Wall Street hit by healthcare slump; U.S. yields rise

By Sam Forgione

NEW YORK (Reuters) - U.S. Treasury yields rose on Tuesday on signs of improvement in the U.S. housing market, while Wall Street was mostly lower after a slump in healthcare and biotech stocks.

The S&P healthcare sector <.SPXHC> fell 1.6 percent, dragged down by Allergan and Pfizer , while a drop in IBM shares also offset gains in companies that reported strong quarterly results such as Verizon and United Technologies .

European shares ended lower, with traders citing profit-taking in the absence of anything to justify extending the recent gains. Major energy stocks such as BP and Total were among the decliners.

 

S&P 500 companies are expected to show a 3.9-percent fall in third-quarter profit and revenue is expected to fall 3.8 percent, according to Thomson Reuters data.

"In the face of falling revenues, the market is going to be concerned about the next several quarters unless there can be some turnaround and resumption of growth in revenue," said John Carey, portfolio manager at Pioneer Investment Management in Boston.

Benchmark 10-year Treasury yields > hit 2.079 percent, their highest in over a week.

Commerce Department data showed U.S. housing starts increased 6.5 percent in September to a seasonally-adjusted annual pace of 1.21 million units. That beat expectations for 1.15 million units, according to a Reuters poll of economists.

MSCI's all-country world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, was last down 0.27 percent. Europe's broad FTSEurofirst 300 index <.FTEU3> closed down 0.45 percent at 1,431.95.

The Dow Jones industrial average <.DJI> was last down 0.09 percent, at 17,214.9. The S&P 500 <.SPX> was down 0.25 percent, at 2,028.48. The Nasdaq Composite <.IXIC> was down 0.67 percent, at 4,872.67.

Oil prices eased slightly after failing to hold onto marginal gains earlier in the session as market participants waited for direction from two key U.S. oil storage reports. Industry group the American Petroleum Institute (API) will report stockpiles data later on Tuesday, and EIA will release oil inventory data on Wednesday.

Brent crude was last down 29 cents, or 0.6 percent, at $48.32 a barrel. U.S. crude was last down 62 cents, or 1.35 percent, at $45.27 per barrel.

The euro rebounded against the dollar after falling for three straight sessions, bolstered by solid regional economic data and comments from ECB officials suggesting further monetary easing may not be imminent.

"The euro zone data and (ECB governing council member Christian) Noyer's remarks doused expectations that the ECB would increase stimulus for the euro zone," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

The euro was last up 0.11 percent against the dollar at $1.13410 >. The dollar index, which measures the greenback against a basket of six major currencies, was last roughly flat at 94.921 <.DXY>.

Spot gold prices > were last up $3.93, or 0.34 percent, at $1,174.23 an ounce.

(Additional reporting by Marc Jones and Sudip Kar-Gupta in London, Michael Connor and Gertrude Chavez-Dreyfuss in New York; Editing by Nick Zieminski)