Wall Street slips as traders cash in healthcare stocks' gains; Nasdaq flat

US budget signalled higher regulatory costs for the sector and a cut in funding for medical research

US stocks slipped on Thursday pressured by healthcare shares as traders cashed in gains from one of the best performing sectors so far this year.

Proposals in President Donald Trump's budget signalled higher regulatory costs for the sector and a cut in federal funding for medical research. Though still a ways away from becoming a reality, they gave traders a reason to sell.

The S&P 500 healthcare index dropped 0.9 per cent.

Financials outperformed in a rebound after the sector was the worst performer on Wednesday and as the benchmark US Treasury note yield rose, while utilities weakened.

Biogen weighed down the S&P 500, falling 4.7 per cent to $278.96 after two brokerages downgraded the stock.

 

"Healthcare is being dragged down by equipment and supplies, biotechnology, and tools and services. These sectors have actually done quite well year-to-date, so this is just a little speed bump," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"There's a push and a pull with these stocks as the President has promised to accelerate the (drug and device) approval process, but now he's proposing to cut the budget of the FDA, which could make it difficult to get expedited approvals."

The Dow Jones Industrial Average fell 15.55 points, or 0.07 per cent, to close at 20,934.55, the S&P 500 lost 3.88 points, or 0.16 per cent, to 2,381.38 and the Nasdaq Composite added 0.71 point, or 0.01 per cent, to 5,900.76.

Oracle surged to a record high of $46.99 before closing up 6.2 per cent at $45.73, after it posted a better-than-expected quarterly profit.

Tyson Foods slipped 1.7 per cent to $62.00 on news that a form of bird flu that is highly lethal for poultry had infected a second farm that supplies Tyson.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favoured advancers.

The S&P 500 posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 145 new highs and 52 new lows.

About 6.60 billion shares changed hands in US exchanges, below the 6.96 billion daily average over the last 20 sessions.