S&P 500 retreats from record high

Specialist Joseph Dreyer works at his post on the floor of the New York Stock Exchange, Friday, March 21, 2014. Signs that the U.S. economy is emerging from a winter chill drove major stock indexes higher Thursday. Investors were encouraged by an increase in manufacturing and a rise in a key index of economic indicators. (AP Photo/Richard Drew)

Specialist Joseph Dreyer works at his post on the floor of the New York Stock Exchange, Friday, March 21, 2014. Signs that the U.S. economy is emerging from a winter chill drove major stock indexes higher Thursday. Investors were encouraged by an increase in manufacturing and a rise in a key index of economic indicators. (AP Photo/Richard Drew)

Saturday, March 22, 2014

NEW YORK - An early surge on the stock market evaporated Friday, as healthcare stocks tugged major indexes down. Biotech companies were especially hard-hit after lawmakers questioned the pricing of a hepatitis-C drug made by Gilead Sciences.

The Standard & Poor’s 500 index raced past an all-time high in early trading, then lost steam in the afternoon. It still finished with a solid weekly gain, up 1.4 percent.

The S&P 500 slipped 5.49 points, or 0.3 percent, to close at 1,866.52. It traded as high as 1,882 earlier in the day, 4 points above its record high reached March 7.

The Dow Jones industrial average lost 28.28 points, or 0.2 percent, to 16,302.77. The Nasdaq composite dropped 42.50 points, or 1 percent, to 4,276.79.

It might sound surprising that the stock market is trading near an all-time high with all the uncertainty surrounding China’s slowing growth and simmering tensions in Ukraine. Last week, those concerns were credited with knocking the S&P 500 index down 1.9 percent, its worst weekly loss in nearly two months.

This week, investors seemed to return their focus to the basics.

“There are always bad things going on in the world, but they don’t all matter to the ultimate direction of markets,” said Douglas Cote, chief market strategist at ING U.S. Investment Management. “

The only thing that matters is the following: corporate earnings, manufacturing and the consumer. And they’ve all been solid.”

Health-care stocks fell the most in the S&P 500 index. Gilead lost $3.46, or 5 percent, to $72.07. Biogen Idec fell $28.51, or 8 percent, to $318.53.

Nike fell after warning that a stronger U.S. dollar will dampen its results this quarter.

Strong demand for its shoes and apparel ahead of international soccer’s World Cup competition in June helped it beat analysts’ earnings expectations in the previous quarter, the company said late Thursday. Nike, one of the 30 stocks in the Dow, lost $4.06, or 5 percent, to $75.21.

Reports on manufacturing and housing sent the stock market higher early in the week.

The big stumble came Wednesday, when the Federal Reserve said it could start raising short-term interest rates as soon as next year.

Traders drove down prices for gold, government bonds and stocks in anticipation of higher interest rates and borrowing costs.

Those market jitters overshadowed some good news, said Dan Veru, chief investment officer of Palisade Capital Management in Fort Lee, N.J.

“If interest rates are going higher, it’s because the economy is doing better,” he said,“and that’s going to be a good thing for corporate profits. What’s so bad about that?”

In other trading Friday, the yield on the 10-year Treasury note fell to 2.74 percent. Crude oil rose 56 cents to close at $99.46 a barrel. Gold gained $5.50 to settle at $1,336 an ounce.

Shares of Zions Bancorp., a regional bank based in Salt Lake City, fell $1.75, or 5 percent, to $31.24.

Late Thursday, the Fed said Zions was the only one of 30 major U.S. banks that didn’t pass an annual “stress test” that determines whether banks have sufficient capital buffers to keep them lending through an economic crisis.

Business, Pages 28 on 03/22/2014