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S&P 500 ticks higher as investors weigh stimulus against virus worries

Credit: REUTERS/BRENDAN MCDERMID

The S&P 500 edged higher in choppy trading on Friday, as investors juggled between prospects of more fiscal stimulus and fears of further business disruptions due to another record-breaking rise in COVID-19 cases across the country.

By Medha Singh and Devik Jain

July 17 (Reuters) - The S&P 500 edged higher in choppy trading on Friday, as investors juggled between prospects of more fiscal stimulus and fears of further business disruptions due to another record-breaking rise in COVID-19 cases across the country.

Netflix's shares NFLX.O fell 6.4% after it forecast slower-than-expected subscriber growth during the third quarter.

The video streaming service's shares weighed the most on the S&P 500 and the Nasdaq and also pulled the communication services sector .SPLRCL down 0.9%.

The S&P 500 and the Dow are set to close the week higher as optimism over an eventual coronavirus vaccine helped investors look past a continuous surge in COVID-19 cases. The United States saw 77,000 new infections on Thursday.

"It's going to be fairly range bound until we get more transparency into exactly how the coronavirus virus is going to affect us long term," said David Trainer, chief executive officer of investment research firm New Constructs in Nashville, Tennessee.

"I don't see a lot of downside, but I do see a lot of rotation away from the really expensive large-cap tech names, into more reasonably valued individual security."

High-flying companies including Microsoft Corp MSFT.O, Apple Inc AAPL.O and Amazon.com AMZN.O which have powered Wall Street's recovery since March slipped on Friday.

The utilities .SPLRCU and healthcare .SPXHC sectors rose the most among the major S&P sectors.

At 11:33 a.m. ET, the Dow Jones Industrial Average .DJIwas down 37.90 points, or 0.14%, at 26,696.81, the S&P 500 .SPXwas up 4.02 points, or 0.13%, at 3,219.59. The Nasdaq Composite .IXICwas up 13.79 points, or 0.13%, at 10,487.62.

BlackRock Inc BLK.N, the world's largest asset manager, rose 3.1% after reporting a jump in quarterly profit as investors poured money into its fixed-income funds and cash management services.

As the second-quarter earnings season gets underway, investors are looking for clues on the path of recovery for Corporate America. Unprecedented stimulus measures and improving economic data have helped the S&P 500 rise to within 5% of its February record high.

Investors are also hoping for more fiscal support, as a program that offers additional unemployment benefits is set to expire on July 31. The U.S. Congress will return to Washington on Monday to battle over the next coronavirus aid bill.

"It's going to be very messy over the next couple of weeks, as Republicans and Democrats go back and forth. I suspect they're going to end up settling somewhere closer to maybe one and a half to two trillion in fiscal stimulus," said David Bahnsen, chief investment officer, the Bahnsen Group, based in Newport Beach, California.

The S&P 500 and the Dow have risen so far this week after promising data on a COVID-19 vaccine helped investors look past a record-breaking increase in coronavirus cases in the United States.

Advancing issues outnumbered decliners by a 1.36-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.53-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and no new lows, while the Nasdaq recorded 65 new highs and 6 new lows.

(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel)

((Devik.Jain@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2062; ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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