Health-care sector extends rally
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U.S. stocks reversed direction to close mostly lower Thursday as weak financials and consumer staples shares eclipsed a rally in the health-care and biotechnology sectors.
The S&P 500 dropped 1.11 points to finish at 2,434.50, with financial stocks falling 0.6% and consumer staples shedding 0.7%.
Health-care stocks were among the biggest gainers (http://www.marketwatch.com/story/gop-health-bill-boosts-hospital-health-insurer-and-drug-stocks-2017-06-22), adding 1.4%, as lawmakers released a "discussion draft (http://www.marketwatch.com/story/senate-republicans-unveil-new-health-care-bill-2017-06-22)" of the health-care bill that aims to cut Medicaid and eliminate penalties for people who don't buy insurance, among other changes.
The Dow Jones Industrial Average slipped 12.74 points to end at 21,397.29. The Nasdaq Composite Index bucked the trend for a second day to edge up 2.73 points to close at 6,236.69, supported by the biotechnology advance.
The iShares Nasdaq Biotechnology ETF (http://www.marketwatch.com/story/biotech-etf-ibb-on-pace-for-best-weekly-gain-7-months-2017-06-22)(IBB) was up 1.3%, led by gains in shares of anitbody-therapy company XBiotech Inc.(XBIT), which jumped 20%, and genomic-therapies company Sangamo Therapeutics Inc. (SGMO) , which rallied 13%.
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Morgan Stanley analysts cited a "potentially friendly executive order regarding drug pricing" for biotech stocks' surge. The New York Times reported that President Donald Trump has drafted an executive order (http://www.marketwatch.com/story/drug-stocks-surge-on-report-that-president-trump-plans-to-ease-industry-regulations-2017-06-21-139139) that would ease drug industry regulations.
Meanwhile, Trump tweeted on Thursday that he did not tape his conversations (http://www.marketwatch.com/story/trump-no-comey-tapes-2017-06-22) with former Federal Bureau of Investigation Director James Comey, whom he fired in May.
In the energy complex, oil prices were trying to rebound from a 10-month low. West Texas Intermediate oil futures climbed 0.5% to $42.73 a barrel, after trading as low as $42.26 earlier in the session.
On Tuesday, WTI slipped into bear-market territory, defined as a drop of at least 20% from a recent peak, as fears over rising supply from the U.S., Nigeria and Libya gripped the market.
"It looks like oil prices decoupled from the U.S. equity market as investors realize that lower oil prices are not a sign of weakening global demand and therefore economic slowdown, but rather it's due to excessive supply from the U.S., Iran and Russia," said Quincy Krosby, chief market strategist, at Prudential Financial.
Krosby noted that lack of economic data and earnings releases are likely to result in tepid moves for the next few weeks.
Economic news and the Fed: The leading economic index rose 0.3% in May and offered further proof the U.S. continues to grow at a steady clip.
Earlier, a report on weekly jobless claims (http://www.marketwatch.com/story/us-jobless-claims-edge-up-3000-to-24100-2017-06-22) showed that fewer than 250,000 Americans applied for unemployment benefits in mid-June, underscoring the strength of a U.S. jobs market whose biggest problem is a growing shortage of qualified workers.
Stock movers: Shares of Oracle Corp.(ORCL) leapt 8.6%, posting its best daily gain since December 2014 after its earnings report late Wednesday easily beat analyst expectations (http://www.marketwatch.com/story/oracle-soars-toward-record-highs-after-earnings-beat-2017-06-21).
Read:Oracle leaps to record as cloud transition hits turning point (http://www.marketwatch.com/story/oracle-leaps-to-record-as-cloud-transition-hits-turning-point-2017-06-21)
Shares of hospital operators surged on the health-care bill news. Tenet Healthcare Corp.(THC) shares jumped 6.9%, Community Health Systems Inc.(CYH) rose 5.1%, HCA Healthcare Inc.(HCA) added 2.5% and Universal Health Services Inc. (UHS) gained 1.8%. Insurers were also trading higher, with UnitedHealth Group Inc.(UNH), Aetna Inc.(AET), Humana Inc.(HUM) all finishing in the green.
Shares of Staples Inc.(SPLS) climbed 6.2% after Reuters late Wednesday reported (http://www.marketwatch.com/story/staples-shares-surge-on-report-of-6-billion-acquisition-by-sycamore-2017-06-21)that private-equity firm Sycamore Partners is in advanced talks to acquire the office supplies retailer.
Shares of CarMax Inc.(KMX) rose 4.6% after analysts at RBC Capital raised the stock to outperform from sector perform.
Other markets: Stock markets in Asia closed mixed (http://www.marketwatch.com/story/metals-help-australian-stocks-rebound-other-asian-markets-calm-2017-06-21), with Australia's S&P/ASX 200 index as the outperformer as metals rebounded. Gold was up 0.3%.
Most major European markets were lower (http://www.marketwatch.com/story/european-stocks-dragged-down-by-oil-shares-for-third-session-2017-06-22). The ICE Dollar Index was flat while the yield on the 10-year Treasurys fell to 2.14%.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
June 22, 2017 16:38 ET (20:38 GMT)