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* Stocks set for weekly gains on recovery hopes
* Alibaba slips despite upbeat earnings report
* Splunk jumps after forecasting higher cloud demand
* Indexes: Dow down 0.35%, S&P off 0.15%, Nasdaq up 0.09% (Adds details, updates prices)
By Ambar Warrick and Pawel Goraj
May 22 (Reuters) - U.S. stock indexes moved in a flat-to-low range on Friday as simmering Sino-U.S. tensions weighed on markets struggling to gauge the pace of economic recovery from the coronavirus.
President Donald Trump’s rhetoric against China’s plan for a national security law in Hong Kong on Thursday raised concerns over Washington and Beijing reneging on their phase-1 trade deal.
Fears of a renewed trade war have cut short Wall Street’s April rally and indexes are now moving in a tight range, with fresh tariff actions likely to hamper a recovery from the economic shock of the coronavirus.
“Sentiment is really vulnerable to expensive valuation at the moment,” said Andrea Cicione, head of strategy at TS Lombard in London.
“After the shock of the COVID-19 lockdown, we have to go through a regular recession with high unemployment, low capex, low demand and that’s not what’s priced in at the moment.”
Still, optimism over the U.S. economy gradually emerging from the lockdowns have put the major indexes on course for weekly gains, with the S&P 500 set to add more than 2%.
At 9:56 a.m. ET, the Dow Jones Industrial Average was down 86.21 points, or 0.35%, at 24,387.91, the S&P 500 was down 4.34 points, or 0.15%, at 2,944.17. The Nasdaq Composite was up 8.51 points, or 0.09%, at 9,293.39.
Ten of the 11 major S&P 500 sub-indexes were trading lower, led by energy as oil prices sank 5%. Technology and healthcare shares were the biggest drag on the index.
Real Estate stocks were up in some defensive plays, while losses were limited in the consumer staples sector.
Mixed retail earnings from Walmart Inc, Best Buy Co Inc and Home Depot Inc earlier in the week had shown online shopping gaining traction due to the stay-at-home orders.
On Friday, Chinese e-commerce giant Alibaba Group reported better-than-expected quarterly profit, but its shares slipped 4.4%. Smaller rival Pinduoduo Inc’s U.S.-listed shares gained 1% after posting upbeat earnings report.
Hewlett Packard Enterprise fell 8.4% after missing second-quarter revenue and profit estimates, hit by global lockdowns since February.
Data analytics software maker Splunk Inc rose 7.7% after saying it expects higher demand for its cloud services as people around the world take to working from home.
Declining issues nearly matched advancers on the NYSE and the Nasdaq.
The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 24 new highs and four new lows. (Reporting by Ambar Warrick in Bengaluru and Pawel Goraj in Gdansk; Editing by Saumyadeb Chakrabarty and Arun Koyyur)