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Wall Street Slips As Health Stocks Weigh

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Wall Street Slips As Health Stocks Weigh
The S&P 500 index failed to hold on to its gains after touching a record high on Monday as a drop in healthcare stocks offset the impact of higher oil prices and a strong jobs report.

The S&P 500 healthcare index lost nearly 1 per cent, while the Nasdaq biotech index was off 0.8 per cent.

However, oil prices rose 2.5 per cent after a report in the Wall Street Journal last week that some OPEC (Organization of Petroleum Exporting Countries) members had called for a freeze in production.

The S&P and the Nasdaq closed at record highs on Friday after data showed that the US economy added 255,000 jobs in July, way more than 180,000 that analysts had estimated.

"You know the old saying: 'Buy on the rumor, sell on the news.' So I wouldn't say today's movement is particularly surprising," said Melissa Brown, senior director of applied research at Axioma in New York.

"The markets have been up a lot so it seems like the employment report has already been reflected in stock prices."

Investors also fretted about an earnings recession in S&P 500 companies likely spilling into the sixth straight quarter.

Analysts polled by Reuters expect third-quarter earnings to fall 0.2 per cent as of Monday. They had estimated a 0.2 per cent rise on August 3.

At 1627 GMT (9:57 p.m. in India), the Dow Jones Industrial Average was down 21.88 points, or 0.12 per cent, at 18,521.65. The S&P 500 was down 1.95 points, or 0.09 per cent, at 2,180.92. The Nasdaq Composite was down 10.15 points, or 0.19 per cent, at 5,210.97.

Five of the 10 major S&P 500 indices were lower, with the healthcare index losing the most, while the energy index gained 1.46 per cent.

Bristol-Myers fell for the second straight day, shedding 4.4 per cent, after its lung-cancer drug failed a key late-stage study on Friday. The stock was the biggest drag on the S&P 500.

Merck, which makes a rival drug, fell 2 per cent. The stock had rallied 10 per cent on Friday, following the news on Bristol-Myers' drug.

Allergan lost 2.8 per cent after it slashed its full year revenue forecast and said it was not looking to use its surplus cash to fund any deals.

Pfizer, which had terminated a deal to buy Allergan in April, fell 1.6 per cent.

Oil majors Exxon Mobil and Chevron rose 0.7 per cent.

Advancing issues outnumbered decliners on the New York Stock Exchange by 1,732 to 1,167. On the Nasdaq, 1,395 issues fell and 1,363 advanced.

The S&P 500 index showed 28 new 52-week highs and no new lows, while the Nasdaq recorded 85 new highs and 12 new lows.
© Thomson Reuters 2016


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