Biotech stocks surge on reports of deregulation
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The S&P 500 and Dow industrials ended slightly lower on Wednesday, weighed down by losses in the energy sector as oil prices continued to slide.
But the Nasdaq Composite posted moderate gains thanks to a surge in biotechnology shares.
The S&P 500 index closed with a loss of 1.42 points, or less than 0.1%, at 2,435.61, with eight of the 11 main sectors in negative territory. A drop in oil prices put pressure on energy shares, which fell 1.6%. Heath-care and technology shares were top gainers, up 1.2% and 0.7%, respectively.
Crude-oil futures , which entered bear-market territory--pullback of 20% from a recent peak--on Tuesday, extended losses on Wednesday, settling down more than 2%, at $42.39 a barrel as traders looked past a decline in crude inventories to focus on a rise in domestic production.
Some analysts expect oil to trade in a $30-$60 a barrel range for the rest of the year, as U.S. producers increase production.
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"Oil is not in short supply with U.S. producers drilling and pumping as soon as oil prices rise over $50. Meanwhile demand for oil and gas continues to decline as we get more efficient with our fuel consumption," said Maris Ogg, principal at Tower Bridge Advisors.
Ogg is not worried about the volatility in oil prices, however.
"The energy sector is now one of the smallest sectors comprising 6% of the S&P 500, and as such its impact on overall earnings is rather limited," Ogg said.
The Dow Jones Industrial Average lost 57.11 points, or 0.3%, to 21,410.03, with more than half of the blue-chip stocks finishing with losses. Caterpillar Inc(CAT), du Pont Co (DD), and Chevron Corp(CVX) were the top decliners, down 3.8%, 2.7% and 1.9%, respectively.
The tech-heavy Nasdaq Composite Index bucked the trend, closing 45.92 points, or 0.7%, higher at 6,233.95, thanks to a jump in biotechnology shares. The iShares Nasdaq Biotechnology ETF (http://www.marketwatch.com/story/drug-stocks-surge-on-report-that-president-trump-plans-to-ease-industry-regulations-2017-06-21-139139) surged 4.1% after the New York Times reported that President Donald Trump has drafted an executive order that would ease industry regulations.
Read:This 'irrational exuberance' indicator could spell trouble for the stock market (http://www.marketwatch.com/story/this-irrational-exuberance-indicator-could-spell-trouble-for-the-stock-market-2017-06-21)
Stocks to watch: Shares of Red Hat Inc.(RHT) jumped nearly 10% after the open-source software company late Tuesday posted earnings ahead of forecasts (http://www.marketwatch.com/story/red-hat-jumps-to-highest-price-levels-since-dot-com-boom-2017-06-20).
Shares of Twitter Inc. (TWTR) jumped 5.1%, lifting the stock above both its widely watched 50-day and 200-day moving averages in one fell swoop. Based on current trajectories, the 50-day average is on course to cross above the 200-day average in about a week, a bullish technical event known as a "golden cross." (http://www.marketwatch.com/story/twitters-stock-surges-in-active-trade-a-week-before-bullish-golden-cross-pattern-appears-2017-06-21)
Adobe Systems Inc.(ADBE) climbed 2.4% after the software company late Tuesday announced earnings that beat Wall Street forecasts with record quarterly revenue (http://www.marketwatch.com/story/adobe-rises-to-record-levels-after-beating-earnings-expectations-2017-06-20).
La-Z-Boy Inc.(LZB) surged 22% following better-than-expected earnings (http://www.marketwatch.com/story/la-z-boy-stock-rallies-on-companys-q4-earnings-sales-beat-2017-06-20) on Tuesday after market close.
Shares of Advanced Micro Devices Inc.(AMD) rallied 11% after the chip maker on Tuesday launched a new generation of chips (http://www.marketwatch.com/story/amd-launches-new-epyc-chips-in-direct-challenge-to-intel-2017-06-20) for the servers that drive computing in data centers, seen as a direct challenge to Intel Corp.(INTC). Intel shares lost 0.8%.
Economic news: Sales of previously owned homes rebounded in May despite leaner supply and higher prices.
Other markets:Stocks in Asia closed mostly lower (http://www.marketwatch.com/story/global-oil-slump-weighs-on-asian-markets-2017-06-20), but with the Shanghai Composite Index bucking the negative trend and rising 0.5%. The positive close in China came after MSCI Inc. late Tuesday said it would include some Chinese stocks in its emerging-markets index (http://www.marketwatch.com/story/msci-to-add-222-china-a-shares-in-emerging-markets-index-2017-06-20).
European stocks ended lower (http://www.marketwatch.com/story/european-stocks-pushed-down-led-by-french-shares-oil-prices-2017-06-21) as energy shares fell in sympathy with oil's slide. The pound dropped to a two-month low in early trade (http://www.marketwatch.com/story/pound-hits-2-month-low-as-doubts-over-support-for-uk-government-weigh-2017-06-21), but jumped to $1.2667 after a Bank of England policy maker talked about withdrawal monetary stimulus.
Gold was up 0.3% at $1,247.20 an ounce, while the ICE Dollar Index was flat at 97.708.
(END) Dow Jones Newswires
June 21, 2017 16:36 ET (20:36 GMT)