Wall Street pares gains as energy, health stocks drag

Companies
45
0

(Reuters) – Wall Street’s main indexes pared early gains on Wednesday, weighed down by losses in energy and healthcare stocks.

Oil prices fell more than 1 percent after data showed a surprise build in U.S. crude inventories, pushing the SP energy index .SPNY down 0.31 percent.

Celgene’s 8 percent drop (CELG.O) was a drag on the healthcare sector after U.S. health regulators rejected the company’s application seeking approval of a multiple sclerosis drug.

At 11:04 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.08 percent at 25,430.95.

The SP 500 .SPX gained 0.13 percent to 2,747.86 and the Nasdaq Composite .IXIC rose 0.19 percent to 7,344.06.

Stocks opened higher on Wednesday after U.S. economic growth was revised slightly lower for the fourth quarter.

The U.S. Commerce Department said gross domestic product expanded at a 2.5 percent annual rate, instead of the previously reported 2.6 percent pace.

Strong economic data earlier in the month had raised fears among traders that U.S. interest rates would rise faster than previously expected, sparking Wall Street’s biggest selloff in two years.

Federal Reserve chair Jerome Powell’s comments on strengthening economy and inflation in his first congressional testimony on Tuesday further raised the odds of a fourth rate hike this year.

“Between now and the Fed meeting in March, what we’re seeing is a very traditional capital markets response to incoming economic data,” said Bill Northey, senior vice president, U.S. Bank Wealth Management, in Helena, Montana.

“It’s part of the question out there. Has the reaction function of the Fed changed or will it change under Powell?”

The U.S. 10-year Treasury yields US10YT=RR, the benchmark for global borrowing costs, was last at 2.8898 percent after spiking as much as 2.9250 percent on Tuesday.

The CBOE Volatility index .VIX, a measure of short-term stock market volatility, rose to a session high 18.93.

A string of retail earnings drove gains in the SP retail index .SPXRT, which was up 0.87 percent.

Shares of Booking Holdings (BKNG.O), which rose 9.4 percent after the company reported a better-than-expected profit, was the biggest driver on the index.

Online retailer Etsy (ETSY.O) jumped 18 percent after its revenue beat estimates, and off-price apparel seller TJX (TJX.N) rose 6.5 percent after reporting upbeat same-store sales.

Lowe’s (LOW.N) fell 6.6 percent after the No.2 home improvement chain’s quarterly profit and margins missed estimates.

Declining issues outnumbered advancers on the NYSE by 1,456 to 1,319. On the Nasdaq, 1,488 issues fell and 1,232 advanced.

Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva

Facebook Comments

Comments are closed.