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Stocks Wipe Away Losses, Close Higher; Drug Stocks Feel Trump Thump

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The stock market mounted a late recovery Wednesday, closing with a positive reversal.

The Dow Jones industrial average led with a 0.5% increase, as Merck (MRK) defied weakness in the health care sector, rising 3%.

The Nasdaq, down as much as 0.5%, closed 0.2% higher. The S&P 500 climbed 0.3%. The small-cap Russell 2000 added 0.1%. Volume rose across the board, early figures showed.

Indexes were erratic as Wall Street reacted to President-elect Donald Trump's first press conference since he was elected Nov. 8. Stocks swung as Trump blasted drug companies and the cost of the Lockheed Martin (LMT) F-35 fighter jet. He gave few details on his plans to spend massively on highways, bridges, airports and other infrastructure.

But indexes worked their way back throughout the afternoon, in what can be termed a bullish price reversal.

Biotech, generic drug and other medical stocks were down the most Wednesday after Trump took aim at drug prices for the second time since he was elected. Pharmaceutical and related groups fell roughly 2% to 5%. The iShares Nasdaq Biotech (IBB) fell 3%. Medical stocks such as Bristol-Myers Squibb (BMY) and Myriad Genetics (MYGN) fell in unusually high volume.

But the energy sector led as U.S. crude oil futures climbed 2.8% to $52.25 a barrel.  Mining and metals also came out on top of the day's performance table.

Earnings season is just warming up, and Thursday's announcements will include Delta Air Lines (DAL) and Taiwan Semiconductor (TSM). Delta's results are especially noteworthy because airline stocks have rebounded this week, thanks to a spate of favorable metrics from individual airlines.

Thursday's economic reports include the weekly jobless claims and import-export prices, both due at 8:30 a.m. ET.  Of perhaps more importance to the market will be speeches given by several Federal Reserve officials, including Chairwoman Janet Yellen. She speaks after the market close, at 7 p.m. ET at a town hall meeting with educators in Washington, D.C.

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