NEW YORK (Reuters) – The S&P 500 was little changed in afternoon trading on Thursday, with healthcare stocks mixed after the Trump administration withdrew a rule that would kill rebates.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid
Shares of pharmacy benefit managers gained as the news meant these companies would continue to benefit from after-market discounts from drugmakers. Health insurers and drug distributors also rose.
Helping to support stocks were comments from Federal Reserve Chairman Jerome Powell, which boosted expectations for an interest-rate cut.
Powell, in his first day of testimony before Congress on Wednesday, confirmed the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war and said the Fed stood ready to “act as appropriate.” Powell testified before the Senate Banking Committee on Thursday.
The S&P 500 rose above the 3,000 level for the first time Wednesday following the news and hit a high of 3,002.33 on Thursday, but the index has been able to hold above that level.
“The fact that the market has tried several times this week to get through it and hold has been a big psychological negative,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
The Dow Jones Industrial Average .DJI rose 174.03 points, or 0.65%, to 27,034.23, the S&P 500 .SPX gained 1.97 points, or 0.07%, to 2,995.04 and the Nasdaq Composite .IXIC dropped 13.86 points, or 0.17%, to 8,188.67.
Iron Mountain (IRM.N) slumped after Bank of America Merrill Lynch downgraded the document storage company’s shares to “underperform,” citing recent declines in recycled paper pricing.
A Labor Department report showed U.S. underlying consumer prices rose by the most in nearly 1-1/2 years in June, but that was unlikely to change expectations the Fed would cut rates this month.
Declining issues outnumbered advancing ones on the NYSE by a 1.19-to-1 ratio.
Additional reporting by Medha Singh and Manas Mishra in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Jonathan Oatis