By Yasin Ebrahim
Investing.com – Wall Street closed above session lows on Friday, led by a rebound in large-cap tech stocks, but couldn't avert its worst weekly slump since March as investors had to contend with weaker economic data and rising U.S-China trade tensions.
The S&P 500 gained 0.43%, but still recorded its worst weekly performance since the week ended March 29. The Dow Jones Industrial Average rose 0.25%, or 60 points, after falling by as many as 271 points intraday, while the Nasdaq Composite added 0.79%.
The Commerce Department said on Friday that retail sales fell 16.4% last month, worse than the 12% decline expected. But the prior month's numbers were upwardly revised to -8.3%.The retail sales control group, which has a larger impact on U.S. GDP, fell 15.3%.
The weaker backdrop for consumer spending, however, is expected to get a boost from pent-up demand and the recent stimulus rolled out by Congress.
"The pronounced weakness in April sales sets the stage for a bounce in May spending, which could be significant," Jefferies (NYSE:JEF) said in a note. "There is near-term support from stimulus payments which were largely saved in April, and a good deal of pent-up demand."
Also helping sentiment, Michigan consumer sentiment for May, was better than feared, rising to a reading of 73.7 from 71.8 a month earlier, topping economists' forecasts of 68.
Wall Street's comeback from session lows coincided with a rebound in the bulk of FAANG stocks, with Netflix (NASDAQ:NFLX) leading the pack, closing 2.8% higher. Apple (NASDAQ:AAPL) was the exception, falling 0.6%.
Energy gave up gains to closer just below the flatline even as oil prices surged on data showing that China, the world's largest oil importer, ramped-up daily crude oil use in April. That added to recent optimism for a recovery oil demand amid government efforts to lift restrictions that had weighed on economic growth.
Markets started the day on the back foot after the Trump administration took aim at Huawei, and sized up a move to block U.S companies from supplying semiconductor equipment to the Chinese tech giant.
"The Bureau of Industry and Security is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology," The Commerce Department said.