Published: Thu, February 01, 2018
Economy | By

Wall Street stumbles as health stocks fall

Wall Street stumbles as health stocks fall

U. S. stocks fell for a second straight day on Tuesday, with the Dow Jones Industrial Average tumbling as much as 352 points, hammered by a rise in bond yields and a decline in healthcare companies.

Even though the bears gave the tiniest of roars today (Jan. 30), sending the Standard & Poor's 500 index down 1% and the Dow Jones Industrials index down 1.4%, this kind of one-day drop is far from a crash or crisis. USA stocks also posted the biggest drop of the new year.

Almost every S&P sector was sold-off, with the worst performers being healthcare (-2.1pc), energy (-1.9pc), technology (-1pc) and financials (-0.9.pc). In Hong Kong, the Hang Seng Index shed 0.06%, while on the mainland, the Shanghai composite edged down 0.26%.

"Whatever the trigger, a correction of some kind seems a high probability in the coming months", Goldman Sachs's chief global equity strategist Peter Oppenheimer wrote in an investor note on Monday, when the sell-off began. That's the biggest one-day drop since August 17. The Nasdaq slumped 0.9 percent to 7,402.48.

But investors pulled back this week, dropping the Dow 540 points in two days, after a slew of bearish indicators started flashing red - including weakening appetite for USA government bonds and expectations that the Federal Reserve will raise interest rates in March.

Elsewhere, the Stoxx Europe 600 fell 0.2%, pressured by declines in shares of utilities and real-estate companies. Anthem fell $13.58, or 5.3 percent, to $243.44.

Later this week, investors are looking ahead to the Federal Reserve's two-day monetary policy meeting, as well as President Donald Trump's first State of the Union address and data on manufacturing and unemployment.

Stocks moved higher in midday trading after several big USA companies reported strong quarterly results.

The Fed has signaled it expects to raise its key short-term interest rate three times this year.

The weakness on Wall Street was partly due to profit taking, with traders cashing in on the recent strength of the markets. Natural gas rose 3 cents, or 0.9 percent, to $3.20 per 1,000 cubic feet.

Other major indexes followed the Dow.

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