By Sue Chang, MarketWatch , Ryan Vlastelica
Biotech ETFs tumble after Trump's comments on drug prices
U.S. stocks rose modestly in a volatile session Wednesday as investors digested President-elect Donald Trump's first news conference in months.
Major indexes oscillated between small gains and losses while biotech stocks were notable losers after Trump said companies were "getting away with murder (http://www.marketwatch.com/story/biotech-etfs-fall-as-trump-says-more-bidding-needed-on-drugs-2017-01-11)" with respect to drug prices. Energy shares were among the day's biggest gainers, rising alongside a jump in the price of crude oil.
The Dow Jones Industrial Average rose 69 points, or 0.4%, to 19,926, while the S&P 500 index gained 2 points, or 0.1%, to 2,271. The Nasdaq Composite , which reached its fourth straight record close on Tuesday (http://www.marketwatch.com/story/us-stocks-stuck-in-waiting-game-ahead-of-trumps-news-conference-2017-01-10), edged up 1 point to 5,553. The indexes were all showing sharper gains the moments just before Trump's news event.
"The easy part for the Trump administration has been done. Now words have to be transformed into action and policies. The speed of this, more specifically regulatory relief and tax reform, may dictate the immediate direction of the markets," said Kent Engelke, chief economic strategist at Capitol Securities Management Inc. "If his proposals [and] policies are thought to be bogging down, prices will suffer."
Read:MarketWatch's live blog on Donald Trump's press conference (http://blogs.marketwatch.com/capitolreport/2017/01/11/president-elect-donald-trumps-press-conference-live-blog-and-video/)
In a measure of how uncertainty wasn't alleviated by the conference, the CBOE Volatility at one time rose more than 5% (http://www.marketwatch.com/story/wall-streets-fear-index-climbs-as-trump-holds-news-conference-2017-01-11), though it remains well below its long-term average. Typically, the so-called "fear index" has an inverse correlation with stocks.
"There's a lot of indecisiveness in the market. We can't seem to built on a rally or get any sustained momentum in a correction," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "Investors are playing both sides, trying to figure out what earnings will look like, and what the Trump administration will look like in terms of actual policy."
Markets have advanced since Trump's election in early November, with major indexes hitting repeated records. That rally has shown signs of stalling of late, with some analysts worried that the gains have gotten overdone.
Investors also watched the confirmation hearings (http://www.marketwatch.com/story/tillerson-says-russia-poses-a-danger-to-us-and-more-testimony-highlights-2017-01-11) of Rex Tillerson, Trump's nominee to head the State Department. Russia and China were major topics of discussion in the hearings.
Need to know:The biggest risk as markets shrug at the Trump-Russia imbroglio (http://www.marketwatch.com/story/the-biggest-risk-as-markets-shrug-at-the-trump-russia-imbroglio-2017-01-11)
Joseph Quinlan, head of market and thematic strategy at Bank of America Private Wealth Management, said the coming administration has been more hard-line toward China while sympathetic to Russia.
"The shifting U.S. policy stance towards Russia and China presents asymmetric risks to Corporate America," he said in a report. "Of the two dance partners, U.S. economic/financial linkages with China are far thicker and critical to U.S. firms relative to shallow U.S.-Russian ties. What's more, the market potential of China is infinitely more attractive than Russia."
Read: Trump's game of chicken with China is a lose-lose situation (http://www.marketwatch.com/story/trumps-game-of-chicken-with-china-is-a-lose-lose-situation-2017-01-10)
Economic docket: No key data releases or Federal Reserve speakers are scheduled for Wednesday. But investors will hear from several Fed officials over the next two days, including Chairwoman Janet Yellen, and retail sales data are due Friday.
Stocks to watch:The iShares Nasdaq Biotechnology ETF (IBB) fell 3% while the SPDR S&P Biotech ETF(XBI) lost 3.4% and the VanEck Vectors Biotech ETF (BBH) dropped 2.7%. More broadly, the Health Care Select Sector SPDR ETF (XLV) fell 1%.
Supervalu Inc.(SVU) reported sales below forecasts (http://www.marketwatch.com/story/supervalu-sales-falls-below-expectations-2017-01-11), sending shares down 7.2% in early trading.
Merck & Co.(MRK) rose 2.1% after the drugmaker said the Food and Drug Administration would grant a priority review for one of its lung-cancer drug treatments (http://www.marketwatch.com/story/merck-shares-rise-after-hours-on-priority-review-lung-cancer-drug-application-2017-01-10).
Ford Motor Co.(F) announced a special dividend and gave updates on its forecasts late Tuesday (http://www.marketwatch.com/story/ford-says-profits-will-improve-in-2018-declares-special-dividend-2017-01-10). (http://www.marketwatch.com/story/ford-says-profits-will-improve-in-2018-declares-special-dividend-2017-01-10) Shares fell 1.7%.
Read: Is this the year for stock pickers? Here are 20 picks from Citi (http://www.marketwatch.com/story/is-this-the-year-for-stock-pickers-here-are-20-picks-from-citi-2017-01-10)
Other markets: European stocks ended modestly higher (http://www.marketwatch.com/story/european-stocks-wander-before-trump-takes-center-stage-2017-01-11). In Asia, , stocks outside of China broadly rose (http://www.marketwatch.com/story/asian-markets-off-to-the-races-hoping-trump-will-reveal-stimulus-details-2017-01-11).
The dollar regained some strength across the board (http://www.marketwatch.com/story/dollar-perks-up-but-big-moves-on-hold-ahead-of-trump-conference-2017-01-11), particularly against the British pound , which weakened after a reports on industrial production and the trade deficit.
Crude-oil prices rebounded, adding more than 2%, after two straight day of losses (http://www.marketwatch.com/story/oil-struggles-after-two-days-of-losses-with-focus-now-on-us-data-2017-01-11), with investors focusing on a report on U.S. supply data due later. Gold prices extended gains.
--Barbara Kollmeyer contributed to this article
(END) Dow Jones Newswires
January 11, 2017 14:59 ET (19:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.