S&P 500 enters -2.5% week-to-date
Energy sector lags
Biotechnology outperforms

The major averages sport modest midday gains with the Nasdaq Composite (+0.3%) trading ahead of the S&P 500 (+0.1%).

Equity indices have spent the first half of the trading day inside narrow ranges with the S&P 500 bouncing between 2,052 and 2,063 after starting the day just below its 100-day moving average (2,058).

Although biotechnology has displayed significant strength, a couple other influential groups like financials (-0.3%) and energy (-0.5%) have prevented the market from clearing its early high. Notably, the energy sector has been pressured by a 2.7% decline in crude oil. The energy component hovers near $50.00/barrel, but remains on course to end the week higher by 7.4%.

U.S. economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity.

Gross domestic product expanded at a 2.2 percent annual rate, unrevised from last month’s forecast, the Commerce Department said on Friday in its third estimate. The economy grew at a 5 percent rate in the third quarter.

The government also reported that after-tax corporate profits fell at a 1.6 percent rate in the fourth quarter, as a strong dollar dented the earnings of multinational corporations.

After-tax profits increased at a 4.7 percent rate in the July-September period. For all of 2014, profits dropped 8.3 percent, the largest annual drop since 2008.

Slower economic growth together with benign inflation could prompt the Federal Reserve to delay raising interest rates until later this year. The U.S. central bank has kept its short-term lending rate near zero since December 2008.

Fed officials last week lowered their individual growth estimates for this year through 2017.

The moderate pace of expansion appears to have persisted through the first quarter.

The sturdy dollar, lingering weakness in Europe and Asia, harsh winter weather in the United States and a now-settled labor dispute at the busy U.S. West Coast ports dampened activity in first two months of the year.

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