* Oil prices touch 2016 highs
* Biogen, Alexion drop after drugs fail in trials
* Valeant slumps on weak results, forecast cut
* Indexes up: Dow 0.4 pct, S&P 0.19 pct, Nasdaq 0.04 pct (Updates to open)
By Yashaswini Swamynathan
June 7 (Reuters) - Gains in energy and technology stocks helped the S&P 500 and the Dow move higher on Tuesday morning, but a steep fall in healthcare shares capped gains on the Nasdaq.
Eight of the 10 major S&P sectors were higher, led by the energy index’s 0.8 percent rise as oil prices hovered around 2016 highs.
However, the healthcare index tumbled 0.75 percent, led by Biogen and Alexion, both of which reported that their drugs failed in trials.
The other sectors were mostly higher a day after Federal Reserve Chair Janet Yellen expressed confidence in the health of the economy, but was vague on when the Fed would raise interest rates.
“There is a good possibility we may see the S&P make a new 52-week high as enthusiasm continues to build.” said Peter Cardillo, chief market economist at First Standard Financial in New York.
At 9:39 a.m. ET (1339 GMT) the Dow Jones Industrial Average was up 71.77 points, or 0.4 percent, at 17,992.1.
The S&P 500 was up 4.07 points, or 0.19 percent, at 2,113.48 and the Nasdaq Composite was up 2.02 points, or 0.04 percent, at 4,970.73.
Gains in technology stocks were led by Apple and Microsoft, which were up about 1 percent.
The financial index was the only other index beside healthcare to post losses as the chances of a rate hike in June faded.
Biogen tumbled 10 percent after its multiple sclerosis drug failed in a mid-stage study, while Alexion dropped 10 percent after its drug failed a late-stage trial.
Valeant’s shares slumped 19 percent to $23.47 after the drugmaker posted a lower-than-expected quarterly profit and cut its full-year forecasts.
Ralph Lauren dropped 7.3 percent after the retailer said it would cut jobs, close stores and reduce its real estate as part of a plan to lower costs and revive sales growth.
Advancing issues outnumbered decliners on the NYSE by 1,735 to 872. On the Nasdaq, 1,138 issues rose and 1,094 fell.
The S&P 500 index showed 20 new 52-week highs and no new lows, while the Nasdaq recorded 28 new highs and six new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)