U.S. Stocks On Track For Weekly Gains
23 Juni 2017 - 6:55PM
Dow Jones News
By Riva Gold and Corrie Driebusch
U.S. stocks were on track to post weekly gains, as a rise in
health-care stocks offset a drop in energy companies.
Shares of pharmaceutical companies and biotechnology firms
jumped following some positive drug trial results, and on Wednesday
the Nasdaq Biotechnology Index posted its biggest one-day gain
since the day after the presidential election. Health-care
companies also rose as investors largely brushed off potential
risks for the sector by the Senate Republicans' plans to overhaul
the Affordable Care Act.
Health care's gains helped offset a tough week for energy
companies. The price of oil tumbled during the week as U.S.-traded
crude oil re-entered a bear market. The drop pressured shares of
energy companies and equipment makers as lower oil prices can hurt
their profit margins. Many investors expected the price of oil had
stabilized in recent months, and had purchased energy shares on
expectations of a return to earnings growth. The sharp fall in
U.S.-traded crude oil this week calls that investment thesis into
question.
Oil prices have been a drag on stock markets this week, on pace
to end the week more than 4% lower and off roughly 12% from the
start of the month. The S&P 500 energy sector is down 2.9% for
the week, its biggest loss since September.
On Friday, U.S.-traded crude oil edged higher, up 0.8% at $43.07
a barrel.
The broader S&P 500 index rose 0.2%, while the Nasdaq
Composite added 0.3%. The Dow Jones Industrial Average climbed 14
points, or 0.1%, to 21411.
In corporate news, shares of Bed Bath & Beyond fell 12%
after its earnings missed expectations.
Global stocks found little traction Friday, while the British
pound inched up on the first anniversary of the U.K.'s vote to
leave the European Union.
The Stoxx Europe 600 slipped 0.2%. London's export-heavy FTSE
100 declined 0.2% as the pound climbed 0.4% to $1.2731, paring the
week's declines.
Since the June 23 U.K. referendum in 2016, the FTSE 100 index,
which generates roughly two-thirds of its revenue overseas, has
climbed about 17%, while the pound has fallen roughly 15%. The
pound now looks cheap compared with historical levels, but U.K.
interest-rate expectations have fallen significantly since the
vote, with growth expected to slow this year, keeping the currency
under pressure.
"We don't see a recession on the horizon," said Ed Smith,
strategist at Rathbones. "But the only thing that has really driven
the U.K. economy higher over the last two years has been the
consumer and household spending, and we think that's going to
suffer," he said, noting the sharp fall in the pound has
precipitated a rise in inflation that has outpaced real wage
growth.
Elsewhere in markets, yields on 10-year Treasury notes were
little changed at 2.152% from 2.153% Thursday, while the WSJ Dollar
Index edged down 0.3%.
Earlier, Shanghai stocks recovered to trade up 0.3% in a
volatile session after increased regulatory scrutiny over the
borrowings of China's most prolific overseas deal makers sent
markets lower. The Shanghai Composite Index dropped as much as 0.9%
following news that regulators had ordered banks to check their
loans to major Chinese conglomerates.
The choppy moves could heighten apprehensions about volatility
that bogged down Chinese markets for most of last year, just days
after index compiler MSCI decided to include A-shares in its
emerging-markets indexes next year. A dominance of retail traders
that move in and out of the world's second-biggest stock market has
meant that trades often happen on rumor and sentiment.
--Kenan Machado contributed to this article
Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at
corrie.driebusch@wsj.com
(END) Dow Jones Newswires
June 23, 2017 12:40 ET (16:40 GMT)
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