S&P ends higher after gyrations on reopening optimism, weak data, trade woes

Monday, 18 May, 2020

The mixture of trade tensions and weak knowledge had despatched S&P 500 down round 1.3% earlier within the session however for a lot of the afternoon session it oscillated between constructive and adverse territory. The Nasdaq composite gained 0.9% to 8,943.72 after erasing its earlier loss of 1.8%.

U.S. stock index futures slipped today after the Trump administration moved to block shipments of semiconductors to China's Huawei Technologies from global chipmakers, a move that could ramp up trade tensions between Washington and Beijing.

The S&P 500 is down 410.78 points, or 12.7%.

Stocks initially fell in response to the dour economic data, then wavered between small gains and losses for much of the afternoon.

Meanwhile, economic data continued to paint a grim picture with the latest batch of reports indicating US retail sales and manufacturing output endured record declines in April as the virus-led slump seeped into the second quarter.

Powell's comments came a day after a warning from leading USA infectious disease expert Anthony Fauci prompted a sharp selloff in equities, as investors fretted over how the economy would reemerge from weeks of virus-related lockdowns.

Prices for the 10-Year Treasury dipped, raising yields to 0.64% from Thursday's 0.62%.

Technology stocks bore the brunt of the selling, with chipmakers among the biggest losers after the US government moved to impose new restrictions on Chinese tech giant Huawei.

Meanwhile, the USA on Friday said it will amend its foreign direct product rule and the so-called entity list of people and companies facing restrictions on business in the U.S.to target Huawei's acquisition of semiconductors. The Dow dropped 2.7 percent, while the NASDAQ declined 1.2 percent, marking their biggest weekly drops since the week that ended on April 3. But there have been numerous loopholes that US officials say the new restriction is meant to address.

Crude oil prices gained 12.8 per cent for the week on increasing demand with economic reopenings and lower production from Saudi Arabia and US shale producers.

Oil prices increased $2.02 to $29.58 USA a barrel.

"So I think over the next couple of weeks, we'll see some more weakness, but nothing material, like where we would retest the lows of March 23".

The Dow and S&P 500 each lost about 2.4 percent, while the Nasdaq was down 1.7 percent. Brent crude oil for July delivery rose $1.37, or 4.4% to $32.50 a barrel. But much depends on how the reopening of businesses goes and the trajectory of the outbreak. The drop was the largest since the government began tracking the data in 1992. Best Buy, Kohl's and Nordstrom also rose. That pullback echoed economic declines in France and Italy.