Stock market live Friday: Best week in a month, small caps surge, recovery looking ‘V-shaped

The Dow moved lower on Friday as investors wrapped up a volatile week of trading. Equities were under pressure amid rising tensions between China and the U.S., but the S&P 500 and Nasdaq rose on positive comments from Dr. Anthony Fauci on a potential coronavirus vaccine.

• S&P 500 closed up 0.24% for its second positive day in three
• S&P gained 3.2% for the week for its second positive week in three
• From record: S&P is 12.91% below its intraday all-time high of 3,393.52 from Feb 19th
• S&P has bounced 34.84% off its 52-week low of 2,191.86 from March 23
• Russell 2000 small caps gained 0.59% for the sixth positive session in seven
• Russell 2000 gained 7.84% for the week, the best week since April 9, and fourth positive week in five
• From Record: Russell 2000 is 20.96% below its 52-week high of 1,715.08
• Russell 2000 has bounced 40.29% from its 52-week low from March 18
• Six out of 11 S&P 500 sectors were positive, led by real estate, which gained 2.2%
• For the week, 10 out of 11 sectors were positive, led by industrials which gained 7.2%. Health care was the lone negative sector, dipping 0.78%. – Francolla

The major averages were mixed on Friday as markets capped off a wild week of trading. The Dow slid 8 points for a loss of 0.04%. Earlier in the session it had been down as much as 180 points. The S&P 500 and Nasdaq Composite both ended the day in the green, gaining 0.24% and 0.43%, respectively. For the week, all three indexes gained more than 3% as investors cheered states reopening their economies, as well as hopes for progress on a Covid-19 drug. Small caps were the relative outperformer for the week, with the Russell 2000 rallying more than 7%. – Stevens

With roughly one hour left in the trading session, the Dow was set to post its biggest one-week gain since April 9, when it rallied over 12%. The S&P 500 and Nasdaq were also up about 3% this week amid rising hope for a coronavirus vaccine. —Imbert

Oil prices slipped on Friday amid demand concerns after China, the world’s second largest user of petroleum products, said it would not issue a GDP forecast for 2020 amid the pandemic. West Texas Intermediate settled 1.98% lower at $33.25 per barrel. For the week, however, WTI gained over 12% as ongoing producer shut-ins fueled optimism in the market. International benchmark Brent crude slid 2.58% to settle at $35.13 on Friday, while also managing to post a fourth straight week of gains. – Stevens

The U.S. has a large coronavirus testing effort plan in place that will involve more than 100,000 participants as well as the most promising drug candidates to fight Covid-19 in an effort to discover a vaccine by the end of a year, according to a report from Reuters. The timeline has been markedly accelerated. The development and testing of new vaccines can take a decade, but the growing death toll as well as fast-spreading nature of the virus has drug companies scrambling to find a vaccine. Following the report, stocks moved off their lowest levels of the day. –Stevens

The SPDR S&P Retail ETF rose 0.3% on Friday and is up nearly 6% for the week, as many of the sectors biggest players reported quarterly results this week. JPMorgan analyst Matthew Boss said on “The Exchange” that retailers are seeing pent-up demand from the economic restrictions created duing the pandemic.

“E-commerce trends have been strong, but we’re also seeing brick-and-mortar coming on, and we’re not seeing a slowdown so far in the e-commerce trend. It really accelerated in April,” Boss said.

Still, Boss said that the shock from the pandemic will accelerate a trend of “bifurcation” that helps e-commerce and leisure brands while hurting department stores. —Pound

Hedge funds will be able to meet with giant institutional investors starting next month. iConnections, a networking platform for financial services firms, will host an online introduction event connecting hedge funds and institutions from June 15 to July 2. Some of the institutions participating in this virtual event, named Funds 4 Food, include Yale University, the Hewlett Foundation and Cambridge University, iConnections said in a statement. Registration proceeds will go to charities focused on coronavirus hunger relief. —Imbert

Michael Darda, chief economist and market strategist at MKM Partners, noted Friday that “if you flip first-time claims over the pattern resembles almost a perfect V” as their pace has declined for seven straight weeks after a massive spike higher due to the coronavirus. Darda added that unemployment has likely not peaked, given continuing claims are still at record highs. However, he also said “first-time claims that are the leading indicator” and tend to peak two-to-three months before the unemployment rate. —Imbert

Pro sports and casinos are on hold due to Covid-19, but some are dipping into stocks as an alternative. Dave Portnoy, founder and CEO of Barstool Sports, says he revived his “dormant” ETrade account and began investing hundreds of thousands of dollars in names like Boeing and Alibaba when shutdowns began. As the economy re-opens and sports come back online, Portnoy says the retail interest will “simmer down”. Retail trading has taken off in the past year, in part thanks to major brokerage firms slashing commissions. —Rooney

White House infectious disease expert Dr. Anthony Fauci said on “Halftime Report” that the vaccine candidate from Moderna has shown a lot of promise but has many more hurdles to clear before being approved.”Even though it’s a small number of individuals, and it’s the first step in a multi-step process, it was still very encouraging,” Fauci said. Moderna announced on Monday that eight patients in the phase one trial of the vaccine candidate developed neutralizing antibodies against the virus. Fauci said that the participants in the study were young and healthy, which is typical of the trials at this stage. —Pound

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told CNBC’s “Halftime Report” now is the right time to gradually reopen the economy. “We can’t stay locked down for such a considerable period of time that you might do irreparable damage and have unintended consequences, including consequences for health,” said Fauci. “It’s for that reason that the guidelines have been put forth so that the cities and states can start to reenter an reopen.” Fauci added: “We are enthusiastic about reopening and I think we can do it in a pace that would be reasonable and would get us back as a society, from a morale standpoint, as well as the economy.” —Imbert

The major stock indexes traded lower on Friday amid rising U.S.-China trade tensions. The Dow slid more than 100 points, or 0.5%, while the S&P 500 dipped 0.3%. The Nasdaq fell by 0.1%. Friday’s decline concludes a volatile week for Wall Street in which the Dow and S&P 500 posted three moves of at least 1%. All three of the indexes are, however, on pace for solid weekly gains. —Imbert

Data compiled by EPFR shows money-market funds had their first weekly outflow since late February, a sign that investors may be growing more optimistic about the market’s prospects moving forward. That outflow caps “at least for now — a flight to cash that has seen $1.2 trillion committed to these funds over the past 12 weeks,” writes Cameron Brandt of EPFR. —Imbert

Small-cap stocks outperformed this week as the reopening of the economy sparks hopes that small-sized companies would recover more quickly than expected. The Russell 2000 index rose for a third straight day on Friday, bringing its week-to-date gains to more than 7%. The small-cap benchmark is about tripling its large-cap counterpart’s return this week as the S&P 500 climbed just 2.5%. Still, the Russell 2000 is about 21% off its 52-week high. –Li

Stocks are slipping in early trading, but the major indexes are still solidly in the green for the week. The Dow is more than 600 points, or roughly 2.7%, above its closing level on May 15. The S&P 500 and the Nasdaq have gained about 2.5% over that same period. —Pound

Stocks opened slightly lower on Friday after China’s decision not to set a formal GDP target for the year, which contributed to a selloff in Asian markets. The Dow fell 32 points, or 0.1%, in the opening minutes. The S&P 500 and Nasdaq made similar dips. All three major U.S. indexes have climbed roughly 3% week-to-date. —Pound

With the issue of China becoming a larger focus in the U.S. presidential election, rising tensions between Washington and Beijing could become a more persistent headwind for markets.

So far, the strained relationship — including a war of words between the U.S. and China over blame for the coronavirus, the U.S. crackdown on Huawei and now Chinese companies listing on U.S. exchanges — has not had a major impact on the U.S. stock market. But in the last two sessions, the U.S. relationship with China has hung over the market, especially as China announced new security measures for Hong Kong Friday and Beijing took the unusual step of withholding its GDP forecast because of the virus impact. —Domm

Former Vice President and 2020 presidential candidate Joe Biden said Friday that economic recovery from the coronavirus pandemic looks “a long way away.” In an interview with CNBC’s “Squawk Box,” the Democrat criticized the 2017 Republican tax cuts and questioned what the U.S. could use the lost revenue for as it combats an economic crisis. — Pramuk

Dr. Anthony Fauci, one of the White House’s top health-care advisors, said he was cautiously optimistic about recent data on Moderna’s vaccine candidate to combat Covid-19. Fauci told NPR on Friday that he was happy to see that the early-stage results and the levels of neutralizing antibodies in the eight patients tested in Moderna’s most-recent trial. Moderna’s stock is up 45% in May and rose 4.5% in premarket trading Friday morning. — Franck, Tirrell

Oil prices moved lower on Friday after China abandoned its 2020 GDP target, fueling concerns that petroleum-product demand will remain depressed in the world’s second-largest oil user. West Texas Intermediate dipped 5.6%, or $1.92, to trade at $32.00 per barrel, while international benchmark Brent traded 4.7% lower at $34.37. The pullback comes amid a period of strength for oil, and due to a jump earlier this week oil is still on track to post its fourth straight week of gains. “The price of oil have been rising and rising and rising over the last couple of weeks. Although there is reason for the higher levels, a constant increase is not sustainable or justified,” said Rystad Energy’s senior oil markets analyst Paola Rodriguez Masiu. — Stevens

China took the unusual step of deciding not to set a target for its economic growth for 2020 thanks to the unprecedented uncertainty introduced by the Covid-19 pandemic. “Our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment,” Chinese Premier Li Keqiang said in an English-language text report.

The country’s economy contracted 6.8% in the first quarter, while unemployment has held hear historic highs thought data as recent as April suggest some recovery. Last year, China’s GDP grew by 6.1%, just making the official target range of 6% to 6.5%. — Franck, Cheng

Futures contracts tied to the major U.S. stock indexes fell in premarket trading Friday morning with Wall Street set to end an otherwise strong week with modest losses. Dow futures implied an opening dip of about 100 points while S&P 500 and Nasdaq 100 contracts suggested declines of 0.4% and 0.5% respectively. Still, the major averages remained on pace for solid weekly gains. The Dow was up more than 3% week to date and headed for its biggest one-week gain since the week of April 9. 

Trading will be suspended on Monday in the U.S. thanks to the Memorial Day holiday. — Franck

— CNBC’s Evelyn Cheng, Jacob Pramuk, Meg Tirrell, Yun Li, Michael Bloom, Fred Imbert and Kate Rooney contributed to this report.

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