Nasdaq lost ground in choppy trading on Wednesday as investors fled drug stocks after President-elect Donald Trump said pharmaceutical companies were "getting away with murder" by charging high drug prices. Trump said he has also discussed making it easier to import cheaper drugs in his first formal news conference since the November 8 election.
The S&P 500 healthcare index reversed course following Trump's remarks and fell as much as 1.9 percent. After paring losses it was still down 1.2 percent and on track for its worst day since November 22. The Nasdaq biotechnology index sank 3.1 percent and was on track for its worst day in three months. The pullback ended a six-day winning streak for both indexes.
"When somebody that high profile says something that negative, people do not want to invest in it. They view the sector as uninvestible, and withdraw their money," Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF. The Dow Jones Industrial Average was up 63.87 points, or 0.32 percent, to 19,919.4, the S&P 500 had gained 0.93 points, or 0.040989 percent, to 2,269.83 and the Nasdaq Composite had dropped 8.06 points, or 0.15 percent, to 5,543.76.
The CBOE Volatility index, also called Wall Street's "fear gauge", spiked as much as 6.4 percent before creeping back and was last was up 1 percent. Lockheed Martin, down 0.55 percent in afternoon trading, pared losses after falling as much as 1.3 percent when Trump said the F-35 fighter jet program "is way behind schedule and billions over budget." "(Trump) was tough on businesses that could take advantage of the USA - healthcare, auto makers, any exporter, anyone who did a corporate inversion, pharma, defense contractors and IT suppliers," said Brian Battle, Director, Performance Trust Analytics Group in Chicago, saying traders should get used to White House headlines and tweets moving sectors and stocks.
Five of the 11 major S&P sectors were lower. Helping limit losses was a spike in energy stocks, which rose 1.3 percent as crude prices jumped more than 3 percent. Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.12-to-1 ratio favoured decliners.