By Tanya Agrawal
REUTERS - The Dow Jones and the S&P 500 were little changed in morning trading on Wednesday, while Celgene led a rally in health stocks that pushed the Nasdaq to modest gains.
Bank of America reported its biggest quarterly profit in nearly four years. The bank's shares rose 2.2 percent to $17.51, boosting the financial index.
Celegene's shares jumped as much as 9.4 percent to a record high of $134.34 after the company said it would buy Receptos for $7.2 billion to get a potential multibillion-dollar drug.
Receptos jumped 10.4 percent to $228.64, while the Nasdaq biotech index jumped more than 2 percent to hit a record high for the third time in three weeks.
Earlier, Federal Reserve Chair Janet Yellen said the central bank on track to raise interest rates this year as the labor markets are expected to steadily improve and the turmoil abroad is unlikely to throw the economy off track. She started speaking before the U.S. House of Representatives Financial Services Committee at 10 a.m. ET (1400 GMT).
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"The fact that the Fed feels comfortable raising rates even with what's going on globally and in lieu of weak retail data that we saw yesterday shows that the economy is healthy," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Investor are also awaiting the outcome of a Greek parliament vote on the terms of a third bailout. Greek Prime Minister Alexis Tsipras is struggling to persuade deeply unhappy leftist lawmakers to vote for a package of austerity measures and economic reforms to secure a new bailout.
At 10:04 a.m. ET, the Dow Jones industrial average was down 10.06 points, or 0.06 percent, at 18,043.52. The S&P 500 was up 0.31 points, or 0.01 percent, at 2,109.26 and the Nasdaq composite was up 14.32 points, or 0.28 percent, at 5,119.21.
Seven of the 10 major S&P 500 sectors were lower with the energy index's 0.78 percent fall leading the decliners. Oil prices renewed their downward spiral as investors digested the likely impact of increasing Iranian fuel exports at a time of heavy oversupply. The health index was the top gainer.
China's second quarter gross domestic product grew slightly higher than forecast, but the data failed to stem the slide in its stock markets where a quarter of stocks are still suspended.
The uncertainty in the Chinese markets and the strong dollar will be in focus this U.S. earnings season. Corporate America is expected to report its worst sales decline in nearly six years in the second quarter, while profit is expected to have fallen 2.9 percent, according to Thomson Reuters estimates.
Delta Air Lines fell 2.2 percent to $42.68 after the carrier forecast a drop in third-quarter unit revenue. The warning weighed on other airline stocks.
Yum Brands fell 3 percent to $89.21 after the owner of Pizza Hut and KFC reported its fourth straight quarter of falling sales.
Netflix was down 0.6 percent at $99.78 after it started trade for the first time after a seven-for-one stock split. Netflix and Intel are scheduled to report after the markets close.
Declining issues outnumbered advancers on the NYSE by 1,876 to 883. On the Nasdaq, 1,391 issues fell and 996 advanced.
The S&P 500 index showed 15 new 52-week highs and two new lows, while the Nasdaq recorded 86 new highs and 19 new lows.
(Editing by Savio D'Souza)