U.S. Stocks Notch Weekly Gains
23 Juni 2017 - 10:44PM
Dow Jones News
By Riva Gold and Corrie Driebusch
U.S. stocks posted weekly gains, as a rise in health-care stocks
offset a drop in energy companies.
Shares of pharmaceutical companies and biotechnology firms
jumped this week following some positive drug trial results.
Health-care companies joined the climb throughout the week,
including Thursday when Senate Republicans unveiled their plans to
overhaul the Affordable Care Act. Though the S&P 500's
health-care sector turned slightly lower on Friday, it is on pace
to post its biggest weekly rise since the presidential
election.
Energy companies and equipment makers, however, fell during much
of the week as U.S.-traded crude oil tumbled, since lower oil
prices can hurt their profit margins. U.S.-traded oil entered a
bear market this week by falling more than 20% from a recent high
in February. Investors are watching the energy market closely as it
has been critical for the earnings recovery in the U.S. The sector
is expected to account for nearly half of the S&P 500's
earnings growth in the second quarter, according to FactSet.
"There's now a bit of a concern that energy companies will not
be able to meet earnings forecasts going forward for the year,"
said JJ Kinahan, chief market strategist at TD Ameritrade.
The energy sector in the S&P 500 gained 0.8% on Friday, but
the shares ended the week 2.9% lower -- the sector's worst weekly
performance since February 2016.
The broader S&P 500 index rose 0.2% on Friday, while the
Nasdaq Composite added 0.5%. The Dow Jones Industrial Average
slipped a fraction of a point to 21396. The S&P 500 ended the
week up 0.2%, while the biotech-heavy Nasdaq Composite notched a
weekly gain of 1.8%.
Oil prices ended the week 4.4% lower and off 11% from the start
of the month. U.S.-traded crude oil edged higher on Friday, up 0.6%
at $43.01 a barrel.
In corporate news, shares of Bed Bath & Beyond fell 12%
after its late Thursday earnings missed expectations, the latest
disappointing quarterly results from a retailer.
The British pound inched up on the first anniversary of the
U.K.'s vote to leave the European Union. London's export-heavy FTSE
100 declined 0.2% as the pound climbed 0.4% to $1.2731, paring the
week's declines.
The Stoxx Europe 600 slipped 0.2%.
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, a
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 decline in the pound has
precipitated a rise in inflation that has outpaced real wage
growth.
Elsewhere in markets, the yield on the 10-year Treasury note
slipped to 2.146% from 2.153% Thursday, while the WSJ Dollar Index,
which measures the dollar against a basket of 16 currencies, edged
down 0.3%.
Earlier, Shanghai stocks recovered, adding 0.3% in a volatile
session after increased regulatory scrutiny over the borrowings of
China's most prolific overseas deal makers sent markets lower.
--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 16:29 ET (20:29 GMT)
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