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 Friday, 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 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.

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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

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 joined the climb throughout the week, including Thursday when Senate Republicans unveiled their plans to overhaul the Affordable Care Act. Though the S&P 500's health-care sector pared gains on Friday, it is on pace to post its biggest weekly rise since the presidential election.

Energy companies and equipment makers, however, fell during much of the week as U.S.-traded crude oil tumbled, since lower oil prices can hurt their profit margins. U.S.-traded oil entered a bear market this week by falling more than 20% from a recent high in February. Investors are watching the energy market closely as it has been critical for the earnings recovery in the U.S. The sector is expected to account for nearly half of the S&P 500's earnings growth in the second quarter, according to FactSet.

"There's now a bit of a concern that energy companies will not be able to meet earnings forecasts going forward for the year," said JJ Kinahan, chief market strategist at TD Ameritrade.

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 0.4%. The Dow Jones Industrial Average gained a fraction of a point to 21398. The S&P 500 is on track to end the week up 0.2%, while the biotech-heavy Nasdaq Composite is on pace for a weekly gain of 1.8%.

Oil prices ended the week 4.4% lower and off 11% from the start of the month. U.S.-traded crude oil edged higher on Friday, up 0.6% at $43.01 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," he 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 slipped to 2.146% 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 15:41 ET (19:41 GMT)