Wall Street flat as oil offsets gains in tech, healthcare

Wall Street flat as oil offsets gains in tech, healthcare

US stocks were little changed on Wednesday, with the three major indexes on track to end the month higher, as gains in healthcare and technology were outweighed by a drop in energy shares due to a steep fall in oil prices.

The S&P 500 and the Nasdaq Composite looked set to post their best monthly percentage gain since February. The Nasdaq also hit a record intraday high in early trading.

Oil prices fell by more than 2 per cent to a three-week low, as rising Libyan production fueled concerns that OPEC-led output cuts are being undermined by several countries that are excluded from the deal.

The S&P 500 and the Nasdaq snapped their seven-day winning streak on Tuesday as weakness in the energy and financial sectors outweighed gains in technology shares.

With stocks at record levels and the earnings season in the rear-view mirror, analysts say investors need to see strong economic data and progress on President Donald Trump’s pro-business policies for further meaningful gains.

“We had the Memorial day weekend and volumes on Tuesday were low, so this is the first day that Wall Street is coming back in full force and we could see a resumption of strong equity buying that we saw last week,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

At 9:41 a.m. ET (1341 GMT), the Dow Jones Industrial Average was down 1.23 points, or 0.01 percent, at 21,028.24, the S&P 500 was up 1.97 points, or 0.08 percent, at 2,414.88 and the Nasdaq Composite was up 10.98 points, or 0.18 percent, at 6,214.17.

Seven of the 11 major S&P sectors were higher, with the healthcare index’s 0.48 percent rise leading the advancers.

Johnson and Johnson was up 0.67 percent and provided the biggest boost to the S&P and the Dow.

While first-quarter economic data was mixed, with dips in consumer spending and sentiment, continuing strength in the labor market suggests economic activity will regain momentum as the year progresses.

The Federal Reserve issues its Beige Book at 2 p.m. ET (1800 GMT), a compendium of anecdotes on the health of the economy, that will likely provide further evidence that the economy continues to strengthen giving the Federal Reserve impetus to raise rate next month.

Traders currently see an 86.6-percent chance of a quarter-point rate hike at the Fed’s June meeting, according to Thomson Reuters data.

Shares of Michael Kors fell 8.9 percent to $33 after the luxury fashion retailer gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years.

Mallinckrodt was up 0.6 percent at $43.94, after sources said the drugmaker is exploring a sale of its generic drug unit, in a deal that could fetch as much as $2 billion.

Analog Devices rose 4.7 percent to $88.75 after the chipmaker’s quarterly results came in above expectations.

Exact Sciences was up 9.3 percent at $35.58 after two brokerages raised their price target on the diagnostic test maker’s shares.

Advancing issues outnumbered decliners on the NYSE by 1,371 to 1,186, for a 1.16-to-1 ratio on the upside. On the Nasdaq, 1,221 issues rose and 1,007 fell for a 1.21-to-1 ratio favoring advancers.

The S&P 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.



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