Stocks end mixed; drug shares slide
Stocks ended mixed and mostly lower Tuesday, led by a steep decline in drug company shares as investors worried it will become harder for the companies to raise prices. Materials companies fell along with the prices of precious metals.
U. S. stocks have hardly moved over the last two days, following a four- week rally that erased some big losses from earlier this year.
“People are kind of reevaluating where we are,” said James Paulsen, chief investment strategist for Wells Capital Management. “It’s kind of amazing we haven’t pulled back a little more.”
Trading has been mixed and fairly calm this week as investors wait for the Federal Reserve’s Open Markets Committee remarks Wednesday. Investors are also awaiting Wednesday’s Consumer Price Index report, which Paulsen believes will reveal more than the Fed’s statement.
“We ought to be paying attention to the Fed’s boss, the economy,” he said. “If the economic data gets better, the Fed will raise rates.”
Drug company stocks did not enjoy any of the market’s tranquillity Tuesday. They were pummeled after Valeant Pharmaceuticals said its strategy of boosting prices is no longer viable. Every drug company in the Standard & Poor’s 500 index fell, and Pfizer and Merck led decliners on the Dow Jones industrial average.
Eli Lilly fell on concerns surrounding the potential approval of a drug designed to treat dementia caused by Alzheimer’s disease. The drugmaker said Tuesday it is changing the goal of a latestage trial, and investors worried the change makes it less likely regulators will approve the drug. The stock fell 3.6% to $ 71.24.
Tech stocks made the biggest gains Tuesday, led by Apple, which rose 2% to $ 104.58 after a Morgan Stanley analyst said first- quarter iPhone sales look stronger than Wall Street expected.
Gold fell $ 14.10, or 1.1%, to $ 1,231 an ounce. Silver sank 26 cents, or 1.7%, to $ 15.26 an ounce. Copper slipped less than 1 cent to $ 2.23 a pound.
Energy stocks declined as oil prices fell sharply for the second day in a row. Benchmark U. S. crude sank 84 cents, or 2.3%, to $ 36.34 a barrel. Brent crude fell 79 cents, or 2%, to $ 38.74.
Wholesale gasoline slipped 1 cent to $ 1.41 a gallon. Heating oil fell 2 cents to $ 1.18 a gallon. Natural gas rose 3 cents, or 1.8%, to $ 1.85 per 1,000 cubic feet.
The Bank of Japan left its monetary policy unchanged Tuesday but downgraded its assessment of conditions in that nation, the world’s third- largest economy.
Bond prices held steady and the yield on the 10- year U. S. Treasury note remained at 1.96%. The euro edged up to $ 1.1107 from $ 1.1097 and the dollar slipped to 113.10 yen from 113.80 yen.