Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York March 9, 2016. REUTERS/Lucas Jackson
NEW YORK: Wall Street pared back early gains on Wednesday as a rise in energy shares from recovering oil prices were capped by a fall in biotech stocks.
Biotechs came under pressure after the US government proposed a test programme aimed at lowering Medicare drug costs.
Brent crude extended gains above US$40 a barrel, after US crude stockpiles rose in line with estimates last week and gasoline inventories fell more than expected.
Crude oil has rallied in recent weeks, but industry watchers remained skeptical of a sustained recovery in prices as the markets are dealing with a massive oversupply.
The rise in oil prices helped European shares bounce back on Wednesday, even as investors fretted about global economic conditions ahead of central bank meetings on monetary policies.
“People have been hesitant one way or the other ahead of that ECB meeting,” said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald.
At 11:29am ET (1629 GMT), the Dow Jones industrial average was up 61.16 points, or 0.36%, at 17,025.26, the S&P 500 was up 10.5 points, or 0.53%, at 1,989.76 and the Nasdaq Composite index was up 14.10 points, or 0.3%, at 4,662.93.
The European Central Bank, which will make a decision on policy on Thursday, is expected to increase its stimulus programme.
“It’s almost like a reverse Goldilocks scenario because US data has been just good enough for the Fed to act, while global data has continued to deteriorate,” Cecchini said.
While the US Federal Reserve is not expected to raise interest rates at its meeting on March 15-16, the central bank has said it is on track to raise rates gradually this year.
Amgen’s 3% decline was the biggest drag on the Nasdaq and the S&P 500. Regeneron was down 4.4% and Celgene fell 2.9%.
Chipotle Mexican Grill was down 5.8% at US$494.15. The company, already reeling from several food-borne illnesses, temporarily shut a Massachusetts restaurant after four employees fell sick.
Advancing issues outnumbered decliners on the NYSE by 1,744 to 1,065. On the Nasdaq, 1,370 issues rose and 1,158 fell.
The S&P 500 index showed 25 new 52-week highs and one new low, while the Nasdaq recorded 33 new highs and 32 new lows. - Reuters
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