CORRECTED-US STOCKS-Tech shares boost Nasdaq; energy stocks rebound

(Corrects June 23 story to reflect company name is Conning, not
Conning & Co in paragraph 4)

* Nasdaq on track to post first weekly gain in three weeks

* Oil bounces off 10-month lows

* Bed Bath & Beyond, BlackBerry tumble

* Indexes: Dow down 0.05 pct, S&P up 0.13 pct, Nasdaq up
0.38 pct

By Sinead Carew

June 23 (Reuters) – U.S. stocks rose on Friday, with the
Nasdaq set to post its first weekly gain in three weeks, helped
by strength in technology stocks, while energy shares rebounded
as oil prices rose.

But bank stocks fell even after they passed their annual
stress test as some results were weaker than expected and
investors focused on a flattening yield curve.

Investors were expecting heavy trading around the market
close due to FTSE Russell’s completion of the annual refresh of
its benchmarks.

“The effect is going to be focused on small-caps but there’s
an echo of that in large caps,” said Don Townswick, Director of
Equity Strategy at Conning in Hartford, Connecticut.

While most of the rebalance-related trading comes at the
close “there’s jockeying all through the day from people who
want to get ahead” said Townswick.

Oil prices edged up after hitting their lowest point since
August earlier in the week, but remained on course for a roughly
20 percent decline for the year-to-date as production cuts have
failed to reduce oversupply.

While the S&P 500 energy index was up 0.4 percent on
the day, it was on track to post its worst weekly decline since
February 2016. Oil prices have added to concerns about the
inflation outlook, which, along with a flattening yield curve,
could pose a challenge to the Federal Reserve’s rate hike plans.

The Dow Jones Industrial Average was down 10 points,
or 0.05 percent, to 21,387.29, the S&P 500 gained 3.16
points, or 0.13 percent, to 2,437.66 and the Nasdaq Composite
added 23.93 points, or 0.38 percent, to 6,260.62.
Big technology stocks, including Apple, Facebook
and Microsoft, were the S&P 500’s biggest boosts
on the day and sent up the tech sector 0.6 percent.

The laggards included the healthcare index which
was down 0.4 percent on the day after a strong week.

The healthcare rally faded on Friday as investors sought to
understand whether a Senate Republican bill to replace
Obamacare, released Thursday, would gain enough support to pass.
Healthcare stocks had rallied ahead of the bill and were still
on track for a weekly gain.

The S&P financial index, fell 0.44 percent with
pressure from banking stocks after the stress test results and
ahead of the second part of their test due on Wednesday.

“It is a sell on the news effect,” said R.J. Grant, head of
trading at Keefe, Bruyette & Woods in New York. “It might get
people back to focusing on things like the yield curve.”

Instead, investors favored growth sectors such as tech.

“People are making bets that rates will stay lower for
longer and the economy will kind of muddle along and have very
tepid growth,” said Grant.

BlackBerry’s U.S.-listed shares were down 11.6
percent after quarterly revenue missed estimates.

Bed Bath & Beyond was down 12.7 percent following a
bigger-than-expected drop in same-store sales.

Advancing issues outnumbered declining ones on the NYSE by a
1.96-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored advancers.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj
Kalluvila and Nick Zieminski)


Leave a Reply