Wall Street stocks slipped yesterday, led by a decline in healthcare stocks after a tweet from US President Donald Trump on the need to lower drug prices, while expectations the Federal Reserve will raise interest rates supported the US dollar.
Shares of large US pharmaceutical companies sold off after Mr Trump said he was working on a “new system” to reduce prices in the industry. Shares of Pfizer Inc and Merck & Co shed 1.1 per cent, and Amgen Inc dropped 1.4 per cent.
The dollar edged up 0.09 per cent against a basket of six major trading currencies and gained 0.11 per cent against the Japanese yen ahead of the Fed’s meeting next week.
The monthly US jobs report, due on Friday, is expected to show an increase of 186,000 jobs, probably enough to push the Fed to raise its base rate again for the second time in three months.
US Treasury yields rose yesterday, supporting the dollar, as data showed the US trade deficit grew in January to its widest monthly level in nearly five years.
The benchmark 10-year Treasury yield was up nearly two basis points at 2.511 per cent, while two-year yield edged up one basis point at 1.322 per cent.
The market is taking in stride, unlike past years, expectations the Fed will raise rates, said Rahul Shah, chief executive of Ideal Asset Management in New York.
The Dow Jones Industrial Average fell 2.73 points, or 0.01 per cent, to 20,951.61. The S&P 500 lost 3.04 points, or 0.13 per cent, to 2,372.27 and the Nasdaq Composite added 1.76 points, or 0.03 per cent, to 5,850.93.
The S&P 500 healthcare index dropped 0.65 per cent, setting it up for its worst day in more than five weeks.
Stocks in Europe traded slightly lower as weak corporate earnings and the biggest fall in German industrial orders since the depths of the global financial crisis weighed on sentiment.
Europe’s FTSEurofirst index of the 300 leading regional shares fell as much as 0.31 per cent, pulled down by healthcare and financial stocks.
MSCI’s all-country world stock index fell 0.21 per cent.
Brent crude added 17 cents at $56.18 a barrel while US West Texas Intermediate (WTI) crude rose 19 cents at $53.39.
Gold slipped 0.64 per cent to $1,217.70 an ounce.