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Jun 05, 2020 PRINT EDITION
Markets

Wall Street mixed as China-US tensions weigh

 The Nasdaq index is down about 5% from its Feb. 19 record high, helped in recent weeks by gains in Microsoft. 
May 22, 2020
  • The Nasdaq index is down about 5% from its Feb. 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.
  • Six of the 11 major S&P 500 sector indexes were lower, with energy dropping more than 1% as oil prices sank 5%.

Wall Street was mixed on Friday 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.

The rhetoric knocked Wall Street off multi-month highs, although the main indexes were still set to add over 2% for the week, fueled by optimism about an eventual coronavirus vaccine and the easing of virus-related curbs.

"The biggest thing out there today is the Hong Kong/China saber rattling," said Eric Freedman, chief investment officer at US Bank Wealth Management. "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."

The Nasdaq index is down about 5% from its Feb. 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.

At 2:17 p.m. ET, the Dow Jones Industrial Average was down 0.11% at 24,446.31 points, while the S&P 500 gained 0.14% to 2,952.58. The Nasdaq Composite added 0.36% to 9,318.50.

Six of the 11 major S&P 500 sector indexes were lower, with energy dropping more than 1% as oil prices sank 5%.

Mixed earnings from retailers Walmart Inc, Best Buy Co Inc and Home Depot Inc 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 Group reported better-than-expected quarterly profit, but its shares tumbled almost 6%. Smaller rival Pinduoduo Inc's US-listed shares surged 11% after the company posted upbeat results.

Nvidia rose 2.8% after forecasting strong quarterly revenue as demand surges for its data center chips.

KKR & Co rose 0.9% after India's Reliance Industries said the private equity firm would buy a 2.3% stake in its digital unit for 113.67 billion rupees ($1.50 billion).

Data analytics software maker Splunk Inc jumped 12% after it said it expects more demand for its cloud services.

Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.

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