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Jun 7, 2016

Wall Street at Close Report, by CNBC on June 7, 2016: Stocks Closed Mixed; Biotech Falls 2.5%

cnbc.com
 
Evelyn Cheng
 
U.S. stocks closed mixed Tuesday, with health care leading decliners and energy leading as oil settled above $50 a barrel for the first time since July.


The Dow Jones industrial average briefly traded above the psychologically key 18,000 level for the first time intraday since April 28. Chevron contributed the most to gains. The S&P 500 traded near 2,118, around its highest since July last year.

"We stalled out below 2,100 for so many times (that closing above it yesterday is) dragging some new money in, dragging some shorts to cover. ... Then you can throw in the fact that interest rates continue to remain low," said Bruce Bittles, chief investment strategist at RW Baird.
Energy held about 2 percent higher to lead advancers. U.S. crude oil futures settled up 67 cents, or 1.35 percent, at $50.36 a barrel, its first settle above $50 since July 21.
The Nasdaq composite underperformed. The iShares Nasdaq Biotechnology ETF (IBB) briefly traded more than 2.5 percent lower, while health care was one of two decliners in the S&P 500.

Shares of Biogen traded about 12 percent lower after reporting disappointing results in a mid-stage review for its experimental multiple sclerosis drug treatment.
Shares of Alexion Pharmaceuticals held more than 10.5 percent lower after the firm said its drug Soliris missed its primary goal in a late-stage trial. The drug is already approved in the United States for the treatment of two rare blood disorders, Reuters said.
"When you have two (large) events happening at the same time in the same sector you have a negative effect," said Mike Bailey, director of research and chair at FBB Capital Partners.
The Dow transports traded more than 1 percent higher. The Russell 2000 held slightly higher in afternoon trade.
"I think what we're seeing globally right now is the dovish sentiment following (Fed Chair) Janet Yellen's comments yesterday," said Ryan Larson, head of equity trading, U.S., at RBC Global Asset Management (U.S.).
European stocks closed more than 1 percent higher. Major Asian indexes closed higher, with the Nikkei 225 up more than half a percent and the Hang Seng 1.4 percent higher. The Shanghai composite rose mildly.
China's foreign exchange reserves in May fell to $3.19 trillion, central bank data showed on Tuesday, the lowest since December 2011. The data was mostly in-line with expectations and analysts generally attributed much of the decline to changes in currency valuations.

On Monday, the S&P 500 closed at its highest since November 3 after comments from Fed Chair Janet Yellen and helped by a rise in oil prices that pushed energy up nearly 2 percent.
"If the SPX finishes the week at current levels, it would allow for confirmation of the breakout from its downtrend channel in a bullish development," Katie Stockton, chief technical strategist at BTIG, said in a morning note. "We think one of the biggest challenges for the market is sentiment, which tends to be complacent near market tops."
Yellen's remarks Monday remained positive on the U.S. economy despite the "disappointing" May jobs report. She did not give a specific time period for the next rate hike, but maintained rates probably need to rise gradually over time. Her comments came right before the blackout period for policymaker speeches heading into the Federal Reserve's June 14 to 15 meeting.



 

DJIA Dow Industrials 17941.02
20.69 0.12%
S&P 500 S&P 500 Index 2112.27
2.86 0.14%
NASDAQ NASDAQ 4961.75
-6.96 -0.14%
In economic news, first quarter productivity, which measures hourly output per worker, contracted at an annualized rate of 0.6 percent, instead of the 1.0 percent pace reported last month. Unit labor costs, the price of labor per single unit of output, increased at an upwardly revised 4.5 percent pace.
The Treasury auctioned $24 billion in three-year notes at a high yield of 0.93 percent Tuesday. The bid-to-cover ratio, an indicator of demand, was 2.79, down from 2.93 at the prior three-year auction in May, Reuters said.
Outstanding consumer credit rose a seasonally adjusted $13.4 billion in April, well below Reuters expectations. The seasonally adjusted annual growth rate was 4.5 percent, down from 9.6 percent the prior month.
Treasury yields were lower, with the 2-year yield around 0.78 percent and the 10-year yield near 1.71 percent as of 2:31 p.m. ET.
The German 10-year bund yield was sharply lower near 0.04 percent, amid uncertainty around the U.K. vote on whether to leave the European Union, and ahead of the European Central Bank's corporate bond buying program set to begin Wednesday.
The U.S. dollar index traded mildly lower, with the euro around $1.136 and the yen near 107.3 yen against the greenback.

In afternoon trade, the Dow Jones industrial average rose 55 points, or 0.31 percent, to 17,974, with Verizon leading advancers and Nike the greatest laggard.
The S&P 500 rose 6 points, or 0.30 percent, to 2,115, with energy leading eight sectors higher and health care and utilities the only decliners.
The Nasdaq composite declined 0.4 points, or 0.01 percent, to 4,968.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, held steady around 13.7.
About two stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 530 million and a composite volume of 2.5 billion in afternoon trade.
Gold futures for August delivery settled down 40 cents at $1,247.00 an ounce.
Reuters contributed to this report.
On tap this week:

Wednesday
10 a.m. JOLTs
1 p.m. $20 billion 10-year note auction
Thursday
8:30 a.m. Initial claims
10 a.m. Wholesale trade
1 p.m. $12 billion 30-year bond auction
Friday
10 a.m. Consumer sentiment
2 p.m. Federal budget
*Planner subject to change.