technologies [HWT.UL] from global chipmakers, ratcheting up U.S.-China trade tensions.

China was swift to respond with a report saying it was ready to put U.S. companies on an “unreliable entity list,” according to the Global Times.

“It’s the tug of war between the economic numbers being worse than expected and progress on containing the disease being reasonable. Reopening is proceeding with no negative surprises so far. That lends credence to support an optimistic bias,” Carol Schleif, deputy chief investment officer at Abbot Downing in Minneapolis. “You can pull enough threads to support whatever case you want to make.”

Schleif saw the market going sideways from here without a change in economic data and earnings: “We’ve rallied a lot from the bottom, and we need some verification the economic numbers will at least stabilize to justify the big move we’ve had.”

At 2:38 p.m. ET, the Dow Jones Industrial Average .DJI fell 11.26 points, or 0.05%, to 23,614.08, the S&P 500 .SPX lost 3.64 points, or 0.13%, to 2,848.86 and the Nasdaq Composite .IXIC added 10.30 points, or 0.12%, to 8,954.03.

The trade worries sent the Philadelphia Semiconductor index .SOX down more than 2%. Seven of the 11 major S&P sectors were higher, led by a gain in energy .SPNY. Utilities .SPNY was the weakest with a 2.5% drop.

Healthcare stocks were the biggest boost to the Nasdaq .IXIC.

The small-cap Russell 2000 rose 1.7% and its top percentage gainer was Sorrento Therapeutics Inc (SRNE.O) after the company’s experimental antibody candidate showed potential in blocking COVID-19 infections in early studies.

Advancing issues outnumbered declining ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored advancers.

The S&P 500 posted six new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 15 new lows.

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