U.S. Stocks On Track For Weekly Gains

By Riva Gold and Corrie Driebusch Features Dow Jones Newswires

U.S. stocks were on track to post weekly gains, as a rise in health-care stocks offset a drop in energy companies.

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Shares of pharmaceutical companies and biotechnology firms jumped following some positive drug trial results, and on Wednesday the Nasdaq Biotechnology Index posted its biggest one-day gain since the day after the presidential election. Health-care companies also rose as investors largely brushed off potential risks for the sector by the Senate Republicans' plans to overhaul the Affordable Care Act.

Health care's gains helped offset a tough week for energy companies. The price of oil tumbled during the week as U.S.-traded crude oil re-entered a bear market. The drop pressured shares of energy companies and equipment makers as lower oil prices can hurt their profit margins. Many investors expected the price of oil had stabilized in recent months, and had purchased energy shares on expectations of a return to earnings growth. The sharp fall in U.S.-traded crude oil this week calls that investment thesis into question.

Oil prices have been a drag on stock markets this week, on pace to end the week more than 4% lower and off roughly 12% from the start of the month. The S&P 500 energy sector is down 2.9% for the week, its biggest loss since September.

On Friday, U.S.-traded crude oil edged higher, up 0.8% at $43.07 a barrel.

The broader S&P 500 index rose 0.2%, while the Nasdaq Composite added 0.3%. The Dow Jones Industrial Average climbed 14 points, or 0.1%, to 21411.

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In corporate news, shares of Bed Bath & Beyond fell 12% after its earnings missed expectations.

Global stocks found little traction Friday, while the British pound inched up on the first anniversary of the U.K.'s vote to leave the European Union.

The Stoxx Europe 600 slipped 0.2%. London's export-heavy FTSE 100 declined 0.2% as the pound climbed 0.4% to $1.2731, paring the week's declines.

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, 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 fall in the pound has precipitated a rise in inflation that has outpaced real wage growth.

Elsewhere in markets, yields on 10-year Treasury notes were little changed at 2.152% from 2.153% Thursday, while the WSJ Dollar Index edged down 0.3%.

Earlier, Shanghai stocks recovered to trade up 0.3% in a volatile session after increased regulatory scrutiny over the borrowings of China's most prolific overseas deal makers sent markets lower. The Shanghai Composite Index dropped as much as 0.9% following news that regulators had ordered banks to check their loans to major Chinese conglomerates.

The choppy moves could heighten apprehensions about volatility that bogged down Chinese markets for most of last year, just days after index compiler MSCI decided to include A-shares in its emerging-markets indexes next year. A dominance of retail traders that move in and out of the world's second-biggest stock market has meant that trades often happen on rumor and sentiment.

--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 12:40 ET (16:40 GMT)