NEW YORK -- The Standard & Poor's 500 index closed little changed, with the benchmark declining for a second straight week, as a selloff in biotechnology stocks thwarted a rally led by Nike Inc.
A rebound in U.S. stocks, fueled by reassuring statements from Federal Reserve Chair Janet Yellen and Nike's better-then- expected earnings, was eventually undermined Friday by a snowballing drop in biotechs. The Nasdaq Biotechnology Index fell into a bear market amid its worst weekly decline in four years. Banks, meanwhile, had their best day in more than two weeks, rising along with bond yields.
The Standard & Poor's 500 index fell less than 0.1 percent to 1,931.34, after erasing an earlier 1.1 percent climb.The Nasdaq composite index lost 1 percent, wiping out a 1.1 percent advance. The Dow Jones industrial average gained 113.35 points, or 0.7 percent, to 16,314.67, supported by gains in Nike and JPMorgan Chase & Co.
"Health-care was kind of the stalwart and we're starting to see cracks in leaders,"
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said Channing Smith, a managing director at Capital Advisors in Tulsa, Oklahoma. The firm oversees about $1.6 billion. "When you see that, it's one more reason to step back and be cautious."
Equities were initially boosted after Federal Reserve Chair Janet Yellen said in a speech following the close of markets Thursday that the central bank is on course to raise interest rates this year. Yellen's remarks bolstered confidence the economy is sturdy enough to handle higher borrowing costs. She acknowledged that economic "surprises" could lead policy makers to change that plan.
The Fed held its fire on a rate increase last Thursday, saying it's considering spillover risks to the U.S. economy from turmoil in global markets. That sparked declines in U.S. equities in five out of six sessions prior to Yellen's speech. The selloff was briefly interrupted on Monday when Fed officials said a 2015 increase is still warranted. Traders are split on whether it will happen, pricing in about a 43 percent chance of a hike in December and a roughly 51 percent probability of liftoff in January.
The S&P 500 lost 1.4 percent this week, and posted its first back-to-back weekly drop since July. The benchmark has lost 6.4 percent in the third quarter, on track for its worst performance and first consecutive quarterly declines since 2011, with equities pressured as China's slowdown weighed on sentiment.
Amid the intensified weakness in stocks, the Chicago Board Options Exchange Volatility Index has closed above 20 for 25 straight sessions, the longest stretch since January 2012. The measure of market turbulence known as the VIX rose 0.6 percent Friday to 23.62, after earlier erasing an 11 percent drop.
Calming some worries about the impact of an emerging-market downturn, data Friday showed the world's largest economy expanded more than previously forecast in the second quarter. Growth was boosted by gains in consumer spending and construction. A separate report showed a final measure of consumer sentiment for September fell less than forecast, though it reached the lowest level in almost a year.
Biotech shares were a drag on the broader health-care group amid biotech's longest losing streak in four years. The Nasdaq biotechnology index lost 5.1 percent, and is down 22 percent from an all-time high on July 20.