US open: Stocks head south following massive drop in retail sales
US stocks opened lower on Friday as market participants thumbed over some tragic retail sales figures for April.
As of 1530 BST, the Dow Jones Industrial Average was down 0.23% at 23,572.06, while the S&P 500 was 0.31% weaker at 2,843.73 and the Nasdaq Composite started out the session 0.37% softer at 8,910.77.
The Dow opened 53.28 points lower on Friday, reversing momentum seen at the tail end of the previous session after a solid performance from bank shares and climbing oil prices helped offset another dire jobless report.
Friday's main focus was the Census Bureau's monthly retail sales figures which revealed that US retail sales collapsed in April as lockdowns to brake the Covid-19 pandemic's advance across the country kept consumers indoors and Americas kept their wallets shut even as many were forced to join unemployment queues.
In seasonally adjusted terms, US retail sales volumes shrank at a month-on-month pace of 16.4% to reach $403.95bn (consensus: -10.7%). That followed an already dire 8.3% drop in retail sales during March.
Oanda's Craig Erlam said: "This was meant to be a week of promise, the first step towards the new normal - whatever that will be - and instead it's been a little draining.
"Don't get me wrong, it would come as no surprise if this is forgotten about over the weekend and stocks are marching higher again on Monday but this week serves as a reminder that there's wounds that endless stimulus can't heal. There's going to be plenty of them in the months ahead.
Also in focus was news that America's Department of Commerce on Friday closed a loophole that it said had allowed Huawei to continue employing US technologies through companies not on its national security blacklist.
Under the new rule, firms using US chip-making equipment would require express authorisation from Washington in the form of licenses and also meant that Huawei could be blocked from supplies of some chipsets or certain semiconductor designs.
Markets.com's Neil Wilson said: "US-China relations sour by the hour, with the White House moving to block semi-conductor shipments to Huawei. Reports suggest China is looking at retaliation with measures against US companies like Apple, Qualcomm and Cisco.
"I think we can assume a ratcheting up of pressure by the Trump administration in the coming weeks for reasons discussed before."
Elsewhere on the macro front, industrial production collapsed in April, according to the Federal Reserve said Friday, as industrial output fell a record 11.2% amid a historic drop in manufacturing as a result of the Covid-19 pandemic.
Still on data, consumer sentiment inched higher at the start of May as a result of extensive stimulus measures undertaken by the White House to sustain the US economy amid the pandemic.
The University of Michigan's preliminary consumer sentiment index came in at 73.7 for May - up from 71.8 in April and well above expectations on the Street for a reading of 65.
On the corporate front, Applied Materials shares were down 3.15% in early trade after the chipmaker posted mixed second-quarter revenue figures overnight, while UnitedHealth shares advanced 2.56% at the bell after agreeing to partner with tech giant Microsoft on a coronavirus "return to work" venture.