Healthcare shares fend off US slump

THE Dow and S&amp;P 500 stock indices both put in slight falls yesterday, recovering from sharper declines in earlier trading, as investors shrugged off weak consumer confidence data and focused on positive earnings reports.<br /><br />Stocks in the healthcare sector led the afternoon rebound, with biotech shares rising a day after <strong>Amgen&rsquo;s</strong> strong quarterly earnings report. The health insurance sector also rose after <strong>Coventry Health Care&rsquo;s</strong> earnings topped Wall Street estimates. <br /><br />Strong earnings have given a second wind to a stock market rally that wilted in June after a 40 per cent gain in the S&amp;P 500 from its 12-year closing low in March.<br /><br />&ldquo;We&rsquo;ve seen an 11 per cent rally in 2 weeks,&rdquo; said Tim Smalls, head of US stock trading at Execution LLC.<br /><br />He said that with the markets technically overbought, and looking for a reason to take a breather, yesterday&rsquo;s slight decline is a good performance.<br /><br />Smalls added that a lot of the afternoon recovery was linked to a poor US Treasury auction, as money shifted from bonds into the stock market.<br /><br />Shorter-dated US Treasury debt fell after weak results in an auction of a record $42bn (&pound;25.6bn) of two-year notes had some analysts wondering if the global appetite for US government debt might be waning.<br /><br />The Dow Jones industrial average shed 11.79 points, or 0.13 per cent, to 9,096.72. The Standard &amp; Poor&rsquo;s 500 index dropped 2.56 points, or 0.26 per cent, to 979.62.<br /><br />This also came after the US consumer confidence index declined by more than was expected in July, a second consecutive monthly fall, as a sluggish labour market continued to worry consumers, the Conference Board said yesterday. <br /><br />But the Nasdaq Composite index gained 7.62 points, or 0.39 per cent, to 1,975.51.<br /><br />Amgen&rsquo;s stock rose 2.7 per cent to $62.42 on Nasdaq following the company&rsquo;s release of much better than expected second-quarter earnings after Monday&rsquo;s closing bell. The Dow Jones biotechnology index <br /><br /><strong>Aetna</strong> jumped 12.6 per cent to $28.96 after at least three brokerages said the insurer&rsquo;s recently-slashed 2009 earnings forecast is achievable. <br /><br />But the energy sector&rsquo;s shares weighed on the broader market as the weak consumer confidence data took a toll on oil prices, which had risen on optimism about the economic recovery. US crude oil futures dropped $1.15, or 1.7 per cent, to settle at $67.23 a barrel. The S&amp;P energy index slid 1.5 per cent.<br /><br /><strong>Exxon Mobil</strong>, down 1.2 per cent at $71.89, was the top drag on the Dow industrials index.