By Sinead Carew
NEW YORK (Reuters) – The S&P 500 and Dow were weighed down by energy and bank stocks on Wednesday while healthcare and technology stocks helped lift the Nasdaq Composite index.
Energy stocks tumbled after oil prices reversed course during the morning session and touched its lowest point since August despite larger-than-expected declines in inventories.
While technology stocks were likely attracting growth investors taking advantage of a recent dip, healthcare stocks were helped by reports that U.S. President Donald Trump's efforts to rein in drug prices may be friendlier than expected to the industry, according to Brad McMillan, Chief Investment Officer for Commonwealth Financial in Waltham, Mass.
“We had a great quarterly earnings report. Early signs are good for the second quarter,” said McMillan. “We're just continuing to bounce around here until second quarter earnings come out.”
The Dow Jones Industrial Average () was down 41.67 points, or 0.19 percent, to 21,425.47, the S&P 500 () had lost 0.62 point, or 0.03 percent, to 2,436.41 and the Nasdaq Composite () had added 44.02 points, or 0.71 percent, to 6,232.05.
The S&P energy index () was the S&P's weakest sector with a 1.5 percent decline. It has fallen more than 15 percent this year compared with a 8.8 percent rise for the S&P 500. Oil futures have fallen about 21 percent so far this year.
The four-company telecommunications sector () was the second weakest with a 1 percent drop, with CenturyLink (N:) and AT&T Inc (N:) leading the percentage decliners there.
Bank stocks <.SPXBK> fell 7 percent, on track for their second consecutive decline on concerns about interest rate margins due to a flattening yield curve.
The Nasdaq biotechnology index () was up 3.7 percent, on track for its biggest one-day gain since the day after Trump's Nov. 8 election. Its biggest positive drivers were Celgene (O:), Regeneron (O:) and Biogen (NASDAQ:)
The move follows Friday's Politico report about an “industry-friendly” drug-price remedy from Trump and a Tuesday New York Times story suggesting he would ease regulation for drug firms, implying a softer stance than expected.
“Whenever you see that kind of headline, that's got to act as a signal to investors that maybe at the margin the situation is a little better than you thought,” said McMillan.
Caterpillar's (N:) 3.2 percent fall weighed on industrials (), which fell 0.6 percent.
FedEx (N:) shares hit a record high at $ 213.86 after the delivery company forecast higher fiscal 2018 earnings. They were last up 1.7 percent at $ 212.54.
Declining issues outnumbered advancing ones on the NYSE by a 1.70-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored decliners.
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