BIOTECHS GET CRUSHED: Here's what you need to know

Stocks reversed a big rally on Friday. Biotechs dragged the Nasdaq lower and the S&P 500 dipped into the red, while the Dow was held afloat mostly by an 8% rally in Nike shares.

All three indexes closed down for the week.

First, the scoreboard:

• Dow: 16,314.67, +113.35, (0.70%)
• S&P 500: 1,931.34, -0.90, (-0.05%)
• Nasdaq: 4,686.50, -47.98, (-1.01%)

And now, the top stories on Friday:

1. The US economy grew in the second quarter better than previously reported. The third and final estimate of Q2 gross domestic product (GDP) was 3.9%, compared to the prior reading and consensus forecast of 3.7%. GDP was lifted by consumer spending on healthcare, food services, and accommodation. Second-quarter consumption was revised to 3.6% from 3.1%. "Our bet is on the consumer," wrote Chris Rupkey at Bank of Tokyo-Mitsubishi in a note to clients. "The larger picture remains the same, growth remains on track and the economy's positive, steady performance gives the Federal Reserve the confidence it needs to raise interest rates later this year."
2. In other data, the University of Michigan's consumer confidence index rose to 87.2 in September, better than the forecast for 86.5 and up from 85.7. The report said sentiment was boosted because consumers realized that the stock market sell off in August had more to do with international weakness than with the domestic economy. However, they also now believe that what happens abroad has a real impact on their wage and employment prospects, according to the survey's chief economist Richard Curtin.
3. Markit's flash reading of the US services purchasing manager's index was 55.6 for September. Business activity gained at the slowest pace in three-months, as entrepreneurs became less confident in the economy's prospects.
4. Nike shares surged 8% to an all-time high. On Wednesday, the company reported strong quarterly earnings results, with adjusted earnings per share of $1.34 on revenues of $8.4 billion - both higher year-over-year and past consensus estimates. The stock's gain added about 60 points to the Dow - all of its rally for a few minutes during the session.
5. The US oil rig count fell for a fourth straight week this week, by 4 to 640. It was the slowest pace of declines in this streak. Driller Baker Hughes reported that the combined count of oil and gas rigs fell 4 to 838.

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