U.S. stocks close up; biotechs rally
NEW YORK (MarketWatch) — The U.S. stock market closed with modest gains on Wednesday, led by advances in the health-care and technology sectors.
The main benchmarks gained in the three of the past four sessions, bouncing off the lows reached last week.
Gains on the Nasdaq Composite were led by biotechnology companies, with the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) up 2.2%. The Nasdaq Composite (NASDAQ:COMP) added 44.87 points, or 1%, to 4,434.13.
The Dow Jones Industrial Average (DJI:DJIA) added 91.26 points, or 0.6%, to 16,651.80.
The S&P 500 (SNC:SPX) climbed 12.97 points, or 0.7%, to 1,946.72. Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) led gainers.
Even consumer plays nudged higher, despite softer-than-expected retail sales data as well as disappointing quarterly results from retailers such as Macy’s Inc. and Fossil Group Inc.
Michael Arone, managing director at State Street Global Advisors, said the day’s economic data were positive enough to indicate that consumers are still spending, but not strong enough for the Federal Reserve raise rates sooner than currently anticipated.
Looking more broadly at the markets and the S&P 500’s recent drop of nearly 4% from its peak, Arone said pullbacks historically have tended to be shorter and shallower when price-to-earnings ratios are rising.
“Benign inflation and a stronger dollar mean that the U.S. economy and company earnings will continue to grow. This is a positive environment for the stock markets,” he added.
Sales at U.S. retailers were unchanged in July, the weakest result in six months, as sales fell at auto dealers, but rose at gas stations and food and beverage stores, according to government data released Wednesday. Separately, business inventories rose in June by more than expected.
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