Stocks Close Mixed; NASDAQ Supported by Surge in Health Care Sector

U.S. cash stock indexes closed mixed on Thursday with the technology-based NASDAQ Composite posting a second day of gains. The blue chip Dow Jones Industrial Average closed lower. Banking stock Goldman Sachs weighed on the Dow while UnitedHealth provided the support. The benchmark S&P 500 Index closed marginally lower. Support came from the health care sector, resistance from the banking sector.

Health care stocks continued their hot streak on Thursday in the wake of the unveiling of the Senate’s health care bill, aimed at repealing and replacing Obamacare.

Investors continued to keep an eye on crude oil as the market tried to bounce back from several days of selling pressure. This week’s sell-off in crude oil dropped the S&P energy sector about 3.5 percent this week.

In the cash market, the S&P 500 Index finished at 2434.50, down 1.11 or -0.05%. The Dow Jones Industrial Average finished at 21397.29, down 12.74 or -0.06% and the NASDAQ Composite Index settled at 6237.59, up 3.64 or +0.06%.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.5.

Economic News

U.S. Weekly Unemployment Claims came in as expected at 241K. The Home Price Index rose 0.7%. This beat the 0.4% forecast. Last month’s data was revised upward to 0.7%. The Conference Board’s Leading Index came in lower than expected at 0.3%, but higher than the previous 0.2%.

U.S. bank regulators have room to “eliminate” or “relax” aspects of the Volcker Rule, Fed Governor Jerome Powell said in prepared remarks to the Senate Banking Committee.

In other news, U.S. banks passed through the latest round of stress testing relatively unscathed, setting investors up for news next week of payouts from the banking industry’s biggest names.

The 34 banks subjected to the Fed’s stress testing appear to have enough capital to return cash to shareholders. The second, more critical part of the test happens next week when the central bank announces whether it approves or disapproves of the banks’ capital plans.

The tests are part of the Dodd-Frank regulatory reforms instituted after the financial crisis.

Crude Oil

Profit-taking and bargain-hunting helped drive crude oil prices up from 10-month lows on Thursday. Aggressive counter-trend investors bought crude oil despite bearish market sentiment due to the persistent supply glut and doubts over the OPEC-led plan’s ability to balance the market.

Gold

Gold was supported on Thursday for a second day due to the softer U.S. Dollar and weakening U.S. Treasury yields. Risk averse sentiment due to weaker oil prices also drove up demand for the safe-haven metal.