(Updates with Nasdaq turning higher)

NEW YORK, July 31 (Reuters) - The Nasdaq turned higher on Thursday, helped by an advance in shares of biotechnology companies following news of a proposed buyout in the sector.

Bristol-Myers Squibb Co's (BMY.N: Quote, Profile, Research) buyout bid for ImClone Systems Inc IMCL.O also fueled gains in the broader pharmaceutical sector, helping the Dow and the S&P 500 pare losses. For details, see [ID:nN31345022].

A drop in oil prices also curbed the broader market's losses.

The Dow Jones industrial average .DJI fell 56.59 points, or 0.49 percent, to 11,527.10. The Standard & Poor's 500 Index .SPX shed 4.28 points, or 0.33 percent, to 1,279.98. The Nasdaq Composite Index .IXIC gained 7.75 points, or 0.33 percent, to 2,337.47. (Reporting by Ellis Mnyandu; Editing by Jonathan Oatis)