Health care shares, oil price fears weigh down Wall Street

NEW YORK — Wall Street fell on Monday as health care stocks slid and investors worried about rising costs for companies as oil prices rose, although the major indexes eked out a gain in April to snap a two-month losing streak.

The health care sector, which dropped 1.6%, weighed most heavily on the S&P 500, as shares of Allergan Plc and Celgene Corp. led the sector’s slide.

Some investors suggested that on balance, a strong earnings season has not been enough for US stocks to break out of their recent trading range.

“The earnings are priced in,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “There’s not a whole lot of reason to buy. We’re stuck in the mud right now.”

Oil prices rallied after Israeli Prime Minister Benjamin Netanyahu said Iran had lied about not pursuing nuclear weapons after signing a 2015 deal with global powers.

Even as companies’ quarterly results have come in strong, their earnings calls have raised concerns that rising commodity prices may pinch profit margins in the future.

The possibility that temporary exemptions on steel and aluminum tariffs might expire for several US allies also weighed on US stocks. Without an extension from US President Donald Trump, the exemptions will expire on Tuesday.

“That might be the most negative (news event) this week,” said Stephen Massocca, senior vicepresident at Wedbush Securities in San Francisco. “It’s not going to be viewed well by the market.”

The Dow Jones Industrial Average fell 148.04 points or 0.61% to 24,163.15; the S& P 500 lost 21.86 points or 0.82% to 2,648.05; and the Nasdaq Composite dropped 53.53 points or 0.75% to 7,066.27.

For the month, the S&P 500 rose 0.27%, the Dow added 0.25% and the Nasdaq gained 0.04%.

Earlier in Monday’s session, US stocks were helped by data on income and spending that kept broader inflation worries in check. US personal income rose 0.30% in March, compared with expectations of 0.40%. On the consumption side, personal spending growth in February was revised lower to 0.30%, instead of the previously reported 0.40%.

McDonald’s Corp. shares jumped 5.8% after the world’s biggest fastfood chain by revenue topped analysts’ forecasts for profit and sales.

Shares of Allergan fell 5.2% after the company’s chief executive said he was opposed to fundamental changes to the drug company’s business strategy.

Celgene shares fell 4.5%. Morgan Stanley said it expects a delay of up to three years for Celgene’s key multiple sclerosis drug, ozanimod.

Shares of T- Mobile US, Inc. and Sprint Corp. sank on worries that the two companies’ $26-billion merger would face regulatory challenges. Sprint shares tumbled 13.7%, and T-Mobile shares dropped 6.2%.

Arconic, Inc. shares fell 20.6% after the aluminum products maker slashed its 2018 forecasts.

Declining issues outnumbered advancing ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.99to-1 ratio favored decliners.

The S&P 500 posted 22 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 55 new highs and 46 new lows.

Volume on US exchanges was 6.81 billion shares, compared to the 6.57 billion average over the last 20 trading days. —