May 15, 2020 / 12:00 PM / 15 days ago

US STOCKS-Futures fall as China trade war fears add to coronavirus woes

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* Futures fall: Dow 0.99%, S&P 0.98%, Nasdaq 1.06% (Adds comment, details, Updates prices)

By Ambar Warrick and Medha Singh

May 15 (Reuters) - U.S. stock index futures slipped on Friday after the Trump administration moved to block shipments of semiconductors to China’s Huawei Technologies from global chipmakers, a move that could ramp up trade tensions between Washington and Beijing.

This comes after President Donald Trump on Thursday signaled a further deterioration of his relationship with China over the virus outbreak, going so far as to suggest he could even cut ties with the world’s second largest economy.

A renewed Sino-U.S. trade war could exacerbate the economic downturn caused by the virus outbreak.

Trade-sensitive chipmakers Qualcomm Inc, Micron Technology Inc and Texas Instruments Inc fell between 2.7% and 3.1% premarket.

“The overarching concern that we’ve had as this epidemic has worked its way around the globe is that U.S.-China relations are heading in the wrong direction and that can cause a worse economic effect than the pandemic itself,” said Art Hogan, chief market strategist at National Securities in New York.

Wall Street’s main indexes ended a choppy session higher on Thursday, with the S&P 500 rising more than 1% as investors looked forward to the prospect of some U.S. states lifting curbs on business and social activities.

Still, all three major U.S. stock indexes are set for their worst week since mid-March, as sobering comments on the outbreak from major U.S. officials pointed to a longer period of economic weakness.

At 7:40 a.m. ET, Dow e-minis were down 234 points, or 0.99%, S&P 500 e-minis were down 28 points, or 0.98% and Nasdaq 100 e-minis were down 96.5 points, or 1.06%.

Stock futures initially rose on Friday after positive Chinese industrial output data indicated certain facets of the economy would be able to bounce back quickly from the outbreak.

However, retail sales in China fell more than expected in April, pointing to a large dent in consumption.

U.S. retail sales are also expected to mark a second straight month of record declines in April due to the pandemic. The Commerce Department’s report is due at 8:30 a.m. ET.

Abbott Laboratories slipped 3% after U.S. Food and Drug Administration said the company’s speedy coronavirus test could potentially be inaccurate, but can still be used to test patients.

SPDR S&P 500 ETFs were down 1.0%. (Reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Shounak Dasgupta)

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