Stock market live updates: Dow sheds 2.6% this week, record retail sales plunge, China tensions

Stocks swung wildly in Friday’s volatile session amid trade worries and weak economic data. Investors digested a record drop in retail sales, while monitoring signs of increased trade tensions with China. The major U.S. equity averages posted slight gains on the day, but notched more significant losses for the week. Here’s what’s happened:

• NASDAQ closed up 0.79% for its second straight positive day
• Week-to-date: NASDAQ closed down 1.17% for its worst week since April 3 when the NASDAQ lost 1.72% and its third negative week in 4
• Year-to-date: NASDAQ is up 0.47% 
• From Record: NASDAQ is 8.37% from its intraday all-time high of 9,838.37 from Feb. 19
• Dow closed up 0.25% for its 2nd straight positive day

• For the week: Dow closed down -2.65% for the week for its third negative week in four and its worst week since Apr 3rd when the Dow lost -2.7%
•  Year-to-date: Dow is down -17.01% year-to-date on pace for its worst year since 2008 when the Dow lost -33.64%
• From Record: Dow is 19.90% below its intraday all-time high of 29,568.57 from Feb. 12
• S&P closed up 0.39% for its second straight positive day
• For the week: S&P closed down -2.26% for the week for its worst week since March 20 when the index lost 14.98% and its third negative week in four
• From record: S&P is 15.61% below its intraday all-time high of 3,393.52 from Feb. 19
• Sectors: 6 out of 11 sectors were positive today led by communication services up 1.26%
• Sectors for the week: 10 out of 11 sectors were negative this week led by energy down 7.6%
• The only positive sector for the week was health care up 0.88%
• Sectors year-to-date: 10 out of 11 sectors are negative year-to-date led by energy down 40.34% 
• The only positive sector year-to-date is tech up 1.83%

The Dow Jones Industrial Average finished the wild session about 60 points higher after dropping 271 points at its session low. The S&P 500 ended the day up 0.4%, while the Nasdaq Composite eked out a 0.8% gain. All three major averages posted weekly losses with the Dow and the S&P 500 losing more than 2%. The tech-heavy Nasdaq shed 1.1% this week. –Li

Bank stocks resumed their struggles on Friday, with the KBW Bank Index falling by 1.5%. Wells Fargo senior banking analyst Mike Mayo said on “Closing Bell” that the industry would face near-term struggles but that the major banks were still in solid shape.”It’s earnings hell. It’s going to remain earnings hell maybe for the next quarter or two or for much of the rest of year. But the banks have the wherewithal to absorb the losses” and build value, Mayo said.Mayo also called PNC Financial’s decision to sell its stake in BlackRock “brilliant” and said it positioned the bank to make a valuable acquisition during the economic downturn. —Pound

West Texas Intermediate settled up 6.79% at $29.43 on Friday after hitting a high of 29.92, its highest level since March 17. Friday’s advance brought its weekly gains to nearly 19%, marking oil’s third straight positive week. Still, oil is down 51.8% this year, on pace for its worst year ever through contract’s inception in 1983. –Li, Francolla

With about an hour left in the trading session, the major averages hovered along the flatline in what has been a roller-coaster session. The Dow was just 8 points higher after falling more than 260 points to start the day. The 30-stock average also traded up about 100 points at one point. The S&P 500 was up 0.1% while the Nasdaq Composite advanced 0.4%. Both the S&P 500 and Nasdaq dropped more than 1% earlier in the day. The Dow, S&P 500 and Nasdaq were also headed for weekly losses. —Imbert

Randy Frederick of Charles Schwab said Friday he would like to see another month of consolidation in the S&P 500. “I would always rather have a sideways period than a boom-bust cycle, which is what I was afraid we were headed for. Thankfully, we did not get that,” he told CNBC during a phone interview. Frederick pointed out the S&P 500 is up just slightly over the past month, following the coronavirus-induced sell-off and subsequent rebound.  Sideways trading “keeps the market from getting overheated. That’s a good thing,” he said. —Imbert

Michael Shaoul, chairman and CEO of Marketfield Asset Management, highlighted the S&P 500’s inability to make a meaningful run through the key 3,000 level. “The SPX remains trapped below key resistance at the 3,000 level, with this week’s assault stalling at 2945,” he said, noting the broader-market index has at least seen support around 2,800 on a closing basis this week. “The recent churning movement by the SPX index is increasingly reliant on a small number of mega‐cap technology issues,” he said. “However, it is certainly true that a broader advance would be preferable, particularly one which cast a wide net across cyclically sensitive sectors.” —Imbert

• J.C. Penney — The retailer’s stock rocketed 17% on Friday after the company said it had made an interest payment of about $17 million that was due and payable on May 7. The payment by J.C. Penney likely came as good news to investors and part of its ongoing talks with its lenders.
• Micron, Intel, Broadcom — Chip stocks fell following news that the Commerce Department announced that it was restricting the sale of semiconductors to Chinese telecom giant Huawei. U.S. officials have raised security concerns about Huawei.
• Denny’s — Denny’s stock rallied 10% in midday trading after the diner chain reported better-than-expected quarterly earnings despite sales falling 36% from a year earlier.

Stocks that traded higher at the New York Stock Exchange held a slight advantage over the number of names trading lower around midday. FactSet data shows about 1,500 NYSE-listed stocks were up while just over 1,200 dipped as Wall Street wraps up its worst week since March. —Imbert

The major averages swung wildly earlier in the session as investors grappled with a slew of economic data and U.S.-China trade tensions flaring up. The Dow traded about 200 points lower at midday, or 0.8%. The S&P 500 slid 0.9% along with the Nasdaq Composite. The Dow briefly turned positive before trading back lower. The major averages were also on pace for their biggest weekly declines since the week of March 20. Both the S&P 500 and Dow were down more than 3% week to date while the Nasdaq fell 2.8%. —Imbert

Companies don’t know what the near-term future is going to hold, so many of them have given up trying to forecast. With first-quarter earnings season nearing a close, about 70% of S&P 500 companies either withdrew or revised their guidance for what is ahead, according to a Gartner analysis. Only 11% of companies maintained guidance while another 19% either didn’t offer or did not clarify guidance. For the rest of the firms, 21% revised while 49% withdrew guidance completely. —Cox

• Stifel upgraded Yum! Brands to buy from hold.
• BMO upgraded Goldman Sachs to outperform from market perform.   
• UBS upgraded Cardinal Health to buy from neutral.
• Citi downgraded Wayfair to sell from hold.
• KeyBanc downgraded KB Home and PulteGroup sector weight from overweight.
• Citi initiated Microsoft as neutral.
• Bank of America downgraded Canada Goose to underperform from neutral.
• Guggenheim named Pepsi a best idea.
• Cowen upgraded Northrop Grumman to outperform from market perform.

CNBC Pro subscribers can read more here. — Bloom

The SPDR S&P Retail ETF turned positive in morning trading despite the record drop in retail sales. The fund last traded up 0.9% after dropping about 1.5% earlier in the session. The turnaround was led by strong gains in Office Depot and Dillard’s which both rose more than 10%. –Li

Less than an hour into Friday’s trading, the Dow Jones Industrial Average erased a 270-point loss and climbed into positive territory. -Li 

The early May read on consumer sentiment in the U.S. came in at 73.7, up from 71.8 in April, according to preliminary data released Friday by the University of Michigan. Economists polled by Dow Jones expected U.S. consumer sentiment to drop to 65 in May. –Li

Business activity continues to contract in New York, though not as bad as economists had feared. The New York Fed’s Empire State Manufacturing Survey saw a reading of -48.5%, which signified a sharp contraction but not as bad as Dow Jones estimates of -60. The index measures companies reporting expansion against those seeing contraction, which in the May survey was 14.5% vs. 63.% respectively. Both new orders (-42.4%) and shipments (-39%) showed a continuing downturn but were significantly better than the April gauges. Notably, the employment reading was -6.1%, as 14.7% of employers reported increasing staff while 20.8% said they are seeing decreases. That net measure, though, was far better than the -55.3% reported in April. – Cox

CNBC’s Jim Cramer said Friday that now is not the time for the U.S. and China to escalate trade tensions as the world already faces unprecedented economic calamity from the coronavirus pandemic. “What are we crazy?” Cramer asked, adding the prospect of retaliation from China is “scary.” The “Mad Money” host’s comments come after the Trump administration’s move to block semiconductor shipments to Huawei. –Li, Belvedere

All but one of 13 major retail categories experienced declines in sales in April. Clothing stores took the biggest hit with a 78.8% drop, while electronics and appliance stores saw a 60.6% decline. Non-store sales, which includes online sellers, is the only category with gains. –Li

Major U.S. equity averages traded lower at the open as a record drop in retail sales dented sentiment as signs of increased trade tensions with China added to investors’ anxiety. The Dow Jones Industrial Average fell about 200 points, while the S&P 500 dipped 0.9%. The Nasdaq Composite declined 1.1% at the open. — Li

Consumer spending sank by a record 16.4% in April as a main component of the U.S. economy contracted amid the Covid-19 outbreak, according to a government report Friday. Economists surveyed by Dow Jones expected the advanced retail sales number to fall 12.3%. Some 68% of the U.S.’s $21.5 trillion economy is derived from personal consumption expenditures, which tumbled 7.6% in the first quarter as social distancing measures began to take effect. — Cox, Franck

Barclays raised its target on West Texas Intermediate and Brent on Friday, saying that while prices will likely remain volatile in the short term as the market re-balances, the worst is now over. “Market forces have aligned producers around the world to support fundamentals and demand is increasingly showing signs of having troughed,” the firm said. Barclays sees WTI and Brent averaging $33 and $37 this year, respectively, before rebounding to $50 and $53 in 2021. WTI traded around $28.23 per barrel on Friday, with Brent at $31.70. — Stevens

Hu Xijin, editor-in-chief of Chinese state-run publication Global Times, said in a tweet Friday that if the U.S. takes further action to block supply to Huawei, China will activate the “unreliable entity list”, “restrict or investigate” U.S. companies including Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes. His comment came after the White House moved to prevent shipments of semiconductors to the Chinese telecom giant as tensions between the two nations flared up again amid the coronavirus pandemic.

The companies Hu mentioned came under pressure in premarket trading Friday with shares of Qualcomm and Cisco dropping 5.3% and 2.3%, respectively. Apple also fell 2.4% in premarket, while Boeing dipping 3.5%. Hu’s Twitter account was closely followed by many Wall Street traders for insight on the trade war last year. His commentary appeared to have inside knowledge about the U.S.-China trade relationship and has sometimes been market-moving. The Global Times is a tabloid under the People’s Daily which is the official newspaper of the Communist Party of China. — Li

Retail sales are expected to hit new depths in April as wary consumers stayed home and bought mainly essentials online. The advance reading, to be released Friday at 8:30 a.m. ET, is expected to show a plunge of 12.3%, according to economists surveyed by Dow Jones. That comes a month after a record 8.7% drop for data that goes back to 1992. The previous low was a 3.8% decline in November 2008 during the financial crisis. Consumers account for about 68% of all U.S. economic activity, so the retail figures are critical. — Cox

Semiconductor stocks fell in premarket trading after the Commerce Department said it would move to block the sale of chips to Chinese telecom giant Huawei. Shares of Micron were trading 3.4% lower, while Nvidia fell roughly 2%. Broadcom and Intel both slipped 1.8%. — Pound

The Trump administration on Friday took action to prevent shipments of semiconductors to China’s telecom giant Huawei Technologies. The Commerce Department said it was changing an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” The company has for months been in the crosshairs of a broader U.S.-China trade battle and the latest announcement is likely to take a toll on the globe’s second-largest smartphone maker. — Franck

U.S. stock futures pointed to losses to start the regular session Friday as investors braced for what’s expected to be a grim report on April’s retail sales at 8:30 a.m. ET, which will provide a key insight into U.S. household spending in recent weeks. Wall Street is also monitoring U.S.-China relations after the White House took action to block shipments of semiconductors to Huawei from the world’s chipmakers. The move could, in tandem with the administration’s prior move to ban federal retirement investment in Chinese stocks, lead to renewed angst between the globe’s two economic superpowers. — Franck

— CNBC’s Jeff Cox, Pippa Stevens and Fred Imbert contributed to this report.

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