Another weekly loss for stocks
A late slump in healthcare stocks pushed the market to its third weekly loss this month.
Stocks had traded solidly higher for most of the day. Banks, insurance companies and brokerage firms climbed after Federal Reserve Chairwoman Janet L. Yellen said that policymakers are likely to raise interest rates this year.
The market gave up most of its gains in the afternoon as a sell-off in drugmakers led the healthcare sector lower.
The stock market has been volatile for the last six weeks on worries about the effect of slowing growth in China and other emerging markets and uncertainty about the outlook for interest rates. The late sell-off Friday pushed stocks to their third losing week in the last four.
“This is a dangerous market that is still looking for direction,” said Jerry Braakman, chief investment officer at First American Trust investment management firm. “Although the U.S. is continuing to improve, outside the U.S., it’s just scary.”
The Standard & Poor’s 500 index fell 0.9 point, or less than 0.1%, to 1,931.34. The Dow Jones industrial average gained 113.35 points, or 0.7%, to 16,314.67. The Nasdaq composite fell 47.98 points, or 1%, to 4,686.50.
The S&P 500 closed down 1.4% for the week. The Dow was 0.4% lower.
Shares of drugmakers began their slide Monday when Democratic presidential front-runner Hillary Rodham Clinton pledged to stop “price gouging” in the industry. The healthcare sector, a longtime favorite of investors, ended Friday with its worst weekly performance in more than four years.
The market had started Friday with solid gains as investors were encouraged by a report that the U.S. economy grew faster in the spring than previously estimated.
The combination of higher rates and a growing economy is good for financial companies because they can earn more from making loans. Citigroup rose $1.42, or 2.9%, to $50.55 and Bank of America climbed 34 cents, or 2.2%, to $15.89.
“The financials are a wonderful place to be over the next several quarters if a rate rise materializes,” said Jim Russell, a portfolio manager at Bahl & Gaynor Investment Counsel.