S&P 500's energy sector outperforms
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U.S. stocks edged higher Friday as investors digested economic data and monitored a slew of Federal Reserve speakers for clues on the central bank's view on the economy.
Friday was expected to be one of the busiest trading sessions of the year as traders adjust their stock portfolios in response to FTSE Russell's annual rebalancing of indexes. At the same time, bank shares were in focus after the Federal Reserve released the results of stress tests. The Financial Select Sector SPDR exchange-traded fund (XLF) failed to get a lift, slipping 0.2%.
The S&P 500 rose 5 points, or 0.2%, to 2,439, while the Dow Jones Industrial Average flipped between small gains and losses to gain 14 points to 21,411. The Nasdaq Composite Index added 18 points, or 0.3%, to 6,255.
The Nasdaq was on course to rise more than 1% for the week, ending a two-week run of losses. The S&P 500 and the Dow industrials were on track for relatively flat weekly performances.
A report from the Fed on the health of the banking sector (KBE) was released Thursday, showing that all 34 banks assessed (http://www.marketwatch.com/story/fed-stress-tests-show-banks-could-withstand-a-deep-downturn-2017-06-22) have "strong" levels of capital and would be able to keep lending even during a severe recession. The second set of results, which outline which banks may return capital to investors, are due next week.
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Health-care shares are in focus after big gains Thursday. Those moves came after Republican senators released a health-care bill draft (http://www.marketwatch.com/story/senate-republicans-unveil-new-health-care-bill-2017-06-22) that includes cuts to Medicaid and the elimination of penalties for people who don't buy health insurance.
Stocks had little reaction to flash purchasing managers index readings for June. IHS Markit said its services activity index fell to a three-month low of 53.0 from 53.6 in May, while the manufacturing PMI dropped to a nine-month low of 52.1 from 52.7 in May. A reading of more than 50 indicates an expansion in activity.
Major indexes held their ground after the Commerce Department said new home sales ran at a 610,000 seasonally adjusted annual rate in May. Economists had forecast a rate of 590,000 versus 569,000 in April. See: MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic).
There are three Fed speakers on the list Friday. St. Louis Fed President James Bullard, speaking at a convention in Nashville, said the Fed can afford to stop raising short-term interest rates (http://www.marketwatch.com/story/feds-bullard-says-time-for-fed-to-pause-on-rate-hikes-2017-06-23) and take a wait-and-see stance to see where the economy is headed and how policy debates in Washington play out in coming quarters.
At 12:40 p.m. Eastern, Cleveland Fed President Loretta Mester will give a speech in his regional city on community development at an economic summit on housing, human capital and inequality.
That will be followed at 2:15 p.m. Eastern by Fed Gov. Jerome Powell's speech in Chicago on central clearing and liquidity at a Chicago Fed symposium.
"This week we heard from eight Fed officials. Speaking across a number of platforms on both the domestic and international stage, it is clear there is a varying degree of opinions among Committee members regarding the appropriate pathway for rates," said Lindsey Piegza, chief economist at Stifel Fixed Income.
Stocks in focus:BlackBerry Ltd.(BB.T) sank 11% after the software and services company swung to an unexpected quarterly profit but its sales fell short of expectations. (http://www.marketwatch.com/story/blackberrys-stock-sinks-as-surprise-profit-offset-by-sales-miss-2017-06-23)
Synchronoss Technologies Inc. shares (SNCR) surged 36% after the private-equity firm Siris Capital Group and its associates offered to purchase the cloud-services provider for $18 a share in cash.
Bed Bath & Beyond Inc. shares (BBBY) dropped more than 12% after the home furnishings and accessories retailer late Thursday posted fiscal first-quarter earnings and sales that missed expectations. (http://www.marketwatch.com/story/bed-bath-beyond-shares-tank-after-earnings-sales-miss-2017-06-22)
Other markets: The ICE Dollar Index , which measures the dollar against a basket of six currencies, was off 0.4% and gold was up 0.6%. U.S. oil futures are higher, but are heading for their fifth week of declines (http://www.marketwatch.com/story/oil-prices-edge-up-as-big-producers-stick-to-cuts-2017-06-23-6103497).
Stock markets in Asia finished mostly higher, with the Nikkei Stock Average logging a modest gain. European stocks edged down. European Union leaders were meeting in Brussels on Friday, with Brexit a key topic one year after the U.K. voted to leave the bloc.
Read:Brexit's impact on markets and the U.K., 1 year after the vote--in charts (http://www.marketwatch.com/story/brexits-impact-on-markets-and-the-uk-one-year-after-the-vote-in-charts-2017-06-23)
(END) Dow Jones Newswires
June 23, 2017 12:19 ET (16:19 GMT)