NEW YORK (Reuters) – Wall Street dipped on Monday afternoon, reversing gains from earlier in the session, as healthcare stocks slid and investors worried about rising costs for companies as oil prices rose.
The healthcare sector .SPXHC, which dropped 1.2 percent, weighed most heavily on the S&P 500.
Shares of Allergan plc (AGN.N) fell 4.8 percent after the company’s chief executive said he was opposed to fundamental changes to the drug company’s business strategy.
Celgene Corp shares (CELG.O) fell 3.8 percent. Morgan Stanley said it expects a delay of up to three years for Celgene’s key multiple sclerosis drug, ozanimod.
Oil prices rallied after Israeli Prime Minister Benjamin Netanyahu said Iran had lied about not pursuing nuclear weapons and had expanded its nuclear weapons knowledge after signing a 2015 deal with global powers. U.S. President Donald Trump has until May 12 to decide whether to restore sanctions on Iran.
Oil has risen this month to the highest since late 2014, driven by concerns over potential disruptions to Iranian crude flows. [O/R]
Even as companies’ quarterly results have come in strong, their earnings calls have raised concerns that rising commodity prices may pinch profit margins in the future.
Some investors suggested that on balance, the strong earnings season has not been enough for U.S. stocks to break out of their recent trading range.
“The earnings are priced in,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “There’s not a whole lot of reason to buy. We’re stuck in the mud right now.”
The Dow Jones Industrial Average .DJI fell 91.88 points, or 0.38 percent, to 24,219.31, the S&P 500 .SPX lost 16.39 points, or 0.61 percent, to 2,653.52 and the Nasdaq Composite .IXIC dropped 41.54 points, or 0.58 percent, to 7,078.26.
The energy index .SPNY, up 0.1 percent, was the only sector within the S&P 500 in positive territory.
Earlier in the session, U.S. stocks were helped as data on U.S. income and spending kept broader inflation worries in check.
U.S. personal income rose 0.3 percent in March, compared with expectations of 0.4 percent. On the consumption side, personal spending in February was revised lower to 0.3 percent, instead of the previously reported 0.4 percent.
McDonald’s Corp (MCD.N) shares jumped 5.0 percent after the world’s biggest fast-food chain by revenue topped analysts’ forecasts for profit and sales.
Shares of T-Mobile US Inc (TMUS.O) and Sprint Corp (S.N) sank on worries that the two companies’ $26 billion merger would face regulatory challenges. Sprint shares tumbled 14.5 percent, and T-Mobile shares dropped 6.2 percent.
Arconic Inc (ARNC.N) shares fell 20.2 percent after the aluminum products maker slashed its 2018 forecasts.
Declining issues outnumbered advancing ones on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.
The S&P 500 posted 22 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 49 new highs and 36 new lows.
Additional reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Jonathan Oatis