US STOCKS-S&P 500, Dow edge lower on trade war fears, virus woes

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* Sorrento Therapeutics top gainer on Russell 2000 index
* Philadelphia chip index slides
* Three main indexes eye worst week since mid-March
* Indexes mixed: Dow down 0.23%, S&P off 0.12%, Nasdaq up
0.26%

(Updates to early afternoon)
By Ambar Warrick and Medha Singh
May 15 (Reuters) - The S&P 500 and the Dow Jones indexes
fell on Friday, but were well off their session lows, amid signs
of deteriorating Sino-U.S. trade relations and growing evidence
of the economic slump due to the coronavirus pandemic.
However, the small-cap Russell 2000 .RUT rose 1.2% as
shares of Sorrento Therapeutics Inc SRNE.O more than doubled
after the drug developer said its experimental antibody
candidate showed potential in blocking COVID-19 infections in
pre-clinical studies. Healthcare stocks were the biggest boost to the Nasdaq
.IXIC with Sorrento topping percentage gainers on the index.
"Small cap indexes are probably going to rally given that
maybe a COVID-19 cure isn't going to come from a S&P 500
company, maybe it's going to come from a smaller biogen lab,"
said John Brady, senior vice president at R.J. O'Brien &
Associates in Chicago.
Brady added that news of the potential treatment was also
helping some underlying strength in the markets.
President Donald Trump said on Friday the U.S. government
would invest in all the top coronavirus vaccine candidates and
said a list had been narrowed to 14 promising possibilities with
a plan to narrow further. Earlier in the day, the S&P 500 fell as much as 1.3% as the
Trump administration's move to block semiconductor shipments to
China's Huawei Technologies HWT.UL from global chipmakers,
ratcheted up trade tensions between the two countries.
China was swift to respond with a report saying it was ready
to put U.S. companies on an "unreliable entity list," according
to the Global Times. China's countermeasures include launching investigations and
imposing restrictions on U.S. companies such as Apple Inc
AAPL.O , Cisco Systems Inc CSCO.O , Qualcomm Inc QCOM.O , as
well as suspending purchase of Boeing Co BA.N airplanes, the
report said, citing a source.
Boeing fell 1.6% and Apple was down 1.2%. The
trade-sensitive Philadelphia chip index .SOX slumped about
2.5%.
"There's talk that the trade deal that we signed in January,
the U.S. could walk away from that," said Ryan Detrick, senior
market strategist for LPL Financial.
"While we don't think that's the base case, what could
potentially happen is that rhetoric keeps up, and stocks don't
like that."
After a strong rally from 2020 lows, the three major stock
indexes are on course for their worst week since mid-March, as
sobering comments on the pandemic from major U.S. officials
pointed to a longer period of economic weakness.
Meanwhile, economic data continued to paint a grim picture
with the latest batch of reports indicating U.S. retail sales
and manufacturing output endured record declines in April as the
virus-led slump seeped into the second quarter. At 1:18 p.m. ET, the Dow Jones Industrial Average .DJI was
down 53.89 points, or 0.23%, at 23,571.45, the S&P 500 .SPX
was down 3.42 points, or 0.12%, at 2,849.08. The Nasdaq
Composite .IXIC was up 23.06 points, or 0.26%, at 8,966.78.
Six of the 11 major S&P sectors were higher, led by a 0.9%
gain in consumer staples .SPLRCS .
Advancing issues outnumbered decliners for a 1.11-to-1 ratio
on the NYSE and a 1.40-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and no new low,
while the Nasdaq recorded 42 new highs and 15 new lows.