Biotech stocks weigh on market
U.S. stocks ended the week with a whimper, turning big opening gains in the S&P 500 and Nasdaq Composite into losses by the conclusion of Friday's session on 25 September 2015. A sharp selloff in biotech and health-care stocks spread to broader markets, weighing on sentiment. All three main indexes booked weekly losses, even as the Dow Jones Industrial Average eked out a gain on Friday, largely thanks to a 8.9% jump in Nike shares.
The Dow Jones Industrial Average had been up by as many as 250 points, but closed 113.35 points, or 0.7%, higher at 16,314.67 and declined 0.4% over the week. The Nasdaq Composite ended the day down 47.98 points, or 1%, at 4,686.50 and posted a 2.9% weekly loss. The S&P 500 closed less than a point lower at 1,931.34 and booked a 1.4% weekly loss.
Utilities, consumer staples and financials booked weekly gains, as investors turned to defensive sectors. Biotechs weighed heavily on the Nasdaq as the sector got hammered this week.
Caterpillar led laggards this week, posting a 9.6% loss as the machinery giant plans to lay off 10,000 employees by end of 2018.
The main indexes declined in six of the past seven sessions, since the Federal Reserve left its key borrowing rate unchanged on Sept 17, citing concerns over slowing global growth. Earlier on Friday sharp gains were attributed to optimism after Federal Reserve Chairwoman Janet Yellen's hawkish comments late Thursday, when she said the economy is strengthening and an interest-rate hike is likely before the end of the year.
In economic reports, revised data on second-quarter U.S. growth appeared to underline Yellen's view. Data showed that the economy grew faster than first estimated, driven by higher consumer spending and somewhat stronger business investment. U.S. economy grew at an annual 3.9% pace in the second quarter instead of 3.7%.
The University of Michigan Consumer Sentiment Index was revised up to 87.2 in the final September reading from 85.7 while the consensus expected a revision up to 87.0. The Expectations Index was revised up to 78.2 from 76.4, but is still down from 83.4 in August The Current Conditions Index was revised up to 101.2 from 100.3, but remains down from 105.1 in August.
Among stocks under focus, shares in Nike surged 8.9% after the company late Thursday reported better-than-expected sales, that were driven by a jump in revenue in China.
Bullion prices took a hit on Friday, finishing lower after the Federal Reserve's Janet Yellen said she expects an interest-rate hike in 2015. December gold fell $8.20, or 0.7%, to $1,145.60 an ounce on Comex, for a weekly gain of 0.7%. December silver shed 2 cents, or 0.1%, to $15.11 an ounce, down 0.3% on the week.
Crude Oil futures climbed on Friday, 25 September 2015 adding to the week's gain, as upbeat comments on the U.S. economy from Federal Reserve Chairwoman Janet Yellen helped provide a boost to the outlook for crude demand. Prices got an added lift from data showing a fourth straight weekly decline in the number of active U.S. rigs drilling for oil.
November West Texas Intermediate crude settled at $45.70 a barrel, up 79 cents, or 1.8%. Based on the close of the October contract last Friday, which was the front month at the time, prices were up 2.3% on the week. The November contract itself was up 1.5% from a week ago.
On Monday, August Personal Income, Personal Spending and Core PCE data will be released at 8:30 ET while August Pending Home Sales will be announced at 10:00 ET.
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