U.S. Stocks on Track for Weekly Gains
June 23 2017 - 01:47PM
Dow Jones News
By Riva Gold and Corrie Driebusch
U.S. stocks were on track to post weekly gains Friday, 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 also rose despite potential risks for the
sector by the Senate Republicans' plans to overhaul the Affordable
Care Act.
Energy companies and equipment makers fell during much of the
week as U.S.-traded crude oil tumbled since lower oil prices can
hurt their profit margins. Ahead of this week, when U.S.-traded oil
entered a bear market by falling more than 20% from its most recent
high, the price of oil had stabilized and the sector was expected
to account for nearly half of the S&P 500's earnings growth in
the second quarter, according to FactSet. The sharp fall in
U.S.-traded crude oil this week calls into question whether the
sector can continue to provide a boost to earnings. The energy
sector in the S&P 500 gained 0.5% on Friday, but the shares
were on track to end the week 3.2% lower -- the sector's worst
weekly performance since February 2016.
The broader S&P 500 index recently rose 0.2% on Friday,
while the Nasdaq Composite added 0.3%. The Dow Jones Industrial
Average climbed 14 points, or 0.1%, to 21411. The S&P 500 is on
track to end the week up 0.3%, while the biotech-heavy Nasdaq
Composite is on pace for a weekly gain of 1.8%.
Oil prices were on pace to end the week more than 4% lower and
off roughly 12% from the start of the month. U.S.-traded crude oil
edged higher on Friday, up 0.8% at $43.07 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," Mr. Smith 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 was
little changed at 2.152% 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 13:32 ET (17:32 GMT)
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