Stocks slide as US-China tensions flare, retail sales post historic drop

FAN Editor

U.S. equity markets sank Friday as tensions grew between the U.S. and China and retail sales dropped the most in nearly 30 years.

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The Dow Jones Industrial Average fell 178 points, or 0.76 percent, in the opening minutes of trading while the S&P 500 and the Nasdaq Composite dropped 0.81 percent and 1.01 percent, respectively.

Retail sales plunged by a record 16.4 percent in April, worse than the 12 percent drop that analysts surveyed by Refinitiv were expecting. The drop was the largest since the government began tracking the data in 1992.

Meanwhile, the U.S. 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.

Apple, Boeing, Cisco Systems and Qualcomm were in focus after an editor from the Chinese state-run Global Times suggested Beijing could “restrict or investigate” those companies, and others, should the U.S. further block key technology supply to Huawei.

Taiwan Semiconductor announced plans to build a high-tech plant in Arizona that will employ 1,600 workers. The chipmaker, which expects to begin production at the plant in 2024, hopes to bring its supply chain with it.

Abbott Laboratories’ rapid coronavirus test is under Food and Drug Administration scrutiny after a New York University study said it missed one-third of results that tested positive.

Sneaker giant Nike warned COVID-19 will have a “material impact” on sales, but said stores in Greater China have almost all reopened.

Looking at earnings, sports-betting platform DraftKings announced a wider-than-expected loss, but reported a 30 percent spike in revenue despite sports shutting down due to COVID-19.

West Texas Intermediate crude oil jumped 2.47 percent to $28.24 a barrel while gold edged up 0.11 percent to $1,743 an ounce.

U.S. Treasurys ticked higher, pushing the yield on the 10-year note down by 1.8 basis points to 0.601 percent.

In Europe, Germany’s DAX was up 0.60 percent after government data showed the country’s economy contracted 2.2 percent in the first quarter. Elsewhere, Britain’s FTSE gained 0.55 percent Bank of England Governor Andrew Bailey said the central bank was not considering negative interest rates. France’s CAC was down 0.2 percent.

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Asian markets were mixed as Japan’s Nikkei climbed 0.62 percent while China’s Shanghai Composite and Hong Kong’s Hang Seng slipped 0.07 percent and 0.14 percent, respectively.

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