U.S. Stocks Edge Higher as Crude Rally Offsets Slump in Biotech

  • U.S.benchmark trims weekly slide as oil jumps most in 2 months
  • S&P 500 near flat for year as corporate earnings season looms

U.S. stocks edged higher, with the Standard & Poor’s 500 Index trimming the worst weekly slide in two months, as a surge in crude that boosted energy shares offset a slump in biotechnology shares.

The S&P 500 climbed 0.2 percent to 2,047.63 at 4 p.m. in New York, remaining in a range it’s held since the Federal Reserve’s last policy meeting on March 16. The index rose as much as 0.9 percent Friday, and closed down 1.2 percent in the week, the most since Feb. 5. Equities have swung between gains and losses in the five days as investors search for clues on the strength of the American economy ahead of what is forecast to be the worst earnings season since the financial crisis.

“You still have a lot of uncertainty surrounding earnings,” said Peter Jankovskis, who helps oversee $1.9 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. “There was definitely a risk off trade yesterday. People don’t want to jump in and take a big position either way in front of an earnings number that people expect to be down.” 

The Dow Jones Industrial Average advanced 0.2 percent to 17,577.23. The Nasdaq Composite Index was little changed after erasing gains, dragged lower by biotech shares. The group fell 1.1 percent for a second day of losses following a 6 percent rally Wednesday.

Energy shares led gains in the S&P 500 Friday with a 2 percent advance, as Chevron Corp. surged 1.6 percent. Crude rallied 6.1 percent to top $39.50 a barrel in New York. Gap Inc. shares fell 14 percent after the struggling apparel chain posted disappointing sales.

Stocks have made little progress since snapping a five-week winning streak last month that erased losses from the worst-ever start to a year. The S&P 500 ended the week higher by 0.2 percent in the year. It has remained within 1 percent of the 2,050 level over the past three weeks, as sentiment lurched from optimism that central banks will support growth to worry that their efforts may not be enough to fend off a slowdown. The Chicago Board Options Exchange Volatility Index capped its biggest weekly advance since January.

Still, more stocks are moving with the benchmark than before. Breadth as tracked by the relative size of swings in the S&P 500 Equal Weight Index has risen to highs not seen since 2012, a departure from last year, when a few big stocks held sway over the index.

Investors are awaiting fresh cues from corporate America, with the earnings season unofficially kicking off when Alcoa Inc. reports first-quarter results on April 11. Analysts estimate profits fell 9.5 percent in the first quarter, compared with calls for flat earnings growth at the start of the year. That would mark the worst reporting period since the financial crisis.

After comments by Federal Reserve Chair Janet Yellen and minutes from the March meeting this month reaffirmed officials won’t rush to raise interest rates, traders are pricing in zero chances of a raise in April. The first month with at least even odds for a boost has been pushed to February 2017 from December last week.

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