US STOCKS-Wall St dips as U.S.-China tensions add to economic woes

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* Indexes set to gain between 2.5% to 2.8% for the week
* Alibaba slips despite upbeat earnings report
* Splunk jumps after forecasting higher cloud demand
* Indexes fall: Dow 0.56%, S&P 0.33%, Nasdaq 0.19%

(Adds details, comments, updates prices)
By Ambar Warrick and Pawel Goraj
May 22 (Reuters) - U.S. stock indexes dropped on Friday as
Sino-U.S. tensions weighed on markets struggling to gauge the
pace of economic recovery from the coronavirus.
President Donald Trump's statement on China's plan for a
national security law in Hong Kong on Thursday raised concerns
over Washington and Beijing possibly reneging on their Phase-1
trade deal. Fears of a renewed trade war cut short Wall Street's April
rally that was powered by optimism over a potential COVID-19
vaccine and the U.S. economy gradually emerging from the
lockdowns.
The three main U.S. stock indexes have kept to a tight range
in May, but are still on course for weekly gains between 2.5%
and 2.8%.
"It's a bit of a push-pull as there's some positive news
from a healthcare perspective at least, but then we also have
the rhetoric ramping up with China," said Paul Nolte, portfolio
manager at Kingsview Asset Management in Chicago.
"Investors may be a little bit nervous, may pull in their
horns ahead of a three-day weekend."
At 11:23 a.m. ET, the Dow Jones Industrial Average .DJI
was down 137.22 points, or 0.56%, at 24,336.90, the S&P 500
.SPX was down 9.75 points, or 0.33%, at 2,938.76 and the
Nasdaq Composite .IXIC was down 18.07 points, or 0.19%, at
9,266.81.
Eight of the 11 major S&P 500 sub-indexes were trading
lower, led by energy .SPNY as oil prices sank 5%. O/R
Real Estate stocks were up in some defensive plays, while
losses were limited in the consumer staples sector.
Mixed retail earnings from Walmart Inc WMT.N , Best Buy Co
Inc BBY.N and Home Depot Inc HD.N earlier in the week had
shown online shopping gaining traction due to the stay-at-home
orders, a trend that could damage brick-and-mortar players.
On Friday, Chinese e-commerce giant Alibaba Group BABA.N
reported better-than-expected quarterly profit, but its shares
slipped 4.4%. Smaller rival Pinduoduo Inc's U.S.-listed shares
PDD.O gained 9.6% after posting upbeat earnings report.
Hewlett Packard Enterprise HPE.N fell 11.5% after missing
second-quarter revenue and profit estimates, hit by global
lockdowns since February. Data analytics software maker Splunk Inc SPLK.O rose 10.7%
after saying it expects higher demand for its cloud services as
people around the world take to working from home. Declining issues outnumbered advancers 1.9-to-1 on the NYSE
and nearly matched them on the Nasdaq.
The S&P index recorded three new 52-week highs and no new
low, while the Nasdaq recorded 37 new highs and six new lows.