Wall Street off lows; health stocks, weak reports drag

By Abhiram Nandakumar

(Reuters) - U.S. stocks moved off session lows on Thursday afternoon, but were still weighed down by a raft of weak earnings reports, while the healthcare sector fell after the U.S. launched a probe into drug prices.

However, losses were limited by Facebook's strong quarterly results, that sent its shares to a record high, and a rise in the financial sector <.SPSY> on the prospects of a rate hike next month.

Facebook rose as much as 6.5 percent to $110.65 and gave the biggest boost to the S&P and Nasdaq.

Half of the 10 major S&P sectors were lower, with the healthcare sector <.SPXHC> down 0.34 percent.

 

A U.S. Senate panel on Wednesday launched a probe into eye-popping drug price increases, seeking documents from four drugmakers including Valeant . Valeant shares sank 18.5 percent to $74.90.

The probe hit the entire biotech group and the broader market as well, said Larry Peruzzi, a senior equity trader at Cabrera Capital Markets Inc in Boston.

The Nasdaq biotech index <.NBI> dropped 1.63 percent, also weighed down by Celgene's 5.4 percent decline after the company posted its smallest revenue growth in five quarters.

At 12:53 p.m. ET (1753 GMT),the Dow Jones industrial average <.DJI> was up 3.14 points, or 0.02 percent, at 17,870.72.

The S&P 500 <.SPX> was down 1.26 points, or 0.06 percent, at 2,101.05 and the Nasdaq Composite index <.IXIC> was down 19.06 points, or 0.37 percent, at 5,123.42.

Investors are awaiting Friday's crucial monthly nonfarm payrolls data to gauge if the Federal Reserve will lift rates off near-zero levels next month, a likelihood Fed Chair Janet Yellen alluded to on Wednesday.

Yet the ongoing debate over when the central bank will end an era of interest rates has added to investor uncertainty.

The interest-rate sensitive utilities sector <.SPLRCU> fell 0.41 percent, the steepest among the S&P sectors, as treasury yields rose on continued expectations of a rate hike.

Dow components JPMorgan and Visa were up more than 1 percent. Bank of America rose nearly 2 percent.

Qualcomm's shares slumped 14 percent to $51.86 after its weak profit forecast for the first quarter. The stock was the biggest drag on the S&P 500 and the Nasdaq.

HomeAway surged 25 percent to $40.02 after Expedia said it would buy the vacation rental site for $3.9 billion. Expedia was up nearly 4 percent at $139.40.

Declining issues outnumbered advancing ones on the NYSE by 1,535 to 1,438. On the Nasdaq, 1,512 issues fell and 1,169 advanced.

The S&P 500 index showed 17 new 52-week highs and six new lows, while the Nasdaq recorded 76 new highs and 59 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Additional reporting by Caroline Valetkevitch; Editing by Savio D'Souza)