US close: Stocks slide for second session amid healthcare headache

US stocks retreated again on Tuesday as the rally in cyclical stocks stalled, health stocks stumbled as Donald Trump held firm on his election promises on healthcare, and the dollar also gained.

The Dow Jones Industrial Average closed down 0.15% at 20,924.76, the S&P 500 and Nasdaw both lost almost 0.3% to close at 5,833.93 and 2,368.39.

Crude oil prices were lower, after a mid-session spike flattered to deceive, with West Texas Intermediate down 0.2% to $53.07 per barrel and Brent crude 0.3% lower at $55.86.

The dollar was up 0.25% on sterling at 1.22, 0.1% on the euro and the yen at 1.0568 and 114.02 respectively.

"While headline equity indexes remain close to their record high, the rally in cyclical stocks has stalled, signaling possible hurdles for the equity market and economic activity at a time when the Fed is ready to raise interest rates sooner and more than markets had previously expected," said Kathy Bostjancic at Oxford Economics.

"The pullback in cyclical stocks versus defensive stocks reflects investor concern about the lack of detail and progress on pro-growth economic policies such as corporate tax reform and infrastructure spending, and the large focus on immigration restrictions that hold back growth."

Real yields remain low, which Bostjancic said reflected her view that while the fiscal expansion of 'Trumponomics' may well boost aggregate demand in 2018 but is unlikely to meaningfully lift the aggregate supply or significantly boost economic growth for very long.

On opening, the S&P 500's healthcare sector collapsed into a pool of red on the back of another tweet from President Donald Trump that under a new system for the industry where "pricing for the American people will come way down".

The Republican party also unveiled plans to dismantle the Affordable Care Act, commonly known as Obamacare.

The plans would shrink the government's role in healthcare by scrapping the requirement for most people to have health insurance and roll back extra funding for those on lower incomes.

Showing the twin fallout for companies focused on drugs prices and Obamacare, drugmaker Ionis Pharmaceuticals and healthcare services provider Tenet Healthcare fell 7%, while industry giants Pfizer and Merck were down around 1%.

On the macroeconomic data front, the US trade deficit jumped to $48.5bn in January from $44.3bn, in line with the consensus forecast, $48.5bn.

Imports rose to $197.6bn in January from $192.6bn the previous month , while total imports increased by $5.3bn to $240.6bn.

The surplus on the services balance slipped to $21.2bn from $21.4bn.

Meanwhile, as investors bet the Fed will hike rates at its meeting next week, analysts said investor focus will shift to the release of the non-farm payrolls report at the end of the week for signs of continued growth, with the US economy expected to have added 186,000 jobs last month.

The unemployment rate and wage growth components will also be watched closely.

In corporate news, Jack Daniel’s whiskey parent Brown-Forman Corp was down 2.21% after it reported that profit fell short of expectations and it cut its outlook for the year.

Verizon was down a day after saying it would at last begin offering customers unlimited data plans, having held off for years as it argued they would lead to lower margins and network congestion.

Dick’s Sporting Goods slumped 7.66% despite the retailer posting better than expected fourth-quarter results.

Michaels Companies gained 2.92% after the arts and crafts retailer beat fourth-quarter earnings forecasts and gave an upbeat outlook for 2017.

Snap’s dramatic reversal continued into a second session, with the Snapchat owner's stock down almost 10% having soared more than 40% after its IPO on Thursday, but reality dawned as several stock analysts initiated coverage with a sell rating.

Dow Jones - Risers

Intel Corp. (INTC) $35.80 0.65%
Boeing Co. (BA) $182.02 0.60%
United Technologies Corp. (UTX) $112.26 0.56%
Caterpillar Inc. (CAT) $95.93 0.28%
Microsoft Corp. (MSFT) $64.40 0.20%
Walt Disney Co. (DIS) $110.86 0.17%
Visa Inc. (V) $89.06 0.13%
Apple Inc. (AAPL) $139.52 0.13%
American Express Co. (AXP) $79.58 0.10%
3M Co. (MMM) $189.09 0.10%

Dow Jones - Fallers

Chevron Corp. (CVX) $111.81 -1.20%
Verizon Communications Inc. (VZ) $49.42 -1.18%
Pfizer Inc. (PFE) $33.99 -1.05%
Merck & Co. Inc. (MRK) $65.96 -0.77%
Home Depot Inc. (HD) $146.00 -0.75%
JP Morgan Chase & Co. (JPM) $91.40 -0.55%
E.I. du Pont de Nemours and Co. (DD) $79.39 -0.53%
General Electric Co. (GE) $29.86 -0.47%
Coca-Cola Co. (KO) $41.99 -0.45%
Goldman Sachs Group Inc. (GS) $250.90 -0.44%

S&P 500 - Risers

Humana Inc. (HUM) $217.87 2.45%
Viacom Inc. Class B (VIAB) $42.93 1.75%
F5 Networks Inc. (FFIV) $143.60 1.60%
Best Buy Co. Inc. (BBY) $44.55 1.50%
Lennar Corp. Class A (LEN) $50.70 1.48%
PulteGroup Inc. (PHM) $22.80 1.47%
D. R. Horton Inc. (DHI) $32.85 1.36%
Electronic Arts Inc. (EA) $88.30 1.33%
Coca-Cola European Partners Limited (CCE) $35.39 1.29%
Stericycle Inc. (SRCL) $80.86 1.26%

S&P 500 - Fallers

Tenet Healthcare Corp. (THC) $19.32 -7.11%
Frontier Communications Co. (FTR) $2.62 -5.07%
Endo International Plc (ENDP) $10.90 -4.39%
Southwestern Energy Co. (SWN) $7.61 -4.16%
Express Scripts Holding Co (ESRX) $67.39 -3.80%
Signet Jewelers Ltd (SIG) $63.25 -3.58%
United States Steel Corp. (X) $36.15 -3.50%
Nordstrom Inc. (JWN) $44.01 -3.23%
Brown Forman Corp. Class B (BF.B) $46.96 -3.14%
Alexion Pharmaceuticals Inc. (ALXN) $129.18 -3.11%