US close: Wall St ill as healthcare stocks plunge; rising bond yields weigh

Rising US bonds yields and weaker healthcare stocks helped send the Dow more than 350 points lower at the close on Tuesday as the equities sell-off continued.

The Dow Jones Industrial Average fell 362.59 points, or 1.37%, to 26,077.65, the S&P 500 was 31.10 points, or 1.09%, lower at 2,822.47 and the Nasdaq Composite dropped 64.02 points, or 0.86%, to 7,402.48.

Investors were also looking to President Donald Trump's State of the Union address and keeping an eye on the first day of the Federal Reserve’s two-day rate-setting meeting, particularly as higher bond yields had been attributed to expectations that policymakers could revise their economic forecasts higher in light of recent tax changes brought in by the administration.

Healthcare was the biggest decliner, with United Healthcare recording the largest losses on the Dow.

The plunge came after Amazon, Berkshire Hathaway and JP Morgan declared they would shake up the sector through a joint venture aimed at cutting the healthcare costs of their workers, estimated at around one million people.

The prospect of rising interest rates also started to weigh on the sunny sentiment that has characterised the market's record breaking run since the start of the year.

The yield on the benchmark 10 year Treasury note jumped to 2.72%, remaining at levels not seen for almost three years.

"The fear that interest rates may have to rise faster than markets had initially priced in amid concerns of faster inflation is starting to weigh on trading decisions," said Fiona Cincotta Senior Market Analyst at City Index

"The dollar is back on the front foot finding support from higher yields, although investors will turn towards the Fed FOMC announcement due on Thursday and President Trump’s State of the Nation address this evening."

Shares in healthcare heavweight Pfizer were also looking green around the gills as the company said it expected to pay tax at an adjusted rate of around 17%, higher than some investors had expected, and sending its shares more than 3% lower.

Harley-Davidson slumped after it said that 2017 shipments were at the low end of expectations, while McDonald’s nudged lower despite its quarterly earnings and sales beating forecasts.

In economic news, the latest data from the Conference Board provided a bright spot, showing that US consumer confidence rose in January following a drop the month before.

The board’s consumer confidence index rose to 125.4 from December’s reading of 123.1, which was revised up from 122.1 previously. Analysts had been expecting a reading of 123.0.

The present situation index fell slightly to 155.3 from 156.5, while the expectations index rose to 105.5 this month from 100.8 in December.

Elsewhere, US house price growth was as expected in November, according to the S&P/Case-Shiller National Home Price Index.

The 20-city index rose 6.4% on the year, up from 6.3% growth the previous month and in line with economists’ expectations.

Meanwhile, the national home price NSA index covering all nine US census divisions was up 6.2% on the year, compared to a 6.1% increase the month before.

Dow Jones - Risers

Caterpillar Inc. (CAT) $163.72 0.70%
Procter & Gamble Co. (PG) $86.96 0.12%
United Technologies Corp. (UTX) $136.51 -0.12%
Travelers Company Inc. (TRV) $148.72 -0.16%
Nike Inc. (NKE) $67.34 -0.36%
Verizon Communications Inc. (VZ) $53.91 -0.41%
Apple Inc. (AAPL) $166.97 -0.59%
Coca-Cola Co. (KO) $47.41 -0.61%
American Express Co. (AXP) $98.73 -0.68%
Johnson & Johnson (JNJ) $142.44 -0.86%

Dow Jones - Fallers

Unitedhealth Group Inc. (UNH) $236.68 -4.34%
Pfizer Inc. (PFE) $37.80 -3.13%
McDonald's Corp. (MCD) $172.48 -2.98%
Chevron Corp. (CVX) $125.23 -2.53%
Intel Corp. (INTC) $48.79 -2.38%
General Electric Co. (GE) $15.95 -2.03%
International Business Machines Corp. (IBM) $163.59 -1.92%
3M Co. (MMM) $251.56 -1.74%
Wal-Mart Stores Inc. (WMT) $107.73 -1.66%
Merck & Co. Inc. (MRK) $60.64 -1.61%

S&P 500 - Risers

Harris Corp. (HRS) $156.27 6.17%
Wynn Resorts Ltd. (WYNN) $171.45 4.88%
Qorvo, Inc. (QRVO) $70.67 3.64%
Dover Corp. (DOV) $107.09 3.29%
Tenet Healthcare Corp. (THC) $19.62 2.51%
United Continental Holdings Inc. (UAL) $67.01 1.87%
Universal Health Services Inc. (UHS) $122.51 1.86%
Southern Co. (SO) $44.80 1.84%
Dr Pepper Snapple Group Inc. (DPS) $119.00 1.65%
F5 Networks Inc. (FFIV) $140.95 1.48%

S&P 500 - Fallers

Mallinckrodt Plc Ordinary Shares (MNK) $18.37 -9.51%
MetLife Inc. (MET) $49.70 -8.64%
Harley-Davidson Inc. (HOG) $50.74 -8.23%
CIGNA Corp. (CI) $207.90 -7.15%
Chesapeake Energy Corp. (CHK) $3.63 -6.44%
Southwestern Energy Co. (SWN) $4.45 -6.32%
United States Steel Corp. (X) $38.62 -6.15%
SCANA Corp. (SCG) $40.77 -5.86%
Corning Inc. (GLW) $32.33 -5.61%
Noble Energy Inc. (NBL) $30.40 -5.38%

Nasdaq 100 - Risers

Wynn Resorts Ltd. (WYNN) $171.45 4.88%
Workday, Inc. (WDAY) $120.26 3.21%
Amazon.Com Inc. (AMZN) $1,437.82 1.42%
Cerner Corp. (CERN) $69.36 0.92%
Electronic Arts Inc. (EA) $118.70 0.89%
Verisk Analytics Inc. (VRSK) $99.12 0.89%
Comcast Corp. (CMCSA) $42.34 0.86%
Facebook Inc. (FB) $187.12 0.61%
Charter Communications Inc. (CHTR) $376.52 0.54%
Starbucks Corp. (SBUX) $57.19 0.30%

Nasdaq 100 - Fallers

Maxim Integrated Products Inc. (MXIM) $61.71 -6.88%
Walgreens Boots Alliance, Inc. (WBA) $76.13 -5.16%
Mylan Inc. (MYL) $44.02 -4.26%
PACCAR Inc. (PCAR) $75.74 -4.13%
Baidu Inc. (BIDU) $244.07 -3.81%
Micron Technology Inc. (MU) $41.67 -3.74%
Applied Materials Inc. (AMAT) $53.38 -3.52%
Alexion Pharmaceuticals Inc. (ALXN) $122.36 -3.49%
Amgen Inc. (AMGN) $191.27 -3.40%
Express Scripts Holding Co (ESRX) $79.31 -3.19%